How to identify and earn growth opportunities for your franchise – Dave McDougall, Your Pie

Your Pie, a homegrown pizza franchise brand that started right here in Athens, Georgia, and recently moved its headquarters to Alpharetta. On this episode of Atlanta Franchise Today, host Leslie Kuban, owner of FranNet Atlanta, sits down with Dave McDougall, CEO of Your Pie Franchising, and 35-year veteran in the food and franchise leadership world.

Transcription: 

Leslie Kuban:
Dave, it’s so great to have you on the show today.

Dave McDougall:
Well, it’s good to be here, Leslie.

Leslie Kuban:
Well, for our viewers who don’t know you, let’s hear a little bit about your story in franchising.

Dave McDougall:
Well, it’s been a long time. My franchise career really began probably over 30 years ago, but my food service career began before that. It’s when I went to a little cinnamon roll company called Cinnabon that I got involved in franchise support, and that’s really what my first introduction working with franchise owners was. It was a wonderful experience. I could say today a number of those franchise owners and I are still very good friends, and it’s been nice to kind of just follow their success in franchising as they’ve diversified and gotten involved with different brands.

Leslie Kuban:
And you mentioned friendships in franchising. That’s so true in the franchising world. In my 25-year career, some of my closest friends come from my franchising experience. I know exactly what you mean by that. Now you’re with Your Pie. Tell us a little bit about the brand and kind of how it got started and the brand’s story.

Dave McDougall:
Oh, certainly. This has been a lot of fun, and my career has certainly evolved over the years. I’ve been involved with takeover situations and financial distress situations, and this one has been one that really is a growth story. It was an introduction to Drew French, who is the founder. Drew was a young entrepreneur out of the University of Georgia that developed the first down-the-line customizable pizza concept, very similar to what I guess you’d say Chipotle was, and he thought, “Well, why can’t we do this with pizza?” The inspiration for Drew was when he and his wife, Natalie, went to Italy on their honeymoon in 2006, and he saw the culture of family togetherness, food and thought, “There’s something really to this.” It took a couple years, but in 2008 he opened the first Your Pie.

Leslie Kuban:
Well, that’s exciting. I love these entrepreneurial stories. Did he have plans for franchising from the beginning? Or did that kind of take place over some time? How did the franchising side of Your Pie come into play?

Dave McDougall:
Well, that actually happened pretty fast. I mean, Drew was familiar with franchising because he’d worked in some different franchise concepts. I think within the first year he had someone who said, “Hey, I want to join,” and Drew said, “Sure.” They wrote up a little agreement, and he had his first franchisee. Now we know there’s a lot more to it than that, but when you’re a young entrepreneur and don’t really know any different. That is all evolved and changed, but within that first year he had his first franchise.

Leslie Kuban:
And how many franchisees do you now have at Your Pie, with how many locations?

Dave McDougall:
We have 77 locations with 40 in development, and a total of 56 franchise owners.

Leslie Kuban:
Okay. Great, so rocking and rolling then. We’re still navigating COVID, and gosh, you’ve been in the restaurant business/food industry a long time, so this is probably a new experience here. What are you guys seeing with the brand as we’re still in the midst of the pandemic?

Dave McDougall:
Leslie, I tell you, this was probably one of the most uncertain, hardest things I’ve ever had to deal with. When COVID first came on us in March of 2020, we just weren’t sure where this was all going to land and extremely concerned for all the franchise owners, especially when the shutdowns started to happen. The good news is we were considered an essential service, and really our focus was just trying to keep at least some level of cash coming in the door as we navigated particularly those first couple months. I will say as you kind of fast forward, we definitely came through it. Some folks would say, “Well, you’re pizza. You must have done phenomenal.” Well, not really because for us, 80% of our business was dine-in, and so it did take a very hard pivot to takeout, delivery, and curbside that we had to make which helped us get through this.

Leslie Kuban:
And with that pivot, just looking into the future, are there any changes that you had to make by necessity that you will keep moving forward or some version of that because it benefits your business and your franchisees?

Dave McDougall:
Right. What was interesting is that we had done a major technology upgrade in 2019, which involved a new POS platform, online order system, loyalty rewards program. We changed up the whole office infrastructure and the franchisee intranet. Again, I wouldn’t recommend doing that all at once like we ended up doing because it was a lot of change very fast, and it was hard on the franchise owners. However, it certainly allowed us in March of 2020 to ramp up the online order program quickly because we had the technology in place, so I guess sometimes you get lucky.

Leslie Kuban:
Right. So maybe a little bit of, things are like a tsunami through all these changes, but gosh, it poised you for something that you didn’t know was coming.

