This Franchise Chatter Guide on how to build a million-dollar franchise business was written by Brian Bixler.
The back door of Paul Danylik’s Handel’s Homemade Ice Cream & Yogurt franchise is getting crowded with the names of employees and colleges. When students leave Danylik’s employ to go off to college, it has become tradition for them to sign the door and put the name of the university they are attending by their name.
Saying goodbye to some of the teens is one of the bittersweet aspects of the ice cream business, where the staff tends to be young, Danylik says. But finding the right employees to replace them and building loyalty to the company is one of the secrets to having a million-dollar business.
And Danylik should know.
Million Dollar Baby
After scooping up an impressive $1 million in gross revenue last year at his Redondo Beach, Calif., store, the 61-year-old entrepreneur says he is on track to surpass that sales mark in 2014. His formula for success can be applied not only to other frozen dessert operations, but to many other types of franchises as well.
With ice cream-making machines whirring in the background, Danylik discussed some of his best practices with Franchise Chatter recently, revealing some of those strategies he believes have led to his phenomenal success that has even outpaced two other California locations for Handel’s.
His Handel’s store, which opened in June 2010, is the most successful in the ice cream and yogurt company’s franchise system with 14 percent same-store sales growth year over year. In July 2014 alone, Danylik’s store registered $125,000 in sales—all within a 1,800-square-foot piece of real estate.
Hiring Practices Are Crucial
“I’ve grown every month since the store opened,” says the owner, who left a career in TV syndication to open his own business. “We’re still growing every month. I don’t have any indication that I’ve matured to the point that I’m not going to grow anymore and I’m trying everything not to get to that point.”
One of the things he and his wife try to do is instill loyalty to both the store and the brand in the people they hire to work for them. Danylik believes that is one of the secrets to doing good business. For example, some of those students who walked through the store’s so-call “Door of Fame” while leaving the name of their college destination will march to school with a Kindle given to them by their employer last Christmas.
“My wife ‘Q’ gives everyone a gift on their birthday,” Danylik added. “We make our store a fun place to work. A happy staff gives much better customer service than a staff that doesn’t want to be there.”
A Family Affair
Either Danylik or his wife Susan (called ‘Q,’ short for ‘Suzie Q,’ by the staff) is at their store every day. This summer they oversaw a staff of 22, mostly between the ages of 16 and 21. When college beckoned some of the longstanding employees, they went off to places like Berkeley, Notre Dame, Ohio State and UCLA. But Danylik knows he can count on some of them returning during next summer, saving him from having to train a whole new crew.
Still, high turnover comes with the territory when dealing with employees of that age group. Himself a father of two sons who are 23 and 25, Danylik also calls employees his “kids,” a clue to the paternal closeness he feels with his workers.
High School Grades Count
“I think my kids would kill for me,” he says of his young employees. “I’ll tell them I won’t ask you do to anything I haven’t done a thousand times. The only way to get fired on the spot is to steal: taking money or giving away ice cream for free.”
“The first question I ask anybody applying for a job is what their grades are like. If they’re lousy, my response is go home and work on your grades. I think almost all of the kids in our first crew have successfully completed college, or will this year.”
But keeping his crew happy with such things as employee bowling nights and birthday presents isn’t Danylik’s only suggestion for building a million-dollar business. It has to start from the very beginning, especially with a franchise, when the location decision is made.
Danylik said location was especially crucial because he was introducing the Handel’s brand to his region in Southern California, the cradle of the current frozen yogurt craze. He also wasn’t sure how competition from that product would impact his ice cream business.
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“It was identifying a product I wanted to bring to California. I didn’t want to be the No. 52 Subway in the area. I wanted to do something different that wasn’t available. The risk I was taking is it was a totally unknown brand.”
He remembered the Handel’s brand himself after tasting it more than 25 years ago as part of a wedding party in Youngstown, Ohio, where the franchisor is based. And he and the groom from that day, who now lives near Danylik in California, had been known to drive more than 50 miles to the closest Handel’s store to them in California before Danylik opened his franchise.
