Persistence Beats Resistance: From Sudan to the U.S. Army to multi-brand operator

Name: Yonas Hagos

Title: Multi-brand franchisee

Companies: 18 Smoothie King (25 by March), 7 Dunkin’ (4 combined with Baskin-Robbins), 1 Arby’s (with plans to work on a couple more), 1 Chicken Salad Chick

Age: 38

Family: Married with two kids

Years in franchising: 12

Yonas Hagos spent most of his childhood in a refugee camp in Sudan. His family emigrated to the U.S. in 1992 when he was 10. In 2002, following the World Trade Center bombings in New York, he enlisted in the U.S. Army. While serving in Iraq, he was wounded by a rocket-propelled grenade and was awarded a Purple Heart. Hagos experienced more in his first couple of decades than most people do in a lifetime.

Back home in the U.S., he started thinking about his future. “I knew then if I want to chase my dreams, I have to do it now because I’m not getting any younger,” says the 38-year-old today. He started his own company before deciding to purchase his first franchise in 2009, an Anytime Fitness on the outskirts of Chicago. Franchising was a perfect fit for the disciplined Army veteran.

He grew fast, adding brands and building the infrastructure to support his expansion. At one point he had 17 Dunkin’ locations in Illinois and Missouri. Today he has 7 Dunkin’ stores, 18 Smoothie Kings, one Arby’s, and one Chicken Salad Chick. He also has agreements to build more units with each of his brands.

Hagos is a firm believer in following the franchisor’s proven process, which is one of the things that attracted him to the franchise business model. “As the franchisee, it’s important to trust the process and their decisions. It’s not Yonas’s donut shop, it’s Dunkin’.”

He also believes following the process has helped him become more aligned with his brands’ corporate teams. “When you’re showing the franchisor you’re doing everything right, they are open to hearing your ideas,” he says. “The leadership team is willing to listen.”

Hagos intends to continue growing each of his brands. He’d like to ramp up to 10 Dunkin’ locations, 10 Chicken Salad Chicks, 5 Arby’s, and, wait for it… 100 Smoothie Kings. He’s a big fan of the smoothie brand and its healthy products. He’s also looking for more opportunities in real estate. “Real estate is a long-term goal for me,” he says. He owns most of the real estate where his Dunkin’ stores are located and is gradually doing the same with his Smoothie Kings.

Hagos says the secret to life, and to franchising, is to be persistent. “When things get hard, just keep going. Persistence beats resistance.”

PERSONAL

First job: McDonald’s at the age of 14.

Formative influences/events: I spent most of my childhood in a refugee camp in Sudan before coming to the United States when I was 10 years old. My parents always told me when you come to America, it’s the land of opportunity. It was instilled in me early on if you work hard, you can make it. The other formative influence/event was coming back wounded from Iraq. I had that military discipline and understood life is short. I knew then that if I want to chase my dreams, I have to do it now because I’m not getting any younger.

Key accomplishments: Opening my first Dunkin’ was a milestone for me. From there, the transition to becoming a multi-brand and multi-unit franchise owner. Of course, becoming a father was a huge accomplishment and a blessing for me, too. In fact, 2013 was a big year: opening my first Dunkin’ and welcoming my son into this world a few days later. 

Biggest current challenge: Trying my best to operate through Covid-19 right now. I’m blessed to have a solid staff in place and nine locations with drive-thrus. Even when the stores are doing well, it’s vital to keep everyone healthy, from the employees to the customers. It can be very challenging. It’s the uncertainty of not knowing when this will be over with.

Next big goal: I gave myself a 5-year goal. I’d like to be at 10 Dunkin’ locations, unless some great opportunity arises to do something different. I could see myself having 100 Smoothie Kings, maybe 10 Chicken Salad Chicks, and 5 Arby’s. I want to focus more on real estate. I do own a few properties, that’s huge for me. Real estate’s a long-term goal for me. I own most of the properties my Dunkin’s sit on, and I’m slowly doing that with Smoothie King. I do have personal properties that I own, too. I want to invest in real estate for my restaurants, personal, and rental properties.

