Franchise QB

Episode 67: Frank and Kacie Radochonski- Pop's Beef

• Mike Halpern • Season 1 • Episode 67

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In this episode of the Franchise QB Podcast, host Mike Halpern speaks with Frank and Kacie Radochonski of Pop's Beef, a family-owned fast-casual franchise. 

They discuss the origins of Pop's Beef, the transition from a licensing model to franchising, and the importance of community involvement. The conversation also covers the diverse menu offerings, the competitive landscape of fast-casual dining, and the qualities sought in successful franchise owners. 

The episode concludes with insights on the investment required to open a Pop's Beef franchise and the dedication needed to succeed in the restaurant industry.

Takeaways

-The importance of hard work and customer relationships
-Family values are central to the business culture
-Transitioning from licensing to franchising was necessary
-Community involvement is a key aspect of their brand
-Pop's Beef offers a diverse menu for all customers
-Flexibility in business models helps them stay competitive
-Successful franchise owners must be hands-on and committed
-Investment costs vary widely based on location and model
-Running a restaurant requires significant time and sacrifice

Chapters

00:00 Introduction
01:13 The Origins of Pop's Beef
03:06 Family Dynamics in Business
05:47 Transition from Licensing to Franchising
08:53 Community Engagement and Values
12:10 Menu Diversity and Customer Experience
17:08 Competitive Edge in Fast-Casual Dining
18:03 Qualities of Successful Franchise Owners
19:53 Investment and Financial Considerations
24:00 Conclusion

https://popsbeef.com/

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Contact me and my team with any questions along the way. www.calendly.com/franchiseguy
Mike Halpern, CAFC
mike@franchiseqb.com

