3 Questions With Steve Romaniello

Steve Romaniello,
Managing Director of Roark Capital Group

In addition to Managing Director of Roark Capital Group, Steve Romaniello is Chairman of the Board of FOCUS Brands, the franchisor and operator of nearly 2,200 ice cream stores, bakeries, restaurants, and cafés in the United States, the District of Columbia, Puerto Rico, and 32 foreign countries under the brand names Carvel®, Cinnabon®, Schlotzsky’s®, Moe’s Southwest Grill®, and the franchisor of Seattle’s Best Coffee® on military bases and in certain international markets. Focus Brands also sells its famous ice cream cakes in over 10,000 retail outlets through New Britain, CT-based Celebration Foods, Carvel’s manufacturing and distributing division. Romaniello also serves on the Board of Directors of FASTSIGNS Holding Corporation, the International Franchise Association (IFA), the IFA’s Diversity Institute, and the Atlanta Franchise Alliance.

Prior to joining Roark, Romaniello was President and Chief Executive Officer of FOCUS Brands (2002-2008). Steve joined Carvel in January 2002 as President of the franchise and foodservice division, and led the strategic turnaround of Carvel, one of America’s favorite ice cream brands. During his tenure at Focus Brands, Steve led the acquisition of Cinnabon® and Seattle’s Best Coffee® International in 2004, Schlotzsky’s® in 2006, and Moe’s Southwest Grill® in 2007.

Prior to Focus Brands, Romaniello was President and Chief Operating Officer of US Franchise Systems (USFS). Romaniello helped grow USFS from one brand with 27 hotels in nine states to three brands with over 500 hotels in 47 states and 5 countries. Before joining USFS, Romaniello was a Vice President at Holiday Inn Worldwide’s, responsible for franchise sales, services, support, and training for the 1,700 hotels in the U.S., Canada and the Caribbean operating under the Holiday Inn and Crowne Plaza brands. During his tenure, Holiday Inn Worldwide increased its franchise from 60 in 1991 to 300 franchises in 1995. From 1988 to 1991, Steve held various positions with Days Inn of America. Romaniello is a graduate of Tufts University.

Since moving over to Roark as a Managing Member, what have been your primary initiatives?
Since moving to Roark my primary initiatives have been to support certain of our franchise portfolio companies, including Focus Brands, Money Mailer, McAlister’s, and Fast Signs (Roark affiliates also control Primrose Schools and Batteries Plus, two other leading franchisors). I have also helped organize the second annual Roark Franchise Summit which brought together 90 executives from our franchise companies for leadership development training and to work on best practices. Finally, I have been helping the team in finding investment opportunities in the franchise space and evaluating and acquiring brands. Roark has over $900 million to invest and we recently announced an agreement to acquire Pet Valu, a leading Canadian based franchisor of specialty retailers selling pet food and pet products.

When do you foresee an improvement in our economic climate?
I think the economy is at or near the bottom though we expect choppy waters on the way back up. Our best guess is that the improvement will be gradual and recent improvements will likely not accelerate until unemployment bottoms out sometime next year.

As a franchisor in Atlanta, what regions have you seen attract the most franchisors and why?
Atlanta is home to a large number of franchise companies- some of the best brands and franchise leaders in the industry are here. One other notable area is Colorado, specifically Denver. While I am not sure what attracted them to the region initially, I think their presence is more visible because the leadership there is top notch and committed to franchising as an industry.

BONUS: Where is your favorite travel spot and why?
Italy! Do you really have to ask why?

Interested in connecting with Steve Romaniello from Roark Capital Group, (404) 591-5215, http://www.roarkcapital.com/; stever@roarkcapital.com.

Three Questions, interviews conducted by Stan Friedman, President and Co-Founder of RetroTax, appears twice a month exclusively at http://www.retrofacts.blogspot.com/.

RetroTax Welcomes Bob Ritter, Franchising Industry Veteran, to the Team!

As the co-founder and President of an emerging franchise concept, supporting existing franchisees, along with the ongoing growth of the network, are my two top priorities. Well this week, in one move that I am extremely proud to share with you here, RetroTax has accomplished both, when Bob Ritter, veteran franchise professional, joined the team as Vice President of Franchising and National Accounts.

As has been the case with so many industry peers, I met Bob Ritter through the IFA. Bob and I first connected at an Annual IFA Convention back in the day, and we have become really good friends since. I’ve always been impressed with Bob’s tremendous appetite for knowledge and how well networked he was with the franchising community’s leadership. It’s been during the past two years though, that we developed an even stronger business bond and personal friendship. All of this occurred at the same time that Al Newcomb and I were creating and launching RetroTax.

