S1 E1: Why Catering Is Your Next Best Franchise With Nick Panos, Mellow Mushroom
It’s easier to sell 100 slices of pizza to one customer than one slice to 100 customers. This valuable lesson is just one element of Nick Panos’ highly successful franchise playbook.
As Vice-President of Panos Restaurant Group, one of the company’s main focus points is operating its highly successful Mellow Mushroom restaurant chain.
And if there’s one valuable lesson Nick is keen to share, it’s that catering is a game changer. It provides your business with a b2b revenue stream that, crucially, doesn’t cut into your peak operating hours but utilizes unused capacity.
Nick joins The Wolf to talk about pseudo-recurring revenue streams you can effectively build into your restaurant business. He also shares how positioning your business as the restaurant of choice for annual conferences should be at the top of your to-do list.
You’ll learn why playing long-term games with long-term people is the key to recurring revenue. And hear how to pick a franchise brand with longevity, plus why your long-term success depends on you choosing great employees and taking care of them.
Monetizing franchises is a passion Nick shares with our sponsor FranShares, who are making it easier to build, manage and grow your franchise empire from as little as $500. Find out more at: franshares.com
Follow Nick on LinkedIn: linkedin.com/in/nicolaospanos
Check out The Wolf’s newsletter: https://workweek.com/brand/the-wolf-of-franchises/
Stay up-to-date on all things Franchise Empires by following The Wolf on Twitter: https://twitter.com/franchisewolf
Episode Transcription
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.
Today in the show we have Nick Panos, a co-owner of seven mellow mushroom restaurants in Atlanta. Mellow Mushroom is a regional franchise that has 200 locations in about 20 or so states, and is known for serving higher end specialty pizza and specialty cocktails. Nick grew up in the restaurant industry with his father who acquired the family’s very first mellow Mushroom location back in 1995. In our conversation, we get into the weeds of restaurant ownership, specifically how Nick created a six figure additional profit stream through catering. The forms of recurring revenue is built through relationships in his market, and why Nick believes that the franchise model is well worth of royalties and franchise fees he pays. I hope you enjoyed the episode set.
Narrator:
The Wolf of Franchises is the c e O 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:
Want to sit back and earn passive income each month? You can actually do this through F Shares. Invest anywhere from $500 to $500,000 and let the team at FHAs build, manage and grow your franchise portfolio. You’ll receive a check each month plus a lump sum when the portfolio sells. Go check them out today and add your name to the wait [email protected]. All right, man. So yeah, let’s just get into it. I mean, I guess the good starting point I think is Mellow Mushroom It. It’s more of a regional brand with 200 locations across,
Nick Panos:
Pretty much in the southeast is kind of the geographic center, and then it kind of spreads out from there.
The Wolf of Franchises:
If someone’s listening to this and doesn’t have any familiarity with the brand, can you just give a primer on what the concept is?
Nick Panos:
So the concept is kind of a stone baked pizza where it’s your artisanal pizza, your high end, higher end craft pizza, and you paired with higher end craft cocktails, whether that’s your actual cocktails themselves, whether that’s a higher end wine craft beer. So they’re going after the consumer, whether it’s someone like you and I who want to go out and just have a nice lunch dinner, grab a beer, grab a cocktail, or a family that wants to go out with everyone, and there’s something on the menu for each person. So it kind of caters across the spectrum in terms of what people could want and gives people what they want, if they want pizza, anything like that.
The Wolf of Franchises:
Cool. Cool. And so it’s pizza, so obviously there’s a takeout element kind of Oh yeah. Embedded into it, but I looked online, the restaurants look pretty cool
Nick Panos:
And all that. They’re all unique, one of one notes who are the same. Yeah.
The Wolf of Franchises:
Oh, interesting. Okay. All right. Well, we can dive into that a bit later. What was your first exposure to Mellow and how’d you get involved?
Nick Panos:
Going back to, I guess the mid nineties, my parents got involved kind of when Mellow was still growing. It was started in 1974 and we picked up in around 1995, I believe, and my parents came here from South Africa, and they’re looking for a business to do so. My dad is a restaurateur. My grandfather’s a restaurateur, so it’s kind of in the family blood. So he came to Atlanta and just looked with different brokers, and he found this little holding the wall pizza joint at the time, and we’re like, wait, take that part out. I don’t mean to hold the wall. They found this good pizza joint called Mel Mushroom, and the dough was what sold him. The dough is kind of the quintessential piece of the pie. Obviously if you have good dough, you have a good pizza, and that’s really what’s what hooked him.
And we’re lucky that he kind of got on that early on and he bought a duo package and then he was running two stores from the get-go, which is Oh wow. <laugh> very tough, whether you have two stores or 20 stores, it’s just the same. It’s not one. So he started off having two, so I guess we were built in multi-unit owners from the get-go. But yeah, pretty soon after that we opened up our third one and we stuck with those three for quite a while. And then around the beginning of two thousands, right early two thousands, we really ramped up and we did our fourth, fifth, and sixth one in pretty short order. We pretty much were able to grab three more locations within the Atlanta market, and we were able to kind of go from one to one to one back to back to back. So very quickly we went from three to six and Wow. Yeah, there were all builds, so there weren’t any buys. There was an old Korean barbecue place that we literally had to buy the rights of to then shut it down and build AEL mushroom.
The Wolf of Franchises:
Oh, wow.
Nick Panos:
Yeah, the location was great, which in restaurants, your location’s, everything. But in order to buy this location, the guy wanted to sell us his restaurant, and we’re like, okay, well, we have to literally buy this guy’s Korean barbecue. And this was before Korean barbecue was cool. This was like, and 2002, like no one knew what it was. It was no surprise you were selling, but yeah, so we had to buy that, shut it down, convert it into a mell mushroom. That was one of them. The other, we bought the rights to kind of a really popular area in Atlanta called Sandy Springs, and that was where one of the, I think it was the second mellow mushroom ever was built, but it was tiny. It was a very small footprint, and we moved it down the street into a beautiful new building that was, I think the fifth one.
Then we did a standalone building where we just did a ground lease and built it from the ground up. So my dad was the developer, everything for it. All we did was pay the ground lease literally to rent the dirt and have to build a building, infrastructure piping, you name it, we have to build it from the ground up. Yeah. Wow. So that was the sixth one, and then we did the seventh one. Actually, the seventh one was probably besides the original two that we bought. The seventh one was the only existing mellow that we bought and took over. That was not a build, that was just a transfer of ownership, basically.
The Wolf of Franchises:
Okay. And when did you acquire that one?
Nick Panos:
That one was 20 15, 20 16, I believe.
The Wolf of Franchises:
Okay, gotcha. So you basically grew up, oh, you’re watching your father kind of <laugh>. Yeah, yeah.
Nick Panos:
I remember doing payroll with my dad. I was like, oh, wow. I was like, nobody was going with him store to story, dropping off payroll, and at the time, one of our director or the director of operations, what’s hate to the people? Be careful, this guy will be your boss one day, <laugh>. Another time. I was like, nine, 10, whatever. And then here we are.
