How I Run a Restaurant Franchise With Virtually Zero Turnover In five years, James Kolzow has managed to build a Pancheros Mexican Grill that makes over $1 million in revenue a year and has a turnover rate of close to zero.
By Kate Taylor
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Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email ktaylor@entrepreneur.com.
One of the biggest struggles in the restaurant franchise industry is the high employee turnover rate. However, that's one problem James Kolzow doesn't have. The Pancheros franchisee says he has had virtually zero turnover in the last five years, aside from part-time and seasonal workers. And, by keeping turnover low, Kolzow's revenue has been able to skyrocket, first hitting the $1 million mark only three years after he opened up shop. Here's how he did it.
Name: James Kolzow
Franchise owned: One Pancheros Mexican Grill at the present time in Voorhees, N.J. A second location in Cherry Hill, N.J .,is also in progress.
How long have you owned a franchise?
Opened in November 2009, so almost five years.
Why franchising?
I liked the team aspect and the brand awareness a franchise has to offer. Additionally, I was always interested in QSR (quick service restaurants) but lacked experience.
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What were you doing before you became a franchise owner?
I am currently a pilot and was looking for an investment that I could develop while traveling or during off time. While I do love flying airplanes, I have developed a passion for growing my restaurant and plan to grow to a least 10 units with the brand.
Why did you choose this particular franchise?
I did not have restaurant experience. I truly believe in the "fox and hedgehog" concept of doing one thing really well versus many things above average. Pancheros has a very simple concept of focus on what they do really well: burritos. Quality ingredients prepared fresh daily is something that I believe in, and the quality shows in the end product. In the décor, kitchen and menu, simplicity done right is the overall goal. As Pancheros says, "Burrito's Better Built!"
How much would you estimate you spent before you were officially open for business?
Around $500,000.
Where did you get most of your advice/do most of your research?
The best thing to do if you are interested in a franchise is to talk to other owners. Pancheros highly encourages prospective franchisees to research their markets and become familiar with area competitors. Taking the time to do this is invaluable as it helps you take ownership of the market you're conducting business in, and it takes out a lot of the fear of opening a new business.
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What were the most unexpected challenges of opening your franchise?
The weather! I live downtown Philadelphia and when it snows or rains, I made it a point to go out and visit local restaurants. My restaurant is in the suburbs and the spending habits are different than what I am used to in the standard in urban life. Due to driving requirements, a person living in the suburbs is more likely to say in and cook versus going out to eat during a storm. Downtown, I can safely walk, take a bus/train, or taxi to arrive at a restaurant. Additionally, the city does not have a whole lot of grocery options downtown.
What advice do you have for individuals who want to own their own franchise?
Do the research beforehand. Don't be afraid to connect with other franchisees and ask them about their experience. Ask questions similar to that of this survey and you will be surprised what they will tell you.
Also, don't be afraid to get out in the community and talk to owners or managers from competing brands or concepts. Worst case, you will learn something from every visit.
What's next for you and your business?
I am currently under negotiation in Cherry Hill, N.J. I plan to build at least three restaurants in southern New Jersey. After three, I will reassess and decide where to go from there.
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