To the Top: Former Delivery Driver Finds Franchise Success
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To the Top: Former Delivery Driver Finds Franchise Success

To the Top: Former Delivery Driver Finds Franchise Success

Award-winning Toppers Pizza multi-unit franchisee Karl Malchow got his start with the rapidly emerging chain when he took a job as a delivery driver while attending college at the Milwaukee School of Engineering.

It turns out, Malchow was a quick study when it came to pizza. After accepting a role as an assistant manager in Toppers’ management program, he worked his way up to general manager and supervisor over multiple corporate restaurants. He eventually transitioned to become a franchise business coach for the Whitewater, Wisconsin-based brand.

“Through all of my roles, I became very intimate with the model and what made restaurants and franchisees successful,” says Malchow, 35.

In late 2018, Malchow and his brother Mac Malchow teamed up with business partner Adam Oldenburg to purchase a Toppers Pizza in Lawrence, Kansas. Malchow immersed himself into the group’s Renegade Pizza venture as the operating partner while his brother and Oldenburg retained their corporate roles.

Success as a top-performing store was swift, spurring the opening of four more restaurants in the Midwest over the next five years. Malchow earned Franchisee of the Year honors in 2022 and 2023 and serves as a voice for his fellow franchise owners as a member of Topper’s franchise advisory council.

His business partners, who also started with Toppers as delivery drivers, continue to give Malchow unique insights into the franchisor/franchisee relationship. Oldenburg was named Toppers’ CEO in 2023 while Mac Malchow serves as the chain’s vice president of development.

With plans to double the business in size in the next five years, Malchow continues to heed the early lessons learned as he develops his group of young team members.

“You won’t go anywhere in this industry without a great team surrounding you that believes in the company’s vision,” Malchow says. “This rings true for your franchise company and the franchisor as a whole. Beyond that, I make it a mission to stay aligned with my franchisor leadership team. If you have a great working relationship with your franchisor, you can accomplish awesome feats.”

Name: Karl Malchow

Title: Owner

Company: Renegade Pizza LLC

No. of units: 5 Toppers Pizza

Age: 35

Family: Partner Leah Kennedy; 1 daughter, Delilah, 5; partner’s daughter Katy, 10

Years in franchising: 5

Years in current position: 5

PERSONAL

First job: My first job was at a supper club in northern Wisconsin. I was a dishwasher and started at 15 years old. My brother had to drive me to work every day because I didn’t have a license yet. Luckily, he worked there as well.

Formative influences/events: My biggest influence in life has always been my older brother. He is extremely hard working and caring. However, he also is very candid and transparent. He will do whatever you need if you hold up your end of the deal whatever that may be. Mac has always been very driven and has an extensive list of accomplishments that have pushed me to try and be my best self.

Key accomplishments: I am a three-time Manager of the Year nominee and a Toppers Road Dawg of the Year recipient. I’ve won various sales-increase and record-year awards and a President’s Award. My biggest achievement would be the back-to-back Franchisee of the Year awards I received in 2022 and 2023.

Biggest current challenge: Staffing is the biggest current challenge we are facing right now. Recruiting top talent for an aggressively expanding business is always a challenge.

Next big goal: The biggest thing we are working on right now is getting a location opened in the Manhattan, Kansas, market.

First turning point in your career: When I became a general manager for Toppers Pizza, I knew I was going to be doing this for a long time. I was obsessed with the numbers. I learned so much in that first year about running a business and developing people. It also helped me more clearly define what I wanted to do long term for a career. During that period was the first time my brother and I really started planning to become franchisees someday.

Best business decision: The best business decision I ever made was partnering with guys I trust and respect. Mac Malchow, my brother and Toppers’ vice president of development, and Adam Oldenburg, Toppers’ CEO, were those guys. We can challenge each other and push to achieve more because of the relationships we have built over time. We don’t always agree and have had plenty of butting heads, but we all keep focused on the overall goal and don’t get caught up in finger-pointing or making excuses for coming up short on a goal. We expect our very best work from each other, and most importantly, we celebrate each other’s wins.

Hardest lesson learned: I feel like I have a lifetime of hard lessons learned—ha ha! At times, I probably worked much harder than I needed. I always have operated at a high level when the pressure is on and things are difficult. However, when things get easier, I can lose sight of the most important things to accomplish each week. As many people have said, “Proper planning prevents poor performance.” I have learned multiple times to always be planning for the next thing.

Work week: Currently, I oversee three of our five locations. My week is split between meetings with my managers, visits to each location to determine our biggest needs, meetings with my business coach, time to review our previous week’s results, and time to plan for the upcoming weeks and months.