The Wolf of Franchises:
Wow. All right. So it starts out your father does two new builds at the same time to start, right?
Nick Panos:
No, well, no, the two he bought existing.
The Wolf of Franchises:
Okay. So we started off acquiring two, then three through six are new builds and then finishes off the seventh with an acquisition. That’s
Nick Panos:
Right.
The Wolf of Franchises:
Okay. Wow. Yeah, basically it sounds like 1995, you said, starts out with acquiring two, expands it to six locations over the next 10 years, and then it sounds like another 10 years go by and he decides to acquire another one pretty much. Wow. All right, so let’s just get into it then, man. I mean, I see the investment for ML Mushroom for a food franchise on the higher end, it’s about 1.6.
Nick Panos:
It’s pretty substantial.
The Wolf of Franchises:
Yeah, it’s about 1.6 million to 2.3 million per location according to their franchise disclosure document. And so a lot of people who hear that would probably say, who the hell can afford <laugh> a restaurant for that? Right. So do you want to just generally, how did your father, and how do you guys as a company think about financing that? Sure.
Nick Panos:
So a lot of restaurant tours, this will, a lot of new people looking at going into the restaurant space have a very limited scope of what they can do to finance it. Either they think it’s all cash or expensive debt, but a really popular program that I’m sure seasoned people know obviously is the SBA financing, right? Where the S B A will back your local bank for up to, I believe it’s like 80% of what the build is. I could be wrong on these numbers, but I think I’m just generally speaking, no.
The Wolf of Franchises:
Yeah, I think it’s 85 to 90%, potentially it’s
Nick Panos:
85 to, so I mean, you really don’t need that much equity in terms of cash. What you do need is obviously good credit and good banking relationships, so you really don’t need that much cash on hand to get it going, but the problem is, right, once you do it, you’re on the hook for it, so you better be damn sure that you’ve picked the right location to get that thing up and running.
The Wolf of Franchises:
Yeah, no, definitely. I mean, I think once you kind of understand what’s possible at financing, it really
Nick Panos:
Unlocks, it really opens up your Yeah, it really does.
The Wolf of Franchises:
Yeah. Because I mean, you just can acquire a existing locations or B built, do a new build for minimal cash down and have more cash flow coming through the next year.
Nick Panos:
And there’s a couple things I’ve seen people do, and another one that people in the space know of is seller financing, which is very popular where you’re able to, and I’m not sure if you can do stellar financing in conjunction with SBA because that’ll be the dream, right?
The Wolf of Franchises:
But exactly.
Nick Panos:
But I think a lot of people, especially if it’s a smaller restaurant or smaller franchise, stellar financing, it’s very popular because people enter the space who may not have that much credit, that much history. If you’re a 21 year old coming into the space and you’re trying to acquire a $400,000 franchise, the bank probably won’t lend you the money, but that’s not to say the seller won’t finance it for you. If you put in let’s say a hundred grand, they do seller financing of 300,000 and you slowly pay it off, and then from there you have an existing restaurant that you can use as collateral, whatever you need to then parlay into your next venture and just repeat, repeat, repeat.
The Wolf of Franchises:
Exactly. Yeah, I mean, that’s kind of the name of the game. It’s really, if you can get yourself that first location, then, especially if it’s performing well, everything just gets a lot easier.
Nick Panos:
It does. It just builds on you.
The Wolf of Franchises:
Yeah. Yeah. And I mean as you compound and grow locations, you just have more assets to leverage. So obviously you’ve got to be smart about that leverage, but that that’s kind of just the playbook you see across all industries with multi-unit franchise owners.
Nick Panos:
It all starts the same way, whether it’s food, I’m sure fitness is the same, I’m sure anything else is relatively similar because it’s not so much the actual brand, it’s the process that you do with it.
The Wolf of Franchises:
Exactly, man. It’s all about the process. And you sound like you’re pretty familiar with the financing side of things. So tell me about W what did you do before the family business before you got into it with Mellow Mushroom with your family?
Nick Panos:
Yeah, so growing up, I’ve always been interested in business, interested in entrepreneurship, but I knew growing into the family business, people wouldn’t necessarily take you serious if you go straight from school or undergrad into the family business, like, oh, he just slides right in. So I thought to myself, where can I go learn the most, kind of get paid the most to then be able to have an understanding of business and of course, <laugh> my eyes set to Wall Street specifically into m and a, right for those who know mergers and acquisitions. So my overall concept was if I can understand the high level of what drives successful businesses, I can take that, distill it and bring it back into the family business on a per unit economic basis. So that’s kind of where I went straight up undergrad, I worked for a bulge bracket bank up in New York within the consumer retail group.
And then obviously I had a specific focus in restaurants given my background. So that’s where I’ve learned all the nitty gritty. I was very privy to how dealers were underwritten and the hundreds of millions of dollar range. So I figured it’s probably similar to the smaller units. So seeing all the ebitda, which fellows who don’t know your cash flow, a proxy for cash flow I was able to see detailed franchise groups, what they do, how they do it, how they build, what’s considered attractive, what’s not considered attractive. So I got a really good understanding of your base fundamentals, and then I was able to pivot and come to Atlanta within finance, still working in the restaurant m and a space where I got to be a lot closer to home seeing the Atlanta markets. And eventually I moved on back into the family business and I took all that, distilled it, and hopefully I’ve been a good ad for the family business thus far.
The Wolf of Franchises:
Yeah, yeah, no, definitely. I mean, I love that. I think just earning your stripes, and I’ve seen this with some owner groups that I worked for in a past life where just coming in with some pedigree from a different company does speak volumes to it
Nick Panos:
Makes all the difference. Yeah, it makes people realize why should they listen to you? Not so much the actual day-to-day employees, but the managers. There needs to be a reason why they should listen to you.
The Wolf of Franchises:
Yes, a hundred percent. So you went from Wall Street, right? Where I’m sure you’re up early staying in the late wearing a suit
Nick Panos:
And every day ties, suits. Yeah, dress shoes. Now I have corn meal everywhere.
The Wolf of Franchises:
So how was the transition? I got to ask going from that, and you’re learning these high level concepts, kind of doing m and a, but then you show up at Mela Mushroom, but what’s that showing up basically at a pizza restaurant from Wall Street? Great
Nick Panos:
Question. One thing I learned the hard way, <laugh> managing people, man, that’s the name of the game. It’s managing people. I came into the family business with the same mindset expectation of when I was in Wall Street, which obviously I knew it was different, but I also didn’t realize just how different it was. So one of the things I was very privy to was spreadsheets, understanding numbers, understanding reports. So I would try to make processes at first like I did on Wall Street, but for the family of business. And then you realize your managers sometimes don’t wake up on time, they don’t show up. So you’re like, okay, if you have all these great processes, but you have the wrong people in place, it all means nothing. So very quickly, I kind of learned you need boots on the ground, you need to understand your people, build from that foundation, and then you’re able to take the process and build from that. You can’t just come in guns blazing, which I learned the hard way where it just doesn’t work that way.