During this period, I’ve been traveling more frequently to Bob’s home-town of Indianapolis. Indy also happens to be Home Base for RetroTax. When Bob and I first began talking about my new business concept, (over a beer or two, I might add) he became extremely intrigued by the RetroTax concept. Like me in years past, Bob has spent a great deal of time involved with a concept that occupies a highly competitive, crowded market space. Conversely, RetroTax represents a unique b2b offering and is a virtual stand-alone, in terms of competitive franchise offerings. Before learning too much more about our concept, this fact alonw, captured Bob's attention and interest.

As Vice President of Franchising and National Accounts, Bob will perform multiple roles, as a powerful utility player on the RetroTax team. His diverse experience will be called upon to assist with the development and training of new franchisees, support of existing franchisees, and the growth and management of our National Account relationships. Additionally, Bob’s skill sets will also provide a real boost to the leadership development of our Indianapolis-based franchise support and tax credit processing teams.

Recruiting someone with Bob’s expertise and strength of reputation is a major coup for the RetroTax team and we are extremely proud to welcome him to the family.

RetroTax Adds Third Franchisee in 2008 – Big Plans for 2009

Me (Stan Friedman) with our newest franchisee, Iraida Bottazzi. Iraida will represent us in Miami-Dade and Broward Counties.

The good times keep rolling, as we are proud to announce that our third franchisee is already rocking and rolling in Miami. Iraida Bottazzi will manage relationships with the Miami-Dade and Broward communities and she provides us with a perfect “fit” in South Florida. Iraida is a tireless, extraordinary networker, has limitless energy, and as a former school teacher, that can educate potential clients to the opportunity available for them to redeem the tax credits that we administer. What’s more, as a native of Puerto Rico, she is fluent in both English and Spanish, a real advantage in the South Florida market, where that is more a necessity, than a luxury.

Iraida’s territory is home to an extensive Federal Empowerment Zone which includes Miami, Homestead and extends into Broward County as well. While Broward offers no Geographic Zone opportunities, it is rich in service businesses and restaurants, rife with opportunities to administer demographic credits for the countless businesses there.

Iraida is the third to join our growing family of franchisees. Our first two franchisees in Atlanta and Cincinnati are both doing quite well. Kevin and Dennis in Atlanta are gaining lots of traction with work already in the door and a very full pipeline. Their fourth quarter prospecting efforts are really paying off in Q1 of 2009. In Cincinnati, Jim, barely out of training, has already landed his first account, which also resulted in a referral to yet another and he too, has a very full pipeline. It just doesn’t get much better than that.

For 2009, it looks like franchisees four, five and six are already on the horizon. Keep your eyes on Chicago, Milwaukee, Washington DC and San Antonio. These markets are all in my cross hairs, with Boston and Buffalo/Rochester not far behind. And our growth won’t stop there. What we look for in our prospective franchisees is someone with strong interpersonal skills, comfortable dealing with high net worth individuals, executives and business owners. Big ticket, longer cycle, intangible sales experience and/or a finance background could be a plus, but the ability to communicate at high levels is the requirement.

As job loss continues to be a by-product of our nation’s economic woes, I would imagine more mid to high-level executives will be turning toward franchising in the next six months. As a white collar, Monday-Friday type B2B concept, appealing to those types of skill sets, RetroTax looks like a perfect fit for many of those displaced executives.

Prospective Franchisees... Where are they Hiding?

At this week’s IFA Convention in San Diego, one hot topic will certainly be about selling franchises in a down economy. As soon as I hear anyone serving up “selling" advice, I’m on my way to a different session. “Sorry, you have it all wrong.”

Even in this economy, I am still not "selling," just continuing to meet those people who might be right for our concept – based on referrals from friends, existing clients, affiliates and alliance partners. As I have said in the past, networking and developing relationships has proven to be much more effective than selling.

Normalcy, whatever that was, must be thrown out the window in these trying economic times. I can’t rely on “typical” marketing measures to grow RetroTax, Instead, I rely on viral and guerrilla marketing at every level. I don’t use mass media, to speak of, but rather, spread the word one mouthpiece at a time, or via press opportunities as they present themselves.