This is the Franchise QB Podcast, where we empower entrepreneurs to win big in franchising. We huddle up weekly to educate our audience about the most successful small business model ever created. Franchise it! Welcome to the Franchise QB podcast. I'm your host, Mike Halpern, a 20 year industry veteran and entrepreneur. My mission is for listeners to achieve their American dreams of creating wealth and independence through franchise ownership. Every week we speak with franchisees, franchisors or vendors that support the industry. Thank you for joining us and let's get started. Joining us in the huddle today are Frank and Kacie Radochonski of Pop's Beef. Welcome to the show. Thank you. Thanks for having us. It's great to have you both. So let's start with you, Frank. Frank, you're the founder of Pop's Beef and your daughter Kacie is the VP of operations. We'll talk to Kacie here in a moment. And your son, Frankie, is also a multi-unit franchise owner. So you guys are all involved in the family business. So those that are listening that are unfamiliar with your concept, I'll fill them in. So Pop's Beef, is a beloved fast casual franchise. Probably wasn't called fast casual back then, but that's our new industry term that you founded back in 1980. 17 locations across Illinois and Indiana. Pop's beef has become a go-to for fresh house made Italian sausage, beef and more. The brand is celebrated for its high quality food and also the strong community connections and family driven values. So Frank. Take us back to the beginning when you first opened your location back in 1980. How did your initial vision and dedication help shape Pop's Beef into the big success story it is today? So it's pretty funny you say vision. all honesty, I had no vision. You know, I was young, I was 23 years old, and I was looking to simply survive. You know, I had worked five years previously at a place called Duke's Italian Beef and Sausage. And so I took kind of that same concept. and figured that if I was just to work hard, let's just see what happened. But as Kacie sees it, well, back then it was me and my mom, two people in that store. And I literally never left. you know, never, never left. was there morning, noon, night. I never left that store for two years. So, you know, I think I was lucky. I don't think this is something you teach that, and it's not like I'm full of my own boat, but you have to be have a work. ethic. And so I think more than anything, I was driven by the fear of failure. Nobody likes to fail. So I was determined, no matter what it took, that I wasn't going to fail. And the most important thing that I knew from the very beginning were your customers. So they were few and far between in the beginning. But as they came in, you talked to them, and you kind of got to know them. So I think together with what I was doing, like working hard and getting to the customers, it kind of evolved from that. My Mom was a great help. My Mom was unbelievable. Yeah. I I have a tremendous amount of respect for restaurant operators. I know how hard it is to be good at it and it is not an easy thing to do. Even as a franchise owner, can be challenging, but to do it from scratch, create your own concept, even if you had the foundation from a previous restaurant, coming up with your own menu and your way of doing business and managing people, it's a lot. So Kacie, let's talk to you for a moment. So the legacy of the business continues through both Kacie and Frankie. Kacie, you're the VP of Ops, ensuring brands operational excellence. And as I mentioned, Frankie has multiple franchise locations. You guys are the next generation of the family business. So Kacie, tell us a little bit about growing up in the family business and your current role as VP of Ops. So very much like my dad's story of never thinking that this is going to be his long life term plan. I don't think it was ever mine. I we have stories from growing up when, you know, my sister is nice. I'm 104. Me and my brother in the operation, my two sisters, would always say our smart chose different career paths. we would, high school, someone wouldn't show up and dad would get on the phone. you it's my mom, send one of the girls in and we'd all be yelling, I went last time. And so for you to say that this would have been my career path, I don't think I would ever chose it. But now with that being said, before this, we were a license agreement. So I don't know if you're familiar with, know, the big differences between licensing agreement between franchising. And so I graduated college in 2008, excuse me, and then in 2010, you became a franchise. So that's kind of when I came on board full time. decided that this is what I wanted to do and I mean back and forth the different options what I wanted to do but I think the reason that I stayed and I still stay is because of the ties not only to family but I think that there's family within our employees I think there's family within our customers that relationships my dad had built over the years and there's a family with our franchisees now that were not franchisees there were licensing agreements of course but Not only is that family values instilled within our own family and that's something that, you know, again, integrity has built, but that has become ties, like I said, again, with the customers and with our employees and with other franchisees. And it's, it's created a great work environment, not only, and something to be truly proud of. And it feels like home. And so in instilling that in our franchisees, and I think that that is why I stay, because of that, like I said, that's really something to be proud Yeah, and I want to get to the franchising. Yeah, I definitely want to get to the franchising aspect of it. I'm curious about like the