The Wolf of Franchises:
Definitely. So what is something that you’ve gathered over the past few years now to establish a really good base of managers for your system?
Nick Panos:
So it’s going to sound very cliched, but it’s one of those things, people say it all the time because it’s true, you need to lead by example. So in the restaurant business, which I can talk from personally, obviously not other franchises, but if you can’t get in the kitchen and create the food and show them how to create the food, they’ll never take you seriously. There are times where you have to send people home, you have to fire them. And if you can’t step in and say, you know what? I can do your job out of here, they’ll never listen to you. So you’ve got to establish some power base, whether it’s your expert in the food. For me, I drove a lot of my power base for my catering knowledge, and some people have a very strong front of ours presence. So for me, I was able to tackle all three. But in restaurants specifically, you have to be able to create the food. If you don’t, there’s just no one’s going to listen to.
The Wolf of Franchises:
Interesting. Yeah, I mean I could see that. And so when you first step in, did you just basically just go through a full loan training? Yeah, bootcamp exactly where you in every role?
Nick Panos:
Right. So I was lucky because obviously grew up in the family of business, I had a good sense of how things operated. So I had a very good foundational level but a lot of franchise groups, and I’m very lucky with Mela Mush, and they do an excellent job of training new franchisees and managers. I got to do, I think it was a three week, it was either a two or three week bootcamp with them at their corporate office starting from the very bottom and working your way up. Oh, nice. I had some former knowledge, but I went through this intense training bootcamp where I got brought right up to speed. So I had this crash course, and then from there I spent a few months after that kind of starting in a store, running a store, then kind of overseeing the actual aspects like scheduling, food, ordering, how to make the food, learning the nitty gritty, because at the end of the day, and a franchise, if you can’t run a store, where’s your money going to go?
The Wolf of Franchises:
That makes sense too that you kind of go through that training program and Mellow Mushroom’s offices, their corporate offices in Atlanta.
Nick Panos:
That’s right. Yeah. So I was very lucky I didn’t have to fly anywhere. I drive, just woke up and drove <laugh> down the
The Wolf of Franchises:
Road Clutch.
Nick Panos:
But I’ve got people who fly in from all over, new franchisees especially, but also new managers are given the option of attending these as well. So that’s great, a great training. And that’s one of the things I’m sure we’ll touch on later, but when you do franchises, you have to be very, very particular and careful who you pick because that whole entire brand equity will make or break you.
The Wolf of Franchises:
Oh, definitely. I mean, that’s tough, right? Cause there’s so many franchises out there, it’s very tough, right? There’s 4,000 plus franchises, like 300 new ones or 300 to three 50 new ones every year.
Nick Panos:
I saw what you put out last week about the theor cutting off, but the one from Israel that absconded with the money.
The Wolf of Franchises:
Oh, yeah, burger Rim. That was a mess. That’s wild. I mean, that is a mess still. But yeah, I mean, you got to be careful, right? Because it’s an investment and it is a regulated investment. Franchises are in the United States, it’s regulated by the Federal Trade Commission, but oh,
Nick Panos:
Is that right? I didn’t even know that.
The Wolf of Franchises:
Yeah. But I mean, bad shit still goes down. So that’s part of my inspiration for the account is just bring a level of transparency to brands and hold them accountable. And it’s overwhelming. And when things are overwhelming in the beginning, if you’re working a corporate job and you want to be an entrepreneur and you’re looking at franchises, yeah, it’s just tough to navigate. And when you’re not sure of yourself and you’re feeling overwhelmed, it can lead to poor decision making and you’re just vulnerable to folks like that Burger Rim founder who basically stole a bunch of money via franchise fees. So yeah be careful out there, folks. Yeah,
Nick Panos:
No, for real. It’s a rough game.
The Wolf of Franchises:
So you mentioned something earlier about your catering experience so far with Mellow, and I know you know mentioned a concept to me once before about unused capacity. So do you want to just explain that concept and how it’s impacted what you’ve been doing at Mellow?
Nick Panos:
There’s a concept, I think it’s in a direct marketing way back when it was either Dan Kennedy or Jay Abrams who mentioned the concept of unused capacity. And that’s basically what do you have available to you? Or when I say you, you’re a business that you aren’t using or aren’t taking full advantage of that you could squeeze out some extra profits. And in the restaurant business, there’s a lot of downtime. Really, your prime hours are your dinner hours for majority of it, and also your lunch as well. But that leaves majority of the day open for something to be used from. And I kind of by mistake, really stumbled into catering very early on when I came back to the family business, and it’s been an absolute game changer for us. It’s one of those things where your margins are just incredible because you don’t have any extra overhead.
You’re already paying the rent, you’re already paying your general manager salaries, you’re only additional is your food cost and whatever labor costs you incur. And of course your franchise fees that go on the sales. But if you do some quick mass, man, it’s like a 50% profit margin. And the best part about it is you pretty much can run those sales in the off times, which is where I learned that unused capacity. So for us, we did all, not all, but a lot of your catering is done for the lunchtime business, and a lot of it has to be out of your door by 11 30, 11 45, because you have to transport to the actual client’s site where they’re eating by 12, 12 30. So you’re able to use a lot of that morning time to make a good amount of money when you would previously just do nothing with it. So you’re able to really squeeze out some nice profit on that unused capacity.
The Wolf of Franchises:
Interesting. Yeah. So are your stores open while you’re prepping for your catering clients? Oh, well, yeah. So what are the standard operating hours for a mellow mushroom?
Nick Panos:
The retail hours when guests can come in and outs are usually from 11 to 9 30, 10 o’clock. Right, okay. That’s your defined hours of operation. We have most of our managers come in around 9, 9 30 to get the store set up for the day, and that’s the time when typically, if I have a big order, depending on the size of it and the time I need to go out, I’ll come in anytime at 7, 7 30 to make sure everything’s up and running. Wow. Coming from Atlanta, we’ve had quite a few high profile clients who just over time, through reputation, through building trust with them, they’ve given us some very nice size orders for us. We have Home Depot, the headquarters of Home Depot off the
The Wolf of Franchises:
Road from us. Yeah, I was going to say Home Depot’s headquartered there.
Nick Panos:
I don’t even know how we did this. We had around a $5,000 lunch order for them on Valentine’s Day of 2020. And it was incredible because they’re like, oh yeah, we have to feed our department. And of course, I’ve worked with this lady so many times, and I know kind of the rough size of it, but what I didn’t know was that they had the entirety of the department to feed, and they came to Mel Mushroom to have it done. So I didn’t even know what time I got there. I probably got there seven o’clock to get everything up and running. I mean, we had multiple waves because there was so much food to get out to them.
