S2 E8: Donatos: The Fintech Professional Turned Multiple Franchise Owner
How does a fintech professional end up owning multiple pizza units? Having a soft spot for the brand definitely helps.
Meet Shwetabh Gautam, the NYC-based pro who took a risk on franchise ownership with four friends he grew up with, and who now owns eight Donatos Pizza units in Cleveland.
The Wolf and Shwetabh get into why loving the brand played a big part in jumping on board, how they were offered five more locations even as they built their initial three, and why Donatos sits at the intersection of family pizzeria and massive franchise.
You’ll also hear how to effectively manage your local teams remotely and why incentivizing success is a key management tool.
And if you’ve enjoyed listening to Franchise Empires, I’d be so grateful if you could drop me a 5-star review on Rate My Podcast. Thank you so much!
Follow Shwetabh:
Twitter: @therealshwetabh
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Episode Transcription
Shwetabh Gautam:
I’m done, right? They’ve ran these things for 20, 25, 30 plus years, and they have generated incredible cash flow. They’ve created jobs, they’ve created value in their communities, and now they said, my work here is done. I want to go live on the beach. I want to go on vacation. I want to take some time off, and they are ready to sell.
The Wolf of Franchises:
Welcome to Franchise Empires, where aspiring entrepreneurs learn exactly what it takes to become a successful franchise owner. From one location to 10 and beyond, I’m the wolf of franchises. Hey everyone. Today on the show we have Shwetabh, who’s an employee of a major FinTech company. We get to find out why despite working at a massive FinTech company, he loves being a donatos franchise owner and how he’s doing it while working in New York and overseeing his pizza franchises that are in Cleveland. Strap in for this one. It’s a great conversation and hope you enjoy.
Narrator:
The Wolf of Franchises is the CEO of Wolf Pack Franchising, as well as a creator at Workweek Media. All opinions expressed by the Wolf and podcast guests are solely their own opinions and do not reflect the opinion of Pack franchising or workweek. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The Wolf Work Week and Wolf Pack Franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
You own five donatos today. When did you first get into the business and what were you doing professionally at that time?
Shwetabh Gautam:
Yeah, so we started having these conversations about mid to late last year when the group, and we got together and we said, Hey, we’re all from Columbus, Ohio. We all I, well, Ohio State alumni, we grew up with Donatos. Donatos is sort of a cult classic in Ohio, and we said, have this massive brand loyalty to it. But B, it’s a company that’s been around for decades and decades, and I’ve always had a very, very high quality product, have always had super, super good leadership. And through our experiences professionally, we said, Hey, this is a challenge that we’re willing to tackle. This is something that we think will be fun, and this is a great way for us to give back to the community. We all have personal ventures of our own that we’ve been pursuing on giving back to the community and the charitable side, and that’s a huge part of what Donatos does. So our values were really aligned when we sort of went down that path. The group itself consists of five folks four of which our doctors all anesthesiologists, and my background is in payments consulting and more recently FinTech. So we have a really unique set of perspectives between folks that have run practices and gone through hundreds if not thousands of patients. And then folks like myself that have managed pnl, managed people, managed processes, been in that zero to one phase of starting and growing businesses.
The Wolf of Franchises:
And did Donatos have any I guess, reservations about five folks effectively with full-time jobs? Or is that something that’s been done in the system and they know that it can work?
Shwetabh Gautam:
It’s something that had been done in the system before, is actually being done currently by other franchisors? I think donatos, when they look at it, of course, they want folks that they believe have the foundational skills to run a business, but I think they also look for folks that are very passionate about the business, people that will invest the time. Yes, we do have full-time jobs, but we do spend a significant amount of time on the business. I think the other part of it is there’s just the symbiotic relationship between us and the GMs, right? We have district managers that have been there for 10, 15, 25, 30 years. So these are folks that know the business in and out, know the people in and out, know the product in and out. And because of that, there’s this very symbiotic relationship between these folks that have the boots on the ground are executing, and then us that are sort of setting the strategic vision of, Hey, let’s pull everything up. Let’s see where we can optimize. And once we decide that we can prioritize and say, Hey, these are our top three priorities for this month or this quarter or this year.
