Industry Insight from a 77 Unit Restaurant Operator

Dec 26, 2023 | Insights, Restaurant Research

The country and economy owe a big debt of gratitude to entrepreneurs like Don Wollan who have worked & sacrificed to build large businesses that employ hundreds directly & indirectly (vendors), feed thousands, and generate substantial tax revenue for Uncle Sam. When Don, who is President of Paradigm Investment Group, recently called us to share some operational insights that he believes will help the restaurant industry, we were quick to listen & publish his wisdom outlined in this research post.

Through a series of divestitures, closures, acquisitions, and new store development spanning a 22-year period, the Paradigm Investment Group today owns 77 Hardee’s restaurants in Huntsville, Montgomery and Mobile, AL, Pensacola, FL, Panama City, FL and Biloxi, MS.

Hardee's Group Photo

Don Wollan, President of Paradigm Investment Group, has been in the restaurant industry for over 35 years with experience in all segments of the industry ranging from quick service restaurants (QSR) to casual dining to upscale offerings. Mr. Wollan began his career working his way up through the Burger King system. In his last position with BK corporate, Mr. Wollan served as regional VP overseeing 535 restaurants located throughout the southwestern U.S. In the late 1980’s Wollan left BK corporate to become a franchisee with the purchase of 4 units in the San Diego area. Over the next 10 years, Don acquired, developed, and ultimately sold over 100 Burger King franchised restaurants throughout the country with great success. In 1994, Don also became a franchisee in the TGI Friday’s concept in the San Antonio area. In 1999, he created his very own award-winning steakhouse, Donovan’s Steak & Chop House, with locations in San Diego, CA (2) and Phoenix, AZ (1).

Don’s Case Study: Service Speed is King

  • In the current economic environment, restaurant operators must be more bottom-line-focused than ever before. This reflects the need for industry players to adapt & pivot in response to shocking post-covid food & labor inflation and changes in consumer behaviors.
  • Today’s operators require great skill in capital allocation, with a relentless focus on ROI. However, done properly, operators can move from a scramble for survival to executing for success.
  • In Don’s own experience operating 77 Hardee’s, he found that his greatest opportunity was to increase service speed, particularly during the morning which represents a key daypart of this concept.  
  • To accomplish this, Don on his own, simply added a second drive-thru window to his stores with the first window used to accept payment & the second to serve the food. This cost him $80k/store to expand the drive-thru sufficiently to accommodate both windows, add a pre-order menu board, and complete some exterior updates & a parking lot refresh.
  • Don points out that building capacity will often dictate an operator’s ability to grow transactions such that a building with a single drive-thru window may be able to process 60 cars/hour at peak (60-second window times), but 120 cars/hour with a second window (30-second window times).
  • While there are additional opex to consider, including additional labor to man the extra window & associated training costs, these capex & opex investments pale in comparison to the potential opportunity to double sales during peak periods. Don points out that virtually all QSR restaurants with 30-second “window” times generate AUVs of at least $2MM.
  • Notably, the risk to under-capacity is substantial. While Don’s customers love their Hardee’s breakfasts, if they must wait too long, they may leave the queue and never come back.
  • This seasoned operator further emphasizes the need for menu simplicity to improve service speed. In particular, he praised his chicken menu items which are faster & less complex to execute compared to burgers.
  • Technology also comes into play here & Don further praised his new Winston ovens which increase product hold times (2 hours for chicken), allowing employees to focus on service instead of cooking during peak periods.    
  • In conclusion, Don’s message for the industry is that operators must emphasize a return to basics (speed, quality & value) with a reminder that there is a good reason for the “fast-food” industry moniker. LTOs & interior remodels may have their place, but the clear mandate is to keep from adding operational complexity while allocating limited capex & opex funds to facilitate their customers on the go.

Thanks Don!    

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