The Wolf of Franchises:
Wow. Well, I love that because I mean, you’re in the restaurant game, which is naturally of retail. You’re selling to retail consumers, but the catering side, you’re, it’s b2b transforming it. Yeah, it’s b2b,
Nick Panos:
Which is where you really want to play.
The Wolf of Franchises:
Yeah, I mean, like most B2B products, I mean the people purchasing it aren’t actually dipping into their own personal bank account, which I’ve just seen. People are much more happier to spend their money when it’s not theirs.
Nick Panos:
The whole thing with that is if you can make their life easier, it’s game over. They don’t care what you sell.
The Wolf of Franchises:
Yeah, no, definitely. There’s a good, something, someone quoted this on Twitter, it was direct to consumer, is you have to prove through the marketing that the buyer, your product will make them happy. And then, yeah, B2B is, you have to make sure that the purchaser won’t feel any regret, meaning no, that they’re higher up. Hundred percent can’t come cracking down on them and say, why did you agree to purchase this? Yeah, exactly. As long as you’re good with that, then you’re in.
Nick Panos:
And what’s crazy in the catering, spaceman, I’ll tell you this people just really, really don’t know what they’re doing. There’s people who will show up late, not set up correctly. So few things you have to do to stand out and people just throw it all away. I mean, I’ve had people tell me you won’t, like, I’m going to pull up some notes here that I had from one of my catering clients when I basically had a interview and I’m like, look, so what are people doing? What are they doing wrong? And she gave me a whole host of stuff.
The Wolf of Franchises:
So you just asked basically someone at a company who orders lunch a lot. Yeah. And said, what do the restaurants mess up? <laugh> pretty, and pretty much what should they do? Well,
Nick Panos:
Yeah, I had a really good contact to I H G, which is a pretty big hotel group. I’m not sure if they’re headquartered in Atlanta. I think they are, but they certainly have a huge presence here. And one of the things that she said when I say, what does it take to go above and beyond for her? She goes, it sounds crazy, but just show up with multiple people in the sense that don’t have one person running to and from the car trying set it up. You want to be efficient, right? Yeah. So that’s the first one. Two, set the food up, right? Don’t just drop it off and say, okay, cool, I’m going. I’m like, see you later. That’s one of ’em. Fast response, meaning if they email you or call you, you’re quick to get it back to them. Another one is good at communication, which basically is if they have any type of dietary preference, any type of restriction, just make sure you listen to them and you’re able to tell ’em, yes, we can accommodate, or no, don’t just ignore the question. And then the last one is, it sounds even worse, actually. Happy to be there and set up. Just show up being grumpy, have some type of happiness. Just even if you have to fake the smile, it goes a long way because these people are stressed out all day admins where they basically have to put out fires and make sure things don’t go bad. And if you show up happy, it rubs off on them
The Wolf of Franchises:
For sure. Now, and even just the smoother the catering process goes, it just takes, I would imagine, a lot of stress off them. Because if the caterers aren’t doing a good job, in a way, I would guess the admin feels like that’s reflecting on them because they’re the ones who chose them
Nick Panos:
Because they’re the ones who choose the lunch. And the obvious one will be, why did you choose them?
The Wolf of Franchises:
Yeah. Yeah. A lot of what you said to just sounds from someone who used to work in a customer service role, easier said than done, but a lot of what you just said is kind of customer service 1 0 1. Just show up on time, set it up for them. Don’t just leave them hanging and give ’em a smile.
Nick Panos:
When I started really figuring out this catering stuff, I was able to see a lot of parallels to my time. It’s going to be crazy, but by time on Wall Street with this, where in the sense of, for me, the same thing as getting a deal done is getting a large client, because it’s all relationship driven. If you do one deal well on Wall Street, they will follow you around whichever bank you go to. And the same way here, if you do really well for them, that person, if they go from Home Depot to Delta or to Coca-Cola, chances are they’ll go with you and they’ll take you, say, Hey, this person helped me in this role. Now I’m going over here. Let me use something again. Cause I know they’ll do a great job.
The Wolf of Franchises:
It’s really all about the trust. I mean, if they know that you’re going to do a good job, mean it’s why wouldn’t you keep going back to them?
Nick Panos:
And what’s crazy if you’re a restaurant owner, and for me I know we spoke earlier about this example, but is it easier to sell a hundred pizzas to a hundred people or to sell one person a hundred pizzas? And if you have that one person who has to order every week or every month, you want to be damn sure you’re on that short list because it’s just as close as you can. It’s recurring revenue for restaurants.
The Wolf of Franchises:
That’s what I was thinking, just that those repeat customers and Right. I mean, those are bulk orders. Oh yeah. It’s not your ever those was your
Nick Panos:
Classic.
The Wolf of Franchises:
Well, yeah, I mean, I’m a big, I love pizza, and I’m based in Manhattan, so I eat quite a bit of a good amount. And there’s one restaurant nearby that every Friday night I’m walking in there. But yeah, clockwork, if you’re a corporate client and every third week of the month you’re ordering thousands of dollars worth of food, that’s a lot better situation for you as an owner than me. A hundred
Nick Panos:
Percent. Yeah. And what’s what, what’s crazy is I love marketing, understanding people, understanding all types of advertising. And one of the forms of marketing that I really was drawn to over the years, just for personal enjoyment, was direct marketing. And I kind of found a way to blend direct marketing into catering. And I’ve had some pretty crazy results from it because hardly anyone I know is doing it. The only person I know who’s doing it, it’s this guy called Michael Atia, who’s really, really successful at it, but he’s the only one I’ve ever found in the space who does something similar to it. And it’s just taking something that you found that works in one industry, applying it to your industry, and getting some crazy results from it.
The Wolf of Franchises:
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Nick Panos:
Exactly. Because you can take your catering, I think I put a very short tweet out there the other day where if you’re doing, let’s say a million dollars in a restaurant sales and you’re taking home 10% profit, which is in line with what restaurants do, depending if you run an additional 200,000 in catering, you could take home another a hundred thousand from that. So if you’re doing 1.2 million, you’re doubling your net income strictly based off of that revenue stream. So if you scale it up, you could be making substantially more from your, it’s almost like your restaurant sales will pay for the overhead and your profits taken from your catering sales.
The Wolf of Franchises:
Yeah, it’s a much higher margin service. I can definitely see that.
Nick Panos:
And there’s no risk of having to have another lease, having to hire another manager. All that expense is capped already.
The Wolf of Franchises:
Yeah, no, I mean, honestly, it’s a great strategy.
Nick Panos:
People just don’t understand. And that’s one of the things when people talk about franchising, I really, really tell them, look, if you’re going to go into, or the people who are looking at the space, I would tell them, go into something where you can either do, if it’s restaurants, do catering. I mean, I don’t know what it’ll be if it’s fitness, but find a way to get that B2B segment going, because that’ll be where all your profit is.