The Wolf of Franchises:
So it sounds like, and I’m jumping ahead a bit, and so I’m going to jump ahead now and go back after, but it sounds like, so you acquired five with five donatos and you kept the teams in place from the previous franchise owners like the key managers?
Shwetabh Gautam:
That’s exactly it. We wanted to make sure that those folks stayed on. They had been in that district for a very significant amount of time. They know the market, they know the trade areas. As we go on to open up more restaurants, we want to make sure that there are those connections in the community, there are those connections, whether it’s in the local government or the local school system or other restaurants. We want to make sure that we’re able to penetrate in those trade areas and make sure that we’re able to have a solid distribution system. So we wanted to keep the infrastructure in place, not only to run the business as successfully as it’s already been being run, but as we expand, make sure that we have the right infrastructure to set ourselves up for success there.
The Wolf of Franchises:
Definitely. Yeah. And I’ve noticed a fear, and this goes with franchise acquisitions or even just independent small businesses, there’s a fear that with the transition of ownership like key staff and personnel might leave. Did you guys feel that way? Were you nervous about it? And how’d you kind of mitigate the risk when you did jump in?
Shwetabh Gautam:
Yeah, it’s, it’s a great question. I think the number one almost fear that folks have in transition of ownership or leadership is this going to suck. And that is what we were sort of setting up risk avoidance there of saying, Hey, our Seniormost staff, we were lucky in that we knew that we were going to expand. We had these five stores and we knew that we were going to open up three more after that. So that was almost a motivating factor to say, Hey, look, we’re not just doing these five stores. We want to make sure that we’re set up for success for the next three as well. So as a function of that, we adjusted compensation, we adjusted how we’re doing tips. We enlisted the idea of profit sharing with our senior leadership. So we wanted to make sure that on day one, everybody knows that our incentives are aligned and that our values are aligned and that we are all working towards the same
The Wolf of Franchises:
Goals. That’s really smart. All right. So basically you gave ’em all upside in a way and said, Hey, we’re growing this, our donatos portfolio and people who stick around are going to be able to share in the upside, assuming it’s successful.
Shwetabh Gautam:
That’s exactly correct. And these people have driven so much success in the past. There was no reason we didn’t believe they could continue doing that.
The Wolf of Franchises:
That’s awesome. So jumping back a bit, so you were in FinTech, you got four friends that who are doctors. Was it Donatos or bust? Were you guys just all big lifetime Donatos fans or did you all say, Hey, let’s check out cause we all are big customers of it, but if that doesn’t work, we’re going to find another franchise?
Shwetabh Gautam:
I think we wanted to go into the franchising space, do it in a multi-unit fashion. We evaluated a few franchises, but Donatos just always hit closest to home. The Donatos product itself is very unique when pizza is such a scrutinized food. But when you think about donatos, it’s actually a very unique pie. It has the edge to edge pizza, there’s no sort of outside crust. The dough has been used the same recipe for the last 50 years. When you order the large thin crust pizza, there’s a guarantee that there’s always going to be a hundred slices of pepperoni on that pizza. So it’s just this very unique value prop that resonates with everybody, right? No matter who you are. This is a pizza I have yet to find someone who said they don’t like this pizza. And so I think just the fact that it’s a super high quality product, the people are super high quality, the employees are super high quality. Everything about it across the spectrum was very attractive to us. And that’s why, I mean, not to mention like I said, the nostalgia around it, but it was just something that was very close to our hearts and something that we knew and believed in would work.
