“I’m not willing to settle for anything. Maintaining quality, pride, and
being passionate will push us forward,”
says Kunkel. “We’re a small brand growing into a small to medium-sized brand,
so it’s very important for our first 10 to
20 stores to be home runs.”
His plan is to create a strong foundation in South Florida and expand strategically before moving beyond his home
turf. Starting in 2009, he’d like to open
10 stores a year, but he’s not wedded to
that number. Finding the right person
and location comes first, he says. He’s
willing to wait for “A” locations.
“We’re hoping to find great operators, as passionate as we are about the
brand,” he says. But for this young company, franchisees will have to come up
with their own financing.
What’s ahead
As 2008 draws to a close, Lime Fresh
has four restaurants open: the original
South Beach unit (still corporate), three
franchised units (North Miami Beach,
Pembroke Pines, and Coconut Creek);
and two more in the pipeline: a midtown Miami unit (February 2009) and
one at the University of Miami in Coral
Gables (summer 2009).
As he looks for new sites, there’s a
new variable to contend with, thanks to
the economy: as big box anchors and
other retailers pull out of the upscale
malls he’s been seeking to enter, he’s
wondering if those malls are as desirable
a location as they were before. “It’s definitely a different world,” he says.
Even as he prepares to expand Lime
Fresh out of state, Kunkel is preparing
to roll out a new concept in South
Beach in early to mid-2009, modeled on
the same idea of taking a fast-casual concept and dressing it up. The new brand,
Buns Burger Joint, he says, is a chef-driven concept that revolves around
hamburgers and hand-cut french fries
with 30 kinds of dipping sauce.
Start-up will be easier this time, as he
can use the systems and legal documents
he developed for Lime Fresh. The first
unit will open as a corporate store and
be sold to a franchisee when the kinks
are ironed out. Like Lime Fresh, it will
have an indoor/outdoor format, an open
kitchen, high-end décor, and a straightforward, simple menu. “It’s a ton of fun.
We have lots of people wanting to get
involved,” he says. It’s easy to see why. ■
—Eddy Goldberg
John Kunkel
Title: Founder, CEO
Brand: Lime Fresh Mexican Grill
Founded: 2004
No. of units: 4 open, 2 in the pipeline
Concept: Affordable, fresh, fast-casual quality Mexican food
Family: Wife Alison, son Thomas, 4, daughter Lily, 2
Advice for budding franchisors
• Perfect your operations – “The restaurant business is hard in itself, but the closer you get to full service, the more moving parts there are. We’ve tried to limit
that as much as possible and streamline our operations.”
• Find passionate franchisees – “The franchisees in the company are extremely
passionate about the brand and feel very strongly, especially as the economy slows,
that we’re in a unique position because of our price point and the niche in the market that we’re in.”
• Hire the right people – “Get some qualified people surrounding you. It seems
there are fewer and fewer A-plus operators who can run a store. You can teach
someone the ins and outs of a restaurant, but it’s difficult to teach them to be
a leader.”
• Get professional help – Kunkel worked with Technomic to help streamline the
operations manual, and he hired an experienced franchise attorney to create the
FDD and franchise agreement. He also hired an accounting firm and improved
his software.
• Be selective and patient – This applies to finding franchisees, management
and staff, the best locations, and outside vendors and partners. “We were—and
still are—very selective of franchisees and will not go directly into multi-store operators.”
• Get your ducks in a row – “We wanted to make sure we started with the right
franchise agreement and correct operations manual. I’m passionate about operations, that’s been my background, and I wanted to make sure we had a very strict
standards, control of the brand, and consistency of operations as we grew.”
• Know your goals – “Take it slow, don’t get ahead of yourself. There are a lot of
ins and outs in franchising.” Much depends on your reasons for becoming a franchisor. “Some look at franchising as a sales vehicle; public companies and investors
have the bottom line in mind. It depends what your goals are.”
• Learn on someone else’s dime – “I had the fortune of doing it for other people’s concepts,” he says. He began as a dishwasher and worked his way up, gaining operations, management, marketing, and leadership skills as he went.
• Stick to your plan – Kunkel says he’s learned from the mistakes of others who
expanded too quickly. “You can open 50 fast, but are you going to shoot yourself
in the foot by growing too fast?” he asks. “So many concepts are fantastic on paper
and fail on the operations side. As an operator that’s disappointing to see.”
• Stay open to change – While operations can be honed to a science, consumer
tastes and trends are constantly evolving, competition is constant, and external
events (like the economy) are forever. “We’re always adding new items and changing the menu,” says Kunkel. A recent example: “In a nod to the Cuban community, we’ve added a new burrito, the ‘8th Street Burrito.’ It was a huge request.”
Franchise fee: $30,000 per location
Total unit investment: $544,000 to $730,000 (not including real estate)
Royalty fees: 6 percent of gross sales
Average unit size: approx. 1,800 sq. ft. with an additional 600-plus sq. ft.
for outdoor seating area
New franchisee training: 5 to 7 weeks
