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Shaquille O'Neal: The Renaissance Man of Franchising
With a robust multi-brand portfolio and a net worth of over $400 million, the former NBA star is quickly becoming a true leader in the franchising industry.
At the 2022 International Franchise Association conference in San Diego, former NBA player Shaquille O’Neal revealed the spark that got him interested in franchising: “I learned from the great Magic Johnson that it’s okay to be a basketball star, but at some point, you want to start investing in businesses,” O’Neal told CNBC during the event.
After signing with the Orlando Magic in 1992, the then-21-year-old athlete spent 19 seasons as a professional athlete. The 15-time NBA All-Star’s unprecedented athletic career earned him countless awards and honors, including NBA Most Valuable Player, NBA Rookie of the Year, four NBA Championships and a First Ballot NBA Hall of Famer. Currently, O’Neal is an analyst on TNT’s Emmy Award-winning “Inside the NBA.”
Since O’Neal announced his retirement from the NBA in 2011, he has shown that he can dominate anything he puts his mind to. And, taking Magic Johnson’s advice to heart, he has set his mind to business. The 7?1? former basketball player studied business when he was a college student, earning an MBA from the University of Phoenix and a Ph.D. in Education. With a net worth of $400 million, he is one of the five richest players in the NBA, only preceded by Michael Jordan, Magic Johnson, Junior Bridgeman and Lebron James.
Shaq the Franchisee
O’Neal, like many celebrities, seems to have a soft spot for franchising. His eye-popping portfolio has included 155 Five Guys hamburger establishments, which represented 10% of the total company, 17 Auntie Anne’s Pretzels restaurants, nine Papa John’s restaurants, a “few” Krispy Kremes, 150 car washes, 40 24-Hour Fitness gyms and a movie theater in his native Newark.
“The franchise is a simple model,” O’Neal told CNBC. “If it works, you follow the rules, and it will continue to work. If you stick to the values you’ve learned, you can’t go wrong.”
But that may be oversimplifying it just a bit. O’Neal says he is also very careful and strategic when it comes to which franchise brands he invests in.
“My skill is, if something comes across my desk, and I don’t believe in it, I won’t even look at it,” O’Neal told the Wall Street Journal. “Whenever I do business, it’s not about the money. I heard Jeff Bezos say one time when he was talking – he says he makes his investment based on if it’s going to change people’s lives for the better. And once I started doing the strategy, I think I probably quadrupled what I’m worth now.”
Of course, not every investment is going to be a slam dunk. In 2012, O’Neal invested in The Original Soupman, a soup concept based on the “Seinfeld” episode. O’Neal is no longer involved in the company, which in 2017 filed for Chapter 11 bankruptcy, its assets later acquired by Gallant Brands, which in turn has made multiple attempts to revive the brand.
“Oh yeah, the Soupman,” O’Neal said to The Franchise Times. “That didn’t work out so well. It was, you know, in the winter, you could sell a lot of soup, but when else do you eat soup?”
Similarly, O’Neal recently sold his Auntie Anne’s locations, explaining: “I sold my Auntie Anne’s. Because Black people don’t like pretzels that much. So I had to switch it up.” You have to respect someone who goes with their gut.
Shaq the Franchisor
Never one to only do something halfway, O’Neal has also explored the other side of franchise ownership. In 2018, O’Neal founded chicken sandwich brand Big Chicken, backed by a dream team of partners; JRS Hospitality, an accomplished Las Vegas-based ownership group and Authentic Brands Group, a multinational, multi-billion-dollar brand development, marketing and entertainment company. In 2021, he officially became a franchisor after launching the Big Chicken franchise concept.
Big Chicken
“This team has built a world-class menu,” Big Chicken CEO [and former Budweiser executive] Josh Halpern told Forbes. “We have amazing milkshakes. We have a different value proposition with our chicken sandwiches. We have 5-ounce chicken sandwiches, while most are in the 2-to-2 ½-ounce range. We’re also hormone- and antibiotic-free, our chicken is breaded and fried in-store with proprietary breading, and we have so many options compared to others.”
O’Neal has been involved in all aspects of building out the Big Chicken franchise, from naming the chicken sandwiches after people he admires, like the “Charles Barkley” to the sourcing of the supply chain.
Now, the Las Vegas-based chain can be found on two Carnival Mardi Gras cruise ships (a company in which Shaq serves as the Chief Fun officer) and arenas in Seattle and New York, as well as in Las Vegas and Los Angeles. It also has plans to open over 80 ghost kitchen locations inside Walmart stores and open its first stand-alone first brick-and-mortar Big Chicken shop in Houston early next year, with more franchised locations popping up throughout the country in 2023. Overall, Big Chicken has already sold over 200 units since franchising last year.
“Shaquille is great, but if the food was not good, there was no chance I was going to do it,” says Steve Christensen, who with Reid Richards signed a multi-unit agreement to bring 12 locations to Arizona. “We’re going to go toe-to-toe with Raising Cane’s on the chicken tenders.”
Other Ventures
In addition to franchising, O'Neal also acts as a celebrity endorser and a board member for Papa John’s, where he just recently resigned an endorsement deal worth $5.63 million. It's estimated that Shaq makes $22 million per year through endorsement deals alone, and his willingness to endorse a plethora of companies and products has become a running joke on “Inside the NBA.” He is a pitchman for everything from Icy Hot pain-relief patches to Epson printers and The General Insurance.
"Shaq isn’t just another spokesperson for us," Papa John’s CEO Rob Lynch told QSR Magazine in November. "He’s a franchisee. He has ownership in the brand. He’s a board member. It was about how do we put Shaq into a situation where all of the great things he brings to the table can be married with all of the great things we’re trying and aspiring to be."
Another line on O’Neal’s resume? Philanthropist. The basketball star has used his wealth and investments to empower others to follow a similar path. He co-founded Majority, for example, an ad agency focused on diversity. His vision is to tell stories about diversity and “help open doors, connect dots, create opportunities and celebrate successes,” said co-founder Omid Farhang in an interview with businessinsider.com.
O’Neal also has a long Hollywood resume and recently became a published author with his first recipe book titled Shaq’s Family Style, which promises “championship recipes for feeding family and friends.”
Oh yeah, he's a DJ too. Is there anything this man can’t do?
Today, O’Neal said he makes more annually from his business investments than he did from his $30 million-a-year basketball paycheck. At this year’s IFA convention, O’Neal told the audience of more than 3,000 franchise professionals that he wanted to make it in business and not be “one of the 60% of NBA players who go broke after leaving the game.” With such a robust portfolio, it is clear that O’Neal understands the longevity of the franchise business model and is eager to dominate that arena as well.
“I want to be something more than Shaq — that guy is going to fade away with Steph Curry and all those guys stepping up,” he told The Wall Street Journal. “But Dr. Shaquelle O’Neal will be around forever.”
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