initial expansion. Did you, Frank, did you open a second location or did you go right to licensing? How did that all look back in the day when you got the store to? So it's the second store actually was my uncle Joe. He drove a Mayflower truck. But every time he was in town, he was at the store, whether he was helping slice beef or make jardiniere or something. And then when he got the call or whatever, he hit the road again. So in between time, the realtor that had put me in position to own my store, he called me up and says, hey, listen, we have a store on our third, are you interested? And instantly I called Uncle Joe and I said, hey, listen, we got an opportunity. So he says, I'm in. So that was our second store. And we helped him get started with that. And then we went to a third store, which I did. So those were the first three stores. So Kacie, tell me a little bit about the licensing. So it sounds like you guys started with a licensing model and then evolved into a franchise model. Can you walk us through for those listening that may not be familiar with the differences between the two? Can you touch on that? So licensing, think, has a lot more flexibility in what they can do with in the store. One, for a licensing, you don't collect a royalty, right? You kind of give them, normally they give you a check and they can use your name, your recipe and kind of do it like their own mom and pop shop, but just operating under your name, which is kind of cool because again, going back to things that are so important to us as community. So they can market and advertise the way they wanted to do it. They could run the business. They wanted to do it, but of course they'd be using our recipes and our name. And kind of like my dad was saying, know, Uncle Joe opened the first one, know, opened the third one, but it was a friend, you know, a friend wanted to open this, a friend wanted to open that. And so I think we hit nine stores, was it nine stores? It was around nine stores. And it was actually the government came to us and is like, I don't know what you're doing here, but this is no longer a licensing agreement. You've gotten too big. You're operating as a franchise. And so with the government intervening, we didn't really have a choice. We were backed into a corner. And I think he could prove that he wasn't collecting royalties and they were truly operating as a licensing agreement. You know, they made some, they made a deal saying pretty much if you become a franchise and you kind of follow all the things, well, you know, not find you as what you will. There was a small penalty. Yes, exactly. So that was, we were forced into franchising. and so yeah, and it's, it's for the, for the greater good for the, I really appreciate your candor because not a of people talk about that. And I think it's really interesting. And there are a lot of differences between the two. And I see licensing models and things like, you know, Nike shoes will be placed in a Dick's Sporting Goods, but they can decide, Dick's can as a licensee, well, this is the part of the store we want to put it in and this is how we display the shoes. But, you know, they can kind of do it the way they want. Whereas in a franchise, they're going to tell you exactly the trade dress, the location, the way of doing business, the way you present the sale, all those things. So they are very different. But I can see how most restaurant brands are going to be at some point at scale, going to be converting to a franchise system. So you guys went through that. Did you say it was 2010? 2010, yes. Okay, cool. So family business became a licensor, now as a franchisor. Talk about the dynamics of running a family-owned business. I mean, I'm sure there's challenges, I'm sure there's rewards. But talk about working within the family unit, but being a franchisor, what's that like? Well, I'll start off. Yeah, so everything I think she has gotten better than I have. Well, I think you've gotten better to as she understands that I'm always going to say my piece before. don't think when I started out and say maybe she's she was always as accepting as she is now. Because I think she sees the you know, it's kind of difficult to find that line, but I could remember the day like she kind of came to me and I said, you know, the one thing we have to do is make sure family remains family. Yeah, business remains business. I think we've done a good job. Well, I think yes, that is something he's always said, you know, when we're a family, we're family times, family time and business is business and you kind of gotta keep that separate. And I know this is a kind of layup to the next question of my brother being a franchisee. I don't think he does that as well. And I think that that's why he became a franchisee and he is a very good franchisee. He has in 2021, he worked for another fast food restaurant before this. And in 2021, or he excuse me, he then came full time at our corporate location and 2021. They had a partner in one of our stores that was looking to get out and so he had stepped in and it was a great fit. And so I think he has a hard time keeping business and family separate. And I think with him becoming a franchisee, it's become a great dynamic. And he brings something, you know, kind of brings a different side to, you know, the family dynamic and gives good advice, right? I he comes up with new ideas. I wish he would come up with more because this is what he went to school for. You know, he worked for restaurant hospitality management. He actually went to work for hotels and he worked for another franchise and stuff. So he got the full gamut where, you know, I didn't go to school for any, I didn't go to school. So I've been flying by the seat of my pants the entire time. looking for