I recently spoke to Carl and Betsy, operating partners at Culver’s of Iron Mountain, Michigan. Carl and Betsy tested the waters of the restaurant business, and then took advantage of a franchise program to get their new business started quickly and successfully. They are proof that taking action with help leads to faster results than struggling alone.
Tell us a little bit about yourselves and what you were doing before Culver’s.
C “Before we started on the Culver’s adventure, Betsy and I were both working in the Denver, Colorado, area. Her parents had been in this business for quite some time and they talked to us about a possible new restaurant in Houghton, Michigan. We’re like, ‘Where the heck is that?’ Betsy worked for Kroger doing graphic art and I was a professional motorcycle technician at a dealership. I twisted wrenches all day and she played on computers all day, and we’re like, ‘Yeah, let’s try something different.’ Houghton was definitely different.”
B “My parents own a Culver’s in Marquette and they have a Culver’s in Escanaba. They wanted to open another one but they didn’t want to do it without somebody else from our family helping them. We kind of approached them at the same time they approached us and they asked, ‘Do you want to do this?’ And we decided, ‘Sure, let’s quit our jobs and move back to the midwest.’”
C “It was a huge lifestyle change for both of us but it was worth it. Houghton was crazy. I’d never seen that much snow in my life.”
Before you opened the restaurant in Houghton, had you thought about business before? Did you ever think you wanted to own your own business?
B “I think everybody at some point wants to work for themselves. To not have a boss.”
C “I could never go back to working for somebody else ever again, I don’t think. I like what we do too much.”
B “The opportunity was presented to us and we decided to jump on it to see how we could make that work. To see if we could be successful running a restaurant.”
C “Yeah, and it wasn’t like ‘You have to do this for the rest of your life and you’re nailed down to Houghton.’ We agreed to a 5-year plan to see where it goes. We could see where it was going and we liked where it was going, and then they gave us the opportunity to branch out on our own here.”
B “We became franchisees last summer. We had to go through a training program that Culver’s puts on. We graduated last July and started building the Culver’s in Iron Mountain, Michigan, in September of last year. It all happened really fast.”
What was the best thing about the transition from working at your day jobs to this?
C “Not really having to answer to a direct supervisor who is over your shoulder all the time. That was nice for me. The people I worked for in Colorado were great and I was friends with them, but there were times I just wanted them to go away.”
B “I think from my perspective it’s a lot harder work, but we put so much into it. It’s more gratifying.”
C “I’ve never worked this hard in my life at any job, and I’ve done everything from construction to mechanic and other service industry jobs. This is by far the toughest, but I wouldn’t change anything.”
B “Physically and mentally, this is a tough job because we’re in here every day on the front lines, directing the crew and helping our guests. We want to be here for our guests, and it’s definitely the hardest we’ve worked, but there’s a light at the end of the tunnel.”
What I find interesting about you as a franchise owner is that you’re in the thick of it. I don’t know about Culver’s, but I’ve noticed that for most establishments in this industry, the franchise owner is more like the investor. You guys are different. Is that because of Culver’s or because of you or is it just a model you’ve adopted?
B “It’s kind of a little bit of everything. We see how other businesses run and we see that they don’t run well with their leaders on the front lines helping guests directly but we would be considered operating partners in this Culver’s. My parents are partners with us.”
C “There are a couple of different shareholders who helped us with the costs of getting this thing going and of course they have interests in our day-to-day operations. But they need people who know what they are doing to be in here running it. It’s required of us to be present.”
B “We want to make sure that our team is trained to do things the way we want them to do things and we do that by being here and leading by example and putting in the work on this end.”
C “You can tell that your team members appreciate (our involvement). We’ve had lots of team members since we opened here say, ‘I’ve never gotten to work directly with the owner of the business’ so it strikes some as unusual, but we find that it works pretty well.”
So you’re hustling in Houghton and you’re putting in the grunt work. Was starting the store here always in the back of your mind or did it come along as you were working at the business?
