RAVING BRANDS
WORDS BY SCOTT STEINBERG PORTRAIT BY DAEMON BAIZAN
A RECIPE FOR SUCCESS
Martin Sprock is the brains behind Atlanta-based company Raving Brands, one of the food Industry’s fastest-growing franchise empires. His restaurants have franchises coast to coast, from the southeast to New York and California. Scott Steinberg corners the enthusiastic entrepreneur and forces him to talk turkey, plus burritos, smoothies and more.
Martin Sprock is quite the paradox: unlike most businessmen, the 39- year-old founder of Atlanta’s Raving Brands measures his wealth in terms of people, not profits.
A good thing, too; despite helming a $300- million restaurant empire, he’s one of just a handful of employees who draws more than $50,000 in annual compensation. Unimpressed? Consider that his portfolio includes seven of the nation’s most rapidly expanding fast-casual brands—Mama Fu’s Asian House, PJ’s Coffee and Wine Bar, Shane’s Rib Shack, Planet Smoothie, Boneheads Seafood, Doc Green’s Gourmet Salads and Moe’s Southwest Grill—and that, at the company’s current growth rate, the entrepreneur’s influence will extend to over 1,000 outlets by the end of 2005.
But things haven’t always been so rosy for the former ski bum, who bounced between jobs after graduating from the University of North Carolina with a BA in political science.
“I spent my first year out of college lounging around Aspen’s slopes,” he chuckles. “I was a dishwasher, a busboy… Every gig I had was almost a game; the challenge was to quit before I got fired. But I learned something important during those days: the vast majority of people in the restaurant business—owners, operators, managers— don’t value their employees. I decided then and there that this was the industry I wanted to be in.”
There was just one problem—capital. As the ’90s dawned, Sprock found himself selling real estate in Atlanta, where he had eventually settled in 1988. Abandoning his less-than-lucrative career in property (year one income: $7,400), he founded his first venture, local watering hole Clarence Foster’s, with money borrowed from friends and family. Although success came quickly—the investment was paid off in only nine weeks—peace of mind still proved elusive.
The life of a nightclub owner just didn’t suit Sprock, who declared a ban on personal drinking binges and decided a healthier approach was needed. However, he found himself “disgusted” at the options available to small business owners in the city at the time. Everywhere he looked, he saw huge corporations milking individual franchisees for their hard-earned revenue. Therefore, he decided to go it alone.
As Sprock explains: “The situation was reprehensible. I just couldn’t believe it. So I found a bunch of partners as crazy as I was and went into business. Planet Smoothie was born.”
Sprock’s vision was to run a chain of restaurants that treated affiliates and employees as well as they treated the owners. Traditional franchisors make money by charging licensees for the use of intellectual property (such as the chain’s name and menu), supplies and marketing/training services. Assistance with peripheral functions, such as store design or layout, almost always costs extra too. Sprock opted instead for the exact opposite approach.
As the savvy Southerner reminisces: “We were in it to help people from the start. We had the lowest royalty rates in the industry and cut franchisee costs wherever possible. Our competitors would pile on a penny here, a dollar there… we offered all the same services without charging a cent. We cut costs so much, in fact, that I was unable to take a salary. I won’t lie, it was hard at first, a tough model. But in the end, it’s proven a blessing.”
It’s precisely this family-first mentality and service-oriented approach that have helped Sprock make history. The company quickly went on to acquire existing chains—Shane’s Rib Shack of McDonough, Georgia and PJ’s Coffee of New Orleans—and launch original enterprises Boneheads Seafood, and Tex-Mex favorite Moe’s, the fastest growing concept of its kind. What’s more, Raving Brands now fields over 150 calls and emails a day from potential franchisees—not bad for a decade’s work.
I learned that the vast majority of people in the restaurant business don’t value their employees. I decided then and there that this was the industry I wanted to be in.
Raving Brands collects just 5% in royalties for use of its intellectual property, and the outfit is 100% employee-owned, with executives handsomely rewarded in stock. Frugality is a watchword too; company heads, including Sprock, share hotel rooms on the road and have offices housed in the back of operating restaurants.
Furthermore, in an unheard-of precedent, franchisees receive preferential treatment. Sprock willingly draws upon his real-estate background to steer interested parties towards prime locations. Most chains operate using a different strategy: corporate leaders hog premium plots, place individual investors in less desirable locales, then turn a tidy profit charging external partners exorbitant operating fees. By contrast, Raving Brands owns only one store within each of its signature holdings and shies away from over-expansion.
“You can’t be greedy,” explains Sprock. “This business is all about location. Open in the wrong place, and you could work years without earning a dime. Many firms set people up to fail; I refuse to cheat my franchisees. There are countless ways I could take a bite out of their profits, but we’re here to help… it’s the right thing to do.”
Franchisees aren’t the only ones benefiting from Raving Brands’ benevolence either; walk into any of the company’s cafés, and you’ll notice quality levels are way above typical fast-food fare.
Says Sprock: “Because we make a point of having the happiest associates, we also have the best brands. You feel good visiting our stores, and that means something to me. I’d go so far as to say I’d actually be willing to take a date to them. Can you claim the same thing about McDonald’s?”
But not everyone’s thrilled at the meteoric rise of a man who describes himself as the world’s least likely to succeed. In January, Grateful Dead singer Jerry Garcia’s estate sued Moe’s, claiming the burrito chain, which featured portraits of the musician at over 130 restaurants, improperly used the icon’s image. Dismissing the attack as financially motivated: “We took the paintings down, and six months later they sued… jeez, I wonder what they were thinking!” Sprock nevertheless remains in good spirits.
As he says, “We’ve built a thriving business being charitable to people. Granted, our approach is unconventional—we’re constantly wondering when the bottom is going to drop out. But my mom still calls me to tell me how proud she is. And at the end of the day, life just doesn’t get more rewarding than that.”
SPROCK’S FIVE ESSENTIALS FOR ENTREPRENEURS
1. “Never, ever, ever be greedy. Share the pie with the guys around you; ultimately, you’ll reap greater rewards for having done so.”
2. “If you’re planning on becoming a franchisee, always make sure you understand the concepts involved. Ask as many questions as possible. If a company doesn’t take the time to answer, run.”
3. “Don’t sit on the sidelines talking about your dream. Get out and make it happen. I had no money when I started trying to fulfill my ambitions; I just did it.”
4. “Treat people like you’d treat yourself. Give them health insurance, stock options… people like to feel like they’re part of something bigger. Our guys are willing to work 60-hour weeks because they love what they do.”
5. “Find a concept that works and do it better. I’m living proof you don’t have to be a genius to make an idea work. It’s not like I invented Asian food.”