Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Exclusive Q&A with Ron Green, Founder and CEO of Another Broken Egg Cafe, a 7am to 2pm Cafe Serving Breakfast, Brunch, and Lunch

by Franchise Chatter on February 17, 2012

in Breakfast Franchise, Franchise Chatter Exclusive, Q & A Interview

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Another Broken Egg Cafe is a Destin, Florida-based franchise of upscale breakfast, brunch, and lunch restaurants known for their diversified menu with more than 90 entrées, and charming atmosphere with lots of interesting details – everything from hand-made ceramic coffee mugs to warm color schemes and original artwork.

This 18-unit franchise is set to double in size over the next 24 months and already has franchise agreements signed in Tennessee, North Carolina, Alabama, Mississippi, Louisiana, and Texas.  Another Broken Egg Cafe’s growth can be attributed to the fact that they’ve established a unique restaurant concept in a field relatively untapped by competitors.

What’s also interesting about Another Broken Egg Cafe is that the founder has such a cool story. When working as a Department of Defense engineer at NASA in the early 1990s, Ron Green never imagined he’d go on to construct an 18-unit chain of gourmet breakfast, brunch, and lunch restaurants across the Southeast. But after growing tired of his 9 to 5 job and experiencing a “midlife clarity,” Ron decided to begin his personal revolution despite boasting no restaurant experience.

Fifteen years ago, Ron, with his own bare hands, renovated the chain’s first restaurant — a 1908 summer home in Old Mandeville, Louisiana.  The first “Egg” team opened the doors to remarkable success during the Thanksgiving weekend of 1996, with two-hour waits out the door.  Today, Ron’s creation has become the darling of diners across the Southeast, earning a myriad of awards including “Best Breakfast” for 11 consecutive years (Emerald Coast Magazine), “Architectural Interior Design Award” (Lafayette) and “Best Bloody Mary” in Destin, Florida.

Franchise Chatter (FC):  Can you share with us the story of how Another Broken Egg Cafe got its start?

Ron Green, Founder and CEO of Another Broken Egg Cafe

Ron Green, Founder and CEO of Another Broken Egg Cafe

Ron Green (RG):  After moving to Mandeville, Louisiana in 1992, I found that there were no really great places to eat breakfast, brunch, and lunch in the region. I felt that if I could create a snappy name and a unique menu with different and upscale dishes, guests would come. I felt that setting the price point at the middle income level and developing a vacation atmosphere in an old house setting would be unusual enough for guests to want to visit, keeping in mind that service was paramount as well.

The original Broken Egg opened in November 1996. Following its success was the first Another Broken Egg Cafe in August 1998 in Destin, Florida where our corporate offices are stationed. The name came simply from one of our many guests when she asked me “Will you please open up another Broken Egg in New Orleans?”

FC:  What is your professional background?

RG:  Unlike most restauranteurs, I had very little culinary background. I attribute much of my success to a keen sense of detail and a sensible palate. Twenty five years of DOD and DOE projects under my belt helped hone my skills in planning, scheduling, and implementing major government projects. I utilized those talents to bring the first four cafes to fruition — designing the electrical, plumbing, seating, and kitchen layouts. Actually, my first cafe (~90%) was completed with the help of family members.

FC:  For those unfamiliar, please tell us about your food? What is unique about your menu compared to that of a typical diner?

RG:  We’ve spent a tremendous amount of time developing eight different Benedicts; creating dishes with crab, shrimp, and crawfish; taking an ageless Bananas Foster recipe and tweaking it a little; and enhancing waffles, French toast, and pancakes. We also have some very unique burgers with roasted red peppers, caramelized onions, bacon, and fresh basil. Our salads are delightful with fresh and unusual twists.

With our corporate chefs, we’re developing cutting edge items that will continue to set us apart from your typical breakfast, brunch, and lunch cafe, focusing on the health conscious side.

FC:  Most of your restaurants are open from 7am to 2pm. What is the rationale behind your limited hours of operation? Do you expect to extend your hours in the foreseeable future?

Another Broken Egg Cafe's Eggs BenedictRG:  Our hours are perfect for a one shift operation, allowing the owners/managers to have a normal work day and minimizing heavy management requirements. We give our franchisees the flexibility to extend those hours with a caveat:  more hours doesn’t necessarily mean more to your bottom line.

We love being known as the 7am to 2pm cafe, where guests know they’re going to have a great experience, sometimes eliminating their middle meal due to our generous portions.

FC:  Can you describe the ideal franchisee for Another Broken Egg Cafe?