C “It kinda came along. I think in our minds we wanted to be owners but we weren’t sure if it was gonna happen or where it was gonna happen. We started to see the restaurant get better and better and be more successful, and we kinda figured out along the way that, ‘Yeah, we could do this on our own.’ We just needed to save money which was the main concern to get a franchise started.”
To give people a frame of reference if they don’t know what a franchise is, you pay a fee to get into the business model and it’s like you’re given a system to run. You get to run it and, in turn, you get part of the profit. Every franchise is different. There are tradeoffs. The less money you put in, the less profit you make. Would you mind sharing Culver’s requirements?
B “Our fee is 6% of sales. The initial investment is around $50,000. Once we started getting into Culver’s franchise, we started to realize that if we were going to work for any franchise, Culver’s was probably going to be the best one.”
C “They have a really good layout. If you follow this manual and follow all the directions, you get this.”
What I find with franchises is that some franchises do an awful job and some do a great job. Sometimes those manuals that they give their owners are idealistic. Sometimes they are a little bit blown out of proportion in order to get people into the model, almost like network marketing. Since you’ve been in it for 5 years, have you found that model to be true based upon what they instructed you to do?
C “With Culver’s very much so. They are realistic. They make changes to their operations consistently. It’s not a physical book, either. The franchise has very strict standards about everything in the restaurant and to help follow up on that, it’s broken into districts so we answer to a district manager. Our district manager is great because she’s very strict. When we first met her and she first came in, it was a little rough. I thought, ‘This lady is tough and she’s beating me up about everything,’ but it was for a good reason. When we first opened the Houghton restaurant, I didn’t like where we were ranking regionally or even nationally. We were in the bottom of the barrel that first half year that we were open. In working with our regional franchise business consultant, we raised our standard from the 500th ranked Culver’s to the top 20 within a year. Our consultant had a lot to do with it because she was strict about the protocol and rules. And our parents and our parents’ partners were kind of the same way too. They wouldn’t settle.”
B “We kinda decided if we were going to do something we were going to be the best at doing it.
C “Why do you enter a race to get second place?”
What was your biggest fear about doing this? What were you really concerned about?
B “I think, ‘Are people going to like us?’ That’s what everybody wants. We want people to love our food and we want to be profitable.”
C “I had a fear of not liking the town we were gonna move to. I looked up Houghton online and it had the most snowfall on the whole planet. You get there and you’re trying to be positive and you end up liking it for one reason or another. And even starting the restaurant here in Iron Mountain, that was still a concern of mine. You know, you weigh the pros and cons of the area. Am I going to end up liking the place or am I going to hate it? So far so good.”
B “I wanted the community to love us because I like this community and there are so many good things about it. And I worry about letting the community know that this is their Culver’s. We want it to be theirs.”
C “A lot of people have this idea that you’re some big corporation moving into town; that you’re not privately owned and operated. They all think you’re part of this big giant system that’s coming to take dollars from the little guy across the street. We’re not here to put them out of business. We’re just another choice when it comes to what people what to eat.”
Talk to me about the light at end of tunnel that you talked about. What do you mean by that?
B “We’re always striving toward something else and there has to be something that you’re building toward. There has to be another 5-year plan after you reach year 4-and-a-half of your first 5-year plan. So we have to put something into play. Right now, we didn’t come up with a new plan. We came up with a 3-year plan to build sales in this restaurant. You’ can’t really look too far beyond that. Now we know how the 5 years is going to go because we’ve already done it.”
C “I don’t think it’s beneficial to look too far down the road. I kind of like Bill Belichick’s mentality to take it one game at a time. It’s the same thing here. I can’t worry too much about what’s gonna go on next month. I see it, but I’m more concerned with what’s gonna happen tomorrow at 10:30 when I open the doors. I think if we stick to that plan, we’ll gain some fans in this community and it will pay off for us immensely.”
