Multi-Unit Franchisee Magazine Issue II, 2015 | Page 48

MULTI-BRAND 50
At age 30, Ghai may only have five
years under his belt as a franchisee, but
the hands-on operator is a veteran of the
restaurant industry. His father became a
Burger King franchisee in 1999, just four
years after immigrating with his family
to the United States from India. Ghai
manned the counter of his father’s restaurant before he could drive and worked
his way through San Jose State University as a restaurant manager. In 2007,
the college graduate honed his skills as a
district manager, operating five Burger
King restaurants.
These days, Ghai oversees operations
of the company, which made its mark by
buying and successfully reimaging the
Burger King brand and, more recently,
constructing and acquiring high-quality
Taco Bell sites. The company also owns
a portfolio of gas and convenience stores
that are co-branded with their restaurants.

“This is a family
business,
and it is a large
family business
at that.
We are food
people in the
food industry.”
This “power pumper” segment of the
company, operated by a business partner,
offers a triple-branded experience that is
a “machine of business,” he says.
Looking ahead, Ghai is focused on
expanding the Taco Bell and Burger King
brands and solidifying the company’s fu-

ture in the fast casual business. With fewer
than 200 Corner Bakery Cafes nationwide,
the brand has plenty of “white space” that
Ghai views as growth opportunities. “A
lot of people in this business don’t understand that growth requires change,”
he says. “Organizational change is really
what has helped us get to the level we
are today.”
Along with his father and mother,
Ghai’s new wife Gurbir and many extended
family members work for Ghai Management Services. The family’s strong ties
have created a solid foundation to build
a business that’s in it for the long haul.
“We are not a private equity group
or backed by a bunch of investors,” says
Ghai. “This is our hard-earned money
that we are investing into our own business. This is a family business, and it is a
large family business at that. We are food
people in the food industry.”

BOTTOM LINE
Annual revenue: $70 million.
2015 goals: $81 million.
Growth meter: How do you measure your growth? We review our
growth on an annual basis. We consider four issues: 1) how we did with new
acquisitions and development; 2) reimaging or the status of our restaurants’
image—we want to be more than 50 percent reimaged at any given time as
a brand; 3) same-store sales growth; and 4) P&L across the board.
Vision meter: Where do you want to be in 5 years? 100 restaurants, heavily developed in Corner Bakery, acquiring more Taco Bell restaurants,
and building and acquiring more Burger King units. 10 years? 150 to 200
restaurants.
Are you experiencing economic growth in your markets? Absolutely. 2014 was a great year economically for our brands. We experienced
growth on every level.
How do changes in the economy affect the way you do business? If the economy is scaling back we get in there ourselves and help
our restaurants adjust. If sales are negative that means we need to change
economically. When the economy is not doing well we have been able to grow
by acquiring real estate and businesses at a lower cost. And at some point food
inflation is also a big part of our industry. Beef is a big part of Taco Bell and
Burger King, and the rising cost of beef has made it difficult for us to make
money year over year. Just as with sales, you have to adjust. We use that to
our advantage by growing our scale. The best way to counteract a shrinking
economy or lower profitability is to increase our scale. We have leveraged that
to our advantage over the last couple of years.
How do you forecast for your business? We usually rely on our brand
to provide sales growth information and use commodity outlooks and economic
outlooks from our lenders to give us insight on how the economic environment
is going to change.
What are the best sources for capital expansion? We have a lot

46

of really good lenders on our side. We work closely with GE Capital, Franchise
Finance and we also recently started working with City National Bank. We work
with a lot of small local banks looking to invest in the restaurant business.
We also leverage a lot of government programs as well. The EB-5 Immigrant
Investor program allows people from countries like India, China, and Brazil to
obtain permanent resident status by creating jobs here. It is a great program
where someone lends you money for a 5-year period and you pay them back
and create jobs.
Experience with private equity, local banks, national banks,
other institutions? See above. There are a lot of sources of capital out
there. It is all of our skin in the game. We don’t have a private equity group
backing us, it is all of our hard-earned money. If a lender is approving us, they
are approving us personally.
How are you handling rising employee costs (payroll, minimum
wage, healthcare, etc.)? We feel that it is a product of economic change.
I’m not saying we should go out and raise minimum wage drastically. It is true
that California has a cost of living that is higher than the rest of the country and
parts of the Bay Area are difficult to do business in, but the consumer has to
understand that these are costs that are going to be passed on to them as well.
We don’t feel that Obamacare may be the best plan for healthcare, but as a
company we believe healthcare is something to which everyone is entitled. We
are working around it. We evaluate every situation differently and accept that
profitability may go down on a certain level and require us to scale up as an
organization. There are ways to deal with it, other than to just raise prices.
How do you reward/recognize top-performing employees? The
best way to recognize people is to monetize a reward. We offer bonus programs, based on operations metrics. We give out awards at a ceremony once a
year to our top performers. Recognition is a big part of our organization.
What kind of exit strategy do you have in place? We don’t have
an exit strategy. We aren’t looking to sell our restaurants in the next 5 to 10
years—I am looking to do this long term. All the decisi ons we make are based
on wanting longevity.

MULTI-UNIT FRANCHISEE IS S UE II, 2015

muf2_c_ghai(40,42,44,46).indd 46

3/16/15 12:47 PM