How to Do Food Franchises
A former Grand Hotel chef leads a team of investors prospecting margins of 9 to 12 percent in gourmet pizzas and burgers.
Former Grand Hotel chef Seth Hargett is superintending the business aspects of pizza and burger franchises.
“Wow, great pizza,” lunch breaking Mobile police officers verbally approve, huddling over pepperoni in the first degree. Other customers of Uncle Maddio’s Pizza Joint concur, choosing custom-built concoctions with over-the-top toppings and then some. Standing nearby is the store’s owner, Seth Hargett. In the culinary world, he too is over the top and then some.
Hargett is president of Jubilee Restaurant Group, which owns the rights to Five Guys Burgers and Fries restaurants in five states. He is also CEO of Jubilee’s subsidiary, JUMP Restaurant Management. In addition to the two Uncle Maddio’s in Mobile, JUMP has more than a dozen Maddio’s planned for locations across the South.
In fall of 2015, the company opened its first Uncle Maddio’s, on Airport Boulevard in West Mobile. Doors opened in May 2016 for the second Mobile store, in McGowin Park not far from Hank Aaron Stadium. There is little time to stop and smell the pasta.
“I put in 12 to 16 hours a day, seven days a week,” says Hargett, as the interview session follows him from Maddio’s kitchen into the dining area.
“How are you folks doing?” he asks customers.
Hargett has been interested in cooking from childhood but finds he’s still learning more about the business.
“I have always been interested in cooking,” the Mobile-raised restaurateur recalls. “I knew early on I wanted to make a career from the food-hospitality business.”
Born in Tampa, Hargett’s family moved to Mobile in the 1970s. After graduating from St. Paul’s Episcopal School, he attended Furman University in South Carolina on a track scholarship but worked at area restaurants. “College wasn’t for me at that time,” he says. But restaurant work was.
Leaving Furman after two years, Hargett went west, to Vail, Colorado, taking jobs in kitchens, studying culinary arts and enjoying the life of a ski bum. He later moved to Boulder, earning a degree from the University of Colorado, while working in a Zagat-rated 5-Star restaurant.
Later the aspiring chef moved to New Orleans and worked with Emeril Lagasse, the Brennan family and Gerard Maras. “Emeril is flamboyant in television,” Hargett recalls. “But in the kitchen he is quiet, settled, monitors everything and is all business.” The New Orleans experience made a lasting impression on Hargett’s business — not just cooking sense — in the restaurant trade.
In the early 2000s, he was handed culinary reins of the Grand Hotel Marriott Resort, Golf Club & Spa. As head chef, Hargett transformed the Eastern Shore restaurant from an ailing and dated eatery to legendary dining quality.
And then he quit.
“The Grand Hotel’s company was great,” he recalls. “But I wanted out of the corporate world. I wanted the challenge of doing something myself.”
After years of working all aspects of food service, from waiter to executive, he took a leap of faith. “I left the Grand Hotel in search of something better.”
And he gets by with a little help from his friends.
Looking for opportunity, Hargett rallied some friends, and they formed the Point Clear-based Jubilee Restaurant Group. “We talked about starting some type of restaurant business for years,” says childhood pal Dan Harlin, who now lives in New Orleans. “I had experience, investing in a few individual restaurants, but never a chain.” Within six years, Jubilee grew from a circle of friends to 400 employees in five states.
“I’m told when seeking startup money, before you get a ‘Yes,’ you receive a hundred ‘No’s,” Hargett says. “But I received my ‘Yes’ after only 48 ‘No’s.”
The group found that franchising is not for the faint of heart. It takes plenty of diligence, and even the seasoned investors learn much from on-the-job training.
“Do your research,” Harlin notes. “Make sure you have the commitment of money and time. Know what you are getting into.”
“There are many horror stories out there about franchises, but it doesn’t have to be,” Harlin says. “Make sure you have a well-run franchise with a great brand name.”
And, he warns, “Don’t be cocky.”
“People make trouble thinking they can acquire a franchise and improve it. Wrong,” Harlin says. “Follow the franchise’s philosophies, training and practices. They know what they are doing.”
Indeed they do.
A leader in the “create-your-own” fast casual pizza market, Uncle Maddio’s operates 50 locations in 15 states. Currently more than 275 units are in development.
“We are excited about Maddio’s,” Hargett explains. “The company’s founder/CEO Matt Andrew was an executive with Moe’s Southwest Grill and instrumental in its success.” Andrew had a philosophy when starting Uncle Maddio’s Pizza Joint chain: “If we can be as successful with Mexican food as we were with Moe’s, why not the same with pizza, and Uncle Maddio’s?”
Interviewed by phone from his Atlanta offices, CEO Andrew adds, “We could not ask for better partners than Seth and his team. The South Alabama market is one of our top regions, and Mobile has embraced us since we landed there. We look forward to opening new markets with Seth’s team.”
Andrew does not view Jubilee’s inventory of Five Guys as a competitor, quite the contrary. “Five Guys and Uncle Maddio’s have the same customer base,” he says. “Our restaurants are one side of the strip, Five Guys on the other. For our customers, one day it’s burgers, the next day pizza. It is a good fit. We complement each other.”
Hargett’s Maddio’s are planned across the South, including New Orleans, Baton Rouge and Lafayette, Louisiana; Olive, Mississippi, and Memphis, Tennessee.
By company decree, the product must be excellent.
“If you can’t make great pizza, you should not be in this business,” Andrew says. “There is too much competition out there not to have a great product.”
The challenges are many.
“People think restaurant margins are huge,” says Hargett. “Actually, if you turn 9 to 12 percent profit, you’re doing well.”
The rewards are good, too. “It has been very rewarding,” the restaurateur adds. “I look at Uncle Maddio’s and Five Guys and can say ‘I did it,’ or ‘We — the partners — accomplished this.’ We took a great brand, great product, good business model, a leap of faith and brought it on line.”
Mobile’s two Uncle Maddio’s Pizza Joints are on track for $1 million annually.
And the satisfaction is great. Hargett notes, “Seeing the impact this place has on our guests and employees’ lives is great. Pizza is instant gratification for our customers, and seeing my employees develop over time within our system is a reward in itself.”
Challenges, rewards and satisfaction are all in a day’s work for Hargett and company.
More than 93 percent of Americans eat pizza at least monthly, totaling up as a $32 billion business.
Uncle Maddio’s wants a piece of the pie.
Emmett Burnett and Matthew Coughlin are freelance contributors to Business Alabama. Burnett is based in Satsuma and Coughlin in Pensacola.