"I thought it was a good idea to get a truck delivered at 4:30 in the morning because I wanted the truck put away before my restaurant opened and if my drive-through was busy for breakfast, it would be hard to get the food out of the truck. And that was a huge mistake because you are not getting 19 year old to get up at 4:30 in the morning to get on the truck. It takes some time to find people that are adults and are able to get to work on time. So I found myself at 3:00 in the morning picking up frozen docks of chicken and throwing them in my freezer. And that process with 3 or 4 people is an hour and a half. And when you’re talking about yourself, maybe with one other person, that’s a 2 to 3 hour process.”- Marlon Terrell
Why to Listen:
For those that listened to Episode #129 with John Francis, you know that I’ve been thinking about how veterans that are interested in entrepreneurship should really consider a franchise. It seems to be a business with training wheels. It helps bridge the gap between someone’s military strengths and what’s necessary to grow and run a successful company. My guest today is Marlon Terrell, who went straight from the Navy into owning a Chick-Fil-A franchise. I really enjoyed this conversation. Marlon provides just the right amount of detail. I walked away feeling like I understood what it’s like to be in a franchise owner’s shoes in terms of pay, career progression, and hours. He really painted a vivid picture of what life in a franchise looks like. I also think it’s helpful because Marlon was really articulate in discussing exactly how what he learned in the military was applicable to his work as a franchise owner as well as how he went about selecting a franchise. He also talks about why a franchise may or may not be suited for you as a veteran.
- StoryBox - People trust each other more than advertising. StoryBox provides the tools and supports businesses need to take the best things customers say about them, and use them to drive more sales and referrals. StoryBox offers a 10% discount to companies employing veterans of the US Armed Forces.
- Audible is offering one FREE audio book to Beyond the Uniform listeners. You can claim this offer here, and see a list of books recommended by my guests at BeyondTheUniform.io/books
- Kauffman Fast Trac - once a week course, 2-3 hours, with required homework. Marlon learned how to write a business plan, and figured out what he wanted to do
- Vet to CEO
- Boots to Business
- Veterans Entrepreneurship Program (VEP)
Transcript & Time Stamps:
For those that listened to Episode #129 with John Francis, you know that I’ve been thinking about how veterans that are interested in entrepreneurship should really consider a franchise. It seems to be a business with training wheels. It helps bridge the gap between someone’s military strengths and what’s necessary to grow and run a successful company. (1:50)My guest today is Marlon Terrell who went straight from the Navy into owning a Chick-Fil-A franchise. I really enjoyed this conversation. Marlon provides just the right amount of detail. I walked away feeling like I understood what it’s like to be in a franchise owner’s shoes in terms of pay, career progression, and hours. He really painted a vivid picture of what life in a franchise looks like.(2:20)I also think it’s helpful because Marlon was really articulate in discussing exactly how what he learned in the military was applicable to his work as a franchise owner as well as how he went about selecting a franchise. He also talks about why a franchise may or may not be suited for you as a veteran. (2:58)A few admin notes before we get started. In January 2018, I’m going to be hosting two different events. The first is called Veterans in Consulting. It will be a panel interview with three veterans that went to three different consulting firms directly from active duty. If you are in any way, shape, or form interested in consulting, you do not want to miss this.(3:35)I’ll also be doing my second session of Reprogramming. The Reprogramming Seminar is a six-session video seminar where we cover topics related to a successful military transition. I’m very excited to offer this again. (4:04)Apple iTunes seems to be the most effective way to get the word out about Beyond the Uniform so if you are enjoying the show, please take a moment to leave a review. It really helps get the word out and reach more veterans.
(5:00)Welcome to Beyond the Uniform, Marlon. I want to give special thanks to Charlie Mellow who is also a 2002 Naval Academy graduate. A couple weeks ago, I spoke with John Francis about franchising. And now I’m excited to talk to Marlon, who went straight from the Navy to owning a franchise. (6:20)
How did you transition from what you were doing in the military into your civilian career?
I was on submarines in the military so I have a mechanical engineering background and I had the opportunity to go back to the Naval Academy to get a Master’s degree in Leadership Education and Leadership Development. During this time, I taught a class in leadership at the University of Maryland College Park as part of my degree program. Around this time, I also realized that I was really interested in going down the entrepreneur route. (7:04)During my time at the Naval Academy, I was learning a lot about leading a group of people, I started to work on some different businesses. I got out of active duty in 2010 and I went into a Campus Recruiter position. This allowed me to stay as an active duty reservist and recruit in the area of Maryland and DC. I did this for five years and during that time I continued to work on entrepreneurship and gain experience in this field so that I could eventually get to where I wanted to be. (8:20)
What did you learn during that time that ultimately lead you to join a franchise?
