Conversations With Coffey

How to Beat Chipotle & Starbucks on Site Selection

• Guy Coffey • Season 1 • Episode 15

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In this episode Guy is joined by Edgar Cepuritis from Cafe Zupas. Edgar gives us a run down on what it takes to find the ideal real estate for a successful franchise and how he beat major companies like Starbucks and Chipolte in obtaining the best sites.

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Welcome back to the show with me, Guy Coffey, Franchise Business Real Talk with my guest, Edgar Separitis. He's with Cafe Zupa. He's a real estate professional. He's been at it for a long time and we're looking forward to learning some things about real estate site selection, maybe negotiation that all of us can learn from, from someone that's been in the trenches and on the front lines for a long time and has done really well.

So thanks for being on the show, Edgar. No, 

hey, 

my pleasure. Well, I know you're with Cafe Zupa. Tell us a little bit about that and then what you do for them, if you wouldn't mind. 

Sure. So Cafe Zupa is a Salt Lake based restaurant company. We're in the fast, casual category. Soup salad sandwich arena. You know, big competitors for us would probably be looking at Panera or Corner Bakery.

You know, I think our, the big difference for us is we, we have a scratch kitchen. You know, we make all of our soups, our salad dressings in house, no commissary, no microwaves. Um, you know, we're not warming things up. Uh, you know, it's, it's made fresh every day. Our produce gets shipped in every day. So it's,  It comes in as whole tomatoes or heads of lettuce and we wash and chop, you know, again, nothing's processed for us.

We do it ourselves. Big difference in the quality of food. Um, you know, price point is, is the same, if not a little bit less than Corner Bakery in, in,  uh, Panera. Um, much more modern spin on it. Um, it's kind of where we're, you know, I think it's,  Obviously corner bakers having their troubles, but we're para would love to shift, but with it, I mean, they've done a great job, but with as many units as they have, it's, it's tough to turn those big ships, 

right?

And so how many do you guys have right now? And in how many states are you at? 

We have 80, 79 restaurants open. We'll have right now we'll have 81 by the end of the year. Uh, we're in seven states. It's again, we're based in, in Utah and Salt Lake. Um, but you know, so I don't really, I think it was 32 in the, you know, Salt, Salt Lake Ogden, Provo, um, MSA and, um, you know, then Phoenix, Las Vegas, Boise,  Minneapolis, uh, Wisconsin, Illinois, and Ohio.

Yeah. I was checking out the site and, uh, I was going down to Arizona sometime soon. And I was like, where are they down there? Cause I'm going to Arizona before I'm going to Utah.  

We've got 12 restaurants and feet in the Phoenix market. So, yeah.  Let me know where you're going. I'll point you in the right direction for it.

Great. 

To that end, have you been with them from, from the start or from like what point to what point? And then, um, And then tell us about your exact role in, in the organization. 

Sure. So I've been with Cafe Zupas for about 10 and a half years, um, at store 24. We just opened 24 when I got there. Okay. Um, so early, early on in, um, uh, in the system.

So it's been, uh, it's been great ride. It's. You know, it's ever evolving. We've got two owners that are extremely creative. They actually came out of the tech world, so we're very technology forward, which gives us an advantage, too, is kind of the market shifting and, you know, to that end, um, you know, what the customers want in my role is I am responsible for all the new store development.

Um, I oversee our construction team. We have a VP of construction, um, that manages that process. But at the end of the day, I'm responsible for identifying the real estate, negotiating the deals, kind of putting the overall market plans together prior to identifying the real estate and then kind of getting it through the entitlement process.

You know, we have quite a few freestanding drive thru units, which we kind of moved towards in the post COVID, uh, era. And so that has got, uh, added, uh, you know, lengthy entitlement process, as you can imagine, going through all the city hearings and meetings and, and then, yeah, and just kind of helping put out fires for our construction team.

You know, as they arise, we either with the city or with the landlord on conflicts of, you know, what was promised, what was supposed to be there and 

sure 

things, things of that nature. 

Do you have your own construction team as well, then 

we do, we do. We have a VP of construction and two project managers. Um, we have an in house designer, uh, the kind of  straddles offense between marketing and, and, you know, store design.