First turning point in your career: When I opened my third Dunkin’. That’s when I could say I was more of a multi-unit operator. The first two were hard; going from one to two stores was very difficult. By the time I opened the third I had some experience. Things just made sense; things seemed easier because you have more people to pull in if you need help. You have more resources, and that’s when I realized things get easier as you grow. I remember when I was on my fifth location, I was feeling a bit worn down, but then a corporate gentleman from Dunkin’ told me it will get easier as you expand. Now I know what he meant by that.

Best business decision: While I’m glad I listened to him, my best move was following my gut. I’ve heard a lot of negative things all my life, but I never let the opinions of others stop me from my dreams. When you tell people what you’re doing and people start observing, they want to share their opinions. A lot of people put limitations on themselves, so when they see you doing something that they can’t do themselves they are quick to share their opinions and doubts. I received a lot of, “Oh, you should stop,” or, “That’s too hard, and how are you going to get the money?” Since they’re selling themselves short, they’re expecting you to do the same. When you defy gravity, they see you doing it and wonder how they can do it. When you prove people wrong, they are equally just as shocked. 

Hardest lesson learned: Sometimes you do fall flat on your face trying to grow too fast and partnering with the wrong people. It’s like a marriage, that’s probably one of the best things I’ve learned: Be careful who you go to bed with in business. Don’t team up with whoever is flashing you money. That doesn’t necessarily mean you’re going to get along.

Work week: People ask me this a lot, and I love it. I have an office, and I haven’t had one. I’m more manning the shifts now and managing the multi-units, but I’m still hands-on and have my finger on the pulse of every store. There’s no typical schedule. It’s not like a Monday-Friday, 9-to-5 where I clock in at this time, have Saturday and Sunday off, and I have every holiday. Even on vacation, I’m always picking up my phone. I do have an idea of how things can go for the day, but you never know what’s going to happen at the stores. There are big and small obstacles to tackle every day, anything from equipment breaking to someone being hurt. That’s what makes my job very interesting. That’s what I love about it. There’s no set day I know what I’m getting myself into.

Exercise/workout: I do exercise. I’m very active to help keep my sanity. I used to run a lot, but I’m preserving my knees. I do anywhere from 10 to 15 miles a day and I lift weights. That always helps me. I’m very upbeat and energetic. You have to be to be in this business.

Best advice you ever got: It was from the vice president of Anytime Fitness. When I opened up Anytime Fitness, it was during a recession so it was hard to get financing. However, he told me you have to have this kind of mindset for running any business: persistence beats resistance. In franchising and in life it boils down to, “If you want this, don’t give up. Stay persistent.” I’ve been living like that for a very long time, and it’s worked. Every time it gets harder, keep knocking at the wall, keep hitting the wall hard.

What’s your passion in business? I love developing and building, and I love changing lives by building businesses. As I mentioned, there are some naysayers who argue that outside of the managers, they don’t think providing minimum-wage jobs is worthwhile. I disagree, as my team and I are still a part of teaching them what it means to work hard and instill lasting values. Nowadays things are different, but what people don’t understand is that you’re not only creating minimum-wage jobs or high-paying manager jobs, but that it takes people to build a store. That’s why I love capitalism and how things work in this country. You’re going to hire someone locally, from a carpenter and a concrete guy to the machine shop that builds the storefront sign. I am always intrigued by how building businesses creates and requires a variety of different roles and jobs to be created. 

How do you balance life and work? I’ve been doing a better job, but that’s one thing a lot of people who have been doing this longer will warn you about. I’m one of those guys who can work 24/7, but I’ve had people who’ve done this before me tell me, “Hey, you’re a young guy, you have a young family, you have to find some time for your wife and kids.” If you don’t, next thing you know, you’ve provided your kids and wife with this great life of financial freedom, but it won’t mean anything when they need you later. I have known that for the last couple of years now. I tell my managers, “Unless you really need me, leave me alone because I’m on family time.”