The Wolf of Franchises:
Oh, definitely. I mean, even, right, if we want to talk fitness, I don’t know that this could just be naive of me, but maybe you reach out to companies and say, you’ll give some form of a discount to all their employees if they offer, and it’s a win-win, right? The company gets to give a benefit to their employees. You get potentially a high volume of customers from that one client.
Nick Panos:
I think fitness does it that, I dunno if you guys have LA Fitness stuff there, but it’s just a very, very big
The Wolf of Franchises:
Yeah, I’ve seen the concept.
Nick Panos:
So I think they do corporate memberships, and I think it’s the same thing, right? If they can sell the owner of a company on them and they say, Hey, we’re going to pay for all you guys to have memberships, they look like a hero because you’re providing everyone to great benefits. And that person now gets tens or hundreds of new members dealing with one person, which is the same thing as me dealing with one person to sell a hundred pizzas. He’s dealing with one person to sell a hundred memberships.
The Wolf of Franchises:
Exactly. And now that we’re saying this, I worked for a franchise in the trades in the H V A C world a while back, and we had a deal with their local retrofit, which is a franchise, and it was like a discounted membership if we signed that’s right up to one of their gyms. So it’s definitely possible, and I love that. I think it’s a great strategy. Anything where that requires this, the same effort as basically all your other, you’re scaling revenue drivers
Nick Panos:
With leverage. Yeah,
The Wolf of Franchises:
Yeah, exactly. I mean, just the ceiling on it is way higher. And
Nick Panos:
Yeah, I mean, we’re certainly not reinventing the wheel here. We’re just taking what’s working and doing with it.
The Wolf of Franchises:
Yeah. And so how do you think about this with, you know, got seven locations? Yeah. Are you running the catering out of one location, or is each restaurant its own business per se?
Nick Panos:
So that’s a great question. The way I like to run it is, so we have, our seven restaurants are all within the Atlanta market, and within that we have five of ’em that are pretty close to each other. So I run majority of the catering out of one of the restaurants that that’s the largest footprint because some of our stores are smaller, some are bigger. And again, the concept of unused capacity and one of our restaurants that’s quite large, we have a lot of space. So why not centralize all your catering from one place that you know can effectively run it all out? If you have the space where if you happen to get busy for lunch, you still have the space to run your catering. And I know not every restaurant or every group has that benefit, but if you do, why not take advantage of it? So we run everything out of one for the primary letter market and the ones that are a little bit further away, we let them run their own. But to the extent I can control it, I like to have my control on it. <laugh>,
The Wolf of Franchises:
Definitely. No, I mean, and it makes sense what you said, right? If you have the space, yeah, why not? It centralize
Nick Panos:
It, and especially you can build a team at that store rather than having exactly one person running it at seven stores, have a team of four at one, which is so much more effective than one person at each store trying to run that because they have to organize the delivery, they have to organize everything. Verse having a team. I mean, at our prime, before Covid happened, it was myself at the head of the group, and then I had two cooks, and then two front of two or three, it was a group of four or five people, and it was just smooth running. And we were able to leverage all that because if you had each person at an individual store, the synergies will just not be there. The synergies themselves play a huge role because if you have, let’s say an order, if you have four orders that need to go between 11 and 11 30, 1 person could never make that happen. But if you have a group of four, you can easily make it happen. You’re spending the same labor dollars, you’re just be being able to get more revenue for those labor dollars spent.
The Wolf of Franchises:
Definitely. Definitely. No, I mean, think centralizing, it sounds like the way to go just operationally much less complex and let those employees specialize in the specific nuances to catering versus just all the other operations of a regular restaurant. Yeah, that’s
Nick Panos:
Right.
The Wolf of Franchises:
And so we’ve talked a lot about the service side and strategy, but how do you think about product? The food has to be good to keep getting the orders. I mean,
Nick Panos:
Without that then <laugh>, you guys no business.
The Wolf of Franchises:
Yeah, so I mean, I assume you guys believe in and still do a lot in the product, right?
Nick Panos:
Yeah. That’s your heart and soul of everything. If you have a inferior customer service, but a great product, people will come back begrudgingly because you have a great product. But if you have excellent customer service and a poor product, people will come to you that first time, have a great experience, and the food comes and they’re like, okay, well we’re not coming back here because I mean, why would you, customer experience is important, but if your food quality, especially if you’re a little bit pricier, is not there, there’s so many people out there that they can go to, so you won’t get a second chance.
The Wolf of Franchises:
Yeah, no, definitely. And I’m looking at the menu right now. Yeah, looks like a lot of specialty pizzas, a
Nick Panos:
Lot of specialty pizzas, a lot of specialty cocktails. So the whole name of the game is if you could combine some type of distinct product you have. And for us well, just in society, pizza is kind of considered a commodity. Everyone, yes, everyone sells it. So you have to find a way. What do you do to specialize your pizza? And obviously in New York you have New York sell pizza bit. So going back to pizza being a commodity, you have the New York pizza, which is different. My personal favorite besides mellow is the Neopolitan style pizza. Love that pizza. But it all comes down to the, which is the only thing that matters for pizza. What is your dough? So for us, we take pride in our dough. We have a special blend we use for our marinara sauce, which we call the rat sauce. Everything is very built on what your pizza is, and if you can deliver that, people will come back time and time again.
The Wolf of Franchises:
I imagine we can’t get into the details o of what’s going into that dough, so I won’t ask the question, but it sounds like y you guys take a lot of pride in it, which is good to see.
Nick Panos:
That’s one of those things where that’s just what differentiates you as a franchisee or franchisor, I should say.
The Wolf of Franchises:
Yeah, no, a hundred percent. Do you see challenges from location to location, or has it been pretty much a standard operation across all your seven locations versus, I guess what I’m a better form of asking the question is, does each location in your system present different challenges, or is it all pretty much cookie cutter the same?
Nick Panos:
It very much depends on your demographic. We have a downtown location that just this past weekend got absolutely slammed because there was a convention in town. And on a normal weekend they do well. But when there’s conventions, and especially if you’re not aware of what’s happening in your area, you could get hit by surprise, no other. So the short answer is everyone faces the same issues, whether it’s labor, whether it’s your food quality, but depending on location, you do have some nuanced stuff that happen. So our downtown location’s a prime example of you have to be on top of your market because things can come up. You have your recurring conventions happen every year. And then you also have things that pop up because people want to try it out. If you don’t know what’s happening in your market, it could be a Tuesday morning and you think, okay, it’s going to be an easy lunch, but there could be a convention for people on that Tuesday morning that have never happened before, and you could get obliterated if you have no idea. So yeah, it very much is market dependent. Wow.
The Wolf of Franchises:
So that location, the downtown that’s in Atlanta proper,
Nick Panos:
Correct? Yeah. Yep, yep, yep.