Uh, and then we have, uh, outside, uh, consultants from the architectural and engineering standpoint. 

That's, that's pretty rare. I would say for,  I don't know when the tipping point is, but I would think. You know, 80, 80, 80 units. I don't think a lot of, a lot of even QSR has their own. In house real estate or construction at 80.

It do I have that right or or no? 

You know, i'm not sure because I you know, I joined potbelly way back when at six and we had uh, you know construction managers Um, we had our chief development officer that kind of would oversee the construction. So we did not have a vp of construction at the time um You know, but our VP of construction has been there 14 years.

So he was outside building them as a contractor and they brought him inside, you know, you know, maybe two years, three years ahead of me. Um, so, um, but our projects, you know, our ground ups, you know, All of a sudden under 3 million. Um, you know, so it's, it is an expensive project. It's a complicated project.

So, you know, that is a resource internally that you want to be able to manage. Again, that's a good question. I, you know, I'm, I'm thinking back, I mean, I was at Einstein bagel and Boston chicken back in the late nineties. And, you know, obviously we're much bigger group then, but even our area developer development group, um, we had in house construction, um, as it  For four years through their IPO.

We had 400 units at the time, actually with less than that we started, but you know, we had in house construction. So I guess everywhere I've ever been, we've had in house construction. So, 

yeah. Okay. That's interesting. Let me take a step back. How did you like, so you were at real estate, like most people think.

Someone gets into real estate, they're going commercial or residential, um, not necessarily in this sector. How did you end up in this, with a specialization in this? 

You know, in college I did an internship. I majored in regional development, which is, you know, kind of an urban planning type degree, uh, University of Arizona.

And I did an internship with a shopping center developer. Um, actually it was my hockey coach's company, his wife's company. Uh, she's a, everything comes 

back to hockey. Everything 

comes back to hockey. Gee,  that's how life works around here. I really enjoyed that internship. It kind of opened my eyes. I mean, I don't know.

You, you look back as a kid in, in high school and college and, you know, we all ate out, we all went to Blockbuster, pick your store back in the late eighties, early nineties.  I've never thought about, Hey, maybe there's somebody's job is to identify that real estate negotiate those deals and build those stores over there.

I mean, it never even crossed my mind.  Um, I mean, so I don't know. I don't know how they got there. They're just there. Um, so then I, out of college, you know, 91, the real estate market was, uh, In the toilet, um, it was horrible. So I, I got a job with a little boutique restaurant, real estate brokerage firm in Chicago, uh, spent some time there, spent some time on the brokerage side, um, you know, a little bit on the landlord side for a big institution, which, you know, I need to be in a little bit more entrepreneurial environment than working for giant institutions.

That, that. I struggled  with the decision making and kind of the whole mindset in that group.  And then, you know, I met a guy that, uh,  you know, we just hit it off and, and he was looking for, to grow their real estate team at Einstein bagels. And, um, you know, that's when they were with Boston market and, um, You know, so I joined them and I've been on the restaurant side ever since.

I mean, I guess I started in the restaurant side too, but yeah, I mean, it's been, I mean, what, 91, it's 23 years. Right. 

That was in golden, right? Wasn't Einstein's base in gold? They 

were, um, yeah, we were in Chicago and they had a, they had a goofy, not goofy. They had a different kind of, uh, setup. We were all  in air in fads that they called it financed area developers.

It was kind of, kind of a franchise situation. Um, but they really acted more as the bank. And we would run and operate and develop the restaurants. And then they had a goal to buy them back based on some level of media efficiency. You know, this is again, back in the, in the nineties. So it's, you know, we have multiples slower for, you know, you have so many units to get to print so many years to get the radio, so many units to get the TV and the thought process being, if you, if you pump money into those different. 

Media outlets from an advertising standpoint, there's kind of a multiple that you should see your revenue grow. And so, you know, we were, we were kind of, um,  tasked to grow our area, which included most of the Midwest down to, to, uh, Texas, and then they would, uh, you know, they would fund our development and, um, then they would buy us back at some less, you know, when we get to that level of media efficiency, you know, the whole Boston chicken thing kind of imploded a little bit.