Guilty pleasure: It’s funny how things have changed. I used to watch a lot of shows and go to the movies. Now I’m more fascinated and more intrigued by building a business. I get bored easily, but once in a while if I do find a show, I’ll binge Netflix for a day or so. That’s not often, though, I don’t have time. By the time my wife and I say, “All right, let’s watch a show,” it’s 8 or 9 p.m. and we’re ready to go to bed. Then wake up the next morning, hit the gym, and do what life brings to me.

Favorite book: 1984 by George Orwell.

Favorite movie: “Shawshank Redemption” is probably my favorite.

What do most people not know about you? That I do well for myself, and you wouldn’t be able to tell if you met me. I’m not Warren Buffet, but I’m doing okay. There’s ups and downs, but I’m not flashy. 

Pet peeve: I don’t like thieves and liars. I don’t like people who cut corners. If you’re going to do something, you have to do it right. Put your whole back into it. If you’re going to do something, see it through.

What did you want to be when you grew up? I wanted to own my own business. I wanted to be an athlete at one time, but as I started going through high school, I realized you’ll make more money working for yourself, and it won’t beat your body up as much. The muscle you have to flex the most in business is your brain. 

Last vacation: I was in Cancun not too long ago for my daughter’s birthday.

Person I’d most like to have lunch with: Michael Jordan.

MANAGEMENT

Business philosophy: I don’t like micromanaging, but I do have my finger on the pulse of the business. You hire people who can get the job done, so step back and let them do their job. I always tell my managers, “If I have to keep an eye on you every single day, then I don’t need you.” I don’t like babysitting, although being a multi-unit owner comes with 4 or 5 babysitters. However, I empower people to self-manage, and it’s worked pretty well.

Management method or style: Don’t micromanage. That doesn’t mean I’m laid back and let people get away with murder, but I know what tiers they need to hit and where sales needs to be. We have metrics for every concept, and that helps the team understand what to aim for. If they’re hitting them and I’m making money, no need for me to bug them. I do have a saying: In order to be comfortable, you must make yourself uncomfortable. I tell that to all my staff and my managers. Don’t get complacent because you feel like sales are good or we have this down. Things can go south at any minute.

Greatest challenge: Besides Covid-19, it was gearing up to grow into the multi-unit world. Growing at a sustainable pace was the biggest challenge. It was learning how to grow the concept, the brand, and figuring how to raise the financials. When I first started doing this, I met all kinds of people from Dunkin’ and different brands sharing how many stores they had, from 10 to 50 units. I always wondered how they did it and at what pace. Some of their parents started it, so it’s different. For me, I’m first generation. For my kids, it will be easier to take this and grow it even bigger. I’ve met people like me who started from nothing, so you get inspired thinking, “If he or she can do it, I can definitely do it.”

How do others describe you? Hard-working and humble. You can get tired seeing me work. I’m persistent, confident, and I lead from the front. When most people meet me they have no idea who I am or what I have worked for because I don’t flaunt anything.

One thing I’m looking to do better: Just trying to improve the concepts in a respectful manner. I’m always looking to improve and trying to make the process better while following the guidelines of the proven franchise models. Every brand is different, but when you’re showing the franchisor you’re doing everything right, they are open to hearing your ideas. At every franchise I own, the leadership team is willing to listen. 

How I give my team room to innovate and experiment: The key is to give them the resources and tools to be successful. For instance, if they have faulty equipment, you can’t expect them to do their job to the best of their ability. It’s my job to provide my people with everything they need in order to deliver. Empower them to become successful. If they’re successful, I’m successful.

How close are you to operations? I’m hands-on and make my rounds. Right now, I’m in my hometown in Yorkville, Ill., and I’m unboxing items for my Smoothie King. I’m vacuuming, I’m sweeping, and if a bathroom needs cleaning, I’ll do it. If I visit a store and we’re slammed, I’ll jump in. When I meet people who know of me but have never met me, they are always surprised I’m not some Maserati, suit-and-tie sort of guy. I pull up in a pickup truck and I’m always ready to help and communicate with my team and who is in my store. People want to work for someone who isn’t afraid to work alongside them. 