The Wolf of Franchises:
Wow. Okay. All right. So that’s some prime real estate then. I could see that. And I mean, it’s a good problem to have all, and
Nick Panos:
It’s a good problem to have
The Wolf of Franchises:
You all of a sudden have a hundred customers show up. But I get why, again, I’ve been in customer service. It’s stressful when you have lines at your store and it can be you, maybe you’re probably understaffed. Yeah, exactly.
Nick Panos:
I mean, you could be closing at 9 45, you’re getting ready for to close, and you have two buses pull in because they just finished some baseball tournament and you have a hundred people about to come out and you’ve already powered down your oven. Yeah, no, it can be,
The Wolf of Franchises:
Wow. Yeah, for those, because this won’t be on video, my jaw is dropping. You were saying that. What do you, I mean, Nick, what do you do in that situation? Do you turn ’em away? Do you guys
Nick Panos:
<laugh>? No. Oh, so you surely don’t turn ’em away. Well, the easiest way is just to tell ’em, Hey guys, we can serve you. I mean, if you can, if you’ve sent people home and you actually can’t, I highly advise against trying to run the show on your own. But to the extent you really want to get them, because if they’re coming for something, chances are the next year they’re going to come again and again and again. Yeah. And you have that, have a few of those sprinkled throughout the year. That could be pretty substantial revenue because they then tell people, oh, after the, let’s say it was a baseball tournament again, after they finished, you could say, one of the only places open is Mel Mushroom. We went last year and it was awesome. Let’s go again. And now instead of two buses, you have six buses coming in.
The Wolf of Franchises:
Yeah, no, definitely. You
Nick Panos:
Have to always think in terms of e e, every customer you turn away is not a lost sale. It’s a lot of lost sales because it’s not just them coming back, but it’s them telling everyone else to come back.
The Wolf of Franchises:
Yeah, yeah. No, I mean, I like it. You’re playing the long game and you very much recurring revenue’s, obviously very, it’s a desirable, it’s a buzzword, but it, it’s desirable. Everyone wants it Between the catering and even what you just said with the conferences, I mean, it’s not signing anyone up on that’s making a monthly payment or an annual payment, so to speak. But you know, do have these built in recurring revenue streams through relationships.
Nick Panos:
You certainly do because you have people who come back, as we said before, for the product because your product has to be strong, but also for the experience. And if you can combine both of those, you literally have a money printing machine because people want to go somewhere they enjoy. And if the food’s great, they’re going to be coming back.
The Wolf of Franchises:
It’s really interesting. Yeah,
Nick Panos:
We have a location, just to give you a quick example, that we’ve had people coming there before they were married just on dates, and now they come back with their families, their kids. It’s just become a neighborhood staple.
The Wolf of Franchises:
Wow, that’s amazing that, that’s got to be really awesome to see, especially for your dad too, who started it. And I’m sure you’re probably going to see that too, but he probably just gets to know people and has a lot of great relationships through the restaurant.
Nick Panos:
Exactly. He, it’s crazy. When he started, he was running the show, obviously being in the stores, and now he goes back and a lot of people just know him because he’s been around for so long in the same industry, in the same brand, and just knows exactly what he’s doing. He executes it like flawlessly.
The Wolf of Franchises:
That’s awesome. And I’m curious now at this point, seven restaurants, he’s obviously got you helping out. Yeah. How many hours a week would you say he, he’s working at this point? Ooh, him on Melo Mushroom or even in Mellow Mushroom, if he still is.
Nick Panos:
Definitely not in, not in the operations, but I would say he still probably pushes 40 hours a week, because even when he is not working, he’s thinking. So it’s very few times when he is not actually involved. But again, he’s getting up there, he’s turning 60 this year, so he’s starting to want to phase out a little bit. But in the heat of it, I remember as a kid I would always wonder why my parents’ date nights would be Wednesdays. I never thought twice about it. I was like, oh, that’s just normal. And I was like, okay, sure. Now I’m like, oh wait, that makes a lot of sense. Because it can’t be a Friday, it can’t be Saturday. Cause that’s when all your business happens. So it all adds up the Wednesday date nights. So when I was growing up, he was a lot more in the actual weeds of it, but now he’s developed a system where he’s no longer actually having to be in the weeds. He has the kind of a chairman role in the sense that he has the relationships with the banks, the relationships with the landlords, the relationships with the franchisor. So he’s running the actual relationship side of the business. And then I’m kind of stepping into running the operations. A cook calls out, an oven goes down, he’s not fixing those things. I’m the one fixing those things.
The Wolf of Franchises:
Interesting. Yeah, no and maybe a better question, because I think something that a lot of people are curious about is, okay, you can build up multiple locations, become a multi-unit owner, but are they just multiplying their work when you go from two locations to six? Do you have three times as many work as much work when you do that, or, that’s a good
Nick Panos:
Question.
The Wolf of Franchises:
And if your dad wanted to, could he cut his hours in half if he wanted to, or is it a necessity? But I know a lot of owners, they love working in their business and on their business.
Nick Panos:
There’s two types of people, I guess the people who want to be involved. My dad’s a very hands-on operator, and I don’t think that’s going to change whether he wants to or not. He just loves, he lives and breathes in. So for him, he just grew up, his dad was a restaurateur. He’s involved in the restaurants like that, so he just loves it. But in terms of the hours, you can easily scale back. And the beauty of franchise is as you get more units, you get a bigger amount of support you can then use to pay people to do the work you don’t want to do. So if you want to be fully hands off, it’s just a cost of who can I pay to run the business? Because the skillset isn’t rocket science. Can I trust someone? Do they have the necessary skills to run it?
The Wolf of Franchises:
Definitely, man. I mean, labor’s everything. And I completely agree. I’ve seen that across many industries that efficiencies just come with scale.
Nick Panos:
The biggest challenge is getting from that one unit to two, and people think, oh, it’s tough going from two to three or two to seven. It really isn’t. Because if you can master two, you can do three. If you can do three, you can do five, you can do five, you can do seven.
The Wolf of Franchises:
Yeah. Yeah. No, a hundred percent, man. I mean, I firmly believe location number one’s the hardest. Yeah. One to two is also a challenge, but it does get easier from there.
Nick Panos:
And the only thing I would say is if you have multiple locations, you have to be hands-on in the sense that if one manager goes down, you have to be damn sure it’s figure out why. Because as soon as you have two or three going down, then it presents a huge issue. So it’s not hands off entirely, but it’s keeping your pulse on everything.
The Wolf of Franchises:
Definitely. Definitely. But I just think that once you have multiple locations in your belt, that’s when really the beauty of franchising comes into full effect, where it’s rinse and repeat.
Nick Panos:
Exactly. Because if you have a director of operations who oversees your daily of everything, whether you add more stores, it’s all you have to do is if you get to a point where you have too many stores, all you’ll do is get a second director of operations. And because you have more stores, you then support that payroll and you still take home you want to take home.