The Wolf of Franchises:
I mean, I love it. It seems there’s franchises that people are big fans of, maybe big customers of, but I probably look at the F D D and say, yeah, sure, I’m a customer too, but I don’t know if it’s a good business to own. But it’s cool that you found one that kind of meets both requirements for owners and for customers. So I want to get to the financing aspect, how you approached acquiring five at once. But before we even get there, can you walk through how you discovered the opportunity? Because I’ve been seeing this more and more where people, rather than building their franchise locations, they start out just acquiring existing ones from older owners. But the big question’s always like, how do I find out who’s trying to sell? So how did that process start from when you first got in touch with Donatos and we’re thinking, Hey, we’re going to build three locations to, oh, wait, no, now we’re going to just acquire five existing
Shwetabh Gautam:
Ones. Yeah, it’s one of those things where you’re in the right place at the right time. When we started on our journey, we knew we were going to expand the Cleveland market and open three net new shops. During that process, we were approached by the franchisor currently in Cleveland that owned all the locations that said, Hey, you know what? I’ve done this for a long time. I want to move on. Are you interested in acquiring my locations? And so I think we had the benefit of being in the system already. We were sort of approved, we were new, we were motivated. I think both Donatos, home office corporate saw that. I think this group saw that in us and they were excited to say, Hey, we would love for you guys to be the new leadership and new owners of our location. So that’s how it really played out. As we look forward to expanding more, hopefully that same sentiment is there. I think the results have spoken for themselves a little bit. We have grown net sales, we’ve had really disciplined controls. We’ve had integrity around how we treat our people, how we treat our processes. So we want to make sure that we continue to do those things and as we scale, all of those things will continue to get better.
The Wolf of Franchises:
And so it sounds like, did you already put deposits down to Build three in Cleveland when the opportunity came around? Or were you still technically due diligence?
Shwetabh Gautam:
No, we were ready to start building. We had put down, the financing was ready to go, the deposits were made. So now it’s just sort of with those five restaurants, it’s been a lot of learning. It’s given us this great opportunity to go in and say, Hey, let’s learn about the process. Let’s learn about the people, let’s learn about the pnl, right? How does this thing work? So we’ve had this opportunity to test and learn with five locations. And now as we’re opening up our sixth one by the end of September, we have a playbook. We know exactly what to do, we know exactly the type of people to hire, the marketing strategy, the p and l, we’re really ready to execute against opening new restaurants now.
The Wolf of Franchises:
Love it. And long term, I mean maybe know you’re focused on building the three in Cleveland, but just like, do you see that those more opportunities coming like that from older owners where you guys say, Hey, look, we’re killing it with our stores, and you have this closed network of Donatos franchisees where you can get the deals before they hit the market or something like that. Is that part of the long-term playbook? Yeah,
Shwetabh Gautam:
Absolutely. Look, I think once you get to five, you get to eight, then you want to get to 20, you want to get to 30. And as we see in and otherwise, right, we are seeing this transition of these extremely successful franchisors, extremely successful business owners that are just saying, I’m done. They’ve ran these things for 20, 25, 30 plus years, and they have generated incredible cash flow. They’ve created jobs, they’ve created value in their communities. And now they said, my work here is done. I want to go live on the beach. I want to go on vacation. I want to take some time off. And they are ready to sell. And on the flip side of that, you have us, we are these folks that are new to the space, we’re motivated. We have a really structured approach to this. And I think there’s this really great connection there that we’re able to make with other franchisors, both in the Donatos network and outside of it as well.
The Wolf of Franchises:
Yeah, it’s really an awesome way to run the entrepreneurship through acquisition playbook because you just, it’s easier to find right, new opportunities. Whereas I’m thinking some people are just acquiring kind of random, different small businesses. Might be a car wash here, a pizza shop there, who knows? But the thing is you kind of have to really hustle more for those deals, whereas you guys are just within the network and can get them surfaced to you easier. And it’s also just rinse and repeat where it’s the same software, it’s the same exact operational playbook, it’s the same marketing playbook, you’ve been running the same staffing. So it’s, to me, it’s more efficient.
Shwetabh Gautam:
Absolutely. I think the big thing there is scale is the most important thing. I think once we get to even six to eight restaurants, that’s hitting some sort of scale. And now all of a sudden, I think in today’s day and age, the hardest thing is finding people, finding really good people. And without people, your stores will not run. Your stores will not be successful. When you achieve scale, now you’re giving people a path for growth. If you have one shop, two shops, maybe you’re sort of like, okay, I got promoted. Now what? Can I do a different function? Or is everybody just sort of siloed into their own functions? When you hit scale now you have hundreds of jobs, hundreds of positions, right across functions. So if I’m in marketing and I want to go to X other function, I have the flexibility to do that because I’m under the same ownership. And that’s something that we’ve been promoting with our current staff is if there are things that you want to try, if there are functions that you want to go experiment with, let’s do that. Let’s grow your career, let’s round you out. And I think that does, that drives engagement, that drives retention of employees.