Franchisors should ABSOLUTELY look outside the box in marketing their concepts in the immediate future. (at least for the duration of 2009 and quite likely beyond) Always know where you are and how to act accordingly. There may have once been a time when just being in the right place at the right time was enough to insure success. Those days, if they "ever" existed, are long gone. Now, you not only need to be in the right place at the right time, but you’ve got to also be aware that you’re there. Then, you’ve got to know what to do about it and have the wherewithal to respond accordingly.

The landscape has changed and along with it, the rules of engagement. Understanding such will help you succeed in these challenging times.

FRANCHISE DEVELOPMENT, Not just about the Sale… It’s more about the Relationship

Many business people boast of their unique approaches to the sale of their products or services. Not to sound trite, but in the world of franchise development, it should NEVER be about the sale, but rather, about the relationship between the parties. Personally, I have no interest in selling franchises. It’s a new world, a new era and at RetroTax, a concept that I co-founded, and whose day-to-day operations I direct as President, SELLING franchises is a non-starter. No, I am not parsing words, with reference to the difference between “awarding” vs. “selling” franchises. I’m just telling it like it is. To date, each of our franchisees have been personal referrals. That notwithstanding, if a prospective franchisee presents himself to us, but does not meet or exceed our baseline for shared vision, values and ethics, they’re out of here, on the first pass, despite the fact that they may have been referred. That is not just lip service either, it is fact. It is real, it has already happened and it will happen again, I’m sure.

As the IFA Convention approaches, (barely a week away, in warm San Diego) it is important for fellow franchise executives and suppliers too, for that matter, to examine their selling practices. Take stock of this fundamental statement: neither your customers nor potential franchisees want to be “sold.” Rather, each of your prospective clients, customers or franchisees, would prefer that you appeal to a deeper level of connection, communication and relationship between all parties to the potrential transaction as well as to your product or brand.

My own personal experience repeatedly demonstrates that it’s more about relationships. Some of these relationships were built months, years, even decades ago. While some of these didn't provide any quantitative value at the time that they were created, several are now front and center and are intrinsic to the growth and development of my company.

There is actually no better evidence of this than the relationship between my partner and me. It took us more than a dozen years of talking about it, prior to putting our program together and our case study is just the tip of the iceberg. Beyond us, I cite the following:

RetroTax Franchisee No. 1, Kevin is an 18+ year friend and peer, a consummate franchising professional.

RetroTax Franchisee No. 2, Jim was a personal referral from our CPA.

RetroTax Franchisee No. 3, Iraida yet another personal referral, came recommended from one of my most highly valued IFA peers.

Prospective franchisees No. 4, 5, and 6, were also introduced to me via personal relationships, from other IFA peers, one of which is actually the President of yet another franchise concept. To my point, it’s much more about the relationships in franchising, than about the sale.

When you attend the upcoming IFA Convention, think about the relationships that you make, renew or update with new, old and established peers and friends. All of these connections represent opportunities for you to seize the moment, every moment, every opportunity, both real and perceived, with each and every contact that you make or renew. As my partner Al Newcomb so often says, no meetings are bad meetings.” As the old saying goes, “Carpe Diem.” Seize the moment and don’t let any opportunities that are worthy of your consideration, pass you by.

Miami Franchise Expo Shows Traction, Despite Economic Woes

After attending last weekend’s franchise expo in Miami, I am pleased to report that franchising is still alive and well, as demonstrated by the strong attendance, and of course 80 degree temps. with sunny skies and low humidity didn’t hurt.

While the country is still in the throes of a credit squeeze and deepening recession, none of that seemed to get in the way of robust crowds in attendance at both the educational sessions and crowded floor of the show on Saturday. That said, let’s keep it real. Everyone is still nervous about what ’09 will bring and how long the economy will remain sluggish. (quite likely until the banks start loosening up their purse strings) Make no mistake though, there is no shortage of SBA guaranteed funds available. Rather, there is however, a stubborn, hoarding of cash, as banks just refuse to make loans and release funds.

On the networking side of things, I was able to enjoy some great success for RetroTax. I made many new contacts for business, both for our core services as well as referrals for franchisee prospects – and yet another, FROM OF ALL PLACES, ANOTHER FRANCHISOR!

This year is going to be tough, though, for everyone. If there's a bright side in the equation, it is that the extensive job loss our nation is facing should lead to stronger franchisee development. The credit squeeze more than the recession, is what's adversely impacting us right now. I believe that most are confident that once the second half of the TARP money gets released, the economic stimulus should start heating things up again.

Business in ’09 will not, cannot be done like it was in years past. There will be winners and there will be losers. The difference, in large part, will be determined by how one plays his hand. Let me hear from you with your thoughts.

