Franchisee Highlight - September 2005

Amerimax Investments, Coral Springs, FL

It's rare for any business to show a profit in its first year -- and even rarer for a fledgling company to do so well it gains national attention. But Barry Spiegel and partners Buddy and Herb Schneiderman of Amerimax Investments, based in Coral Springs, Fla., managed to take their Dunkin Donuts franchise from start-up to standout in a matter of months.

Financial savvy, dedication and flexibility are key ingredients in the trio's recipe for success. Business expertise achieved in other fields adds spice to their enterprise. But their passion for pleasing people is the yeast that makes their products rise to the top of their customers' lists, and turns many of those customers into regulars.

Barry, Amerimax's chairman and CEO, is a former flower child who studied at Kent State, rocked at Woodstock and marched for peace in Washington, D.C. When he was in college, he says, he asked himself what kind of business he could run with a product or service "people would be addicted to" in a benign way. A donut and coffee franchise seemed like a natural. After many years in insurance and real estate development, he finally decided to give it a try.

Barry placed an ad in a South Florida newspaper and interviewed dozens of potential partners. Buddy and his father, Herb, had the track record and personality he was looking for. They'd made their mark in the intensely competitive New York City garment district with one of the first companies to popularize pants for women. When Barry first met them, Buddy was running an employment agency in New Jersey, while Herb, tired of the big city rat race, had retired to South Florida and was hoping his son would join him. "We hit it off immediately," Herb says of their first meeting. Buddy, who was looking for a career change, found the franchise idea appealing. "I like the interaction with the customers," he says. Now Buddy is president and chief operating officer for Amerimax and Herb serves as its senior adviser.

The team opened their first store in a brand-new building at 12432 W. Atlantic Blvd., one block east of the Sawgrass Expressway, in February 2005. The second store, purchased from its previous owner, opened two weeks later in the Heron Bay Shopping Center at 5930 Coral Ridge Drive, one block north of the expressway and right in the community Buddy and Barry call home. When they took over that store, Barry says, they were thinking, "We'd better make these customers happy -- they're our neighbors." The neighbors, quick to tell them what they liked -- and didn't -- about the store's previous management, actually made that task easier.

Eight weeks of training at Dunkin Donuts headquarters in Boston --including hands-on baking and finishing -- prepared Buddy to oversee the franchises' day-to-day operations. "I do know what a good donut looks like," he says.

Putting the tasty treats in the stores proved to be a challenge, however. New to franchising, the partners assumed Dunkin Donuts would supply all the products. But they were in for a surprise. Barry recalls his dismay when, two days after signing the franchise agreement, he discovered he couldn't lease the premises because "I didn't have a way to get my donuts." Fortunately, the trio were able to become partners in a large bakery that will be supplying all their stores. But Herb advises would-be franchisees to "do your homework" because "not everybody can do that."

As the men prepared to open for business, Barry says, their No. 1 goal was "great customer service," which meant clean stores with good products, following corporate guidelines for consistency, and keeping the lines moving, especially during the early-morning rush. To achieve these objectives, he says, they needed honest, friendly, dedicated managers who "passionately enjoy doing their jobs every day." But recruiting them was another challenge, Herb says, because of Dunkin Donuts' rule that "you can't take a manager from another store" in the chain.

The partners soon realized they were in a demanding seven-day-a-week business with much longer hours than they had anticipated. Their stores serve the public from 5 a.m. to 11 p.m., but someone needs to open up at 2 a.m., meet the delivery truck and finish the donuts so they'll be ready for sale.

Buddy advises newcomers to think carefully before deciding whether to take over an existing franchise or start from scratch: "If you buy an existing store, there are hidden costs like old machinery that breaks down and isn't under warranty. In a new store, you're most likely to lose money because of overstaffing at the beginning" because you won't know how many customers to expect. "Be prepared for a lot of employee turnover," he adds.

Now that their franchises are established, Buddy says, the Amerimax team is "always trying to keep things fresh, with new drinks and new flavors to give the customer more choices ... The key is a lot of variety at all times -- 9 a.m. or 3 p.m."

Both of their franchises became profitable in less than four months, and Barry's picture was prominently displayed in a franchisee recruitment ad Dunkin Donuts placed in the Wall Street Journal. He says the company expects to have a total of seven stores open for business by the end of the calendar year, with plans for eight more Broward County locations after that -- in Fort Lauderdale, Plantation and Coral Springs.

Community involvement and outreach are ongoing goals for Barry. The intern program he's developing in local high schools is proving popular with teachers and students alike. This year, teens at two schools created coupons and marketing plans, gave out free samples of Bold Breezes fruit drinks and competed to see who could sell the most Dunkin Donuts products.

The most pleasant surprise during their first year in business, Herb says, is "customer loyalty, the high percentage of regulars ... It's gratifying to see how people love the products." Looking to the future, Buddy says, "I want my customers to feel they're getting the best products and best service around ... and keep coming back." Each of their stores is now approaching 5,000 customers a week. "That's a lot of donuts," Barry quips.

And let's not forget the coffee to dunk them in. Its incredible popularity has been a real eye-opener for the trio, who naturally expected pastries to be their biggest draw. Dunkin Donuts' delectable line of coffee drinks --"better than Starbucks' and much cheaper," as Barry puts it -- seems to be what keeps most of their happy customers coming back, some of them three times a day!