Overnight success. You’ve heard that term—Will Smith explodes upon the scene out of nowhere in Independence Day to become a mega-star. Well, it took a while. Will Smith started as DJ Jazzy Jeff and the Fresh Prince. When the duo took off in popularity, Smith made and spent a lot of money on a house, cars and jewelry—leading to his near bankruptcy in his early twenties.
Franchise concepts often have a long history as well, as Erik Premont discusses in his recent interview with Gini Dietrich and me on The Franchise Show. The El Chico story began when Adelaida Cuellar’s homemade tamales drew huge crowds at a small county fair in 1926. Her sons opened a cafe in Dallas following their mother’s recipes for enchiladas with chile con carne sauce. And 83 years later, the concept is stronger than ever.So why is a concept that’s been around awhile matter—and how can you evaluate not only their past history, but their current growth as well to see if it makes sense for you? Here’s a couple of things:
- Has it kept up? I talked recently about not buying yesterday’s news–the next Montgomery Wards or Circuit City as mentioned in my recent blog on Extreme Pizza on AllBusiness.com. El Chico started in 1929, but today it’s a bigger success than ever with 70 locations and an agressive growth plan. It’s now gone “grande” in all aspects of the business, with a new cafe design, and authentic new tastes. El Chico’s unique Tex-Mex menu and Specials del menu de la Casa (jeff uses Yahoo’s babel) are ready to role in today’s sophisticated restaurant presentations.
- Is it a regional compay that’s going national—or international? Jim Cramer says that’s what you want to look for in great emerging stocks; companies that are giant hits in their original home market (anyone remember the original Starbucks in Seattle’s Pike Place Market?) and are ‘breaking out’ into new markets. El Chico in Dubai? Sure, that’s a good sign as the company climbs out domestically and internationally from it’s Longhorn base camp
- Does the franchisor have skin in the game? You heard and read about Charles Cuellar’s decision criteria in choosing Yogurtland. He put a lot of credence in the fact that the franchisor owns and operates stores themselves. So should you. El Chico owns and runs 25 stores—they literally have 25 of their own test kitchens, and they know what you’re dealing with when you bring up an operational issue with the corporate office.
Lot more to talk about here, including another concept that Erik is involved with—Cantina Laredo—but that’s for another day. In our quest for making the right franchise decision, and then putting it in the right location, let’s get it right—right from the beginning. Please email me your questions and comments, and we’ll do it together.
Hear Jeff and Gini Dietrich on The Franchise Show live every Friday at 3:00 p.m. PDT, and 24/7 in the archives. Jeff comes from 25 years in the franchise industry with such high-growth companies as McDonald’s, Blockbuster, Wendy’s, and Arby’s, and is a graduate of Hamburger U!