Dave McDougall:
Yeah. The interesting thing is just how technology is playing such a critical role in the consumer/customer experience, and as a franchisor the things that we’re continuing to look at and how that evolves and changes in the way people want to do business with you, whether that’s third-party delivery, having integrated systems that all could talk to each other, but that is something that has come out of this that certainly for us, as a franchisor and for our franchisees, is, “Okay, how do you evaluate the data? How do you utilize that to make decisions going forward? And then what new technologies should we be looking at that are going to help enhance both the customer experience, but also our ability to execute at the restaurant level?”

Leslie Kuban:
And do you feel there’s some obvious benefits or opportunities that those technologies are producing for franchisees that you guys have in the plans that you can share with us?

Dave McDougall:
Absolutely. I think one of the beauties of the franchise model is the synergy and scale you can get to be able to support these systems. While we’re not a large mega concept, still with 77 locations, 56 franchises, we’re able to do things that a one or two store location would really struggle to be able to do. The one thing we’re learning with technology is it can be expensive, and again, how we can spread that cost across many locations I think is a definite benefit.

Leslie Kuban:
We’re starting to talk about something I want to pivot to a little bit. You’ve seen a lot of different franchise brands and how they operate and how they innovate. Let’s talk a little bit about good franchising, and if anything is going to be tested during something like a pandemic, it’s that franchisee/franchisor relationship. I just would love your experience on what makes for that enduring franchisee/franchisor relationship that franchisees coming into a system should be looking for and entrepreneurs thinking about franchising their business need to have good awareness around. What’s that success recipe there?

Dave McDougall:
Well, good franchising is all about having a sustainable model that is profitable. I think at the end of the day, if owners, franchisees, are making money, obviously the franchise owner is making money, and it is consistent and you have a system that seems to work, that’s a good place to start. I think some of the other inherent things within a franchise is trust, and that is the one thing that can change on a heartbeat. You always have to keep working at that. That goes back to communication and transparency. I mean, it’s a very delicate relationship. It’s one that can work and we know works well, but every day can bring new challenges.

Dave McDougall:
I will say during COVID, there was a lot of stress. I can’t imagine for the owners who have mortgages and families and personal obligations, and then they see their businesses drop 70% in revenue and were thinking, “Okay, where is this going to lead?” You know that can’t go on for a long period of time, and that really I think was hard on the franchisees. We certainly made it a point to just make sure we were communicating, over-communicating, having regular contact. We kind of took our senior management team, broke our group up into seven, eight owners each, and then that was kind of our call list. We were talking to people every day, and I think we did get a lot of credit for that.

Leslie Kuban:
Yep. What’s the sentiment now in the system as things are opening up? Some places they’re not, but still overall most places, especially here in Georgia, things are open. What is the level of optimism that you see in the market?

Dave McDougall:
Well, it’s definitely gotten better, particularly since April. Now back at the beginning of the year, things were still difficult with the surge we were dealing with, but almost when April came, right around Easter, the trajectory of sales, revenues, those things started to really change, and I will say that owners are feeling better. Ironically sales in 2021 are better than ’19 now, pretty significantly, which we’re excited about. The challenge though has become this labor piece. I’ve got owners that again, they’re working harder than they’ve ever worked because they’re having to run shifts, and that has been a challenge in a lot of businesses, including food service.

Leslie Kuban:
And back to technology, is technology able to assist with easing the burden of that? Or do you have plans for that looking ahead?

Dave McDougall:
It does. I mean, it certainly has helped, especially with the takeout, delivery, curbside pickup. Our business at one point maybe around 20% was those areas. It’s now well over 50. We are able to execute that with maybe less help, but at the same time, as we’ve opened dining rooms up and people have started to venture back in, that has added to some complexity. That’s where just not having enough help has been a challenge. We’re working through it. I would say the owners that have established good relationships, have a good culture in their business, are having less of an issue than maybe those who that’s an opportunity.

Leslie Kuban:
Yeah. Opportunity for growth. Well, this is the sort of thing that people looking at getting into their own business, maybe exploring franchising, need to be aware of that are factors out there. You’ve seen a lot of franchisees over the years, what would be some advice that you would give to our viewers who maybe they’re thinking of leaving corporate America or they’re looking for an investment, maybe they’re looking at the restaurant industry, what do they need to know? What do they need to be aware of? What do they need to be honest with themselves about if they’re thinking about getting into the restaurant space?

Dave McDougall:
I certainly believe any business is going to take hard work and effort. It’s just not going to be a passive investment in most cases. At that point, maybe you invest in real estate or the stock market and hopefully those will get the returns you want. But in a business, you’ve got to stay involved. Whether you hire folks to run the business, you still have to have, I always say, presence. You’ve got to be present. Your influence has to be there. You can’t just invest the money, hand the business over to someone, and think it’s all going to be okay.