What are the two most important things you rely on from your franchisor? You rely on them for the proven concept and model. As the franchisee who invested and believes in their brand, it’s important to trust the process and their decisions. It’s not Yonas’s donut shop, it’s Dunkin’. Trust that they have your best interests in mind. You have to trust them, this is a marriage. You have to hope they make the right decisions. When they’re making the call to roll out a new menu item they tested in a different market, I trust they did enough studying.

What I need from vendors: Vendors are obviously a crucial key to our success. They have to have integrity because some vendors—not all—may be in it only for the sale, and once you buy their product they disappear or become unavailable for customer service needs. Vendors are important because if they’re not there, you can’t get things done. From the companies that supply and repair your equipment to the supply chain that delivers your products and food, you’re trusting they’re going to do as they promise.

Have you changed your marketing strategy in response to the economy? How? We’re pushing more of the third-party delivery vendors now. There are not many people who can go out and about, and if you don’t have a drive-thru, it’s key you still have delivery and/or curbside capabilities. 

How is social media affecting your business? Social media is a good thing, but word travels. Someone takes a picture, tweets this, puts it on Facebook, it can ruin you. So I always tell my employees: be aware. There are always eyes watching, that’s the world we live in. It’s a good and a bad thing. It can be used for marketing and reaching out to people in your community, and it’s used to ruin people. I’ve seen it. I’ve had people do that kind of thing. And you can’t control every employee. For the most part, though, people understand there are always eyes watching.

How do you hire and fire? I use Snagajob for job listings. We pay a pretty penny but it’s worth it. I oversee hiring but trust my managers in place to grow the team as they see fit for all multi-unit locations. We have protocols in place because we never want to terminate people for no reason. There are certain inappropriate things that we’d terminate for on-site. We always do our homework, our due diligence, and investigate, because I don’t like getting rid of someone for conflicting stories that don’t line up. 

How do you train and retain? We’re constantly hiring. Obviously in the fast food industry high turnover rates are pretty common. However, if you train someone, more likely than not they’re going to stick with you. Additionally, when you ask, “What’s the reason they quit?” it was because they’re not properly trained. So we do follow the brand protocols, the videos, the e-learning, and the hands-on training. That’s something I’ve been pushing the last couple of years, and I’ve had less turnover across the board at my stores. As to how to empower people, they need to have the right resources and equipment with the right tools to get the job done.

How do you deal with problem employees? That responsibility falls on the managers. It’s their store and I’m not there every day. They have the employee hand guides, the brand standards, my standards, and their own. They may each have their own managing style, but across the board we’re always fair. I always tell managers to treat people how you want to be treated. Don’t talk down to them, respect them, and lead from the front. I learned “lead from the front” in the military. I always did more for bosses who were willing to do the same work as they were telling me to do. Instead of people saying, “Go clean this, go do that,” if you see them doing it, it’s like, “Wow, he’s the manager or he’s the owner, and he’s on his hands and knees working.” It motivates and inspires you.

Fastest way into my doghouse: I hate liars. Don’t lie, don’t steal. I always tell employees to just be honest with me and then ask for forgiveness. Just be truthful. If you do those things, we’re cool.

COVID-19

What are the biggest impacts of Covid-19 on your business? Mandating masks and making sure your employees are constantly wearing them is very difficult, especially when you’re a multi-unit operator. You can’t be in every store at the same time so you have to rely on your management team. It’s the constant reminders, and reminding them to be safe. It’s not knowing where things are going to end up that can be very difficult to stomach.

How have you responded? We shifted to limited hours so we had more time to clean and less exposure for our employees. We’re still operating under those emergency hours and it’s working fine. The other is just pushing more of the on-the-go curbside pickups, third-party delivery. We want our guests to know we have those capabilities to still offer convenience. 

