Don Strang III, President of Strang Corporation
Originally published: 07.01.07 by Terry Tanker
Terry Tanker met with Don Strang III, president of Strang Corp., an owner of chain restaurants and hotels, to discuss business challenges, staffing, and mechanical systems for the company's properties.
1. What is your favorite hobby?
2. What is the wildest thing you've ever done?
Helicopter skiing in British Columbia.
3. So far, what has been the best business moment of your life?
The opening of our first Applebee's in 1985. I was relatively inexprienced, but things worked out very well.
4. What is your largest business regret?
I was a franchisee of Applebee's, and we sold 86 stores in 2001. I miss the people who were involved, including the corporate executive's franchisor, the franchisees, and our management team.
5. What book are you reading right now?
I just finished A Simple Genius by David Baldacci.
6. Do you have a good marketing story?
When we opened an Applebee's in Indianapolis it was doing a third of the volume we projected, we went into crisis mode. We felt we needed a newspaper ad with a coupon. Unfortunately, we couldn't make the deadline, so we decided to do a radio ad with a coupon. The voice-over instructed the listener to present the coupon to their waitress by making a square with their two thumbs and two forefingers and saying, "Here's my coupon." Not only did we get a lot of people in the door, but the customers and staff had a really good time with this ridiculous method of discounting. This was the first step on the road to making that restaurant one of our top-profit locations.
7. You own 24 Panera Bread cafés in the Philadelphia area and the Don's Restaurant brand in the Cleveland area. In those restaurants, how significantly has the rise in energy prices impacted your bottom line?
The increase in energy costs has been substantial for us. Most of the increase happened in 2006 but we continue to see these costs rise in 2007.
8. What percentage of your overall expenses are allocated to energy consumption?
Our total energy costs are 4.4% of sales, up from 4.2% last year and 4.0% the year before that.
9. Have you begun to invest in energy-saving mechanical equipment?
We have converted about 50% of our fixtures in our Panera Bread cafés to lower-wattage fluorescent light fixtures. We have also used energy consultants to help with our natural gas consumption and have met with some limited success. I know there have been large improvements in energy-saving equipment like rooftops, fans, and motors and controls for restaurants like ours. However, we have not begun our evaluation of those systems yet.
10. How do you select mechanical contractors that work in your restaurants?
We use a general contractor that chooses our mechanical contractor. If we have problems with a contractor, we work with the general contractor to select a new contractor for the next job.
11. Who selects the equipment?
The franchisor specs all the equipment.
12. Who then would make the brand recommendation?
We typically get recommendations on brand from our general contractor, who works closely with the mechanical contractor to make equipment-change recommendations (based on the spec the franchisor has written).
13. Do you have maintenance/service agreements in place for all of your locations with regard to hvacr?
We have preventative-maintenance programs for all of the systems and locations.
14. How much easier is it as an owner/operator to maintain good indoor air quality standards now that smoking has been banned from most indoor public environments?
The ban on smoking has improved our indoor air quality 20significantly in our two independent restaurants. Panera Bread has always been non-smoking.
15. What could mechanical contractors do better to help you manage the indoor environment of your businesses?
They could be more proactive. Contractors typically wait for us to ask for help.
16. What is the largest problem across the board?
Air balancing, because of the kitchen exhaust fans and constant opening of doors.
17. What is your largest management challenge?
Our No. 1 challenge is to hire and retain outstanding managers.
18. You employ over 1,000 people. What kind of management challenge does this present?
Recruitment of quality management candidates is an ongoing challenge. Currently we need to recruit hire and train over 30 managers per year. If we have the right managers in the right positions, it makes all the difference. We have over 1,000 employees that need direction, so we must have fully staffed competent management teams in place to be successful.
19. What organizational tool can't you live without?
Mobile communications devices make my life much easier. I am often traveling between cafés/restaurants and find it helpful to keep up with things as they occur rather than waiting until I get back to the office.
20. You would be an ideal national account for any of the large manufacturers with regard to mechanical systems, but it appears each store is responsible for the decision. Is this true?
Sometimes our Panera Bread cafés are located in shopping centers, where the landlord supplies the mechanical systems. When we were in the Applebee's business, the franchisor did have national accounts with manufacturers that we took advantage of.