Jan 02, 2023 • 26 min read
Franchising is all about finding the right people to partner with. You will be giving up a certain amount of control when you franchise, so finding the right partner is a must. Learn how to franchise so that you can align your values with your employees and customers. Learn all that and more with your host Evan Brandoff and his guest, David Bloom. David is the Chief Development and Operating Officer of Wing Zone and Capriotti’s Sandwich Shop. Listen in on how you can improve brand loyalty by creating positive change in communities long term.
We welcome David Bloom onto the show. He is the Chief Business Development Officer at both Capriotti’s and Wing Zone with over 250 stores across both brands and growing rapidly. David has an extremely interesting and inspiring story. We are excited to share more with you.
David, thank you so much for coming to the show.
It’s my pleasure. I enjoy this and I appreciate the opportunity.
First off, is that a guitar behind you?
Yes. There’s an electric, acoustic and I have another one. My pandemic commitment was to learn a musical instrument. I cannot say that I have mastered it, but I have finally, very late in life, decided to pick up a guitar. I will never be any good but I still enjoy it.
Have you graduated from Smoke on the Water to something more challenging?
I’m one of those guys that love to practice versus play. When I play golf, I hit the driving range and rarely play. With guitar, it’s the same thing. I practice a lot and I’m never going to be playing good songs, be in a band or anything like that. I have no illusions but I enjoy it. There are so many cool apps to learn at home remotely. When I have time, which is often at night, it’s convenient.
I used to play the trombone. Maybe we could start a band together one day.
I was always jealous of people that had any musical talent. It seems like the coolest thing in the world to me to be able to do that. It’s great for people like myself that are used to being in control and driving everything all day long because you are never in control. It takes practice. You are always making mistakes. There are lots of good life lessons in there.
On the topic of life lessons, it seems like you have invested a lot of time and resources into making an impact. Specifically, I was looking at your LinkedIn page before. The banner photo on your LinkedIn page is you outside holding a child with a bunch of happy children surrounding both of you. What’s the backstory to that photo?
I was Chief Operating and Development Officer for Bridge International Academies based in Nairobi, Kenya. That’s at one of the schools. Bridge is one of, if not, the fastest growing education company in the developing world. Iâ€™ve got to spend some time living and working over there in economically depressed areas and building schools that are low-cost, and deliver very high-quality education at scale.
Iâ€™ve got to work in a unique environment. It was a bit of the Wild West. When it comes from a business standpoint, it’s pretty crazy over there. I enjoyed it and learned a lot. I spent a year over there working essentially in slums. Bridge is in quite a few countries in the developing world. It was a unique time and I enjoyed it. I look back on it.
How do you feel your time in Kenya has contributed to your ability to be successful stateside?
Number one, in the developing world, there’s very little infrastructure. We talked about supply chain issues here and things like that. There aren’t even street names. When you are trying to buy land and build a school, you have to pay somebody to do all the geocoding and pinpoints. There’s not a solid legal system to be able to go in and do the land acquisition. It’s all Government Regulations, Tribal Regulations and things like that.
It’s navigating all that while you are having people demanding bribes, kidnapping your construction teams, and holding for ransom your employees. Doing all that is a pretty dangerous environment. On the one hand, when Iâ€™ve got back to the US, I had to get a heart stint put in because I had so much stress and worked 18 to 20 hours a day. On the flip side, there’s not too much that I don’t think I can handle. There’s not too much that happens that fazes me a whole lot because over there, you do have life and death situations. Here, we rarely have that.
Having an alignment around your vision and values is super important as a business.
I can imagine the perspective that it has given you has been valuable. Speaking of some of your incredible work stateside, you have been the pioneer of growing so many impressive brands. You are growing Capriotti’s and Wing Zone. Based on my research, there are 112 Capriotti’s and 80 Wing Zone locations. How many of each are corporate-owned versus franchised?
