David Ostrowe is a Burger King and Blaze Pizza franchisee in 4 states – Arkansas, Mississippi, Oklahoma and Tennessee in the United States. At one time he owned 30 Burger King restaurants. He now owns 14 BK’s having just sold off 13 of his stores.
David is excited about the Blaze Pizza concept – check out this video with LeBron James serving at the counter! The fast, fresh and fun idea of putting together a pizza in front of the customer is new and exciting for customers. The focus is on high-quality ingredients and a very simple menu – pizza, salads and ONE dessert! The mega brands of McDonalds and Burger King have bloated, complicated menus. The new generation of consumer, the millennial, wants a simpler experience (I know, I am one!).
David is also a Professor of Business at Price Business School in Oklahoma State University. He’s a self made guy from Baton Rouge, Louisiana. Upon getting out of the Navy after 8 years in 1992, he applied for many jobs and was offered work with Taco Bell as operations. He had to make the choice between the Secret Service and Taco Bell! Taco Bell is owned by PepsiCo, so David could see a future. He started at Unit operations level then moved up to multi unit ops – experience that is invaluable for his future as a multi unit franchisee.
David started with a recruitment franchise, set up a dotcom in 1999, and owned a small restaurant group that had some Captain D’s seafood restaurants. He then bought a Burger King franchise and grew his holding one-by-one to a high of 30 stores with 840 employees.
If there’s one secret to David’s success, it’s investing in field people before corporate overhead. He would always rather add a person in the field because field people have a direct impact on the bottom line – they improve service, coach managers and contribute to revenue.
“I will always add field personnel before adding head office people. The people in the office don’t make the money. The people in the stores do.” – David Ostrowe
David has some tips for hiring – check people’s references (lots of business owners DON’T!!), check their credit, and ask challenging questions like:
- How are you going to fix your credit score?
- What do you like to do on your days off?
David’s worst moment in business came on a trip to Cuba. As soon as he turned his phone on after the trip he got the text message, “TOTAL LOSS.” Imagine that! One of the stores – only 60 days old – had burned down. It turned out David was under-insured and lost $200k from that incident. He’s got a philosophical approach though. He said “Out of that $200k loss I got a brand new store that was doing better volumes than before.”
The trend report is how David knows his stores are on track. He looks at sales vs fully loaded labor and food costs, which tells him how well his restaurants are performing.
The trend report includes loss – if a hamburger sells for $5 and someone loses 5 hamburger patties in a stores, that’s $25 of money lost. Treating lost inventory the same as lost money keeps his food waste numbers down.
We also talked about inventory. By knowing the $ of inventory on the shelves for each store, David is able to track any phantom inventory or losses. Restaurant managers see the numbers on the trend report which means they understand the extra costs that are put on top of their labor and what it takes to run a profitable restaurant.
Customer service satisfaction ratings are an important part of David’s KPIs. He can look at the numbers and coach his managers on where to add or remove labor to boost numbers. In the episode he gave a great example of how he helps managers tweak the numbers!
Frequency is another important metric. If you can increase customer frequency, they are less likely to never come back if they have a bad experience – loyal customers are more forgiving!
A great tip David identified is to pay your invoices immediately – don’t wait for 21 day terms. By paying immediately David saves $150k a year!
David gets a lot of his information from talking to peers, attending conferences like the Multi Unit Franchising Conference and Restaurant Finance Conference, and from lecturing at Price School of Business at OU. He also is extensively involved in the Young President’s Organization and highly recommends people who qualify get involved.
The number one piece of advice for single unit operators stepping up to multi unit ops is to have more cash on hand than you think you’ll need. The first store often sees a drop in profit when you’re not in the store any more.
Get in touch with David by emailing him direct at [email protected].