Challenges Gladly Accepted Here: Flying, summiting, ultra-triathlons, and now multi-brand franchising
Name: Neil Hershman
Title: Owner, CEO
No. of units: 7 16 Handles, 3 Dippin’ Dots & Doc Popcorn, 2 Captain Cookie
Years in franchising: 4+
Years in current position: 1+
Licensed as a commercial pilot at age 18, summitting Mt. Everest (and several other tall peaks), competing in ultra-marathon and ultra-triathlon races—even winning a 703-mile long triathlon. These are just a few of Neil Hershman’s accomplishments—and he’s only 27.
In the franchising arena, Hershman is a multi-unit operator for dessert brands Dippin’ Dots & Doc Popcorn, and 16 Handles. He also operates two joint venture stores in New York City for Washington, D.C.-based concept Captain Cookie. Clearly, he doesn’t shy away from dreaming big and accepting new challenges. Quite the opposite!
When he dreamed of being an astronaut, he earned his pilot’s license at 18. After graduating college with a degree in astrophysics and finance, he joined a New York City asset management fund as a financial analyst. But the longer he was there, the more he could see that sitting at a desk all day was not the future he envisioned for himself. Instead, he wanted to be involved with “a consumer-facing product that could impact a lot of people” where he could be hands-on. Turns out an opportunity in franchising was right around the corner... literally.
Hershman lived close to a 16 Handles frozen yogurt shop. “I saw it was always busy, and I saw a lot of opportunity,” he recalls. At the time, he says, the brand’s ownership was looking for “fresh blood and new energy.” He saw a chance to become franchisee and, more than that, a leader. And in August 2022, he bought the company from founder Solomon Choi.
It’s all about finding the things you like doing, says Hershman, and then doing the best you can at them. Today his focus is on building a nationwide network that runs successful franchise locations and connects with the communities they serve.
First job: Financial analyst at CIFC Asset Management, a structured credit fund.
Formative influences/events: Steve Jobs (Apple). My father, a surgeon who owns his private practice medical office.
Key accomplishments: Receiving my commercial pilot license at 18. Summitting various mountains, including Mt. Everest. Competing in various ultra-marathon and ultra-triathlon races, including winning a 703-mile long triathlon. Acquiring my first 16 Handles location in New York City with SBA financing. Opening the first Dippin’ Dots store in New York City in its Flatiron District. Opening 16 Handles’ Times Square location during the pandemic to show the city’s resilience. Acquiring the 16 Handles franchise and bringing in a new leadership team to operate and grow the concept.
Next big goal: Getting 16 Handles to 100 units across the U.S.
Best business decision: When I first acquired a 16 Handles location, it was a turnkey business with a full staff. Instead of treating it as a passive investment, I spent every day working open to close so I could fully understand the operation and learn from the employees and customers. By doing this, I realized the business wasn’t optimized or operating at full efficiency, and that there was additional profit to be gained. As I created new systems, I thought about how to scale them, and ultimately acquired additional locations and implemented my new strategy.
Hardest lesson learned: Don’t grow too much too fast. In this business, you’re only as strong as your weakest operators. If you spread yourself too thin and don’t have strong operators in the store, you own a subpar store. The strain of trying to manage a subpar store can steal your attention from locations that matter most, and, overall, can lead to a negative spiral. I’d prefer to make higher margins on lower revenue than lower margins on more revenue.
Work week: I am working at the franchisor level pretty much nonstop. We meet in the office during weekdays, but I still spend weeknights and weekends in my shops to feel the operation and to watch how customers experience my products. I do a lot of meetings throughout the day and, after my 6-month-old daughter falls asleep, I catch up on emails and paperwork between 10 p.m. and 2 a.m.
Exercise/workout: I train for ultra-marathons and high-altitude mountaineering, so I spend a lot of time running and biking, usually six or seven days per week.
Best advice you ever got: Not the best, but an interesting one: “You’ll catch more flies with honey than with vinegar.”
What’s your passion in business? To lead an industry and be able to have a product and brand so good that you are constantly setting the precedent.
How do you balance life and work? I don’t think there has to be a traditional “balance” when you are hands-on with your work, as many of us in franchising are. When your work makes you and your family happy, you can be both working and living all the time. I try to keep my office meetings to weekday mornings so I can spend weekends with my family, but we all live on a flexible schedule. I do think taking some occasional breaks for travel and vacation is important.
Favorite books: Endurance by Alfred Lansing, Unbroken by Laura Hillenbrand.
Favorite movie: “The Big Short.”
What did you want to be when you grew up? Astronaut.
Person I’d most like to have lunch with: Benjamin Franklin.
Business philosophy: I exclusively invest my time and capital into long-term strategies with companies that have great products, active managers, and dedicated customers. I believe you can will your way into business success by being focused, determined, and perseverant.