There are 165 Capriotti’s with another 300 in development. There are about 70 Wing Zones with about 100 in development. We own and operate about 10% of the Capriotti’s brand ourselves. We acquired Wing Zone at the end of 2020. By the end of 2022, we will be the largest owner and operator of Wing Zone as well. Philosophically, we believe in being in the same business as our franchise partners to align us, level-set, and make sure we are all focused on the same things. We are in the process of doing that with Wing Zone. Both are high-growth brands that are growing both domestically and internationally at a rapid pace.
When a restaurant group goes through the decision-making process of scaling through opening more corporate locations versus franchising, what are the key pros and cons to each route?
Franchising is what you would call an asset-light model where you are getting other development or business partners involved that are making investments. You are giving up a certain amount of control in exchange for that because you are dependent on them being the owner, operator, community representative and all those good things. You have to look at that. Fast-growth brands often are franchise models because they allow you to effectively raise capital and deploy them very quickly.
There are lots of successful company-owned like Starbucks and Chipotle. Places like that have grown well over the years as well. I have done both in lots of different verticals not just in restaurants. There are pluses and minuses on either side. It has a lot to do with what is the mandate from the investment group, what are you looking to do, what is the opportunity long-term to grow those brands, and what is the best way to achieve those goals.
I love how your philosophy of corporate is also running some stores in addition to the franchising to understand how to best operate a store and set others up for success.
It’s a big part of our business model. It’s also where we do all of our testing and technology innovation development, develop our people and do all of our training. There are a lot of tangential benefits that are critical to the long-term health of the company.
Both brands are going through incredible growth. Congratulations.
I love to take all that credit, but while I have been a part of teams that have done those things, I have never done any of those things by myself. There are always the investors, senior leadership team, employees, franchise partners, managers, and kindly, the customers. Having alignment around all that and the vision and values are super important. I have been fortunate to be a part of those types of groups.
At this stage of growth as you are choosing the new markets to expand to, what are the key factors that you take into account when deciding what markets or specifically what communities to open stores in?
I don’t take it from a geography-first standpoint. I take it from a business partner-first standpoint. My experience is if you have the right partner, a sound operating system, good support, and infrastructure, as long as you have the right partner, you are going to be successful anywhere. Until we have the right partner, we are not going anywhere. It’s almost 100%.
Iâ€™ve got off the phone with a group in Florida, a husband and wife team, that’s looking to join Capriotti’s side and maybe Wing Zone as well. They have had success in other businesses. They asked the same question, â€œWhy Florida?â€ My answer to them was, â€œIt’s not about Florida.â€ We will be in Florida in 2022. We opened a new store in Florida. This group is looking to go a little North and I was like, â€œIt’s not that I’m in love with Florida any more than any other market. It’s when we have the right partner, either domestically or internationally, then we will go. Until we have that, we don’t go.â€
What makes a partner the right partner?
Number one, alignment around values. For us, it starts with that. Our values are about passion, family, integrity and profitability. Profitability for us means everyone wins. It has to be a win-win and genuineness. We want people to join us that are ready to have real conversations and be able to contribute to long-term success. It’s values alignment.
Number two, it’s the passion for what we do in anything. Like you in your business, what will determine how big you are is how much you invest in it. In things that you are passionate about, you are going to invest a lot of time and energy into. Even when you are not working, you are reading about it and listening to it. Those are critical to us. It’s alignment around values and then vision, which for us is where we are going. The particular niches that we play in, whether it’s the sandwich category, the wing category or whatever other business we decided to get in later on.
As you expand to new markets, what role does corporate play in setting new stores and franchisers up for success? Specifically, how do you help new stores in new markets integrate into the communities that they serve?
There are three things franchise partners have to do. They have to find the right location. We have an outstanding real estate team, work with the best local brokers in the market and invest a tremendous amount of time, energy, and money into what you call an analytic platform to help us find the right sites to make sure we are in the right location. That’s step one.
