Interview with Dino, CEO of Uncle Louie G's Ice Cream Franchise
Today we are joined by Dino, owner of the Uncle Louie G
ice-cream chain headquartered in Brooklyn,
NY. Dino, can you tell me a bit about
how the business got started?
Sure. It’s one
of those funny little stories. One
day my two brothers were shooting the breeze on a stoop when one of our older
neighbors came buy. The exact
conversation is lost to the annals of time, but our neighbor told my brothers
that they were too stupid to start a business, let alone an ice-cream business.
Now my brothers are both quite stubborn, so they took this challenge to
heart and spend the next few years trying to perfect some great ice-cream
recipes.
They started the first store in 1998, and they’ve proved
our neighbor dead wrong. We now
have 30 stores in the tri-state area and beyond.
I took over the business two years ago and I’m now managing our
expansion into the south, which I dare say is the ideal location for our
product.
What makes your franchise model special verses Coldstone or
Baskin Robins?
Well, we’re a big believer of people should be rewarded for
what they do. As such, we don’t
charge a royaltee fee. Some have
said this is short-changing us, but we’re a family owned business and
families don’t take advantage of others in the family.
We believe our franchise owners are all ‘in the family’ and one of
our mottos is ‘they make money, you make money.’
With that said, I think we’re also right.
Baskin-Robin charges 11% on revenue, Cold Stone charges 9%.
They’re shrinking fast with 300 Coldstone franchises and equivalent
number of Carvel and Baskin robins closing.
The margins these days is just very tight, and revenue royalties are the
nail in the coffin for some owners.
We’re also different in that we don’t dictate stores
build in strip malls or such, which are usually more expensive.
Our brand is we’re a family store, so we’re much more comfortable
having a store on main street rather than commerce street.
Finally, our franchise fee is much less. Coldstone is $400K, ours is $50K.
Do you see the franchise model swinging more to your
no-royalty fee model?
I think something has to change in the franchise world.
I would hope they do, as then the franchisee owners get to keep more of
the pie. However, I doubt their
business models will allow for such a change.
That’s fine with us, it means we’re just that more competitive in
the long run.
So let’s swing back to the first shop.
What was your major difficulty?
We had the usual burn-in issues of figuring out what worked
once we got going, but our initial issue was getting money to purchase the
equipment. Banks just don’t loan
to small businesses, and keep in mind this was in 1998; I don’t know how
businesses are getting money today.
You’re now growing very fast.
Are you still totally family operated?
Our core business is controlled by the family, but we’re
now hiring consultants to help us grow out of state.
We also rely on a lot of out-sourcing of specialty needs such as
accounting. It’s a bit scary to
let part of your destination be decided by others, but it’s needed to grow.
It’s very exciting though.
How did you decide where to build your new shops?
Assuming it’s local, I sit in a car and people watch.
Figures and graphs are great, but they just can’t replace on the
ground research. Doing so lets me
see whose in the neighborhood, the foot traffic and patterns.
The map may say there is a school right next door to the location, but
you never know if there’s a reason all the kids take a different path.
What do you look for in a franchise owner?
We look for someone whose excited to have their own business,
and has that zeal. We don’t
necessarily look for people with experience, in certain ways we prefer they
don’t have any so we can train them ourselves.
We have ex stock-brokers and VPs to ex mechanics and salon owners.
Its about you and your dreams as much as it is about ours.
How do you differentiate yourself regarding ice-cream?
As mentioned before, we encourage small stores for that
family feel. We also, and more
importantly, compete on taste and price – where can you go for ice cream with
family for 4 for $8. Coldstone is
$7 for a 5 ounce dollars - $25 for a young family, which is one of the reasons
they aren’t doing that great now.
What’s your biggest current challenge?
Finding the landlords who charge reasonable rent, which is a
problem for everyone. In the
New York
area, to give you some ideas, we face rents of $1100 a month to $5400.
Favorite ice-cream?
Cookies and Cream
Any interesting ice-cream store trivia?
The hotter you get the more ices you sell: 2 to 1.
What does the future hold?
We’re hoping for 75 stores in 5 years in 10-12 states.
We want to keep small size since we make the ice cream ourselves in our
Staten Island
factory and don’t want to outsource. We
also believe it will become more corporate that we want if it gets any bigger.
Who would you like to thank for helping you get to where
you are today?
My wife, mother and father.
They stood behind me in everything.
I also have to thank my brothers who created the business, and their
stubbornness in fighting through all the adversity they faced to get us to
where we are today.
What are your final words for all of us.
If you take 100 thousand and put in the bank you’ll get at
most $2-3 thousand back every year. If
you invest it with us, your upside is unlimited.
We welcome new owners!
You can read more about Uncle Louie G on their website,
http://www.unclelouiegee.com
Dave Blake, the interviewer, is a serial
entrepreneur with a long history of helping consult small
companies.
He's had a thriving photography studio for the last several
years called www.daveblakephotography.com. He
currently is working on several new ideas while actively
consulting several startup companies. Dave has a passion
helping business owners realizing their dream of creating their
life's dream. You can read more about his services at http://www.dmbenterpriseconsulting.com