the input is great. Yeah. I think that's kind of an interesting perspective because sometimes there's a misconception that being a franchise owner means that you have no flexibility in how you run your business. It's super rigid. And obviously there are some big systems, you know, like the golden arches where it's like, hey, it's our way. That's a, you know, 10,000 units, whatever. But a lot of franchisees, it's their business, right? Yes, they have to operate within the parameters of the franchise or, and there's certain things that they absolutely must do, but it's their business. They can come up with ways working within the parameters of what's legal and what's acceptable and what's culturally appropriate from the brand and come up with great ways to build their business. So it's cool that Frankie. can kind of do that and he's still part of the family, but he's on the other side, right? He's a franchise owner. signed a franchise agreement. So tell me about how many locations does he currently operate? Three. He's got three. Okay. And how did he roll them out? Like he got the first one. Did he operate that one for a period of time before he opened the second one? So, uh, like I said, it was an investor that he wanted to get out. And so he kind of stepped into that person's shoes and then kind of it. kind of domino effected, happened with the second one and happened with the third one. So that investor backed out and he got in. it wasn't like he was starting from scratch at any of these locations. These were all acquisitions that were licensees. But he stepped in kind of in the third one. you're right. Fully stepped into the third one. Very cool. So how long has he been a franchise owner? When was that first franchise agreement executed? 2021. So four Cool, last couple of years. So let's shift gears a little bit and talk about like you mentioned community before. I know that's at the essence of Pop's Beef. It values, you guys value the community that you operate in. Tell us about your community involvement, local fundraisers, charitable initiatives. What do you guys do that kind of connects with the community? so it started as i'm not actually i mean it was everything from little league to the library programs you the reader programs when they read so many books you get to get to her churches to if her programs to churches through the schools on halloween you send out free hot dogs for all the kids at the schools a lot of which can't do anymore but then looking to grow that's for a franchise level how do you still get back you know i can't in a much bigger scale and so What's been really cool about that, we've partnered now with Red Cross. That's a great, you know, partnership. then Choice for Tots we do, which is a bigger one. So very much still in the roots from a franchisee level. I think all of our stores are very well connected in their communities. And then on a franchise level, we do, like I said, the Red Cross and Choice for Tots on, like said, a bigger scale. That's really cool. Yeah, it's nice that you can find these organizations that as you grow into different states and communities, you can still kind of stay true to that same. that same cause. So let's talk a little bit about the menu. I know people want to hear about that. Tell us what is Pop's Beef for someone that's not from Chicago, not from Illinois, Indiana, that may not have been to your shop. Tell us a little bit about kind of what's on the menu. Our menu is one of the biggest menus you will find anywhere around. It's going crazy. It's gone crazy. And I think that that is something we both talked about trying to minimize. because of franchising, right? When you look to franchise, it's not easy when your menu, I mean, you look at who is franchising right now and the best out there, you know, that are opening the most of my stores are that they have simple menus. And so ours is nothing but simple. But anyways, you come and visit one of our restaurants, we have something for everybody. We have, know, of course, what we're known for our staples, our beef, our sausage combo sandwich are delicious with homemade Jardinaire. You'll never find a better sandwich. you know, and going past that, you have the hot dogs. It's a proprietary item for us. which is obviously perfect for kids, know, chicken nuggets and stuff like that. And then for the lighter eater, you have our chicken. I love a chicken pita, but we have salads and we have wraps now. A gyro sandwich is delicious. Breaded steak, like I said, I could go on and on. And then our appetizers, we've got everything from cheese curds to onion rings to fries and in between. So and then milkshakes. Yeah. And then when then wash it all down with a milkshake. And then forget about those milkshakes. Yeah. How about catering? Do you guys do jobs for like offices and other commercial accounts? You know what? that's kind of gotten hard because obviously everyone wants the beef, right? Because that's what we're known for. It's delicious. so in the past couple years, we've started doing things called grab and goes, which I think it's easier when you're looking at a cold cut sandwich, but ours is a warm sandwich and best served warm and eaten warm. that's kind of gotten hard on, like you said, corporate level, but definitely Christmas Eve is our busiest day of the year. We do tons of graduations and catering for parties and things like that. But on a corporate level, it's not as easy as it sounds for us. Not to say it hasn't been done before, but it's just. We've also done weddings. Yeah. Yeah. Okay. That's awesome. Yeah. I mean, it's tough because you know that your product is best enjoyed, fresh and hot. And if you sacrifice the integrity of the product, people aren't going to love it as much. And they may not, you