By definition, Flynn Restaurant Team is a multi-unit franchisee. But the descriptor does not thoroughly seize what sector veteran Greg Flynn and his crew have designed across much more than two many years.
The firm is the greatest operator for Arby’s, Pizza Hut, and Applebee’s, the next-most important for Taco Bell and Panera, and the fifth for Wendy’s.
That equates to 2,355 dining establishments nationally, 73,000 staff members, and $3.7 billion in once-a-year income, earning Flynn Cafe Team the most significant business franchisee in the U.S. and possibly, globally. The enterprise stretches much more than 3,000 miles, from Portland, Maine, to Portland, Oregon.
Its most important shift came in 2021, with a $552.6 million obtain of 937 Pizza Hut and 194 Wendy’s merchants from bankrupt operator NPC International—the most significant franchise transaction in U.S. historical past.
“You add all this up, it completed our journey in a way that was 100 % constant with our system,” Flynn says.
Development of Flynn
That journey Flynn speaks of started in the mid-1990s by way of Earth Wrapps, a restaurant that “started the complete wraps phenomenon,” he says. The company was founded by a classmate from the Stanford Graduate College of Business enterprise, and Flynn determined to make a small investment decision. The initial unit opened in San Francisco in February 1995, with lines close to the block.
“Everyone believed ‘oh my God, we’ve bought the future Starbucks on our arms, and we want to deliver this to industry as speedy as possible,’” Flynn recalls.
To speed up development, Flynn agreed to construct suppliers in Seattle, the place he was increasing a budding true estate company. Amongst 1995–1999, he opened 14 models, and was quickly released into the “school of tricky knocks for managing places to eat.”
He uncovered to be a jack of all trades functioning in the front of household, back of residence, building, and other many tasks. Flynn also regarded that because he was in the beginning levels of an independent restaurant reworking into a modest chain, he was actively playing in the riskiest conclusion of an currently treacherous sector.
Almost all facets had been inherently much more hard, irrespective of whether it was convincing landlords to lease house, suppliers to promote their machines, workforce to arrive do the job, or shoppers to try out the foods.
“And you cannot borrow a dime for it, except on a comprehensive recourse basis,” Flynn describes. “Basically, you have to appear up with all the dollars to do this.”
But in the late 1990s, he turned mindful of a funding prospect in which he could obtain all the needed funds to get into a top rated-tier franchise restaurant.
“I seemed at this and it is like wait around a moment, I can borrow all of the dollars on a non-recourse foundation to do this,” Flynn claims. “And then once you do it, the consumers now know you, workers know you and want to function for you, the landlords know you and want to lease to you, sellers know you and want to sell you gear. Anything about it is simpler.”
In that era, the hottest phase was relaxed dining, and the leader in the category was Applebee’s, Flynn claims. So he took out a bank loan and bought eight merchants in the Seattle marketplace.
He acquired those people Applebee’s places to eat from Cleveland-centered franchisee Don Strang III, who owned about 70 units in Minnesota, Ohio, and Indiana, and was commencing to develop New Jersey and Delaware. His Seattle stores, nevertheless, were struggling because of to high priced true estate, building, wages, and meals. The dining places earned about $45,000 for each week.
Flynn entered the enterprise with Brad Pettinger, who he recruited to establish the Earth Wrapps business. Neither had much awareness on functioning a entire-provider cafe, but that void was crammed by Dan Krebsbach, who expended yrs performing for Strang in the Minneapolis and Seattle marketplaces. Subsequent to the acquisition, he joined Flynn’s firm as director of operations.
“He is probably the greatest restaurateur I have at any time met in my daily life,” claims Flynn, describing Krebsbach. “Consummate experienced. And he mentioned, hear, we can make it here in this marketplace, but we want to do factors differently than the way they’re carried out in the Midwest.”
Flynn and Pettinger gave Krebsbach liberty to make operational and CapEx selections. And to ensure everyone’s pursuits were aligned, the duo shifted his compensation greatly towards income sharing and gave him an equity curiosity. Krebsbach released various initiatives, this kind of as leaning into the bar and late-night time organization, shifting promotions to different lines or products, and stacking work to satisfy larger income volumes.
In just 50 percent a yr, normal weekly gross sales grew to $60,000. The team proceeded to open up a ninth and 10th cafe, which debuted with substantial volumes. It was at this place Flynn and Pettinger understood they have been on to some thing important.
A couple of several years later, Flynn contacted Strang all over again and bought the relaxation of his stores, quickly expanding the footprint from 10 to 72 units.
“When you assume of when was Flynn Restaurant Team founded, it’s possible it was when we to start with got in the cafe business enterprise in ’95, but maybe it was when we very first obtained into Applebee’s in a single market place in ’99,” Flynn states. “That’s what I generally assume of it as, but perhaps it was in 2001 when we assumed our present-day configuration of getting a multi-marketplace operator.”