Smaller footprint allows entrepreneurs to open franchises in smaller markets
In 1988, I was a founding partner of Cactus Club. I had a great gig. But I just saw the future differently. It was a corporate company, where you own all the stores but you own all the problems. I really wanted to create wealth for other people. I had some great mentors and I thought it was time for me to become a mentor to other people and the franchise model helped me do that.
“I opened my first Browns in 2004. I hadn’t officially left [Cactus Club] yet. I was trying to convince my partners that the small store model, the small franchise model, was a powerful model. I couldn’t get them to buy into it, so I sold my shares and just kept running with the Browns model. I put the money up for the first four stores, with partners, and it started working.
“I met a lot of guys over the years that wanted to own restaurants. People would borrow money from their family, they’d open a restaurant and they’d lose it all. The smaller footprint was the first key to get your capital costs down. There’s less capital in to do a Browns, but we’re also trying to create systems that are easier to run. So you can actually be in the restaurant business, own a restaurant, but actually have a life. We look for ‘intrapreneurs.’ We do a 20-year franchise agreement with a 10-year renewal. The initial fee upfront is $50,000 for a franchise fee and $35,000 for a design fee and we charge 6% royalty.
“The smaller footprint was really one of the keys. With a smaller footprint we can get into markets the big guys can’t. We’re about 3,000 to 3,500 square feet. You can’t put an 8,000-square-foot store in Dawson Creek or Fort St. John.
“I think we hit the sweet spot in the industry. In Western Canada, it is like a modern-day gold rush to us because there are all these markets that are underserviced – Fort St. John, Dawson Creek, Weyburn, Yorkton, Estevan. Now that I’ve started to travel to Ontario, it’s the same thing, because you’ve got the big guys building in big markets, but everybody’s forgetting about all the other markets.
“We opened a couple of steak houses just before the great recession. That blew up, so we shut down the steak houses. The irony is, we’re going back and we’re doing it again but differently. We have three new concepts we’re opening up in the next 18 months. One is more of a drink-oriented establishment, more of a pub orientation. And we’re going to do a pizza concept. The steak house we’ve trademarked Morison’s. For the pub concept, we’ve trademarked London Bull. We have trademarked a name for the pizza concept. It’s based on the same concept: smaller footprint, easier to run, smaller menus.” •
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