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On November 21, 2016, Posted by , In Real Estate, With Comments Off on ENTREPRENEURS

Secret sauce

BY: ALICIA CECCARELLI | CONTRIBUTING WRITER

November 11, 2016

In an impromptu word association game, business partners and restaurateurs Tim Goff and Justin O’Brien give impassioned responses to the trigger term “bagged guacamole.”

“Yuck!” replies O’Brien.

“Plastic. I can literally taste the plastic,” Goff says with a grimace.

The Cape Coral duo, friends since elementary school, believe their super-high quality standards are an essential component of their bold strategy to go national with their fast-casual, fresh Mexican concept, 3 Pepper Burrito Co.

Goff and O’Brien are using their previous experience owning eight Pita Pit stores in Florida to build their own franchise company. “A lot of people that start a franchise haven’t been on the franchisee side, so I think that’s nice to have learned over the last 10 years and implement it to make people successful,” says O’Brien.

The business partners opened their first 3 Pepper Burrito in Cape Coral in November 2014. Sales at that store are up 28% this year over 2015. A second store followed in Fort Myers, and the plan is to open six more corporate-owned locations throughout Lee and Collier counties in the next two years.

Goff and O’Brien, through Burrito Group Properties LLC, also bought a 3,756-square-foot building in downtown Fort Myers in July that will serve as a corporate headquarters, franchisee-training center and another 3 Pepper location. The partners paid $760,000 for the building.

The concept at 3 Pepper is made-to-order Mexican fare that features fresh-pressed tortillas and chip seasonings. And there must be something good in the sauce. The partners have already received 180 inquiries from potential franchisees, without a full-blown marketing campaign.

But the owners aren’t in a rush. Instead, the pace with franchising, says Goff, is “low and slow for the long haul.” The company will start its franchise efforts in large diverse metro areas such as Orlando and Atlanta. They also initially plan to limit the national expansion to areas within no more than a three-hour plane ride.

Goff and O’Brien believe their business model encourages maximum profitability for the franchisees — without the thick upfront marketing fees and costs some others in their industry charge. The costs at 3 Pepper Burrito include $25,000-$35,000 for franchising fees; a 5% royalty; a 1% marketing fee; and a small square-footage fee on build-out.

The business partners say passing on all possible savings to the franchisee is a wise move in the long run. “Of course, the end-all goal is you want to make money as a company, but we want people to be successful because they’re going to want to open more stores,” Goff says. “That has been the goal from the very beginning.”

Another goal is to spend as much time as it takes in the franchisee vetting process, so both sides get what they expect. “If we put the wrong franchisee in, we’re not only hurting ourselves and the brand, we’re hurting other franchisees,” says Goff.

O’Brien adds that being a good franchisee and running a successful restaurant is about more than having money to pay fees.“The ideal candidate is going to be an owner-operator, because they’re going to care and they are going to be there like myself and Tim,” he says.

Goff and O’Brien, beyond the business model, believe their open-minded business relationship will be a key factor in their long-term success. An important ingredient in the friendship: never harp on setbacks. The duo says that approach would work for many other partnerships. “Instead of even just dwelling on it for a second,” says Goff, “just immediately start in on the solution for it.”

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