From Franchisee to Franchisor: How SMB Franchise Advisors Helped David and Heather Restituto Open Factory Donuts

David Restituto has been in franchising his whole life. His grandparents were among the very first Meineke franchisees in the 1970s, and David grew up working with the car-care brand. When he and his wife Heather decided to branch out from the family business, they purchased a Rita’s Italian Ice, a vastly different concept from Meineke, but still firmly within the familiar world of franchise operations. This summer, after 14 years with Rita’s and a virtual lifetime in the franchise industry, David and Heather decided to open their own franchise business. To help them through the process, they hired SMB Franchise Advisors*.

The Restitutos explored a number of concepts before developing Factory Donuts, which serves made-to-order donuts in a hip, factory-inspired space. They settled on donuts as a concept that was likely to capture the customer enthusiasm that they found with Rita’s.

“We batted around a number of ideas, but we were always attracted to food service,” David said. “When people come into a restaurant, they are there because they want to be there, they are excited to try what you have to offer. A lot of service brands have strong business models because people need to patronize them, but the customers aren’t always excited to be there.”

On top of consumer appeal, David and Heather saw in donuts a number of lucrative operational advantages.

“We analyzed a couple of models, and we saw that donuts could have great profit margins,” David said. “They are simple to make and they don’t require a ton of ingredients, so there’s a low investment and potentially higher margins than with other food concepts.”

Even after they’d settled on a concept, the Restitutos were not entirely sure whether or not they would open the business with a franchise model, so they sought the advice of an old friend from the Rita’s franchise system, Steve Beagelman, who founded SMB Franchise Advisors in 2009.

“Steve was the Vice President of Franchising at Rita’s a while back, so we knew him and kept in touch with him over the years,” David said. “When we weren’t sure if we should franchise or not, we went to Steve for advice. We went back and forth for a bit and eventually decided that franchising would work well for us. We knew and trusted Steve, so SMB was a natural fit for consulting help when we decided to pursue the franchise route.”

Though David and Heather boast years of experience in the franchise world, David admits the process of becoming a franchise required more work than they anticipated, and he attributes his success in opening Factory Donuts to SMB’s ability to simplify that process.

“We knew it was going to be a lot of work, but it was even more complicated than we expected,” David said. “SMB made it all manageable for us. There were a lot of moments where the process had the potential to become overwhelming, but SMB did a great job of showing us exactly how to tackle every issue we came across. They laid out the framework and outlined the entire process from the start. They let us know exactly what we needed to get done and presented us with a number of options for how to achieve that. They completely streamlined the process, and ultimately they took a lot of work off of our plate so that we could focus on perfecting our concept.”

Now that Factory Donuts first store in Philadelphia is up and running, the Restitutos are still relying on SMB, through a combination of phone calls and face-to-face meetings, to help them develop a growth strategy.

“SMB has done a great job of outlining exactly what we need to do to grow, which we’re eager to do,” David said. “They’ve worked with so many franchise brands, and they know the pitfalls that brands make when they are trying to grow. I wanted to aim for 25 new stores in our first year, but SMB worked through the projections with us, and we decided 10–15 would allow us to find the right franchisees and make sure that each new store is up and running properly with all the resources they need, so that’s our new goal for 2018.”

David says that trust played a crucial role in his work with SMB, who he and Heather relied on to guide them through some of the more mysterious aspects of franchise development.

“It’s crucial that you trust the people who are going to help you build your business, no matter who that is, because you are going to waste a lot of time and money second-guessing them if you don’t, and you are going to put your business at risk,” David said. “I can’t count how many years of combined franchise experience SMB’s team has, but it’s a lot. We trust them implicitly, and it’s paid off.”

To learn more about Factory Donuts, visit factorydonuts.com, and to learn more about SMB Franchise Advisors, visit smbfranchising.com.