The World’s Best
Handel’s built its brand after many years operating in Youngstown, where it began in 1945. Its history is steeped in ice cream, which it creates right on the premises using ingredients of very fine quality. The company started out in the corner of a family-run gas station once upon a time and is now a regionally known brand in the Midwest with some 40 locations in seven states, including Ohio, Indiana, Pennsylvania, Virginia, Florida, Nevada and California. National Geographic recognized the brand as the best in the world in its 10 Best of Everything: An Ultimate Guide for Travelers.
When Danylik finally settled on a location for his store, he made sure everyone in the Redondo Beach area knew about the product’s prestigious selection as the world’s best by plastering the fact in the windows while build-out progressed on the unit.
Patience in the search for the ideal location is paramount to achieving success in Danylik’s book and he was tempted a time or two to settle on something that wasn’t exactly what he wanted during the year-long search process.
He said Handel’s corporate executives firmly steered him in another direction: While most other Handel’s stores are stand-alone enterprises, the Redondo Beach store is more adapted to the Southern California lifestyle and is located in an end-cap of a strip mall anchored by a CVS.
Danylik has stayed true to the brand by having an ice cream stand that serves its customers at walk-up windows. The end-cap allows for a patio area with limited table seating outside. And the demographics of the surrounding area could not be more conducive to Danylik’s family-style business.
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“So, I finally found the location I’m in and the biggest plus for me is a private, parochial school with 400 or 500 students, then (within) a block is a public school, and within one quarter mile there are two high schools, and the rest is residential.”
“My patio has become the pick-up zone for mothers picking their kids up from the school across the street.”
Noting that he and his employees can tell the time of day from the school colors that show up on his patio when classes let out, the schools have also become part of the store’s marketing strategies, which are a crucial component to Danylik’s success. He often participates in fundraisers for different school groups by supplying such things as ice cream sandwiches at cost which can then be sold for sometimes double the wholesale price, creating proceeds for school groups.
An avid guitar collector, Danylik sets up similar fund-raising methods to raise money for one of the schools’ music program. His connection to the community has deepened from holding fundraisers on what would otherwise be slow nights.
Successful Sales Promotion
“Going now into our fifth year, we are now an established brand in Redondo Beach,” Danylik said. “Hundreds of customers all know my name and I am embarrassed that I don’t know half of theirs, but I know their faces.”
One of the store’s biggest marketing successes came from an idea Danylik got when visiting his son at UCLA. There, a store called Diddy Riese Cookies was selling ice cream squished between two cookies. Students lined up outside the store to buy one for $1, he observed, and was inspired to do something similar.
His store started with promotions like Wednesday Hump Day, when it would give an extra scoop of ice cream for $1. But the promotion that stuck was Two Buck Tuesdays, when people got a cone (regularly $3.25) for $2. Now if you mention Two Buck Tuesday in Redondo Beach, Danylik says, everyone knows you’re talking about Handel’s. They even had a T-shirt made that reads “I survived Two Buck Tuesday” and it isn’t unusual for the store to have to make 60 vats of ice cream on a Wednesday to make up for depletion of stock from the previous day’s sales.
“That’s become kind of our signature,” Danylik said. “It’s a social occasion. We’ve got every window open and we try to make it as quick as possible.”
People don’t seem to mind standing in line for the special, he continued, and many participate by ordering a little baby cone that’s free for toddlers and then snapping a photo of baby’s first ice cream cone before sending it to the store to be posted on its digital menu board. It’s just another way of connecting with customers, Danylik said.
The Right Business Partner
Finally, Danylik points to his partner in life and business as another reason for his success. His wife of 29 years, whom he calls the “mother hen” of the company, is an entrepreneur who has
Among other things, Susan Danylik helps market the business through social media by posting daily flavors on their Facebook page and answering all Yelp! reviews, whether they be positive, negative or indifferent. It’s part of a multi-pronged approach to marketing.
“You have to identify whatever advertising works best for the business you’re in,” Paul Danylik said. “I think the biggest thing I try to do is use the most effective. I don’t believe in Groupon or anything like that. I don’t coupon at all during the summer months. During the winter I’ll start couponing.”
With so much advice about what a franchisee might do to build a million-dollar business, Danylik is asked about absolute no-nos. Is there something he has done that he would advise owner/operators to avoid at all costs.
“Hiring a friend’s child,” he responds going back to the importance of hiring practices. “I did and it just didn’t work out. I was saddened by it, but don’t put yourself in that situation because it’s a no-win.”