What changes do you think will be permanent? I think the masks are going to be around for quite some time. I’m very optimistic: they’re saying we have a vaccine and that it’s 90% effective. I think come summer, we’ll start to see some kind of normality. I don’t see those sneeze guards going away for quite some time. We also hired some third-party cleaners throughout 2020. 

BOTTOM LINE

2021 goals: Besides growing, I’d like to spend more time with my family. For me, it has to be fun. It’s good to make money, but if it’s not fun I’ll walk away. I’ve walked away from other deals because it’s not fun, and if it’s not fun I don’t like doing it—no matter how much money I’m making. It has to be fun. It has to be something I enjoy. 

Growth meter: How do you measure growth? I grow aggressively, but smart. My growth is based on how well my staff can handle the growth. You don’t want to grow because you have money or the brand is allowing you to grow. You have to say, “Okay, how many stores can I realistically handle and maintain the quality and the standard?”

Vision meter: Where do you want to be in 5 years? 10 years? In 5 years, I’d like to have a few more of the stores I’m building. While I love the hard work that goes into building these brands, I’m still hands-on and do the hustle and bustle. I want to get to a spot where I am able to pick and choose what I want to do. I also want to spend more time with my family. 

We know you have brands in different segments? Why/why not? Dunkin’ has obviously been around for a long time. I wanted to be with the biggest and baddest, and they have a proven record. Smoothie King has been around for a long time as well, and they’re still growing. With Dunkin’ 30 years ago, there were only a few in the Chicagoland area. Now there are more than 700, and the franchise’s AUV is up there. Those people who got in early are doing very well now. So with brands like Smoothie King that have territories to grow in and Chicken Salad Chick, an up-and-coming brand, I’m able to see the vision. I’m in early, so 20 years from now, I’m going to benefit the most. 

How is the economy in your region affecting you, your employees and your customers? It’s scuffling. The Chicagoland area just entered Tier 3 Resurgence Mitigations. It’s going to change things a little bit, but since the first lockdown a lot of what we already implemented for operations will remain the same. We’ve almost been anticipating we’d still be dealing with the virus through the winter, and with cases spiking throughout the region the mission is the same: keep everyone safe. 

Are you experiencing economic growth in your market? Yorkville is. The town is booming, people are moving away from the city. It was growing before but seems to be growing more rapidly now. 

How do changes in the economy affect the way you do business? There are a lot of laid-off people, so they have less money to spend and there was only one stimulus check. You can tell that people’s spending habits have changed, and rightfully so. People don’t know where we’re going to be at a month from now, although they’re saying we have a vaccine now. No one has a crystal ball that’s going to tell us when this will be over.

How do you forecast for your business in a world of uncertainty? Although my stores are doing well, I’m still operating as if the first month-and-a-half of the lockdown is our reality and we saw sales drop 40 to 50 percent. Although we’re up, I’m still tight in how I operate to make sure we’re cash-positive to survive the long, cold winter.

What are the best sources for capital expansion? Working with smaller banks, local banks, and banks that specialize in franchising. Not every bank in your neighborhood understands franchising. 

What are you doing to take care of your employees? We have bonus structures to make sure everyone has their incentives. I do my best to help every employee. I try to give raises frequently and sure I’m keeping their safety in mind first.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? My full-time employees get health insurance if they want to. Some take it, some don’t. I am seeing the increases and we’ve raised prices slowly, but it’s all a balancing act to make sure we keep employees happy without turning off customers.

What laws and regulations are affecting your business and how are you dealing with this? Lockdown is the big one right now. We’re not able to operate at 100%. Minimum-wage increases definitely hurt my business, and my industry too.

How do you reward/recognize top-performing employees? With raises, bonuses, and awards. I buy lunches for employees at least once a month as long as they’re doing their part. There are many ways to motivate the team. 

What kind of exit strategy do you have in place? You have to have a way in and a way out. Right now, I’m still young. I don’t have an exit strategy yet. I still have that hunger to grow. I have two kids. I’m not going to push them into the business, but you never know.