RG:  Our ideal franchisee cannot be identified by experience, age or background; instead, we look for a passion to please, a dedication to putting out the best product consistently, and the desire to work hard to achieve financial success. We look for people that have the ability to understand a basic business plan and execute a well written road map with some flexibility. Finally, we are looking for folks that have realistic expectations of how much work it entails, the amount of investment capital it takes, and the time it will take to exceed the return on their investment.

FC:  What is the ideal neighborhood and territory for Another Broken Egg Cafe? In what regions of the country do you see the strongest demand for your brand?

RG:  Another Broken Egg Cafe has two markets that are of great interest. One is high density areas with average household incomes in the immediate area exceeding $80k per year. We look for quality developments within these trade areas that have great visibility, access and other national brands that attract our same customer.

Second, where we do extremely well is resort markets that receive a lot of visitors and also have a strong full time residential base. Our Sandestin, Florida location really put us on the map. We were offered an opportunity to join Intrawest’s Baytowne Wharf project and it has been extremely successful. Our goal internally is to continue to find outstanding resort markets and develop restaurants that make sense.

One thing that we have done that the larger brands do is we have spent a great deal of time identifying who our core customer is through segmentation modeling and psycho-demographics. This plays a huge role when we go into new markets and allows us to find out where our core customers live,
helping us determine the best locations for the restaurant.

Our growth model is to continue to fill in the Southeast region and Florida, and slowly head west.

FC:  What specific steps do your most successful franchisees take in order to build and grow their respective businesses?

Another Broken Egg Cafe's InteriorRG:  First and most important step, listen. They understand that perfection is almost never attained and strive to improve daily, listen, and follow the path we have set, informed by our successes and challenges.

Second step, ask questions. The most successful franchisees pause throughout the training and say, “I need to understand this better, can we go over it again?” or “I feel comfortable with this segment of the restaurant but find myself avoiding another. Can you spend more time with me on the troublesome segment?”

Third, focus on the plan that is provided. Too often, we find franchisees that try to find a better way to “break an egg.” The successful ones learned to “break the eggs” our way and accept the fact that we have probably done a lot of research and trials to come up with the best way.

The final step is to enjoy the journey. The restaurant business can be very fulfilling and infinitely less risky, especially with a successful brand and a team to keep you on your feet while patting you on the back.

FC:  What are some of the things you are doing to help your franchisees become profitable?

RG:  1.  Continued purchasing strategies to include distribution consolidation and manufacturer negotiations to offset increased product costs.

2.  Increased support visits to franchise locations to identify cost savings opportunities, followed by training and systems implementation.

3.  Increased PR to drive top line revenue through increased brand awareness resulting in guest count growth.

4.  We are currently undergoing an effort to reduce the size of our cafes, without a parallel reduction in seating, to reduce initial investment costs.

FC:  Franchisees across the board, but especially in the food category, are sensitive to the issue of franchisors profiting excessively from kickbacks from approved suppliers and vendors. What can you say about Another Broken Egg Cafe’s policies to ease these concerns?

RG:  We are fully transparent on all rebate and marketing fund programs and disclose all details annually at our franchise summit. All proceeds are distributed back to the franchise community by funding our annual summit lodging and activities. As this revenue base grows, any surplus dollars will be used for incentive/performance awards within the franchise system.

FC:  Every industry has its own unique challenges. What are some challenges in this line of business that your prospective franchisees need to be aware of?

Another Broken Egg Cafe's ExteriorRG:  Recruiting and training talent to represent our brand standards can be challenging. We work hand in hand with our franchisees to assist them in fully understanding the dedicated effort needed to have a great team.

Rising commodity costs of late have created a challenging era to maintain profitability goals. Educating the franchisee on where to find this data/trends and to adjust accordingly is extremely important.

FC:  Can you tell us a bit about the initial investment and ongoing expenses to open and operate Another Broken Egg Cafe? What is the profit potential for your franchise?

RG:  The initial investment can range widely based on a number of factors, such as the scope of build-out and equipment package chosen. Tenant allowances from the landlord can be a huge factor as well.

First and second generation locations save the franchisee some fixed asset costs (i.e. grease traps, vent hoods, etc.), but generally speaking, we consider $400K-$800K to be a target.

The largest contributing on-going expenses for our cafes are food, labor costs, and rent. For food, our target is 23-25% (of revenues), for labor 26%-30%, and rent 6-8%.

Our systems allow for an above average industry return if managed appropriately.

To learn more about Another Broken Egg Cafe, check out their website, Facebook page, and Twitter feed.

Franchise Matching Quiz

{ 1 comment… read it below or add one }

Mr Freeze February 18, 2012 at 5:36 am

Hi there,

interesting breaktfast concept, reminds me a bit of Cereality.

By the way does anyone know, what was the per store average sales volume at Cereality?


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