FranDev Players: Valerie McCartney, Vice President of Franchise Sales and Development for Broken Yolk Cafe

Valerie McCartney has worked in franchise development since the early ‘90s for legacy QSR brands such as Pizza Hut, El Pollo Loco and Johnny Rocket’s. At the height of the last recession, McCartney found herself developing a franchise system for one of her favorite local restaurants, Broken Yolk Cafe, after befriending the owner. Today, Broken Yolk has grown to 33 locations nationwide, with more in development.

1851 caught up with McCartney to gather her expertise about starting a franchise concept during an economic downturn, how franchising is being impacted by COVID-19 and more. 

1851: Tell me about Broken Yolk Cafe.

McCartney: Broken Yolk is a breakfast and lunch franchise concept that has been around since 1979. There was one single restaurant in San Diego for years and the brand started franchising in 2009. As of today, we have 33 units open all over the U.S.

1851: How did you get into franchising? 

McCartney: I came out of the packaged goods industry, including executive roles with Nestlé and PepsiCo. When I came over to PepsiCo, I started working for Pizza Hut on the franchise development side of things and loved helping entrepreneurs open restaurants all over the country. After eight years, I moved over to a role as the head of franchise development for El Pollo Loco and then eventually transitioned over to a development role with another major QSR brand, Johnny Rocket’s. 

Around that time I met the founder of Broken Yolk Cafe, which was one of my favorite restaurants in the San Diego area. The founder immigrated from Greece and worked his way up to buy the location in 1994. We became friends and one day he told me he was going to open another restaurant location and license the concept. I recommended franchising, reviewed his license agreement and told him what was working and what wasn’t. He wanted to grow and I knew I could help him. This was right at the beginning of the last big recession and I had just been laid off. As franchise development people know, we are the first to go when the economy is bad and the first to get called back when it picks back up. So, I had plenty of time on my hands and I wanted to help him get started. Soon, I realized that working with emerging brands was a lot more fun than working with established brands. I knew I could always go back to working for a huge QSR brand, but I wanted to help my friend grow his business. 

1851: Are there any keys to consistent franchise growth? 

McCartney: The first couple of stores need to be profitable so that you are franchising a concept that will actually make someone money. From there, I’m not opposed to fast growth, I’m opposed to unproductive growth. 

For example, it is important to really know your target audience when it comes to franchise development. There are two groups of prospective franchisees — multi-unit operators, who are only attracted to brands that have a strong Item 19, and first-time franchisees who want to open up exactly one location. They both have their pro’s and con’s, but there are a lot more of the latter. The first-time, single-unit franchisees are the people who want to be their own boss. They are hard working, but they need a lot more hand-holding. They are risking a big percentage of their net worth and they’ve never taken out a big loan, so they need more support. The franchisor needs to understand the type of franchisees they are going to attract so they can be better prepared to support those specific prospects. 

Growth starts with knowing who you serve, and smart growth is about being willing to say “no” to those who might be interested but don’t fit the profile. If you say “yes” to too many of the wrong people, the right people aren’t going to come. 

1851: What are the biggest hurdles to successful franchise growth right now? How did the COVID crisis affect franchise growth opportunities? 

McCartney: They are really the same hurdles that we always face when the economy goes through hard times — franchisees are hunkering down with their cash out of an abundance of caution. That means that they are not in a financial or emotional position to open a new store. All of the Broken Yolk locations that we opened during COVID-19 were already under construction. Luckily, when we do start to turn the corner, there will be great real estate available and opportunity for growth in franchising. 

1851: Are there any common mistakes you see franchisors making when trying to grow? 
 

McCartney: One of the most common mistakes is taking on unnecessary expenses early on. If you are an emerging franchisor, you don’t need that fancy office. Most emerging franchisors are willing to spend money, they just don’t always invest in the areas that ones will serve franchise development. 

1851: What are your biggest goals/plans for 2021?

McCartney: Right now, our goal is to just recover from COVID-19 as fast as possible and make it through this crisis so we can start looking to the future.