Step two is we provide a tremendous amount of training and support throughout the pre-opening and the grand opening process on the operation side to make sure they are delivering the product and service that consumers are going to demand. Step three is they have to have a long-term commitment to marketing. Marketing is fairly complex. It’s all the digital platforms and integrations that go on. Also, involvement in the community because nobody knows me or any of us here in Vegas. They only get to know Evan or whoever it is in the local community.
If you are a Capriotti’s franchisee or Wing Zone, you are Capriotti’s in that market. That’s all they know. People that are committed to being part of that community are super important to us. We provide them with the tools and support to help them execute against all those things. They don’t have to go out, create things and figure out how to do it. We have already got all of that done, on the shelf and ready to execute.
We are a community marketing show. I want to focus on that marketing aspect that you spoke about. First you mentioned, â€œA long-term commitment to marketing.â€ What do you mean by that?
You drive down the street, turn on your radio and listen to podcasts. You are doing all this stuff that you do and there’s a tremendous amount of noise. People have to understand that to stay front of mind with consumers, you have to be out there in a variety of channels or be what we call omnichannel. That means whether they are online, on their phone or computer, turning their radios on, going to the local games or participating in church or school functions, having that omnichannel consistent approach is important.
When you look at brands that do that well, both domestically and internationally, they tend to grow well and do so consistently over time. We opened up by talking about Bridge International. One of the lessons I learned there is this theory about a double bottom line or dual bottom line. What that means is that you’ve got a for-profit enterprise that’s got a good return on investment. Otherwise, you are not going to attract capital and nobody wants to be in that business.
Secondly, you are also creating some social good or change. If you look at companies that have done that well, Starbucks is one that’s known, Chick-fil-A and lots of other companies. They are invested in their communities from a variety of standpoints, local communities, and where they are buying their products, whether it’s their coffee or paper cups. They are creating some positive change in those communities long-term that people can identify with and care about.
As long as you have the right partner, you’re going to be successful anywhere. If you don’t, you’re not going anywhere.
Companies that do both of those, have a good business model and double bottom line, tend to be the highest valued and most successful companies over time. It makes good business sense. It creates something that people want to be a part of and stay committed to versus being transactional. Transactional companies tend not to have a very loyal customer base and employees. That turnover can be the kiss of death.
There are lots of positive benefits to it from operations and being able to attract the right employees and keep those people or retain them to customers wanting to be a part of what you are doing and spreading the word for you through word of mouth. Loyalty has a lot of benefits. You are not constantly turning over. You are building and creating exponential growth, not just grinding and turning over.
Speaking of that double bottom line, in your mind, what comes first? Investing in the community or a company’s growth?
I don’t know that I would say either comes first. Thatâ€™s what your business plan has to be. Business is hard. There’s nothing simple and easy about opening a business. You’ve got to do everything at the same time. You’ve got to build a model that works, finance it, open it, run it and market it. Youâ€™ve got to be part of the community from day one. Some of that is simple stuff like being the person that people want to work with and talk to.
It’s an old clichÃ© about this being a people business but it is a people business. If you don’t build relationships with people, they may work with you but the minute they have a chance to work with somebody else, they are going to. It’s not an either/or, 1st or 2nd. You’ve got to do it all from the beginning consistently.
Choosing the right partners is choosing people that understand their community so well. Going off of that, I’m sure that as operators are running their stores, they are learning things that work and don’t work. How do you effectively share with all storeowners those learnings and build a playbook that ultimately all stores are going to be able to play by?
That is one of the advantages of being part of a franchise network where you have close relationships with other franchisees in the market. Some things informally happened. The franchise partners all belong to a franchise council. We have a franchise advisory committee that brings up the best practices, their thoughts and ideas, what they would like to see our work on, they bring that to the table.
We have lots of communication loops. We have weekly webinars, newsletters and a lot of material that’s available for them. They don’t have to go out and create things that have been proven to work. They are on the shelf. They can take off and customize. They don’t have to go find a vendor to print or produce it. It’s all set up for them and done at scale. They are getting leveraged pricing and things like that.
