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John Neitzel of Bar Louie
Franchise Interviews Meets with Bar Louie
Franchise Interviews Meets with Bar Louie
Hi everyone and welcome back to a very special edition of Franchise Interviews, where we have been asking the frantrepreneur who owns one for over nine years. I am your host, Marty McDermott, and the President of Franchise Interviews. We have a great show today. We are meeting with John Neitzel, CEO of Bar Louie. Bar Louie is a national collection of neighborhood bars featuring hand-crafted cocktails and spirits, delectable food, and an inviting atmosphere.
Marty: Hi John. How are you doing? Welcome to the show.
John: Thank you. It's good to be here.
Marty: Thank you, John. We always like to ask our guests, where are you calling from this morning?
John: I'm in Addison, Texas.
Marty: How is the weather there today, John?
John: A little chilly, but it is supposed to be in the 70s. It is supposed to be nice.
Marty: Our listeners may not know it, but you have a very impressive background, John. You could talk about your experience and what you have been doing in the past.
John: I enjoyed growing up in the TGIFriday's system. I worked for Friday's for 28 years. I started as a manager and worked my way up to President of both the international and U.S. business and left them back in the middle of 2010 to join Bar Louie.
Marty: I met my wife in a TGIFriday's. My wife wanted to make sure I told you that this morning.
Martin J. McDermott of Franchise Interviews
John: Oh, which one?
Marty: It was the restaurant in Sayreville, New Jersey, on Route 9, and it is still there. So that place has special memories for us. How is the Bar Louie experience different from your prior experiences, John?
John: You know, it is pretty similar. When I started with Friday's we had 50 locations; when I left we had over 1,500. So, it was very similar to when Fridays first began; it was very much an adult concept. There were no kid's menus, highchairs, or any of that sort of stuff, so it was built to serve baby boomers. When I joined Bar Louie, we had 36 locations. We are a small company, and we just opened our 108th today. So similar in taking something unique and highly differentiated that was small and now becoming pretty good-sized.
Marty: How do you describe Bar Louie for someone who's never been in one, John? The target differs slightly from a Friday's, where you mentioned it's shifted to a more family-oriented atmosphere over time. Bar Louie is a bit different.
John: Yes, it is. You know that probably the most challenging question I get asked is, "What/Who is Bar Louie like?" It is so difficult because we are highly differentiated, so no national player like us exists. We compete more with local independents than we do with national brands. How I describe it is that we are a local bar and eatery, we've got incredible hand-crafted cocktails and a dynamic beer selection, and 100 percent of our food is scratch cooking, so the only reason we have a microwave is to microwave popcorn for our truffle butter popcorn. We create this urban, comfortable, but up-scale atmosphere for our guests. It is designed so that it is straightforward to accommodate people who want to socialize. If you think about casual dining today, there are many tables for two or tables for four, and they will throw in a table for five every once in a while.
Our average table sizes are more significant, and we're cognizant of creating different seating areas for people to congregate. The average guest spends 2 hours and 15 minutes at our place, and if you contrast that to casual dining, the average guest is probably in there for 45 minutes to an hour. People use us far more to socialize than for function. So, while we're functional, we still do a great job with service and execution. People aren't there for just your typical casual dining, i.e., "Let me have a drink, let me have an appetizer, let me have my meal, bring me my check." people are at Bar Louie for more extended periods.
Bar Louie Franchise Opportunity.
Marty: The old school model of franchising, John, is that a franchise in Portland, Oregon, was the same as in Portland, Maine, but Bar Louie is taking a different approach to franchising. Do you want to talk about that approach?
John: We have a substantial guiding principle: First and foremost, we want to remain local. The way we do that is we create freedom within a framework. So let me give you some examples. We have no two Bar Louies alike, so the atmosphere and the elements are the same, but we don't have a prototype. Even if we go into a new space, we challenge ourselves to think about how we make each one unique and how we use as many local elements as possible, whether that be wood or stone or anything local to the area. The menu is identical in all locations; however, we have 30 to 40 draft beers on tap and control 10. We ask that the other 20 to 30 are chosen locally. We ask that each one of our Bar Louies carry 12 vodkas. Here are five you must carry and seven you want to choose locally. So the promotions are done locally, and the entertainment, which most of our Bar Louie's have one day a week, is all done locally because for us to sit here in Addison, Texas, trying to tell someone in Portland, Oregon, or the Northeast would be nuts. Whether it be company operations or franchisees, we like to have people who enjoy freedom within a framework versus people who have to have the entire script, if you will.
Marty: It makes much sense, John. You have been doing this for a long time. Do you think this will be a new trend in franchising because of the way you describe the whole thing: "The quality is always the same," "the menu is always the same," but it is customized to that particular area or region? Will this be a new trend in franchising? It is very clever.
John: I don't know. It is more complicated so that it may be a new trend. It's undoubtedly a massive part of our recipe for success. Whether in our company or franchise locations, the opportunities for sales and who lives and works near our Bar Louies are somewhat different. When I think about who the average guest was at TGIFriday's, it was far more consistent across the U.S. by "day-plate" than what you'd find at a Bar Louie. Twenty-five percent of our locations are in urban centers, downtown Chicago, downtown Minneapolis, etc., and 75 percent are in the suburbs. Some Bar Louies do 25 percent of their sales after 10:00 pm, and some do 10 percent. What one needs for success may be very different than another. Our challenge is how you have standards and require people to deliver against set standards but give freedom where people can succeed based on their circumstances. It may be a trend. It's here to stay for Bar Louie because it's a key to company-owned or franchised success. We are not the right brand for those who need to live in a super ridged world.