C “The light at the end of the tunnel is that we’re profitable and successful enough to put money away into our own personal savings account so we can either start up another Culver’s in the future or retire. Whatever. That’s the light at the end of the tunnel.”
Do you want to start another Culver’s?
C “It’s too early to tell.”
B “We haven’t even been open a year, and that’s the hardest year. It just eats you up.”
C “The first few months leading up to opening and the months after you open it’s like you’re in a fistfight every day. It’s rough mentally and physically. It wears you out. We’re just trying to get to a place where the place doesn’t necessarily run itself, but we can concentrate our efforts to grow sales.”
You said that in the first year it’s really difficult. A lot of entrepreneurs can usually tough it out through burnout. You’re laughing, but how have you been able to deal with that stress and been able to cope?
B “We take our days off. We’re here when we need to be but we don’t work 7 days a week. We usually leave town. We do something that forces you to relax. Being on a plane forces you to relax because you can’t do business while you’re on a plane. We typically take Sundays off because that also forces you into some downtime because nobody does business on Sunday so you don’t have to answer emails or phone calls so Sunday is a really good day. That helps.”
What would you say is the most stressful aspect of ownership? What gets your goat?
C “The most stressful part is the people that work for you. The employees. The guests are typically pretty darn easy. I don’t want to sound like I’m on a soapbox here, but the employees are definitely the most stressful and most difficult part of owning and operating this kind of business.”
B “But I think many other kinds of businesses feel the same way about that.”
C “Yeah, it’s not just us. We go to marketing meetings and we talk to other owners of Culver’s and it’s the same everywhere. The unemployment rate in this county is 3 percent so if you want a job you’ve got a job. The kids that work for us, the majority of them are great. We did a grand opening and we hired 80 people and just kind of winged it. The managers we had been training for a couple of months did most of the interviews and I think there were some lessons learned on both sides of the managerial table.”
For those that are interested in getting a job, what are the top things you’re looking for in people?
B “We’re looking for people with a good work ethic. They are few and far between these days. But there are young people who still have it. There are some people in Houghton in their 20s that have a really good work ethic. Simple things like being on time. It’s the basics of having a job. We’re trying to teach the kids the basics.”
C “Nobody is telling them. The school and their parents, they aren’t letting them know that you’ve made a commitment to that job. You asked for the job and they gave you a job and now you have a responsibility. I think sometimes that might have gone in one ear and out the other or was never told to the younger generation. It was kind of surprising and I guess I had kind of forgotten about it. When we initially opened, we were having our training week, and the pure amount of BS you get from new hires, we were like, ‘Really?’”
B “There was lots of crying. They were very emotional. We have to change ourselves. We adapt.”
Did you learn to fire quickly?
C “We didn’t really have to, not in this community. They kinda weed themselves out. Like, ‘This isn’t for me.’”
B “If you tell them this is what you need to do to have a job here, then they just don’t come back. They don’t like that.”
C “These are the requirements. You’re gonna hear me keep saying the same thing over and over again until you get it. If you’re not getting it, well then, ‘Have a nice day.’ I don’t think I’ve actually fired too many since we opened the store here. One maybe?”
Out of 80 people, that’s really good. That means your batting average is really high.
C “A lot of them just figured it out on their own. Some of them were nice about it and gave us a heads up. Others, you just ask, ‘Where’s so and so? They’re supposed to be here and they’re not. Uh oh. Guess they don’t want a job.’”
B “On the flip side, we want to be the employer of choice.”
C “We want people to have fun when they come to work; to enjoy this job. It’s not bad. I mean it’s heated and air-conditioned. It’s minimum wage, but I think minimum wage is pretty good in Michigan.”
It’s hard to attract the right people when it’s the lowest pay.
C “It’s a good starting place even at minimum wage because there is a progression to allow you to move up from crew trainer to shift leader to manager to general manager to eventually own your own Culver’s. Culver’s shows you exactly the progression.”