know, rave about it the way they do when they get it in the shop. So I know that's a tricky thing is you want to make people happy, but not at the expense of kind of sacrificing. you know, what's good about the brand. Well, not only that, your best source of marketing and advertising is word of mouth. And so kind of like you said, if they don't have a great experience, you know, and it wasn't kind of our fault because they didn't get it from our store. They got it at a party or, whatever it is. And we clearly do do it. Yeah. We make sure that what you want is what you're going to get. Yes. It's not going to be any misconceptions, you know, especially, let's say for the wedding. She says, want to talk to the mom and the bride before the wedding day. So that's cool. So let's talk a little bit about where you're positioned in the fast casual segment. Fast casual for those that are unfamiliar, you go to the counter, you place the order. In some cases you have a runner that brings out the food. In some cases you wait and get the food. It's one of the most popular, probably neck and neck with just fast food QSR in terms of growth. So tell us how do you guys stay competitive in that space and still preserve your family oriented values? I think because we are so flexible and what I mean about flexible is we are not your cookie cutter franchise. We have restaurants and gas stations. have restaurant. We actually just opened a restaurant that's drive-through only. You can't even walk in. Our corporate location is carry out only so we don't have drive-through. We don't have seating in ours. So we are very, very flexible to any market that wants to have us in that. so in addition to that, I think you kind of hit the nail on head with the menu. We have something for everybody, whether it's your big eaters, your light eaters, your kids. And I think community involvement, I think that that's been huge too. We do have the full service where we do have Dine-In, we do have Carry-out, we do it all. And we depend on the Door Dash. Yeah, yeah, yeah. like, Grub Hub for deliveries. Yeah. Yeah, that's great. Yeah, I think the, you know, the something for everyone. I used to work with a client called Paisano's Pizza here in the D.C. market, and they were really great at having a menu that a lot of their competitors couldn't touch because they did so much in the shop. And it was very complex. But that was what differentiated them from the next guy. Is that like if you want, you know, a pizza, you can get a pizza. But if you want something that's hot, something that's cold. It was all there for you. it sounds like, yes, it's going to be a little bit more difficult to execute. But at the same time, that kind of is your competitive moat that is different than what the next guy can do because you guys have figured out been doing it for a while. So tell me a little bit about a franchise owner. I know they come in all shapes and sizes, but what qualities do you guys seek in a new owner that you feel can be real successful with Pop's Beef? I will say first of all, it has to be a good fit. It has to be a right foot. We've learned a lot over the years of the guy that comes in that just truly wants to be an investor or the guy that comes in that doesn't really want to work the store. You know, it's not going to be familiar and tries to put just anybody in place to run that operation. Like we said, it's not our brand is not an easy, you know, cookie cutter brand to just that you could throw anybody in. so. I would say first and foremost, it'd be someone that does want to work in the restaurant industry, not so much just like I said, an investor. We have worked with investors too where we want to meet the manager. Yes. The person that's going to be running the store, you know, that's the most important position there could be. Yeah. So it's good if they have capital because without that there's no project, but there has to be someone that has the chops that's going to be, you know, running the operation. Cause without that, it's going to be really difficult to. Stay open, you know, well, and I think it's important for them to have skin in the game, whatever that looks like. Right. So if you just get kind of anybody in there and like I said, it usually doesn't work out. You're right. You're right. Sometimes when the people, if you have the right people, let's to make it. Yeah. You guys are in the people business and that starts from the top down, you know, not only on the franchise side, but in the store level operations. So, um, let's talk about Item 7. How much does it cost to get into a Pop's Beef? I know it was going to be a variance because. You have a few different footprints, different sizes, gonna have different conditions of the space, but give us like a range of what it would cost to open up a Pop's Beef franchise. So unfortunately that range is so wide, right? Because we do have people that rent their space, right? And they get in these small footprints and we have people that buy obviously the property, which then you're looking at a much higher number. I think in our FTD we're saying we're between 500,000 and 1.4. 