Management method or style: I lead by example and aim to be the hardest-working person at my companies to show customers and employees what it takes to grow in your career. I give my employees a lot of creative freedom and independence because there may be multiple right solutions to a problem. But I do provide guidance and direction to ensure a cohesive working environment.
Greatest challenge: Finding a balance with middle management between being bureaucratic and having too many small rules and too much paperwork to the point where they aren’t focused on the actual job at hand—but also having systems and processes in place so managers can reference cohesive procedures across multiple locations with hundreds of employees.
How do others describe you? Bold, creative, direct, credible, fast-paced, hard worker.
One thing I’m looking to do better: Find a better system for employee reviews so we can help provide constructive feedback more frequently to our retail-facing staff, who may not receive training on every scenario and could use more on-the-job testing and guidance.
How close are you to operations? Very—especially during busy seasons or management changes. I try to spend a few hours a week in every store, hearing from the employees, managers, and helping to resolve ongoing issues and documenting upgrades for maintenance staff to work on. I’m a perfectionist when it comes to the small chip of paint and such.
What are the two most important things you rely on from your franchisor? A franchisor needs to provide constant LTOs and specials to keep the menu fresh, and a well-stocked inventory of product. Many times, franchisors provide a premium-branded product, and while it can be replaced, customers expect the taste and experience of the premium product, so there is no excuse for any outages with them or their distributor partners. At 16 Handles, we take this pressure and hold ourselves accountable to make sure we are always stocked for our many flavors of frozen yogurt and soft serve, as well as 50+ toppings.
How is social media affecting your business? It’s helpful to stay relevant to my customers and provide them with local-level updates such as specials and promotions. With so many brands competing for customers’ attention online, I think it’s most important to just stay present and subconsciously stay at the front of customers’ minds.
How do you hire and fire? We hire through traditional websites like Indeed and Craigslist, but also through a lot of referrals from existing employees who love their jobs and have friends or former co-workers who could be good fits.
How do you train and retain? All employees are onboarded electronically, which gives them a chance to really read through various policies on their own time so they understand expectations like policies for time, attendance, or uniform. We work through various checklist and training guides over the course of two to five in-person shifts. We usually have employees spend time on their first shift interacting with customers to ensure they are a good fit for the team and can have positive and fun interactions with our happy guests.
How do you deal with problem employees? We like to provide constructive feedback through verbal and written corrective actions and offer retraining or guidance where applicable. We want all of our hires to work out and will always support employees who are willing to learn and progress.
Fastest way into my doghouse: Treating a customer poorly for no reason. We sell dessert. We are in the business of giving away smiles!
How did Covid-19 affect your business? Initially, in New York City, we had to close all our stores because we were the epicenter of the pandemic. During this closure, I took the time to do some extra cleaning, painting, and preventive maintenance to my stores. After a few weeks, my staff was eager to start working and we reopened for delivery and pickup only, before eventually reopening for in-store customers in the summer. We did require masks and gloves, which we handed out to customers who needed them. During the summer, I realized New York City was resilient. Because so many commercial tenants had closed for business and retail leases were readily available and cheap, I decided to further invest in the future and open new locations.
Annual revenue: My stores produce about $8 million per year. The 16 Handles, which I manage as the franchisor, does much more than this, and our start to 2023 has shown great revenue increases over 2022.
Growth meter: How do you measure your growth? For my stores, I look at growing each revenue center—in-store, catering, and third-party delivery—as well as maintaining reasonable labor costs and rent. This should, in turn, lead to a higher bottom-line profit margin. Additionally, I look for capital improvement projects where new revenue can fund store updates, which in turn can increase customer demand and lead to more revenue.
Vision meter: Where do you want to be in 5 years? 10 years? I want to expand 16 Handles into the largest frozen dessert concept in the U.S.
Are you experiencing economic growth in your market? Yes, all sales are up double digits over 2022 because of higher prices, higher customer satisfaction, and brand awareness guerilla marketing.
Experience with private equity, local banks, national banks, other institutions? Why/why not? I think the SBA program is great for franchising and can help new operators get into the business cost-effectively and experienced operators grow with leverage instead of giving up equity.
What are you doing to take care of your employees? We do annual holiday parties and outings as well as manager events. Additionally, we are flexible with our time-off policies and reasonable about scheduling around team members’ personal lives. Additionally, we give away gift cards and cash bonuses to top-performing employees and constantly run competitions, such as who can sell the most water bottles in one shift.
How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? A front-facing guest display that allows satisfied customers to add a small tip with their credit card payment has really helped increase net pay to employees without increasing our costs. I did invest a lot of time and money to build a comfortable and easy-to-use POS experience so that customers do not feel awkward or forced to tip unless employees go above and beyond. This, in turn, incentivizes employees to give all customers a great experience because it could end up in their paycheck.
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