It’s about creating that network where there’s completely open access to all those materials. There are a lot of opportunities to jump on, webinars and newsletters, talk to people or participate in the forums that are all set up. For us, it’s an omnichannel approach from a communication or support standpoint. We have to be able to provide operational, marketing, technology and financial support. We have teams of people in all those departments that do that simultaneously. It’s not this either/or thing. It all has to happen at the same time.
That makes it so much more complex but when it’s done right, it’s so impactful. Shifting gears slightly, David, if you could create the most perfect meal by taking things from both Capriotti’s and Wing Zone, how would you comprise that meal?
Turkey is still one of my favorites, first of all. To give you a little anecdote, we use Butterball turkeys. Butterball raises a line of turkeys for Capriotti’s called Capriotti’s Super Tom. We roast whole turkeys in our shops every night. When you go into a Capriotti’s, you are getting that Thanksgiving leftover that was cooked the night before and pulled off the turkey. We are making the stuffing in-house. Thanksgiving is my favorite meal because of the memories and bringing people and family together in a non-denominational way.
Turkey would be a big part of it. The flavors on the sauce side on Wing Zone would be a part of that too. I would use some of the Asian flavor profiles that we have on the Wing Zone side to base the turkey. We would have a little bit of an Asian Roasted Butterball turkey. I would probably pull those things together. I may have to try that by the way.
Nothing brings people together like Thanksgiving and sports. Between the two brands, I feel like you have covered the things that bring everyone together.
The definition of sports has changed a little bit. It used to be the NFL, Major League Baseball, NBA hockey and eSports. One of our investors owns one of the largest eSports teams and is a very large investor in the whole eSports arena. That’s sports. The definition of what sports are anymore is expanding. That’s great and cool.
With Capriotti’s, Wing Zone or any of the amazing companies you have been with prior, what is your philosophy band in sponsoring sports teams or leagues either on a professional or youth sports level?
We do both. Going back over the years, I have been involved with all the Major Leagues and done all the typical advertising. I can remember many years ago when the company I was with ran our first Super Bowl ads and how we had to scrape up $1.5 million. I’m aging myself here because we could buy a Super Bowl ad for $1.5 million.
What is it now, $7 million?
Yes. That doesn’t produce the ad. That’s just the buying. I remember the first time I saw a company I worked for on the Super Bowl and what a huge deal that was.
What company was this?
It was with Quiznos in the early days. It was super cool and great. It was an inflection point for the brand, which was great. It’s a lot more diverse. Sponsoring or being a part of eSports teams and lots of other things, not just sports but also things that kids and families are invested in are much bigger. Doing so not just on the national level is difficult. Until youâ€™ve got scale and have enough distribution to make sense of that type of marketing, then you are going to focus on the local stuff.
Here in Vegas, we are in all the stadiums. We have multiple outlets in the stadiums themselves. We have a deep relationship not just with the NFL. We are in Allegiant Stadium with three Capriotti’s shops. That means we are affiliated with the Raiders themselves, and the groups of people that run those stadiums, which is a whole other company.
It’s a fascinating business. We have done well in it so we are continuing to dive deeper into it. That also includes universities and all the sports that happen in university teams. There are all these traveling leagues and all that stuff to get involved with. There are a lot of pieces to it because it is such a big part of people’s lives.
Companies that are just transactional tend not to have a very loyal customer base.
Have you been to the new stadium yet?
Yes. The first professional event at the stadium was the US versus Mexico International Soccer Championship. I don’t like to sit in the stands and watch the games. We have tickets to everything. I like to go and be in our shops and restaurants. My wife and I worked the counter for the first couple of games. It’s crazy to see the fans going nuts and having a great time. One great thing about Vegas is we are never the home team. There are usually more visitors in town for the game than there are people in Vegas to support the Raiders.
If you go down the Strip, the Bears played here and there were more people from Chicago wearing jerseys on the Strip than there were people from Vegas. It keeps it cool. The Vegas Golden Knights have been great, huge and fun. We are very entrenched with them and even the Minor League Baseball team here. We are in that stadium and involved with that team. It’s fun. The business is not easy but there are lots of fun parts to it as well.