The Wolf of Franchises:
I completely agree. I love that you brought that up because I do feel like generally there’s this, I don’t want to call it over glorification of the local small business owner, but I do think people just naturally write, gravitate towards kind of wanting to support that local small business owner. And then once someone becomes a large multi-unit owner, they’re almost like, because they, they’ve hit scale. They’re not in the stores 24 7. They used to. But the reality is that I think that should be celebrated more because just like you said, right, it’s win-win for everyone. In reality, it’s a win for you as the owners because you’re doing better with more locations under your belt. But for the employees too, I mean the benefits they can get provided the room for upward mobility, the room for transition across roles for personal growth and professional growth, it makes everyone’s careers better. So I love that that’s kind of a theme that you’re promoting within the organization.
Shwetabh Gautam:
Absolutely. It’s really important to us and it’s part of one of our values of career growth, so
The Wolf of Franchises:
Amazing. So when you approached this deal, without getting too much into the specifics, I think a lot of people look at this and think, okay, I don’t have the cash on hand to acquire five existing pizza shops regardless of it’s or whatever. But did you tap into any financing via like SBA or seller financing? What was kind of the approach there?
Shwetabh Gautam:
Yeah, so SBA financing is exactly the path we took on these first five, right? The M S R P on five locations is very different than if you go for 20, 30 locations all at once. So SBA was very cooperative. We worked with them. We explored other options with other banks as well, but SBA at the time was sort of the best partner for us. The way we financed it was a mix of equity of our own plus the SBA loan. We actually given rates where rates were a few months ago. We did go through refinancing pretty quickly just to take advantage of those rates. But as far as performance now our stores, with the help of the interest rates, with the scale that we’ve achieved overnight with those five and now six stores, our current stores are performing ahead of our trajectory ahead of our projections.
If you think about our debt to EBITDA ratio, I think by year three we’re going to be at a four x ratio there. And debt to equity by year three is one and a half x. So obviously I wouldn’t get into the specific numbers, but I hope that’s illustrative enough to sort of say when you go down the debt financing route, there actually is a lot of upside. Again, I think it depends on the nature of the business, what your cash flow is, what your processes and controls look like. But again, we’ve seen it to be a very positive outcome thus far.
The Wolf of Franchises:
That’s awesome to hear. And yeah, I mean I think I, pizza showed a lot of strength through covid too, so maybe a little bit of tailwinds too could be helping you there. But
Shwetabh Gautam:
Yeah, I mean it was funny actually, we generally compare our financials to 2019 because 20 20, 20 21 for everybody we’re such anomalies. It was almost like we laugh at it, right? We’re like, everybody says to buy low sell high. We sort of bought high, but we’ve been making sure that our performance is sticking as close to that as possible. So buying into franchises after 2021 is definitely counterintuitive, but it is definitely a decision that we’ve been very happy with.
The Wolf of Franchises:
And so, you know, have a job, your partners are all doctors, <laugh>, like what does your week look like? And I guess I’ll specifically ask for you since you know, can’t speak for the other four, but I mean, are you working, let’s just call it a nine to five, and then at night having a call with the managers of the stores or just how is it crazy? Is it doable? Just paint a picture for us.
Shwetabh Gautam:
That was something that we were all nervous about going into this. We all have real jobs. We do want to diversify. We do want to challenge ourselves and find something that we would be excited about. And so my week looks like anybody else’s week, except I’m getting tons of texts from our district manager, our marketing manager. The good thing is when you hire really strong people, the things that we talked about are not functional. Like, oh my god, how do we do this? But rather here’s what we need to do or no, here’s what we need to do, yes or no. So that’s sort of how we engage on a daily basis, which we do engage on a daily basis. We meet on Friday or Saturday or Sunday to just get a state of the union on the business. Any big initiatives that we’re working on, whether it’s marketing, whether it’s opening up a new store, whether it’s financing, we go out and have those conversations.
But the other side of that is Donatos home office is extremely, extremely engaged for a brand that has over 400 locations and 22 states, it certainly doesn’t feel that way. When we reach out to them, when we reach out to them, it’s like they’re in our franchise, they’re our partners, they’re very accessible. We text, we call, we set up meetings very quickly. And I think one thing that when we were looking at getting into Donatos was how much support will we get from the home office? How much support and engagement will we get or will we just be left out for ourselves a little bit? And so we’ve been very lucky with corporate being very engaged with us.