The beauty of it is if you’re younger, you can run that role yourself when you have the energy, and then as you get older and you want to be more hands off, you can do that same thing and pay someone to do that while you’re still making a good amount of money. So it just depends what you want to get out of it. For me, I’m obviously young, I have a strong work ethic. I love doing this stuff. So no, it’s a no-brainer. But as you get older, your priorities change. You have a family, you have kids, you want to spend time with them. All of a sudden you don’t have that drive to want to work a hundred hours a week. You say, you know what, if I can earn X and these people can take care of it for me, I’m happy.
The Wolf of Franchises:
I think the biggest thing that people want is the optionality. That’s right. To be in a position where you can make the call like a, you’re in a position if you want to grind and work long hours, you’re getting the financial upside because
Nick Panos:
You’re the owner.
The Wolf of Franchises:
Correct. But if also on the flip side, if you don’t want to keep grinding that you can scale yourself out and you’re still making,
Nick Panos:
And
The Wolf of Franchises:
That’s the beauty, good money. And those are the situations you get yourself into as a multi donor. You can pick your path,
Nick Panos:
Right? If you want to, you can make an incredible amount of money by working crazy hard, but if you do it correct, you can make all, I mean, obviously not the same, but a very, very good amount of money by building an organization, not just, you are the business, which a lot of other companies, when you’re the owner, you have to make it happen. But franchising or really just multi-unit ownership has that optionality.
The Wolf of Franchises:
No. Yeah, it’s amazing. It’s amazing when it really comes to fruition after some years of building at the foundation. So that begs the question, what is your goal long term? Just generally? Yeah. Are you trying to expand the empire?
Nick Panos:
Of course. Always. <laugh>. Always looking to what I can do. The key is if you can find good people, there’s just no, there’s no end because you have people running it, and it’s a family business we have, and it’s a family legacy. I want to just keep continuing.
The Wolf of Franchises:
I love that. And do you see just potentially more mellow mushrooms in the future? Other food concepts, other industry concepts? Yeah,
Nick Panos:
So other industries likely not because I’ve developed such an expertise in the food industry.
The Wolf of Franchises:
Yep. Makes sense.
Nick Panos:
And one of the things I’ll tell people if they ask is what? I go into another concept or when I go into another thing that’s not franchised, hell no, I have to have a franchise because I know operations. I don’t know the first thing about what makes a brand strong. People, like, they say, oh, I can open up Nick’s pizza. Of course you could, but who’s going to come meet your pizza? Where’s the marketing? What’s the color scheme? What’s the menu? There are so many things people don’t think about that I don’t want to pay franchise fees. I happily pay franchise. Well, the businesses happily pay franchise fees.
The Wolf of Franchises:
Yeah, yeah,
Nick Panos:
Yeah. Because it’s paying for such a strong, robust backbone. I don’t know. It’s just very foolish. And altitude to save 7% to not have all the incredible resources. It seems like a very poor decision. So yeah, has to be franchise for me, has to be in the food business.
The Wolf of Franchises:
No, yeah. I mean, that’s a great soundbite. That’s a great marketing soundbite for franchises as an industry right there. Yeah. But I agree, man. I think the stigma against it is when, you know, have that franchise, the one we talked about with the founder fled to Israel and the bad Apples kind of soil, the rest of the good players in the industry. But when you do have a brand that’s bringing a lot to the table, I mean,
Nick Panos:
It’s a no brainer.
The Wolf of Franchises:
The royalties really. Yeah. I mean, it’s being penny wise and dollar foolish as I like to say.
Nick Panos:
I mean, because people will, for instance, you have people who come into Atlanta and they come to, well, I guess Atlanta’s a bad example. Cause I started here. Let’s say you’re somewhere in Colorado and you’re flying in from Atlanta, and you see a Mel mushroom and be like, oh, I know that I’m going to go there because I know it. But if there was a Nick’s pizza, you wouldn’t think twice about it. You’d be looking for something.
The Wolf of Franchises:
Yeah, no, definitely. I mean, most people are creatures of habit,
Nick Panos:
And especially going back to go back to that catering, if you have a strong brand, that sells itself to the catering people as well. Because if you can deliver a strong brand product, but you can bring that personal touch of customer service, like we said before, the person just does not want to be felt like an idiot. So you give ’em good food on time. Game mover.
The Wolf of Franchises:
Yep. Yeah, no, the brand is, it’s a source of inbound interest. Right.
Nick Panos:
Protect the brand because it’s everything.
The Wolf of Franchises:
All right, man. Well, I guess just kind of transitioning here and wrapping up, how right, I mean, we’re coming out of Covid to some extent. Every geography’s different, but just how have you and the family been dealing with the current labor market and anything you guys have learned to battle with it?
Nick Panos:
It’s been tough. It’s been very tough. The labor market, obviously since I’ve been around, it’s the worst I’ve seen, which has only been for a few short years. But I was talking to my father all the time, and he says it’s the toughest he’s seen in 20 years. Because especially when the unemployment was happening, you couldn’t get people to come in that door. You just couldn’t. The labor market a forever battle, right? Because people, you could pay 10 bucks an hour or two to wash dishes now on 12 bucks. The pizza cooks who won at 12 now won 15. So it’s constant having to fight that battle where if you’re paying someone too much, it’s not worth paying them. But at the same time, you need people. So what we found works really well. And again, it’s one of those cliche things because it works, but find the good people, find out who they are, and give them the best possible working situation.
So we have cooks who who’ve been with us and we give them one or two weeks paid vacation a year because where can they go and get paid vacation as an hourly cook? So you find those people. And another good one is if you have a franchise, we’re starting to look into this as well, include a 401k. So include the things that are intangible to people where they can’t just go somewhere else and grab that. They may be able to get more money, but they’re losing it. Especially for us. We’re a family business. My dad is actively involved in the sense that he goes around to stores and people see him, right? He’s not a hands off person. So people know, okay, Michelle comes around, Leslie come around, they see them. There’s a good sense about them. People want to work with us because they know my parents have been doing this for 20 years. I’m coming up, I’m doing it as well. So it’s not a corporate drone where it’s like, you have to do this. Do we have a board of directors we have to report to? It’s, oh, I’m going to let Michelle down. I’m going to let Nick down. You’re adding a personal element touch to it where we go above and beyond to help people, and they inadvertently never want to let us down. So that’s kind of the benefit if you have a ownership group where you’re very hands on.
The Wolf of Franchises:
Yeah, definitely. I just think some connection with the people at the top is critical. Really can align the mission from top to bottom. And without it, and I know this from being an employee, if you don’t see the owner and the person at the top, a lot of employees can kind of start whispering and you villainize because you just don’t see ’em. And that’s where you feel like you’re just the wheel working for the man. You’re just meat in the system. But
Nick Panos:
If you see a face,
The Wolf of Franchises:
Exactly, you need a face and it personalizes everything.
