Building a winner from scratch

Nation's Business, Oct, 1997 by Roberta Maynard

Why does one person's start-up business remain eternally small, with maybe one or two locations, while someone else's grows into an international franchise empire? Is it leadership, hard work, luck, or something else?

Several entrepreneurs talked with Nation's Business about the personal philosophies behind the growth of their companies from start-ups to some of the best-known names in franchising. Their self-described keys to success are both interesting and inspiring.

Robert M. Rosenberg

President and CEO

Allied Domecq Retailing USA

(Dunkin's Donuts, Baskin-Robbins

Randolph, Mass

4,300 Units

You could say that the purchase of Dunkin' Donuts seven years ago by a British company as just another occasion for Robert Rosenberg to hone his adaptability skins. From the time he became CEO of the doughnut company --in 1963 at age 25 -- he had had many such occasions. And it is to that quality of adaptability that he attributes the success of the company, which grew from the single shop opened in 1948 by his father, Bill, to more than 4,300 locations in 24 countries.

Luck, in the form of favorable market trends, had played a part in the company's early success. When the company started franchising in 1955, it benefited from Americans' heightened desire for convenience and the increasing popularity of the automobile.

Rosenberg took over as CEO in the company's eighth year of franchising. By then, time-pressed customers were wheeling into 100 Dunkin' Donuts shops-all franchises -- and the company had annual sales of $10 million. This father's entrepreneurial vision had created the concept and instilled the principle of uncompromising quality, says Rosenberg, but even though his father had always been a great entrepreneur, he wasn't a hands-on manager. When the younger Rosenberg came on the scene, the company was involved five or six businesses -- from vending machines to cafeterias -- spread around the country.

Rosenberg had the advantage of a Harvard MBA degree as well as years spent running his father's shops and delivery trucks as a youth. His goal was to improve em" by focusing on doughnut shops with a standardized format and a simplified menu, he says. The strategy worked: Within 16 years, the business expanded from 100 shops to 1,000.

A public stock offering in 1968 was another landmark occasion for the young CEO and his management team. As the company shifted from a family-owned to a publicly owned enterprise, the change required "new communication skills, a sophisticated business system, and a new level of planning," Rosenberg says.

Then came the inevitable growing pains. "There was a period of time, in the '70s, when we enjoyed immense success. But we went too fast: We picked poor locations and moved into markets in areas we didn't understand. We had to close some stores down, and our stock price dropped. It took a year to turn that around. The big thing we learned was to listen -- to our customers and to franchisees."

Then, in 1990, the acquisition of the company by Allied Domecq, PLC, required the doughnut company once again to adjust its corporate culture and manner of operating. Just the fact that the parent company was based in Europe made for challenging times. Dunkin'donuts became a subsidiary of Allied and part of the U.S. operation known as Allied Domecq Retailing USA.

Recently, the sudden popularity of bagels offered the company a new market opportunity that again called for adaptability. Almost overnight, says Rosenberg, the company got into the bagel business in a big way. Within a year, bagels were being sold in 2,100 Dunkin' Donuts stores.

In business, he says, "the one thing you can count on is a changing environment.... Our hallmark is the ability to charge with the times. We plan well in advance, anticipate, and face the reality about what's happening."

F.C. "Bud" Hadfield

Founder and Chairman

International Center For Entrepreneurial

Development (Kwik Kopy Printing, The Ink

Well, Franklin's Printing, Copy Club, American

Wholesale Thermographer's Demand Graphics

Research, and the Women's Health Boutique)

Cypress, Texas

1,022 Locations

Well into adulthood, Bud Hadfield had to exercise his never-give-up attitude.

After he was expelled from high school in Rhode Island for poor behavior, Hadfield had a string of failures: an ice-cream business, a pig farm, an egg business, a service station, a fireworks stand, and a personnel agency. In his late 20s, he returned to his lifelong love -- printing. He opened a print shop in Houston that eventually assumed the name Kwik Kopy.

Hadfield's fighting spirit eventually led to success, but it also led to problems. Before the dawn of his entrepreneurial life, he had trouble in the merchant marine and in u's early jobs.

Later, Hadfield's self-described "short fuse" resulted in high employee turnover in his business and more than a few fistfights with customers.

It took Hadfield years to overcome his belligerence, which he attributes to his father's death when Hadfield was 15. "I went from being president of the class to being kicked out of school," he says. "I carried that monkey around on my back for a long time."