1.5. I like I said, know that that's a really tall range. think that 1.5 and up are the ones that buy the property. So that includes your property and building and so forth. And if you're going to build, it's just crazy money. Right. Well, and that number is obviously with everything in the academy, everything's gotten so expensive to build. And in our equipment, mean, something we pride ourselves in, we don't come from a commissary. Each store cooks and slices their beef fresh daily. And that's why our product is such a great product. So the equipment that goes behind what you know, the slicers and the the equipment to actually slice that beef is not cheap either And so it is a it is a big investment and kind of like you were saying you got to have an investor doesn't happen So are you comfortable if the right capitals there and they have a commitment to kind of bring the right? GM's to the table to run the shops. Can someone come in and say hey, I want to buy St. Louis and I want to be the only one there and kind of lock down five locations or 10 locations or something like that. Is that possible within your model? So yes it is, but we will start with your first one. Before we would sign any contracts and saying, yes, you can have that whole area. We need you to open one and see if it runs properly and kind of follows our guidelines and what that would look like because you get someone to lock down an area and their first one's a flop, then what, right? Or they won't put the time in the effort. You have the wrong manager. don't want to be don't want to be stuck, yeah. Yeah, okay. And then how many franchise owners do you currently have in the system? That's a great question. 10? So it's really interesting talking about family. Two of our franchisees are families. so one is three brothers that own a set of stores. They each have their own stores. And then another one is he's a guy, but Vince, he's got 10 kids, 10 kids and four of his children. And they're in it in some different capacity. So it's really cool to see that his kids are friends. One was a CPA, a young out of college CPA and stuff. he says, forget the CPA. And he went into this and I'm like, like, really? Yeah. Roll up your sleeves and into the beef business. We're real honest because he says I'm our worst enemy because I want people to know. how difficult this really is. It's not like you're walking up to a vending machine and you put a quarter in and you get a sandwich or a Coke or something. It's just a tremendous, tremendous amount of sacrifice that you have to make. Whether it be your time that your family is limited. I mean, there were times where if there's a wedding coming up and I had two people calling sick, I'm not shutting the store down. I'm simply not going to that wedding. When I think people forget restaurants, know, it's seven days a week for the most part. mean, early mornings, especially someone's at our store by 30 in the morning, slicing, cooking that beef, getting ready for the day. You you open the doors at 11 and then of course, you we close at 10 o'clock at night and then closing. So you're not home till 11, 30, 11, depending on how long it takes to close and how many people you've got on your schedule. And then you get it up, you know, you get up the next day and you do it all again. Right. So people forget that they want to sign up in the restaurant thinking, oh, it'd be so much fun. it's it's long hours. It's hard work. I mean, for all those reasons you said, I know when I talked to a lot of first time franchise investors that have never owned a restaurant and they want to get into franchising, I generally advise them to maybe start a little bit smaller with like a service based model and then they can graduate to something like restaurants once they really understand entrepreneurship and business ownership and managing a P and L and managing people. Because jumping right into what you guys are doing, it is, it is tricky. Now, can it be done? Yes. Have I placed clients in food brands that have been wildly successful and scaled. Of course they have, but I like how you guys are really candid about how hard it is. Like you don't want to sugar coat that cause then they'll get in and say, wait a second. I bought a franchise. paid this big fee. I thought that it was just going to be done for me. It's not like that. You know, you have to run this business. Now you guys give them the blueprint, you give them the menu, you give them the trade dress, the, know, the trademarks, all that. But at the end of the day, they got to roll up their sleeves and get it done. Absolutely. 100%. Yeah. So you guys have shared a lot. mean, you're making me hungry. I'm sure you hear that a lot when you talk about your business, but anything else you want to add to the mix today before we wrap up? No, think everything's pretty good. Pretty good. Yeah. If you do, please don't make sure you order the beef dry. You got to get a juicy with hot peppers. Definitely people coming in to order a sandwich and people will order it with ketchup or mustard or goofy stuff. Or they'll tell you the sandwich is wet. Yes. Yes. You know, they think it's a deli sandwich and it's not. If you eat it with a fork, that's probably the right way to eat it because it's so juicy and that's where all the flavor is. Well, when I come in for the first time, I'm definitely going to take the recommendations that you've had and what your team will have so I get the best experience out it. I want to drip and wet with tons of hot peppers. That's the way I want it. So hey, if anyone listening would like to connect with Frank and Kacie and their team to learn more about becoming a Pop's Beef franchise owner. contact me at FranchiseQB.com. We're on X @QBFranchiseQB. I'll get you guys connected. Thank you so much, and Kacie for taking the time to get in the huddle and talk about Pop's Beef with us today. Thank you. Thanks for having us. Thank you for listening to the Franchise QB podcast where you're at the helm of your future as a franchise owner. If you enjoyed the content, please rate the show and recommend it to anyone that might be interested in franchising. Make sure to visit FranchiseQB.com to subscribe to my newsletter and for an actionable playbook to go from walk-on to legend in your new business. Follow us on Twitter @QBFranchiseQB and join us every week for a new episode. See you next time. Thank you for listening.