Nick Panos:
Everyone who’s involved in restaurants to some degree have some level of hospitality because they want to be in the restaurant business without it. So if you are the top dog or one of the top dogs and you go around, it speaks volumes because people get to meet you, get to see who you are, understand you. So there, it’s not just, oh, Nick told me to do this. Oh, I know why. Because if you don’t do this, then this one you explain to them, right? Yes. And if you explain to your managers, then they, I’m hoping will be able to explain to their staff here, here’s why we’re, it’s not just do this, why we’re doing it, but it has to come from the top down.
The Wolf of Franchises:
Most employees, if you tell ’em why something has to be done, how it
Nick Panos:
Helps so much more
The Wolf of Franchises:
Chance, which in turn helps them. Most people are understanding and want, right? They’re doing. People
Nick Panos:
Just want to a why, right? If you explain to someone the why behind it, they’re like, oh, that makes sense. And not saying everyone will do it, that’s wishful thinking. But a much larger percentage of people would do it. Just being explained why versus do it.
The Wolf of Franchises:
Definitely. Definitely. All right. Well, let’s wrap up here with one final question just for somewhat starting and franchising. What would be the best piece of advice you could give them if they’re heading into ownership?
Nick Panos:
I touched on it before, but you really want to make sure your brand equity is strong in everything. Because you’re putting in your substantial, not just your money, but you’re putting in your time, man. You’re building something. And if you are with something that you think you can grow with, you want to stay with that. You want to be so care, spend months finding that right franchise, because that will make or break everything. Don’t be swindled by people with these saying, you can do 3 million a year from this little deli. Kind of really talk to the people in the space. Anyone talks to me from El Mushroom? I’ll tell ’em the truth. I love it. It’s a good brand. Strong brand that’s been around. Don’t let people swindle you by making these crazy claims. You can make your money back in three years. Make your money back in six months. Those are a dime a dozen. But finding the ripe brand to partner with, because for us, and I think most people should do the same, you want to build a long-term game here. Because long-term games with long-term people is how you create wealth. So if you’re going to stick with the same brand, you want to make sure the brand is strong.
The Wolf of Franchises:
Definitely. Man, I tweeted this one time. It was half, I was half joking but it was just like franchise week 1 0 1, or had had to be a successful franchise owner, and it was just a pie chart with two colors. And
Nick Panos:
I’ve seen it.
The Wolf of Franchises:
Yeah, it was like pick the right brand and then there was a little slip. Pick the right brand. Brand, pick the brand. But yeah, <laugh>. Exactly, man. I mean,
Nick Panos:
That’s the game.
The Wolf of Franchises:
It’s just so important. I mean, that makes all the difference on where you go in your,
Nick Panos:
Oh, and one more thing I’ll also say is don’t go for fad franchises.
The Wolf of Franchises:
Well, we’re talking about frozen yogurt and the whole craze. Yeah.
Nick Panos:
I don’t want to name names, but Correct. Yeah,
The Wolf of Franchises:
No, definitely. I mean, I guess for people out there, in a way, franchises almost remind me of the way like stock markets can move where certain SE sectors just go through hype cycles. Yeah,
Nick Panos:
It’s hot, right?
The Wolf of Franchises:
Everyone wants it. Cannabis has been hot lately, and psychedelic stocks have been hot. They’re just certain segments of franchisees that blow up and it becomes way too oversaturated. And then there’s a closing down.
Nick Panos:
What people don’t realize is when you sign a lease, right? You’re on the hook for 10 years, five years, 15 years. When you sign a franchising group, you’re on the hook for 5, 10, 15 years. So if you get, let’s say you peaked right? When frozen yogurt was going crazy, all of a sudden now it drops. You still have your franchise, you still have your fees to pay. You still have your rent to pay. Yeah. There’s a lot of fixed expenses that people in euphoria and the mania stages, they just forget about. They conveniently gloss over it.
The Wolf of Franchises:
Yeah. I mean, you really got to look at the micro, which is the brand, the unit economics of the business. Yeah. But then the macro, as you just said, is important. Right? The
Nick Panos:
Longevity of the culture of it.
The Wolf of Franchises:
Yeah, the culture, the concept. I mean, you guys with pizza, pizza’s never going away. You guys are good there. So that was an easy one on the macro.
Nick Panos:
Exactly.
The Wolf of Franchises:
But yeah, man, that’s great advice. Well look, this has been an awesome conversation, man. Likewise, man. I think people are really going to, yeah, yeah. No, I’m happy to always have any franchise owners are always welcome on the pod. Yeah. So where can folks find you on the internet if they want to learn from you? Yeah, pick you up, ask questions.
Nick Panos:
I mostly just already gained more active on my Twitter, which is at nick underscore Panos one. Okay. And one thing I’m kind of been touring with is showing people exactly what I’ve done in the catering space, because it’s worked so well. But also, I dunno if I want to do that because it’s worked so well. So I’ve just been going back and forth with tweeting out exactly what I’ve done and just helping people who want to learn the direct marketing side of catering, which has just worked so well for us.
The Wolf of Franchises:
Yeah. Yeah. No, sure. I, I love that. I think that’s super interesting facet of this conversation, just how you’ve generated b2b. Yeah. It’s a game changer. It
Nick Panos:
Really is. You can make so much money in that combined with everything. I want people to realize this really is a path to a great lifestyle.
The Wolf of Franchises:
Yeah, yeah. No, it’s awesome. And I think that playbook would be helpful. I do see why you’re cautioning a bit giving,
Nick Panos:
If everyone’s doing it, then it won’t be as powerful. But I think that the US is so large that people can do it and you’ll never see done again. So it’s one of those things where if people are interested, I’ll actually consider putting something out. Cause it’s all by trial and error that I’ve done it. I’ve sent out hundreds of emails, I’ve dressed up in crazy costumes I’ve done, I’ve done crazy things, but I’ve been remembered. I’ve been recommended, I’ve been referred. I’ve been, yeah, it, it’s just work. One of the best things I’ve ever done.
The Wolf of Franchises:
I think ideas are a dime a dozen. Execution is That’s right. So hard. Correct. So that’s why there’s so many people, I mean the, there’s so many free courses and guides on how to do things, but most people aren’t ultra successful. And that’s because the execution is, it takes work, takes time, and it’s difficult
Nick Panos:
And it takes courage. Like Dr.
The Wolf of Franchises:
<laugh>, it
Nick Panos:
Does. Dressing up in a Santa costume, it’s pretty hard to do that, man walking into an office.
The Wolf of Franchises:
I don’t know if I could do that. Yeah,
Nick Panos:
Yeah. It takes time because you’ll be the center of retention. So
The Wolf of Franchises:
Yeah. Yeah. It’s a specific personality that can handle
Nick Panos:
That. But it works. I’ll tell you that it works.
The Wolf of Franchises:
I love that. All right, Nick. Well, this has been fun, man. Thanks again for coming on, and we’ll talk soon. Hopefully
Nick Panos:
This helps people out there looking for franchises.
The Wolf of Franchises:
Definitely, man.
Nick Panos:
All right. Thanks ma’am. Bye.
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.