Dave McDougall:
Certainly one thing I talk to people about is grit, and they say, “What do you mean by that?” Well, do you have grit? Because when things don’t go the way you thought or unexpected things happen, how you persevere, how you deal with the stress and get through it. I can say of the franchisees that I count as very good friends, not a one of them can’t tell me a story when they were early on in their franchise business career that they didn’t hit a point where like, “What am I doing this for?” and started second guessing because things were not going as they had hoped. Again, it’s not something to be afraid of, but it’s something to know that it comes down to if it’s to be, it’s up to me, and really understanding the role of what’s the franchisor going to be able to do? What can you expect them to do? And then what are you going to be expected to do? But at the end of the day, it’s your business and it goes kind of as you go.

Leslie Kuban:
And that’s I think important for people to hear and to know. We hear about franchising being a business in a box, which is referring to the systems and the playbook, but the franchisor isn’t running somebody’s business for them. They’re the ones hiring their employees and engaging with the community. You’re right. it’s not a place to just park your money and not have anything to do with how that money grows, so I think that’s some really words to the wise.

Dave McDougall:
And I try to certainly share, even in discovery days and we do a new franchise orientation, the roles that each of us play. We do play different roles, but we need each other. I mean, we’re better together going in one direction, but as a franchisor, we’re looking at, “Okay, how do we improve the brand, grow the brand, improve profitability, enhance the guest experience?” As a franchisee, it’s really about execution and executing the brand and being a great restaurant operator and delivering an exceptional experience and driving profit. I mean, we want to do things to help enhance profit, but at the end of the day, it’s still what happens on the premises that will determine if there is profit,

Leslie Kuban:
The owner’s day-to-day decisions have a big factor in that.

Dave McDougall:
Yes.

Leslie Kuban:
We love inspiring success stories, Dave. Can you think of someone at Your Pie, one of your franchisees, who’s a good story for our listeners to know about?

Dave McDougall:
Yeah. Actually I can. Birju Patel. Birju is in Hapeville, Georgia, opened up last fall in kind of the height of a pandemic. What was really impressive to me though with Birju is before he ever opened up his store, he worked a year as an hourly employee in a Your Pie. It happened to be one of our company stores, and it just kind of wowed me that he wanted to learn everything he could before he opened and really understand the intricacies of how things are supposed to work.

Dave McDougall:
And so when he did open, and again, we couldn’t do grand openings the way we normally would have, etc., because of not having large crowds, he and his wife still went after it, have gone after it every day. They have become one of the busiest locations in the system, not only the Atlanta area but the system, and have established themselves as kind of the go-to local pizza place down in Hapeville. The thing that really impressed me with him is how he has attracted so many of the employees that work at Hartsfield to come over on their lunch breaks, leave the property and come over and have Your Pie. Again, I think it’s been a fantastic story, and I give him and his wife a lot of credit for persevering and getting through really that first six months. Then to see where they are today, I’m just wowed.

Leslie Kuban:
That’s a great story and a great example of grit and really being willing to roll up your sleeves and do what has to be done to make it successful.

Dave McDougall:
Yes.

Leslie Kuban:
Just kind of thinking ahead, the rest of this year, 2022, just your opinion, any predictions? What do you see ahead in the world of franchising?

Dave McDougall:
Well again, I see the balance of this year hopefully not getting derailed with kind of the current spike in COVID, but I think we’re learning to deal with it differently. There’s no question the consumer is out there and spending money and hopefully will continue to do so, which I think will be good kind of at the store level for everyone. As we go into next year, I think for me, it was really being hopeful that we could get back to something more normal across the country. I think we’re in a little bit of a wait and see. Franchising itself though, it is going through some evolution and changes, and certainly with the current administration, some things that have been done will I think have an impact, the Joint Employer, things like that. We’re just going to have to work through that I think as these things come in the next year.

Leslie Kuban:
Well, it’s great to hear that your franchisees, your overall system, is up in 2021 than even in 2019 before the current situation of COVID that we’re in, so that’s a good sign, and I hope to see that continue with Your Pie.

Dave McDougall:
It definitely I can say seems to have people in better spirits. Again, I mentioned labor. There’s certainly been some distribution challenges that we were not accustomed to. I think people feel better when they know, “Well, I’ve got money in the bank, and we’re meeting our obligations, and I’m making some money.”

Leslie Kuban:
Well good. Well, it’s been a treat to have you on the show, Dave. I really appreciate you joining me today.

Dave McDougall:
Well thank you, Leslie. Again, enjoyed it myself.

Leslie Kuban:
And folks, thanks for joining us again on another episode of Atlanta Franchise Today, and I look forward to seeing you again next week.

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