Golden Opportunity: Jewelry Wholesaler turns to Franchising and Shines
Annie Aggarwal, whose parents Renu and Bharat Aggarwal moved to Texas from India in 1989, recalls her extended family's surprise in 1997 when her mother decided to use her savings to purchase a Subway franchise in Houston.
Her mother Renu, who had been a full-time housewife, had saved funds from selling 22-karat gold jewelry from India wholesale to upscale jewelers in Houston and Dallas. She heard about Subway and franchising and decided that being a franchisee would be lower risk than selling jewelry, a "golden ticket" sure to take care of her family in the future.
Despite her husband's initial hesitance, the mother of two, who spoke minimal English and some basic Spanish, went ahead with her plan. Today she owns 55 Subways in Texas and New York, and to diversify, recently added Wing Zone in Houston.
Her husband Bharat, who soon quit his job to join her in the business, is now a proud believer in her business acumen. The couple received All Stars of the Year awards from the Houston Subway development agent in 2009 and 2011, and she was named Businesswoman of the Year in 2012 by the South Asian Chamber of Commerce in Houston.
"In our business, my mother is the decision maker, and my father executes those decisions," says Annie, an attorney who handles legal issues for the company. "I'm not surprised that she is a good businessperson, though some of the extended family might have been at first. She's such a strong role model. In our family, she is the powerhouse. She has a lot of guts. She is not afraid of anything."
Renu insists that the success of the family business is due both to family members employed by the business (her husband, daughter, and son, Keshuv) and the more than 300 employees who have become like a second family to her. "I treat the staff like family. Whenever they need help, I help them. They don't steal money from me because I will help them with family problems and they can pay me back when they have the money," she says.
"She really cares for the staff and some have worked for her for more than a decade and are continuing to grow," says Annie. "When we opened our Wing Zone, they worked above and beyond for us because they are so attached to my mother."
Annie, who graduated from the South Texas College of Law in Houston, is gratified that the entire family can work so well together. "My brother, who has a degree in entrepreneurship from the University of Houston, is working to take on my mother's role, managing operations and people and making sure we have the infrastructure to run smoothly. He has also created his own internal software to increase data efficiency and analysis. We're incorporating that into our daily operations so managers can conduct some operations in their stores by cell phone," she says. "I work with legal issues that come up, and since I also have an accounting degree, I look at financials, bringing in capital, and making the network connections we need."
When Renu's son and husband were researching possible new brands for diversification, they came across Wing Zone. "We flew to Atlanta to try to try it and liked it very much," she says. "It's a simple concept that we can easily incorporate into our infrastructure."
Now 51, Renu talks about retiring and letting her children operate the business. But they question that idea since she still has great ambition for her two brands. "I'd like to have 100 stores and a lot more people in the next 5 or 10 years," she says. "I may retire, but I'll still be making the decisions. I'll just call on the phone."
Name: Renu Aggarwal
Title: President and founder
Company: KK Group of Companies
No. of units: Subway, 55; Wing Zone, 1
Family: Bharat, husband of 28 years, daughter Annie, son Keshuv
Years in franchising: 15-plus
Years in current position: 15-plus
I bought my first Subway with savings in 1997, which led to my now owning and operating 55 Subways and 1 Wing Zone.
I didn't even know English when I arrived in Houston in 1989. I learned English and transitioned from being a housewife to being a business owner. My husband quit his job and joined me in establishing the business.
Biggest current challenge:
Expansion and development. The Subway market in Houston is saturated, so the challenge is growing the company to the next level. That is why we are expanding into different brands such as Wing Zone. They are a growing brand and give rights to develop a whole market.
Next big goal:
To grow and develop Wing Zone in Houston.
First turning point in your career:
When I purchased my first Subway in 1997.
Best business decision:
To bring my children into the business. They bring a different perspective and focus on using technology to increase efficiency.