I didn’t have an MBA but I took the opportunity to educate myself on business. I looked for an opportunity that would be a good fit for a veteran. Through meetup.com, I was able to connect with other veteran entrepreneurs and that opened doors for me. I had the opportunity to be around a group of entrepreneurs and share information. Through this I heard about various free courses and other opportunities such as Kaufman, Vet to CEO,Syracuse Entrepreneur Bootcamp for Veterans, VEP.(10:10)When I thought about the expense of starting a business, I decided that a franchise would be a good fit for me because I would have various resources available to me. What lead me to that is that I was working for a non-profit called Lead for America and I was going into schools and teaching philanthropy as a discipline. That lead me to another organization called Repay Vets That helped veterans raise money to start their own businesses. Doing these two businesses, I realized how difficult it was to build a brand and get capital. So I started to look at franchises. I worked at Chick Fil-A in high school so I decided to go back and research what kind of franchise opportunities they had. (11:55)If you’re going to go the route that you’re thinking about a franchise, walk into one and see if you can schedule a meeting with the owner or general manager to see if you can get some knowledge that way. For me, I did think and then started looking at the numbers and compared their model to other restaurants. For me, financially, it made the most sense for me.(14:05)
I love that idea of going from franchise to franchise as a way to learn more about the business and see if it is a fit.
Sometimes veterans can be very humble and they don’t want to bother people but you would be surprised how many people are out there that would love to help you. I wasn’t sure if I should go the MBA route or if I should go the “school of hard knocks” route and learn by experience. That was a difficult decision for me to make but I finally decided that instead of investing that money in school, I was going to hold on to that capital and start gaining experience. I think as veterans we all have that in common – a drive toward achievement. (16:50)
Can you give listeners a sense for how much money is necessary to start a franchise?
That’s a loaded question simply because each franchise is different. Each franchise has a different model. Depending upon how much capital you have, I would recommend Google-ing veteran friendly franchises or inexpensive franchises. (17:40)For Chick-Fil-A, our franchise fee is minimal. We only have to put up $10,000 to start a franchise. I decided that Chick-Fil-A was a good model because first of all, I had worked there before so I kind of understood how the restaurant was run. With it being so little capital up front, Chck-Fil-A is putting up all the money to find the building and create the restaurant. The caveat for me and for other similar franchises is that I don’t have ownership in the building. If Chick-Fil-A decided they no longer wanted to partner with me, they could make that decision. But I have a great deal of trust in this organization that they would not do that to someone unless something had gone seriously wrong. To go back to your original question, Chick-Fil-A is around $10,000. FedEx is more like $50,000. Subway is probably up around $100,000. (20:50)
Once someone has started a franchise, is there additional money that they will need to support themselves while the franchise gets going?
That’s a great question because although there is the price tag of starting the franchise, you could also be looking at a full year before you’re able to start paying yourself. (21:25)One great thing about Chick-Fil-A is that as soon as you open your restaurant, Chick-Fil-A will allow you to start drawing an income of $2500 per month. It usually takes 2-3 months beyond that to where you can start earning a decent income. I say 6-12 months because I left the military in May but my restaurant didn’t open until September. But commonly building openings can be delayed for various reasons so that opening date could get pushed back. So the timeline for you drawing an income also gets pushed back. It’s just safe to have 6-12 months of money saved that will keep you going.(23:50)
What does life look like in the 2-3 months before a franchise opens?
Every franchise is a little different but for most franchises, you will go through a training process. This consists of going to the corporate office and spending 3-8 weeks there going through their training. The franchise, typically, may decide to partner because of what you bring to the table for veterans. For example, some franchises require franchisers to have experience in the restaurant business but many franchises will waive this for veterans because they expect that, as a veteran, you will have that drive and commitment they are looking for. (25:39)For Chick-Fil-A, they don’t necessarily look for restaurant experience. They are looking more at character and competency. So for them, they teach you the basic operations of the restaurant and then once you finish the school, they set you up with a current owner. From there, you go back to the area where your restaurant is open and figure out the specifics for your restaurant such as number of employees, ethos, etc. (27:40)For the first week of the restaurant being open, they send you a group of trainers of about 20 people. When you compare it to the fleet, imagine having a group of 150 people and you’re charged with a mission that you know little about. All 150 people are being trained for a total of a week and then it’s all on you after that. (30:50)
I love that you made the point of how veterans can be a great fit for franchises because of their drive and commitment.
Yes, Chick-Fil-A loves veterans. All those things that we were frustrated with on the submarine, the training and administration, are the things that I now use today to be successful as an operator at Chick-Fil-A. (32:00)I can remember being so frustrated by training during my time in the military. But now, I can see how valuable it is and I go out of my way to find different training opportunities. It is definitely important. It’s also important to maintain talent. If you hire 90 people but 40 leave within the first week, things can fall apart quickly.(33:00)
How did you learn to hire and evaluate the right people?
