Dorego’s: Steven Dally

Dorego’s: Steven Dally

SHARE

According to Steven Dally, owning ten franchise stores is not very different from owning one. As long as strong systems are in place, procedures are followed, staff, managers and operations managers are chosen carefully, and he pays attention to daily, weekly and monthly reports, he can maintain a firm grip on the daily operations of all stores.

That’s not to say that implementing and perfecting those systems has not been a challenge or that such massive growth has not meant long hours and hard work. Spending the first three years personally opening his stores at 7am and closing after 10pm every day, never seeing daylight, working seven days a week and being willing to do any job that needed doing, including cleaning the floors, required real dedication.

Over and above hard work, Dally has witnessed mob justice, seen firsthand how the taxi industry controls its ranks, and even forged relationships with taxi bosses.

Opening his first store in the heart of Joburg’s CBD at the Metro Mall was a huge gamble. But thanks to dedication and a willingness to work within the community where he chose to set up shop, he has reaped the rewards.

Maverick Franchisee

At a time when many franchises were steering clear of the CBD, Dorego’s embraced the idea of carving a niche in the country’s busiest hub. But the attempt was not for the fainthearted. With over 3 500 taxis entering and exiting the rank daily, thousands of commuters and a less than effective police presence, the store had the potential to do extremely well – or become a target for vandalism and robberies.

“Thousands of people walk past that store each day. It was a fantastic market to tap into. I recognised that, but I also knew that it would be quite a tough environment to work in. In those days the CBD was a bit like the Wild West – street justice, violence and robberies were all par for the course, in and amongst the normal commuters just trying to get to work and go about their lives,” says Dally. “That’s why I approached head office and insisted that inexperienced management could not be tasked with launching the store.”

An in-store Dorego’s manager since 1996, Dally was approached by the franchisors to relocate to Joburg as a consultant when they decided to re-enter the Gauteng market in 2001. He knew the brand, and he knew what he was talking about. The franchisors realised that he would be the ideal owner of one of the first Dorego’s in Joburg – particularly given its positioning.

Understanding the Community

Among his unique challenges were the laws that taxi owners and drivers impose in the ranks. “Our first exposure to how things worked in the CBD was a site visit to Metro Mall store before it opened. My first partner, Christopher Brown, and I arrived to check the shopfitting and were met by taxi drivers dragging around a passenger who had tried to steal from them. We went around the back to get to the store and half an hour later we left. That same passenger was being dangled by his ankles from the fourth storey. All we could think was ‘What have we gotten ourselves into? Are we completely mad?’”

To succeed, Dally needed to find a way to operate within the taxi ranks. “In those first few years we often heard shootings. I’ve had people dragged through my stores by taxi drivers meting out justice.

I once even saw a naked man run past the window – closely followed by a mob. We couldn’t get involved, but I needed to find a way to be accepted as well – and possibly enjoy some of that street protection.”

So Dally got to know the taxi bosses, drivers, queue marshals and police in the area. “They needed to know me and like me. We had to build a relationship with each other.” Eight years down the line and six successful stores in the CBD later and Dorego’s has become a trusted brand, and Dally  a familiar face.

“In the past four to five years the Joburg Police Department has put a lot of energy and focus into the CBD as well,” he says. “They are cleaning the CBD up and it’s become a very different place. But even though the CBD is safer, it still pays to know your clientele well. Together we form a community, and that is vital to brand building and brand loyalty. We’ve developed a solid reputation.”

Finding the Cash

Before Dally could be a success, though, he needed finance. “In 2002 securing bank finance was less of a challenge than it is today, but I still had to present an airtight business plan to the bank, I needed someone to sign surety for the loan, and I needed cash.” Dally already had a good relationship with franchisees, Gerald and Cedric Brown, who had also owned stores in Kimberly and were now eyeing Joburg.

“Gerald and Cedric signed surety for me, which meant I got the loan but cash flow was still a necessity. I cashed in my leave, sold what I could and maxed out my credit cards,” remembers Dally. “I put everything I had into that store.” Gerald and Cedric went on to buy the entire franchise in 2005.

Since securing that first loan, and then a second one for his next store, Dally has preferred to rely on cash rather than bank loans. “The repayment on a bank loan eats straight into your cash flow,” he advises. “The more cash you use the better your overall profits – and the more you will care about your investment.”

From One Store to Ten

In Dally’s case, that initial investment has grown from one store to ten. Within six months of opening Metro Mall’s store, a prime position opened in Park Central. “Park Central was even bigger and busier than Metro Mall and I could see the possibilities,” says Dally. “Location is vitally important in this business, and I love grabbing an opportunity with both hands when I see it. That’s probably why I’ve just opened my tenth store, this one in Thembisa. I don’t know how to walk away from a good opportunity.”