The Wolf of Franchises:
And so it sounds like, is that a function of just how your partners divvied up the responsibilities where you’re the one getting attacked from a district manager versus someone else?
Shwetabh Gautam:
No, actually I think we’ve all gravitated towards things that we’re good at. I think some of us are a lot more into the finances and making sure payroll gets done and things like that. And then some folks are better at the p and l management and the strategy and how do we actually operate the stores. And then we have folks that are just really good at the administrative side of they understand hr, they run private practices, they understand how to manage people. And so we sort of gravitated to our own functions that we at the highest level manage ourselves.
The Wolf of Franchises:
And so a big fear people from what I’ve gathered have is that they do this, they keep their full-time job, but they’re like semi passively owning and operating franchises. They don’t want to get the call from that. Someone saying, oh, like the cashier. Or maybe I don’t want to, every team member’s important, but a lower level employee, let’s just call it maybe less reliable, they call out and boom, now you’re hundreds of miles away cause it’s semi passively operating it and you’re in the middle of your day job and now you have to. It sounds like that’s not on you though, that you kind of have delegated those more store level emergencies, let’s call ’em and fires to managers.
Shwetabh Gautam:
That’s correct, yeah. Like I said, these people have done it for a very, very long time. I’m sure there’s not a fire that they haven’t seen or that they haven’t had to deal with. And that goes back to one of my initial points is making sure that the folks that you have running the operation are experienced, are quick decision makers and are folks that you trust with anything. This is for us and for I’m sure most people I’ve heard on your show and otherwise this is the largest investment they make in their lives and to not have complete and utter trust in folks running that operation for you. You don’t want to be dead on arrival with something like that.
The Wolf of Franchises:
And something I’ve been getting a lot recently too is, for instance, recent podcast guests, one person owns 20 wing stops, another person owns 30 my disk, the oil change franchise. And people are like, oh, that’s cool, but is it fun to own that much? So for you, I mean it’s a little different, right? Because those folks were more either just with another partner or on their own, but is it fun or is it purely more of a capitalistic cash flow play where you’re fine with the work it takes?
Shwetabh Gautam:
No, because we have our eyes on growing, we make it fun. It has to be fun because otherwise we aren’t engaged. We have too much other stuff going on. For it to actually not be fun, it can’t be a boring task that you just sort of go by your day and check the box on. It has to be something that it’s like, what can we do better? How can we grow this business? How can we make our people better? How can we go out and actually make sure that we’re doing community events? How can we get in with the soccer leagues and the basketball league? That is fun. It’s this weird business development almost that you’re going out and just finding opportunities that help you grow the brand. So we all take great pride in it. We have a lot of fun with it. We make sure that we do events for employees and for the community that make sure they have fun with it. So no, we definitely we’re responsible in how we manage the business, but we certainly want to make sure that we are staff don out as corporate. Everybody’s having fun and remains excited because if people are excited, there’s that momentum and with that momentum comes growth.
The Wolf of Franchises:
I love the way you talk about, because I feel like you have this local, you really have a local small business owner mindset. But it’s really interesting to me cause there’s a dichotomy in your life where you’re in at a, I forget the name of the FinTech company, but you work in a big FinTech company. I mean your Twitter profile pictures like an N F T, I’m pretty sure. So you kind of have this web three vibe, but yet you’re trying to do community events for your Donatos pizza, which is awesome. So are you just a super curious person where both the FinTech world is super fascinating to you, but you also get a lot out of this business ownership?
Shwetabh Gautam:
I think it’s a couple pieces. One is I feel like everybody these days, but I love food. I love going out and trying new food. I’m eating, I should be like 900 pounds right now. But I love eating. I love trying out new things. I think that’s the first part of it is just everybody loves food, everybody loves pizza. You said it earlier, right over Covid, there was this almost hilarious article about how pizza’s sales are going through the roof and salad sales are going down. So it’s like, I love pizza, people love pizza. And so that’s sort of this funny almost principle on which I operate this. The second part of it is really the idea of the brand. I think something that stirs up nostalgia is always fun for people. We’re seeing so many trends come back. We’re seeing so many movies being remade, people like nostalgia.