B “You can start as a team member and ultimately end up owning your own Culver’s.”
C “We’ve already done a bunch of promoting from within since we’ve opened, too. Not everybody is just a team member here. We have a couple of shift leaders in training and with that comes more responsibility and more money. It’s not a bad gig.”
What has been the most rewarding aspect? You guys wouldn’t be hustling your butts off if it wasn’t somewhat rewarding. What makes it worth hustling?
B “We can use Houghton as an example. We really did a lot to build that restaurant and we put some really good people in charge of that restaurant and trained them from 15 years old.”
C “The general manager of the Houghton store started out as a team member and now she’s in charge of that ship. She sails that thing on a daily basis.”
B “She does a good job and that’s the most rewarding part; seeing someone retain what you taught them.”
C “And of course there’s also the sales in that store. It went like this when you opened the doors and then it went crashing down and then it slowly builds back up.”
I remember when you guys built this place there were cars backed up to the highway. I was like “Holy Cow, what’s in their ice cream? What are they actually selling?”
C “It was the same way here, too. We had liftoff. Our grand opening was huge. Then it drops way off like it’s dropping off a ledge and now we’re slowly trying to build it back up the same way we did in Houghton, with the training of our team members.”
B “By getting better at what we do every day.”
Marketing is the key thing to getting people in your door. What is an effective use of time when it comes to marketing? How do you convince them to come to Culver’s?
B “We do a lot of sponsoring.”
C “We do advertising on paper and radio. There’s an advertising budget for our region. You’ll see a lot of Culver’s ads between 4-6 p.m. There’s a local store marketing plan for every restaurant. We just have to figure out what works best in this community. Right now we’re doing what we know: coupons in newspaper and ads on radio.”
B “We have e-club and text club.”
For the millennials?
I was going to say I don’t have radio. I don’t have TV. I don’t know if I’ve seen anything from you guys.
C “And you probably don’t read the newspaper because nobody reads the newspaper.”
B “So we’re not reaching you if you don’t have radio or TV and you aren’t part of our e-club or our text club.”
C “Culver’s is also working on ways to advertise on certain websites online so the ads pop up.”
What are the benefits of the e-club or text club?
B “If you sign up for either at Culvers.com, you can pick your nearest Culver’s. It’s not just for this one. You get a free value basket just for signing up.
I like free food.
B “And then on your birthday you get a free sundae.”
And what if you have a daughter who is under 18 whose birthday is in two days? Set up an email and sign her up?
B “You can actually sign up as a family, up to a certain number of members. You get the benefits of flavor lists so you can see when your favorite list will be out.”
C “The Culver’s app is pretty nice too. If you’re incredibly in love with buttered pecan, as you are driving around, it will notify you about what restaurants are featuring that flavor of the day.”
B “With our e-club and text club, we send alerts regarding things that are happening. We have a sundae of the month and different things going on. We’re having National Cheese Curd Day on October 15. We’re doing free cheese curd upgrades in value baskets. So keep coming back for all of that good stuff.”
C “Culver’s developed their own holiday a couple of years ago. We’re actually gonna turn it into a whole weekend of celebrating cheese curds.”
Do you have more than one flavor of cheese curds?
B “Nope. All cheddar. White cheddar and yellow cheddar mixed together in the bag.”
C “We’re doing our first benefit coming up soon, too.”
B “We do this program called Culver’s Cares and we donate 10 percent of sales between 4 and 8 to a charity or church or somebody trying to raise money for a cause. The Kingsford Crush Roller Derby Team approached us last month and I was talking to the girls and we decided to put together a benefit so that benefit will be on Tuesday, October 17th.”
C “We’ll have some members of the club in here helping to deliver food.”
I didn’t even know we had a roller derby club. Where do they practice?
C “I didn’t either. Maybe we’ll find out on the 17th.”
B “We’re going to help them raise money.”
C “And maybe a little awareness about what they do.”