Marty: You mentioned you are over a hundred at this point. How many do you envision for the whole country?
John: There are over 400 opportunities. Whether there will ever be 400 will be determined based on real estate availability. There are 400 markets we believe we can be in, but again, that's subject to whether we can find adequate real estate.
Marty: Sure, because more space is required for a Bar Louie. How much space is needed to open up a Bar Louie John?
John: A typical Bar Louie is between 6,000 and 7,000 square feet. Our current portfolio has our smallest Bar Louie at 2,400 square feet, and our largest is 14,000. We have a ton of flexibility. The vast majority are in the 6,000 to 7,000 square foot range.
Marty: What characteristics do you look for in your franchisees, John?
John: We like to have somebody who's been in the hospitality and retail industries. They don't necessarily have to have been in casual dining. We have some franchisees who own hotels and have done a great job managing hotels and expanding within Bar Louie. We've got a couple of quick service franchisees who have demonstrated the ability to operate successful national brands, and they want to step up in terms of investment sales and returns. So, people experienced in retail and hospitality are big for us.
Marty: How does the training for new franchisees work, John? Do they typically come to headquarters for training?
John: Yes. Training will happen, and we have certified training locations. There is time spent here in the support center for a week. It's different for the owners. For the owners, it's a couple of weeks. If the owner is the operator, it could be six to eight weeks of training.
Marty: For our listeners, how would you describe a typical day, John, as a franchisee?
John: You know it depends; I'll contrast. So, there are two different experiences. We've got a fantastic franchisee, Frank Sweeney, who is up in Mishawaka, Indiana, and has just opened his second Bar Louie. So his world has changed, but for the longest time, for the last five years, his day was very similar to our General Manager's day. He would make sure he was staffed, and order was taking place, and he operated the location. In December, he opened up his second location in Greenwood, Indiana, and now his job is somewhat different. Now, it is more about supervising and managing two locations while he is looking for his third. So, it depends on size and scale. If you're like Zubin and Anthony, one of our franchisees with multiple locations, their day is very different than somebody running one site.
Marty: You've been involved in this business/industry for a long time now, John and the majority of our listeners we call aspiring frantreprenuers. Most of our listeners know they want to get into franchising, but after doing the show for nine years now, they don't know where to begin because there is so much out there. From your experience, what advice would you give them in their quest to buy a franchise?
John: I would say two things. First, make sure that whoever you choose has a reasonable chance of having a good return on your investment. Start there so you don't have to worry about money. And number two, whatever you choose, make sure you can fall in love with it. We talk about it at Bar Louie; if you can't fall in love with the brand and be as emotionally connected to it as we are, you're unlikely to have the sort of success you'd like to have. So these are my two pieces of advice: make sure you get a good return on your investment and make sure whoever it is that you are with, you can love because I can only imagine a world where, whether it be a franchisee or me, or anybody in our company who thinks about it as transactional because you won't get the same sort of fulfillment.
Marty: In following your career, John, there must be something about this particular industry that you love because you've been doing it for a long time.
John: I think that if you're an immediate gratification junkie like most of us in the restaurant business are, this is the best place because guests and team members and investors will all tell you how you're doing very quickly, so your ability to affect change is fantastic. So I think if you are an immediate gratification junkie, then this is an excellent industry for you.
Marty: And Bar Louie has that energy, too, right? Looking at the videos and going on the website is undoubtedly an experience. Isn't it John?
John: It's interesting. What's fun about our brand is its very social nature. Our guests are diverse in terms of who they are and their incomes. So I think about it this way: the typical guest at a Bar Louie is 25 to 54 years old or $75,000 medium income. Fifty-one percent are women and highly educated. That's the vast majority of our guests. But it changes somewhat when you think about who uses us over the day. The average age of our guests at happy hour is probably in the 45 to 50-year-old range. The average age of our guests after 10:00 pm is more like my daughters' age, and they are both in their 20s because we 50-year-olds are asleep at midnight. So we have broad appeal, and that's the fun part of our business. The business wall, the atmosphere, the food, and what have you are the same; they change throughout the day. As we get later in the night, the lights come down a little bit, and the music goes up. The music we play late at night is geared more toward the younger end of the millennials, and what we play at happy hour is geared toward folks my age. That's the fun part of being at a Bar Louie: It evolves throughout the day.
Marty: Where do you envision Bar Louie three to five years later, John? You mentioned 400 here in this country. Do you picture the concept going international at some point?
John: Not anywhere in the near term, no. So we've got enough to do to supply all of our energies in the next four to five years down the road. There could be a possibility, but in the near term, we want to focus on the U.S.
Marty: What's the best way for our listeners, John, to get more information on Bar Louie and the franchise? Is there a particular website that you'd like them to go to?
John: Yes. If you go to www.barlouie.com, you can see all about what our guests would see, and there's a franchising icon you can click as well. That will get you in touch with Jill Szymanski, who oversees franchise development. You can contact her, and she'll get back to you quickly.
Marty: thank you again for coming on the show, John. I know you have a hectic schedule, and it was a privilege for me to get to speak with you finally. This is a great concept, and I invite you back next year as you continue to grow. This is great.
John: I will take you up on that, Marty, and tell your wife I said hi, and now you can take her to Bar Louie.
Marty: Thank you so much, John, for coming on the show. We'll be right back with more Franchise Interviews.
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