I think our generation and otherwise love nostalgia and Donatos is absolutely drives that home. And I think the last piece of it that for me is so interesting in this dichotomy of web three and FinTech and modern stuff versus your local pizza shops is strangely the same functional things are required to run either side of that coin successfully. You need to have a solid foundation, you need to get the small things you need to set yourself up for success. You need to set up your team for success. And whether you’re at a FinTech, whether you’re at a corporate job, whether you are at a pizza shop, those basic principles apply. And I think that’s sort of why it’s so interesting to me is that everything that I do in my day job applies to the pizza shops and frankly, I’ve learned things from the pizza shops that I’m applying in my day job. And so it’s just this really, really fun balance and mixture of content between the two.
The Wolf of Franchises:
It’s fascinating. You’re definitely the first person I’ve had on the show who’s in the Web three world but also a franchisee, which I just think it’s cool. And I hear you too on the nostalgia actually. Cause I think I’m pretty sure Pizza Hut recently, they either reverted their logo back to the one in the nineties or they have some, I don’t pay as much attention as they should probably to the big franchises cause I’m so focused on all these new ones that are out there. But yeah, I think they have a Pizza Hut classic kind of store where they just remodel it off to the ones in the nineties because I think of that nostalgia effect that you’re talking about. So
Shwetabh Gautam:
Absolutely, and that’s cross industries, right? You look at the sports leagues, right? The the nba, everybody has their retro days or their retro jerseys, and same thing applies to restaurants. People grew up with the brand and they still like it. You look at movies, Marvel, these comics have been around since the thirties and now they’re billion dollar businesses because people are like, I love comics, I love these movies, I love these characters, I love the stories. And it’s massive business now. So
The Wolf of Franchises:
True. I don’t know, I mean there’s way too many spidermans that have been released, but you, you’re dead right with that. Well, I want to know too, from your just experience with Donatos, are you more informed of, say, just looking at a Pizza Hut? I don’t know, even looking at maybe the number of cars in the parking lot or comparing yourself versus a Domino’s, which is obviously very delivery intensive and they drive a ton of orders through their app. Do you have, now, I’d be curious for your thoughts on the Domino’s Pizza huts, little Caesars of the world, and what kind of works for a pizza franchise, whether it’s like it, does Donatos have sit down areas or is it more takeout? Just generally, what are your thoughts there?
Shwetabh Gautam:
Yeah, that’s a really, really great question and something that I think about often. Donatos sits in this really interesting place in between your local mom and Pops Pizza Shop and Pizza Hut and Dominoes and Papa Johns and all of those we’re square in the middle of that. And I think that’s a really good thing because it allows us to be that local brand, but with all the amenities and all the infrastructure of a big brand. So to answer your question, we do have Dine-in areas. We do have event rooms at some of our locations. You can go in and engage at the location. Most of our locations have drive-through as well. There’s a huge concerted effort on the digital side. There’s a loyalty program. There is an app where you can go in and customize your pizza and order through delivery. There is engagement obviously with the Grubhubs and the door dashes of the world.
So we have this really cool, we have a balance sheet that allows us to be fun and modern and cool, but we have this place in the pizza spectrum that allows us to both say, Hey, for Sunday night football or Monday night football, we don’t have to order Pizza Hut, we can order Donatos or for dinner. Maybe you don’t want to go to your local mom and pop shop on a Thursday night, you can go order, right? So we sit there at this really fun spot that allows us to play on both sides of the field.
The Wolf of Franchises:
I kind of see that too. I’m even just looking at the website right now. It does sort of have this, a local field to it. And maybe it’s for me because I grew up in the Northeast and candidly I don’t think I’ve ever seen it.
Shwetabh Gautam:
Yeah, we’re working on it.