While owning ten stores in and around Joburg stretches Dally thin and he admits that his biggest problem is that he doesn’t spend enough time in each one, the franchise model lends itself to owning multiple stores, and there are actually benefits to owning more than one.

“Franchisors are very supportive of franchisees owning multiple stores. They already have a relationship with you and they’ve seen how you operate,” explains Dally. “It’s a win-win situation. It’s good for the brand and each new store opens on an established footing.”

For Dally, multiple stores was the natural progression of his own development. “Buying into a franchise is all about the systems. They are tried and tested – and they work. It makes opening another store simple, because you already have the blueprint.”

Of course, each store is slightly different. The staff, location and clientele all add to a store’s personality, and often what works for one store does not necessarily work for another. “Systems need tweaking for different stores,” agrees Dally, “but the procedures remain the same.”

For Dally, each new store means four things: growing the brand that he has invested in; the opportunity to fine-tune his systems; revenue growth and growth as a businessperson. “Each store is a challenge. The models and systems I have created enable me to successfully run multiple stores, and the revenue those stores generate gives me the start-up capital needed to invest in each new venture – but that’s just how I manage to own multiple stores.”

Franchise Support

Even though franchisees own their own stores, they operate within a group. That means working towards goals that benefit franchisee and franchisor alike. “Communication is vitally important in this business,” says Dally. “I need to be in regular contact with my franchisor and franchise consultants, as well as my own operational team, who I speak to anywhere from ten to 30 times a day. Even though I am hands on, I can’t be everywhere at once. I rely on my team. Similarly, if we have a problem, chances are someone else might have already had and solved the same issue.

“Let your franchisor know what problems you are experiencing. Too many franchisees say they do not receive enough support from their franchisor, but they are not keeping the channels of communication open either. If you don’t know something, pick up the phone and call someone. The point of operating within a group is that you have an entire support system to assist you and offer advice when you need it.”

Getting the Systems Right

Beyond his ability to thrive in the CBD, Dally won FASA’s Franchisee of the Year award because he designed and implemented systems that have since been applied across the franchise group, and also because of his close relationship with the franchisor.

He has worked within the Dorego’s framework for 14 years, and during that time he has gone from perfecting old systems to implementing new ones. “My systems work for me, so why shouldn’t they work for others?” he asks. Dally’s successful systems have formed the basis for the group’s guides.

“We all need to keep learning, every day. You also need to be open to change, as the market determines how you run your store. We are adjusting our systems constantly – but they form a strong framework to start from, and let’s face it, when you’ve invested money in a business, you need to make it work. Procedures and systems keep things organised and running smoothly, and they provide solutions for problems.”

As a multiple store owner, Dally also recognises the need for all his own stores to operate along the same principles. “My procedures might change slightly from store to store, but my principles stay the same: quality, cleanliness, reliability, maintenance and a focus on sales are paramount.”

Home Advantage

“My stores are only as successful as the calibre of staff I hire. Even though I visit my stores every day and I am hands-on, I cannot be everywhere at once. I rely on my people,” says Dally.

Dorego’s has a franchise-set guide for interviewing and hiring staff, which Dally adheres to, but he also believes in getting his existing staff involved in new hires. “My four operational managers who oversee the stores are involved in the hiring of new store managers. It is essential that they all get along and communicate well. Similarly, my managers are involved in hiring individual store staff. The more input the better.

“I expect my staff to have strong communication skills and to be friendly. Experience is far less important than good interpersonal skills. We can train people in our philosophy, brand structure and systems, but we need someone with a good personality as a base to work from.”

Dally is also a strong believer in getting opinions from staff before making any decisions. “We recently changed a few items on the menu based on the interaction between staff and customers,” he reveals. “They are in constant contact and it would be foolish of me not to ask for their input.”

Simply communicating with your staff is not enough though. “I care about the business and am willing to get my hands dirty, from flipping burgers to mopping floors to doing the paperwork. I lead by example. I don’t expect my staff to do something I’m not willing to do, and I show them what I consider to be the right way of doing things,” says Dally. “The right attitude is vitally important. A business cannot run by itself. It takes hard work and dedication from everyone involved.”

Dorego’s Milestones

  • Joe Dorego opened the first Captain Dorego’s in Cape Town in the early 70s.
  • After a successful period the Cape Town operation was sold to Major Foods, and later to Inter-leisure. However, stores in Bloemfontein remained independent.
  • In 1996 the brand was taken over by Carlos Nunes and in 2005 franchisees Gerald and Cedric Brown – who have been involved with the franchise since 1996 when they opened their first store in Kimberley – purchased the entire franchise operation.
  • In 2005 Captain Dorego’s became  Dorego’s, undergoing a massive rebranding.
  • There are currently 72 stores in the chain, predominantly situated in the Free State and Northern Cape, although its Gauteng presence is growing.
Nadine Todd
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.