Exercise/workout: If I said I hit the gym regularly, the noise I make when bending over to tie my shoes would beg to differ. The job and my 5-year-old do keep me active every week. I personally can’t work behind a desk all the time. I need to be on my feet and moving.

Best advice you ever got: Over the years, I have received a tremendous amount of support and advice from various people in lots of different roles. If I were to pick one that stands out, though, it was a piece of advice that helped me the most when I first started as a manager. When I was a teenager, I worked with my father a lot doing construction work. He always thanked everyone for their hard work at the end of the day. He would say, “The mistakes don’t matter anymore; it’s the end of the day. Always thank your workers for what they did that day. They will always try their best if you show you appreciate them.”

What’s your passion in business? Creating opportunities for others. My partners and I have always been very aligned on this value. Opportunities came to us because we worked hard but also because people saw potential in us and invested their time and energy in making sure we were always striving to improve and achieve more. We are a small and extremely ambitious group, and we want to provide opportunities and rewards to those who trust and join us on this adventure.

How do you balance life and work? This is always a challenge. The biggest thing I do is set boundaries. When I’m at work, I need to be invested in that. When I am at home, I need to be at home. Anything that has not gone as planned at the locations can be handled when I get back to work. At times, this seems near impossible, so I focus on developing the right people to handle issues when I am not accessible, so I am needed less. Always be focused on developing someone who will replace you, so you can protect your own time. It’s a resource we can’t get back.

Guilty pleasure: I like to play computer games but not the usual suspects. I enjoy games like American Truck Simulator, Farming Simulator, and Construction Simulator. Is there a theme developing? I even have a steering wheel, shifter, and pedals to enhance my simulating experience. Nothing like finishing a day at my real job just to make some cross-country runs in my fantasy 18-wheeler or harvesting a field of wheat in my combine.

Favorite book: The Stand by Stephen King.

Favorite movie: “Good Will Hunting.”

What do most people not know about you? I like to think I’m artistic. I enjoy drawing and painting, and they don’t turn out half bad sometimes.

Pet peeve: Finger-pointing. Mistakes happen, things get messed up, and communications break down at times. The focus needs to be on fixing the mistakes, not necessarily trying to always figure out who is to blame.

What did you want to be when you grew up? I wanted to be an architect who designed resort hotels.

Last vacation: My girlfriend and I spent a few days in Keystone, Colorado, enjoying the mountains.

Person you’d most like to have lunch with: Tom Segura. He’s a very successful comedian and also a monster in business. It would be a great time to pick his brain in between outbreaks of laughter.

MANAGEMENT

Business philosophy: Take care of the people who work for you. Provide them with skills they can take further in life with them even if they won’t be working with you forever. If you can do that, those people will take care of your customers.

Management method or style: Care and candor. Invest time and patience with people. Deep down, most people want to be good at their jobs. They want to feel accomplished and appreciated. Don’t sweat mistakes. They are the cost of business and learning. Approach each situation with a clear head and empathy, but don’t be afraid of hard conversations. Not correcting bad habits isn’t empathy; it’s a disservice to your team.

Greatest challenge: Fully trusting someone and removing the safety net is my hardest challenge. I worry they might be overwhelmed, so I need to feel more comfortable letting go of responsibilities. They are always capable. That’s why I put them in the position in the first place.

How do others describe you? I most often hear that I am extremely patient with people. I don’t lose my cool, and I can’t remember the last time I raised my voice at someone. It’s just not necessary.

Have you ever been in a mentor-mentee relationship? What did you learn? Nothing official. I just tend to surround myself with people who are more successful than myself. I’ve heard it said multiple times, “If you’re the smartest person in the room, you’re in the wrong room.”

One thing you’re looking to do better: Routine! I am great at reacting. Always able to solve a problem or rise to a challenge, I struggle to stay in a consistent routine that drives the best results and focuses my time and energy on only the most important tasks. I want to be more proactive.

How you give your team room to innovate and experiment: The managers hold the keys to their locations. We have standards to follow and certain ways things need to be completed, but everything else is up for debate. If they have an idea and a plan that will improve our operations or quality of life for our team, they can try it out. Those ideas can be generated from any position. Innovation isn’t just for me to think about. It’s a team effort.

How close are you to operations? Extremely close right now. Only overseeing three locations allows me that privilege. Over time, that will evolve and change.

What are the two most important things you rely on from your franchisor? Technology innovation and a strong brand to stand behind. Technology always needs to be advanced—from how we obtain orders to making it easier to make those orders. The franchisor also needs to have a great product and values that align with my own. Currently, Toppers hits those needs.

What you need from vendors: Great products that get delivered on time.