The Wolf of Franchises:
Okay. Yeah, I mean perhaps they have a slower intentional growth approach where they don’t want to just expand across states before they build somewhere. But
Shwetabh Gautam:
Well, Donatos has a really, really cool strategy in which we’ve partnered with Red Robin, which I recently found out was a publicly traded company. But if you go in and look at Red Robin’s earnings report, the first two or three things that they mentioned are their partnership with Donatos, how Donatos is in over 200 of their stores where they serve Donatos Pizza. So that’s a huge part of Donatos strategy is to leverage the supply chain infrastructure to leverage the real estate infrastructure. When you enter a new market, Donatos could enter it via Red Robin and people could start saying, wow, red Robin serves this really amazing pizza. And that sort of could set the precedent to go in and open up a standalone. So again, this really, really just interesting infrastructure of how the company has been set up.
The Wolf of Franchises:
That’s really interesting. So wait, is it just a co-branded location or is it Red Robin serving pizza, but it actually says, Hey, this is Donatos Pizza
Shwetabh Gautam:
Dona. Yeah, it’s a, it’s that, exactly.
The Wolf of Franchises:
Wow, that’s very interesting.
Shwetabh Gautam:
Yep. So you get to enjoy the luxury of being in this middle ground between mom and pop shop versus national chain, but you can leverage the infrastructure of a national chain while still serving your local communities.
The Wolf of Franchises:
Do you know what, let’s say in New Jersey, that’s where I’m from. I don’t think there’s Donatos there, but let’s say they’re serving pizza at a Red Robin there and then a franchisee opens in Jersey. Does the Red Robin deal stop as to protect a franchisee’s revenue, or is it just, it’s a brand awareness play and Red Robin kind of has the ability to sell it for as long as they want?
Shwetabh Gautam:
It’s it’s a brand awareness play and I think it’s a trade area question. You wouldn’t open up the donatos across the street from the Red Robin. In our market that we currently serve, Cleveland, there are locations that are Red Robin locations. They’re just in different trade areas. So again, very symbiotic relationship. We can coexist, we do coexist. So yeah, I think it’s a really interesting strategy.
The Wolf of Franchises:
That’s fascinating. I’m glad you brought that up. And that Red Robin is public cause I didn’t know that either.
Shwetabh Gautam:
I recently learned that myself.
The Wolf of Franchises:
Cool man. Well I guess last question here to wrap up. I mean we’ve talked a little bit about it, but what’s the overall goal? Just acquire more? I mean, do you guys have a specific time horizon that you’re looking to hold onto these things for and would you ever entertain other brands down the road?
Shwetabh Gautam:
Yeah, I think we certainly want to expand our current share of Donatos. We have five soon to be eight. We want to keep on growing. We want to expand geographically, we want to expand obviously the number of stores as far as the time horizon. We want to be as aggressive as makes sense. We want to see that in the next 12 to 18 months. We are an established big brand within the Donatos family. And so means if we want to reach that goal in 12 to 18 months, we’re working very hard right now to make sure that that happens. And then after that, how long do we want to do it for? It’s a good question. I think I look at some of the franchisors we talk to and I said, Hey, maybe one day if I just want to run off to the beach or go on a long vacation, I look at them, see when they’re doing it in their careers. Look, if we do this for 25, 30 years, I would consider that a massive success if we do it for five to 10 years. And we’ve ran really successful shops and we feel that we’ve served our employees, our staff, our communities, and feel successful in having done so. That would be considered a huge win in my mind as well.
The Wolf of Franchises:
Definitely. Yeah, I completely agree. That’s awesome, man. I’m looking forward to watching it and I’m glad you came on the show. Is there anywhere online where people can follow you along and watch your journey?
Shwetabh Gautam:
Yeah, absolutely. So we recently started up our Instagram account for our donatos market. It’s at Donatos Cleveland, and if you want to follow me on Twitter, it’s not super exciting just yet, but it’s at the real shwe tab, which is funny because there’s not many other Shwe tabs, but
The Wolf of Franchises:
Yeah, well, we got the real one. All right. Cool, man. Yeah, I’ll plug those in the show notes so anyone can listen along or follow him along on Instagram or Twitter, but it was great to have you, man. We’ll talk soon. Okay,
Shwetabh Gautam:
Awesome. Appreciate your time.
The Wolf of Franchises:
Thanks for listening to Franchise Empires. We’re coming to you soon with actionable insights to take the next step on your franchise journey. So make sure to subscribe on Apple, Spotify, Google, or wherever you listen.