Readers, what did you think about the expo?

Franchise Expo South This Weekend

This weekend I will be heading to Miami for the Franchise Expo South. South Florida in the middle of January? Who could ask for anything more? I am most looking forward to seeing my extended franchise family, representing IFA as moderator on two panels, and did I mention being in South Florida in the middle of January?

While the expo, on the surface is designed to help franchisees find the right franchisee opportunity, I, along with many of my peers, use it as a networking opportunity, as well. I always make a point of connecting with as many people as possible. For new franchisors, make sure to take notes on the back of every business card you collect, with reference to the action item associated with it – and then, of course, be sure to follow-up on those commitments on your first day back at the office.

For those of you attending, you might find interest in the two panels I am moderating: Opportunities in Franchising for Minorities and Women, part one at 11 a.m. – 12:30 p.m. Saturday, January 1, followed by part two from 1 p.m. – 2:30 p.m. in room C221. I will be moderating this session with the help of John R. Reynolds , President, International Franchise Association’s Education Foundation; LaShawn Cartwright, Sr. Recruitment Consultant, Chick-fil-A; Alberto Eyzaguirre, Operator, Chick-fil-A; Russell Phillips, Market Development Manager, ServiceMaster Clean; Jesus Martinez, Franchisee, ServiceMaster Clean; Jose A. Negroni, Lender Relations, Small Business Administration -- Miami District Office.

In an increasingly competitive marketplace for franchise candidates, savvy franchise systems are aggressively seeking qualified entrepreneurs from both the minority and women’s communities to represent their brands. This seminar will help you understand: Pitfalls to avoid; Financing options; How to overcome stereotypes; Mastering the franchisor/franchisee relationship; Specific ethnic markets; Non-traditional franchising opportunities; Legal considerations: Who owns what? Who is responsible for what?; and how to learn what questions to ask yourself first: Am I really cut out for this? How long do I plan to do this? How long can I live without an income? Gain insight into where the opportunities lie.

I look forward to seeing you there.

RetroTax® Continues To Sign Franchisees – RECESSION? NOT HERE!

Franchisors across the nation are struggling with the current state of the economy. It is rough out there for many franchise concepts as leads are few and far between. For us, however, we continue to progress forward. I have said it before and I will say it again, the recession is not affecting the pace of our business growth, because of the business model we have put in place. While the services we provide make sense in any economy, they are nothing less than compelling in times like these.

This week we launched our Cincinnati, Ohio, franchise location. We are very proud that Jim Dahl joined our family to represent RetroTax in Cincinnati. Jim has been a sales professional since graduating college in 1987. From his humble beginnings, working 80 hour weeks in route sales, to more recently managing 26 direct reports in a three-state territory for a wholesale wine importer, Jim has both the people and management skills necessary to drive our business.

Another interesting angle on Jim is that he is a commuter franchisee. Jim and his wife Tina live in Indianapolis with their two children. However, Jim will make Cincinnati his “second home” and service the business community there. He will focus on the Cincinnati empowerment zone, which includes Hamilton, Ohio, just 20 or so miles north, and the I-74 corridor from the Indiana state line to Cincinnati. While this corridor is not in a geographic zone, there should be a great many opportunities to provide demographic credit services to vast numbers of businesses in this region.

With Jim joining our team, and yet another new franchisee (soon to be announced, stay tuned to the blog), we are growing according to schedule. Our Atlanta franchisees are doing great. They are heads down and busy stirring it up in Georgia. They have ended 2008 with new clients already secured and are actively engaged in establishing many new relationships already, for 2009.

The reason we, and our franchisees will continue to do well in recession, is because businesses need us now, more than ever. It’s not business as usual out there. Many companies that thrive in a strong economy are looking for ways to offset the slowdown in consumer spending. Many companies that are experiencing shrinkage in their top lines are looking all the harder for ways to maintain their bottom lines. Beyond the obvious plays like reduction of overhead and expenses, our core services offer an incredible opportunity to provide dollar-for-dollar tax credits against the tax liabilities of the business, and in many cases, the personal tax liabilities of its owner(s).

Our concept thrives in this economic state. Not all franchise concepts do. Franchisors, and all business owners for that matter, must get focused, get proactive, and get outside the box. Don’t let yourself become a victim of changing times. Make whatever adjustments are necessary and move forward. One such adjustment could be to take full advantage of any and all credits and incentives that the government makes available for you. Think of it as “your” answer to the bailout, only this one is designed for the driving force of the American economy, small and medium business enterprises.