Multi-Unit Franchisee Magazine Issue I, 2014 | Page 24

MEGA
sold my stores in Florida and Mississippi.”
Today, as CEO of Kergan Bros. Sonic
in Lafayette, La., Kergan has 54 units
and more than 1,500 employees in his
multi-million-dollar company and says he
feels blessed beyond what he ever could
have expected. “I’m certainly grateful for
the opportunities that got me where I
am today. Sonic, under the leadership
of Cliff Hudson, is a great organization
with great folks.”
He’s pleased, too, that his job has
turned out to be so much fun. “At Sonic,
we sell fun. We have girls on roller skates
and cherry limeades. All we do has to fit
into the ‘fun box,’” he says. “Our success is a combination of our food and
how we serve it.”

Kergan’s personal business success is
built on convictions like this: “I’m always
upgrading the restaurants. If a unit starts
looking tired, I tear it down and rebuild
or refurbish it. I’m a big believer that the
customers want to come into the nicest
facility on the street. Not something
funky—that’s like putting lipstick on a
pig—but something genuinely striking.
That shows respect for our customers
and our employees.”
His best advice for would-be franchisees is simple, and something that
has worked for him. “Go find somebody
who does something you don’t know
how to do and follow them around. Most
people are willing to take the time if you
ask them.”

BOTTOM LINE
Annual revenue: Proprietary.
2014 goals: We’re going to see how far ahead of the pack we can get. We
have such a different take on customer service that, at Sonic, we can do that.
Our competitors have a square box on the side of a window, while we have
girls on roller skates and cherry limeades. We sell fun.
Growth meter: How do you measure your growth? Customer
count is the real indicator of how well we are performing.
Vision meter: Where do you want to be in 5 years? 10 years?
We’ve never had a goal on the number of units we open. If you do that, you’re
making a decision based on an arbitrary number instead of looking at how
many back-up managers you have and whether plant closings are coming up in
town. We’re more focused on the quality of the units we have.
How is the current economy affecting you, your employees,
and your customers? We focus on the entire guest experience to deliver
added value to compensate for outside influences.
Are you experiencing economic growth in your market? Yes.
What did you change or do differently during the economic
downturn that you are continuing to do? Actually, we didn’t change.
We continued to build new stores, to replace older units with new facilities, to
add and upgrade equipment, and to add top-tier talent. We felt that it was a
sound strategy to continue improvements so that when the economy turned
positive, we were ready for it. We wanted to be proactive, not reactive. Our
results have confirmed this was the right decision.
How do you forecast for your business? We feel that we have total
control of our destiny. We know that our customers will respond to excellence in
facilities, products, and services.
Is capital getting easier to access? Why/why not? We have a
history of consistently high sales and financial performance through all kinds of

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Multi-Unit Franchisee Is s ue I, 2014

economic situations over the last 36 years, so getting capital has never been a
problem for us.
Where do you find capital for expansion? We tend to use community
banks as that is where you can meet one-on-one with the decision-maker. Also,
they’re familiar with us and they know us. We also capitalize internally, as we
feel our operations and real estate offer us terrific returns.
Have you used private equity, local banks, national banks,
other institutions? Why/why not? Yes, we use local banks. National
banks have too many layers. We never use private equity. If you don’t run an
operation daily, you can’t be a partner in our company.
What are you doing to take care of your employees? A lot—and
a lot of that is proprietary.
How are you handling rising employee costs (payroll, healthcare, etc.)? Certainly these are ongoing challenges, but we prefer to look
at these as investments in our guests’ experiences, rather than expenses. We
have expended significant resources, so we really understand the options.
How do you reward/recognize top-performing employees? We
do contests and bonuses. We change it up every YX\