I had a unique background because I came from recruiting. For five years, my job was to go do interviews and figure out if a person was a good fit for the Navy. But I think it goes back to one of the things we do and know as military veterans and that is to prepare. I expected turnover and I prepared for it. So I continued to interview even after my initial team was hired. I also immediately but in a training plan because I know how busy and chaotic a Chick-Fil-A restaurant can be. (36:05)
At this point you are two and half years into being a franchise owner. What is your perspective on all of this now?
It has been amazing. Chick-Fil-A does a great job of supporting the owner/operator. Chick-Fil-A has always been there to coach me through different decisions. That’s another reason why choosing the right franchise is so important. (37:29)I’ve also been able to positively impact my community. I had a young woman working in my restaurant that graduated from high school a couple months ago. Two weeks ago, she left to join the Marine Corps. I have a couple other young people that talk to me about joining the Navy. Leading a group of so many people has many unique challenges and is similar in many ways to the challenges I faced as a Naval Officer. It’s all about really investing into the crew and the vision. I always tell veterans that if leading people and supporting a crew is something they miss from being in the military, owning a franchise can be a great opportunity for them. (39:35)I’m extremely envious that you are able to reach back to the corporate offices when you need to. Because they have seen so many franchise locations go through similar struggles in their early stages, I’m sure they’re able to offer extremely valuable advice. Absolutely. Even something as simple as leadership courses that I can bring my management team to. I set my restaurant up similar to the military. I have my team members which are like my E-1s to E-4s. Then I have my key holders who are like my E5s to E6s. From there I have a group of team leaders which are like the Chiefs. And then I have my Electors which are like my Junior Officers. And then there’s me, essentially the Captain of the ship. (41:50)And that’s where I am now. I have my team trained up pretty well. We have our challenges, we always will. We’re a great team and we work together. It’s given me everything I was looking for in owning my own business. I have freedom and flexibility, I’m able to take care of my family, I’m able to have fun. (44:00)
What’s your sense from when your Chick-Fil-A first opened to when you felt like you could step back a little bit? And how would you know that you’re ready to open a new franchise?
It was like boot camp for the first three months. I thought it was a good idea to get a truck delivered at 4:30 in the morning because I wanted the truck put away before my restaurant opened and if my drive-through was busy for breakfast, it would be hard to get the food the truck. What I didn’t know was that Chick-Fil-A sales for breakfast are extremely low. (44:40)And that was a huge mistake because you are not getting 19 year old to get up at 4:30 in the morning to get on the truck. It takes some time to find people that are adults and are able to get to work on time. So I found myself at 3:00 in the morning picking up frozen docks of chicken and throwing them in my freezer. And that process to unload that truck with 3 or 4 people is an hour and a half. And when you’re talking about yourself, maybe with one other person, that’s a 2 to 3 hour process.(45:40)Every year in May, Chick-Fil-A has a conference for all of its franchise owners. My Chick-Fil-A opened in September. The conference happening the following May forced me to leave which was my first time away. For the next six months after that, I was working 10-12 hour days. By one year after the opening, I had cut back to whenever I needed to be there. Now I’m in a position where I can get a lot of my work done at home. I go to the restaurant when we have an operational challenge that we want to overcome. (47:27)When Chick-Fil-A builds a restaurant, it builds it with the capacity to handle three times as many sales as are projected. So we have a lot of growth opportunity and I can keep my team with me because as the franchise grows, I can promote them into new positions. (48:29)It’s often said that it takes three years to get a business to exactly where you want it to be. And with Chick-Fil-A, once you’ve gotten to that point, you begin to open yourself up for the opportunity to open a second restaurant. What I’m doing now is preparing my team to open a new restaurant. (50:05)
It seems like you’re poised, if you wanted to in the future, to open many more franchises. It sounds like franchising has been a great opportunity for you.
Yes it’s definitely a business that works for me and was what I was looking for. You definitely need to find the right fit because there are some franchises that offer more independence, or more autonomy. And maybe you want that, or maybe you don’t. For example, if I wanted to raise my prices, I’m unable to do that whereas in other franchises, that might be allowed. (53:30)
Is there anything else you would add as a pro or a con for someone looking to start a franchise?
The pros are the tremendous amount of support, same feeling of commitment you got in the military, a service oriented business. It provides the freedom and flexibility you are looking for, not immediately but over time. For Chick-Fil-A it was these things that sold me. And I think many of these are the same for many other franchises. The cons would be that you’re limited with branding and ownership. But one of the great things about Chick-Fil-A is that they truly care about their owners and take care of you. (57:00)
I am extremely appreciative of your time today. I feel like I have such a better sense of what it means to be part of a franchise. I love that you’ve been able to carry over so much of what you learned in the military into your civilian career.
Yes that’s true. For example when someone at my restaurant is up for promotion, we do a walkthrough of the restaurant to test their knowledge, similar to a board. I encourage all veterans not just let go of everything you learned in the military. Much of those things that you learned can apply to owning a franchise or being an entrepreneur.