Chains offer piece of the action
Franchising offers path to business ownership.
More than one third of retail sales in the United States come from franchise operations. There are more than 2,000 franchising companies and more than 500,000 franchisee- and franchisor-operated outlets, according to the International Franchise Association.
Lou Maschi has owned a small delicatessen in Brooklyn since 1992, but when his family moved to Wall in 1998, he wanted to run a more significant restaurant, one with a national reputation.
“As a kid growing up in New York, I used to love going to the International House of Pancakes,” said Maschi. “It’s a terrific brand name, and I thought that it would be great to run one in the Shore area as a franchise owner.”
Maschi has realized his dream with an IHOP restaurant at routes 88 and 70 in Brick. The restaurant, which opened on Dec. 20, 2005, is the latest of the chain’s six locations to open in Monmouth and Ocean counties.
In the United States, franchising constitutes more than one third of retail sales; there are more than 2,000 franchising companies and more than 500,000 franchisee and franchisor operated outlets, according to the International Franchise Association.
But franchisees must be prepared to spend a substantial amount of money upfront, invest long hours working in the business and be prepared for the ups and downs of business cycles.
To get his IHOP up and running, Maschi said he had to put up over $1 million, which included the price of the franchise fee, property, building, equipment, furniture and supplies — everything from dishes to silverware. Franchisees must also pay royalties to IHOP, based on sales.
“They take a percentage of your gross sales, less any discounts and sales taxes,” Maschi explained. “That is how it is calculated.”
“I knew there was a need for a family-style restaurant in this area,” Maschi said. “Five years ago, I sensed that IHOP was making a turn in the family-restaurant business. That’s when Julia Stewart took over as CEO. Another franchisee explained it best when he said, “Prior to her coming, it was like driving 5 mph in an old car. Now, with her aboard, you are in the front seat of a Ferrari.’ ”
Toni Maschi, Lou’s wife, manages the restaurant in daytime hours and often works more than 45 hours per week. She said it is difficult working and raising two teenage sons (Matthew, 17, and Alex, 16), but seeing the success of the restaurant has made it all worthwhile.
“You put in an awful lot of time, and you have to do a lot of juggling,” Toni Maschi said. “It is a real lifestyle change but we have all made the adjustment.”
Lou Maschi initially was going to open a restaurant in Wall, but the property he was eyeing didn’t meet IHOP’s size qualifications.
“IHOP has some very stringent requirements as far as size of building, size of property and parking,” Maschi said. “They decided against it because they thought it was too small. They were looking for about an acre-and-a-half and there was an issue with parking.”
Undaunted, Maschi turned his attention to Brick. Picking out a favorable location is vital to a franchisee’s success and Maschi followed IHOP’s three-step plan: Locate a rudimentary site; develop a detailed demographic study; and let IHOP officials examine it through aerial photographs to see what flanks the restaurant.
After analyzing drive-by traffic figures and learning that Brick was a “demographically hot” community, the Route 88 location was chosen.
“We did surveys that focused on the amount of food sold outside the house for breakfast, lunch and dinner,” Maschi explained. “We did traffic counts, everything that you could possibly think of. We spent a lot of money to make sure it would be a home run from the start.”
Manager Michael Economides of Island Heights said one of the keys to the restaurant’s success is IHOP’s training program. There are 70 employees, full and part-time, and the restaurant is open seven days a week from 7 a.m. to 10 p.m.
IHOP officials send a “mystery shopper” in unannounced each month to see if their standards are being maintained.
“We get tested without knowing it, and they send us a report card,” Toni Maschi said. “They pretend they are a customer and then they complete a survey, starting from greeting at the front door to when they leave. We have been doing well, getting 96, 97 out of a possible 100.”
BY MICHAEL AMSEL for the Asbury Park Press.
Michael Amsel (732) 557-5733 or mamsel@app.com
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