Hardest lesson learned:
Retention. A company like ours runs on the support of key staff members. It is easier and quicker to develop when you retain your employees and keep them happy.
I spend most of my time in the office reviewing financials and making key decisions.
I exercise every morning like clockwork for 30 minutes, followed by 30 minutes of prayer.
Best advice you ever got:
Do what you love and work with those you love.
What's your passion in business?
My team. They are like family to me or are actually in my family. That is why we call this a family business.
How do you balance life and work?
We do not discuss business after 6 p.m. in our house. It's off limits. It's hard not to talk shop all day long since we all work in the family business, but that is our rule.
Indian soap operas.
What do most people not know about you?
I am a religious and spiritual person.
People not showing up on time, tardiness.
What did you want to be when you grew up?
Honestly, I didn't think I would run a business. I was going to be a housewife, but then the opportunity presented itself and I ran with it. I would still do anything for my family, but business has become a true passion of mine.
Switzerland with my husband and our two children
Treat your staff like family. Take care of them and they will take care of you.
Management method or style:
I like to be hands-on but give autonomy to my higher staff.
Always finding good staff for our restaurants.
How do others describe you?
Caring, to the point, critical, and demanding the best of others.
One thing I'm looking to do better:
Delegating some of my own tasks to free up my time for other things.
How I give my team room to innovate and experiment:
I encourage them to bring ideas to the table and create solutions to solve problems.
How close are you to operations?
When I started, I was heavily involved in day-to-day operations. Now, thankfully, I have a great team that manages daily operations.
What are the two most important things you rely on from your franchisor?
Protection of my trade area and advertising support. Subway is one of the best franchisors to work with. We are still new with Wing Zone, but they are dedicated to growth and this is important to us.
What I need from vendors:
Product that is on time and fresh.
Have you changed your marketing strategy in response to the economy? How?
We haven't really; just using new technologies that didn't exist when we started.
How is social media affecting your business?:
It plays a tremendous role in advertising. Today's Millennials are all about social media. It's the quickest way to advertise.
How do you hire and fire?
In hiring, I look for individuals who are looking to make a long-term career in my company and want to move up the company ladder. We only work with those who are passionate about growth and helping grow Subway and Wing Zone.
How do you train and retain?
I don't handle the training. We retain by taking good care of our employees who work hard for us every day.
How do you deal with problem employees?
I give my staff three strikes--a fourth and they are out. I have learned that if an individual's values do not match the company's values, then they don't last long.
Fastest way into my doghouse:
To expand and develop more units with Wing Zone. It is a hot, up-and-coming brand and we have a great opportunity to develop Houston.
Growth meter: How do you measure your growth?
Number of units.
Vision meter: Where do you want to be in 5 years? 10 years?
We'd like to have 100-plus total units and be dominating the Houston market with Wing Zone.
How is the economy in your region affecting you, your employees, your customers?
Houston is a great market for growth, so we are fortunate in that respect.
Are you experiencing economic growth in your market?
Yes, Houston is growing and is one of the best cities for restaurant owners. We are excited about growth for Wing Zone in this market.
How do changes in the economy affect the way you do business?
It doesn't change how we operate.
How do you forecast for your business?
5 percent growth continually.
What are the best sources for capital expansion?
Personal finance if you can afford this. Relationships with banks are also important.
Experience with private equity, local banks, national banks, other institutions? Why/why not?
I prefer working with private, small banks. They are quicker on the turnaround. Developing relationships with bankers is important.
What are you doing to take care of your employees?
We treat them like family. We throw an annual Christmas party that includes gifts such as TVs, PlayStations, etc. We end the night with dancing and dinner.
How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)?
With all of the changes, we are still working through this, but we will comply with regulations.
How do you reward/recognize top-performing employees?
Top employees are always promoted and we will find a way to keep them in our system. Our people are what make us a strong system.
What kind of exit strategy do you have in place?
My kids are slowly transitioning into the business and taking over. Our plan is to continue growth rather than sell.
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