Have you changed your marketing strategy in response to the economy? How? With the current economic challenges, we are focused on value. People are still eating out—maybe not as much, but they still are. We need to make great products that people choose over what someone else is offering.

How is social media affecting your business? It’s a fast-moving platform. It’s an exciting and fun way to get new creative ads out in front of people. It also offers a lot of flexibility and options for how you want to invest your marketing dollars. That’s not to mention how fast you can create content and get it posted and served up to your customers.

How do you hire and fire? We use classic interviewing techniques but also try to see if we are a good fit for them. We only want people to work for us who want to work for us. After a team member’s first 30 days, we will usually check in with them. If we don’t think they are the right fit or if they just don’t like being with us, we can separate on good terms.

How do you train and retain? Toppers provides awesome tools and an online training platform to promote great training. These tools also help keep people developing and learning more. This naturally leads to better retention because the job doesn’t get stale. We also spend a lot of time trying to develop true leadership skills that apply to whatever career someone may be looking for.

How do you deal with problem employees? If someone is a problem, they most likely don’t belong on the team. It doesn’t have to be a bad thing. It just didn’t work out. I think a lot of employers and employees forget it is a trade. If either party is unhappy with the expectations of the trade, it’s best to separate and move on.

Fastest way into your doghouse: Living below the line. There will always be challenges and things stacked against us at times. Don’t get trapped being a victim. Find the solution even if you didn’t put yourself in the specific situation. No one else will get you out of it.

BOTTOM LINE

Annual revenue: $5.8 million.

2024 goals: Open a location in Manhattan, Kansas, and surpass $6 million in revenue.

Growth meter: How do you measure your growth? Are we still planning to open more locations? If we are and we continue to work the plan, then I consider us growing.

Vision meter: Where do you want to be in five years? 10 years? In the next five, I would like to see us surpassing 10 locations. In 10 years, it’s a little hazier. The top-end potential with Toppers Pizza right now seems limitless due to all the available prime territory. I expect that to change based on the brand’s growth trajectory, but we intend to capitalize on it while it’s available.

Do you have brands in different segments? Why/why not? Not currently, but the future could change that.

How is the economy in your region(s) affecting you, your employees, your customers? It’s the same challenge as everyone else. Getting staffed in locations and continuing to grow top-line sales is always at the forefront of our planning.

Are you experiencing economic growth in your market? Absolutely. Over the last four to five years, we’ve had major growth occur every year. This past year has pressured all restaurants and even those that are well run in our communities have faced some headwinds when it comes to growing sales. Luckily, we’ve continued to grow our top line, and 2023 will close as another record sales year for our company.

How do changes in the economy affect the way you do business? It’s an opportunity to double down on how you take care of your customers. Like I said before, people are still eating out. Make them want to buy your products over someone else’s. Provide exceptional service. Eliminate any pinch points your customers may have with placing orders or getting issues resolved. The better their experience the more likely they are to return. Retained customers are easier to generate sales from than trying to find new customers. It goes the same with your internal teams. Take care of the team members that take care of your customers. Turnover is very expensive and makes it more challenging to provide that exceptional service.

How do you forecast your business? We do yearly budgets for each location, monthly projection meetings to estimate sales, trends, and costs, and we keep weekly cash flow spreadsheets to compare actual results with projected ones.

What are the best sources for capital expansion? The best source is reinvesting into the business. My partners and I are very disciplined with what we take out of the business. Profits are rolled back in to continue expanding. Those profits may drive the expansion on their own or secure other financing for us.

Experience with private equity, local banks, national banks, other institutions? Why/why not? We have worked with various banks and some self-financed opportunities that have helped us grow over the past five years but nothing groundbreaking.

What are you doing to take care of your employees? Continually doing wage audits throughout the year to make sure we are competitive and offering a fair wage. We also offer very flexible schedules, opportunities to learn and grow, management skills, and even life skills. We work with a lot of young adults who generally appreciate it when someone invests time to try and help them figure out how to transition from young adult to young professional.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? Really finding ways to become more efficient. To raise wages and provide those additional benefits, we need to be able to accomplish more work with fewer people and without requiring more effort on the team members’ part.

What laws and regulations are affecting your business, and how are you dealing with them? There is not anything currently pressing. Some things are under debate but not entirely ironed out yet. So, I try not to get too worked up about things that haven’t come to fruition.

How do you reward/recognize top-performing employees? We do profit sharing with managers, bonus opportunities, gifts, and accolades. Sometimes, the highest performers will be sent to training opportunities around the country to help open new locations for other franchisees.

What kind of exit strategy do you have in place? Currently, there is not one. We are focused entirely on growing with the brand right now.

Published: March 2nd, 2024

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