I love the fact that you and your wife were working the counter. You mentioned core values a lot, and that speaks to your core values and why the businesses that you are with are always so successful.
My wife was a lot better than I was, for the record.
With these different team sponsorships, how do you measure the impact of sponsoring a sports team?
I’m not sure you can measure it. When we are in the stadium, we know, â€œOn Saturday we did $50,000 or $60,000.â€ We’ve got a revenue model that we work and that’s great. Secondly, there are usually opportunities to work with some of the athletes on the team decided, â€œDo I want to work with a quarterback or with one of the newcomers and the rookies on the team and do some promotional stuff?â€ There’s that thing but then you dial down into eSports or local leagues that are much less tangible.
You can say, â€œThe team stops by every Saturday with all the players. Softball tournaments are going on down the street.â€ When we are down there, you might be able to directly tie to it. There are a lot of other factors. Even getting good employees, frankly, is a huge benefit to sponsoring teams. Parents are like, â€œMy kid is growing up and needs a job. I’m going to send them down there because I know they are involved in the community.â€
That’s not something people think about all the time but you can’t open the doors unless you have good people and a continual inflow of good people that you can develop. Some of those people may stay with you for years, grow and become part of your organization. I have lots of friends that own dozens and some that own hundreds of franchises, restaurants, and all different types. Every one of them that have been successful and some of these guys has hundred-million-dollar and billion-dollar businesses are all focused on people and community first.
David, this is the lightning round. There are four questions. The first thing that comes to mind for each question, please share. First question. What is your favorite youth sports memory?
There are two sports. Lacrosse, and then Iâ€™ve got into kickboxing and boxing in college. Those things were transformational for me from a confidence standpoint and taught me to take risks, be out there, make mistakes, how to lose and win, and all that stuff.
When you were a kid, what did you want to do when you grow up?
I wanted to be a veterinarian.
Did you pursue that at all?
No, but we have always had rescue dogs. I can’t imagine life without a dog. That’s about it. I tried breeding dogs for a little while and learned that’s a good way to lose a lot of money. That’s how I satisfied that craving.
What is a brand whose marketing you admire most?
Itâ€™s Chick-fil-A. Their involvement in the local community is their secret sauce in why they have been so successful.
Finally, what is the go-to cause that you like to support?
My wife and I have been very committed to building through different missions and ministries, orphanages, learning centers and health centers around the world for many years. We helped fund a number of them that are in 15 or 20 different countries and helped hundreds of thousands of kids. Kids, orphans, single moms that struggle and the least of these people that have very little ability to change their lives are the ones that touched me the most.
David, you are both interesting and inspirational. It was such an honor having you on. Thank you so much for joining us.
That was great. I do appreciate and enjoy it. Thanks a lot.
This episode was with David Bloom. As a recap, we discussed the values he took with him from his work in Kenya back to the United States, key components to the recipe of building a rapidly growing restaurant chain, and finally, the importance of investing in the community, particularly how it can lead to more engaged and happier employees. Thank you so much for reading. See you next time. Play on, everyone.
Leading with a passion to be extraordinary! Combining the ability to strategically develop and operate at an accelerated pace according to the specific goals of the organization. Organizing the appropriate resources, leading and executing against those goals in an accelerated manner, on a consistent basis, in a wide variety of industries and environments. Including strategic planning, implementation and execution of all phases of national & International brand expansion and operations including the achievement of all financial benchmarks and performance goals. C-Level leadership of numerous national and international brands, private equity investments & start ups. Additional experience includes the financing of real estate and acquisitions along with international supply chain, logistics, intellectual property law and government relations. Global responsibilities have included international supply chain management to include (procurement, warehousing, and logistics), large scale international call center support services, global field operations and security management, operational audit & compliance teams, large scale centralized employee recruiting & training programs.