Um, And then we kind of followed, uh, just, you know,  the model was frowned upon, you know, down the road and especially when Boston chicken went public. And  so that thing kind of imploded and  it's kind of the way it goes. Yeah. Well, you know, on the real estate side, you're kind of the hired gun, right? You're in at the front end and, and when the wave is rolling, you're, everything's great.

And you know, if it hits a beach too hard,  it shakes you off and you kind of dust yourself off and find another way. But 

right. So when you're looking now with Cafe Zupa, um, you said that you're also on the market Market perspective, probably looking at, you know, what are the demos that we do well in, you know, what's, what's available there.

Can we get out ahead of maybe some development the early? Um, so maybe it's a little less expensive or something like that. I don't know if that's the case, but, um, 

how 

are you?  No, well, no construction is expensive, uh, inexpensive right now. Right. 

Or, 

or anything,  what are you seeing out there and like, what are you looking at in terms of markets for, like, say. 

The nice thing also about being internal is you're not a hired gun. You're looking at, Hey, like what's going to happen in five years. Where do we want to be? 

And I'll go back to the, you know, Boston chicken Einstein days. And those guys all came out of the blockbuster boom and, you know, development. Um, You know, really super talented, you know, real estate development people, uh, within that whole organization, you know, and  it's fortunate to be associated with them and, you know, there's a huge network of us around the country with different brands that kind of came out of that school of, of thought.

And it was really. New to me. And this is the first time that somebody really took me under their wing and mentored me. And, you know, there's no right way to do this, right. But a really effective way to do it, which is, you know, you go into the market, pick a town, it doesn't matter. It's, you know, Indianapolis and, you know, how do we maximize, how many Einsteins do we want?

And we had kind of a metric of, you know, we want one per a hundred thousand people. So, you know, in these, but 120 or a million. I don't remember exactly. But so you're looking at 12 restaurants, you know, to, to reach, you know, main full build out for us in Indy. And so where do we want those 12 restaurants located?

I mean, if you just go in and say, I want to build restaurants or any concept in Indy, And you do one deal without any thought of how the whole market's going to lay out You could put one where you should have two or you know You have you'll have one good store a great store But you know, you're right on the edge of two really good trade areas And you know, you've got competitors on each side of you that are doing great And so you have to look at it as the whole Um, and, and here's the 12 or 15 sites, intersections I want down to the intersection, down to the real estate.

You know, we had market plans that were intersection and then the top four pieces of real estate and you know, one to 15 and, and, you know, you're in ranked ABC or one, two, three, doesn't really matter. 

And 

so grouped them in the thirds and said, all right, you know, here's my top five sites in Indy. You know, we're going to do two deals this year.

They have to fall within at least the four. First one's got a fault in the top five and we want the best real estate and you cannot  bad real estate is not cheap enough. I mean, it does not matter how cheap, bad piece of real estate is. You know, if you fail, you will never know. Was it the real estate? Was it the concept?

Was it the operation? What was, what was the flaw? But if you put it in the best piece of real estate for that brand. Okay. You know, let's check real estate off the box. That's not the issue. You know, maybe, maybe there's some co tenancy, maybe the, whatever the reason that, you know, and you know, what's your exit strategy if you're, if you're doesn't work, right.

If you have a good piece of real estate, someone's always going to want  it. If you have a lousy piece of real estate,  I mean, you're going to be stuck. I mean, and we'll get into this later, but it's, I mean, there's, you cannot settle, you know, paying an extra dollar a foot. Is not what's going to make you win or lose.

Um, but you know, taking that cheaper deal could make you lose. Um, 

that was going to be one of my questions later on.  So you took one of my questions away, but that's, you're very emphatic about it. 

But so you, so you, you kind of lay out the market plan and then, you know, so you're in the top five intersections, you know, you've got four sites that, you know, at each, at each intersection, you're just knocking on doors.

There's, you know, really, there's two phone calls, the landlord and the tenant, you know, there's a, there's a landlord happy with that tenant. When's the lease expire, you know, call the tenant, you know, you've got a lease, but how you doing? You know, really? Maybe you call tenants. Oh God. Every day. Every single day.

I mean, the, the number of deals I've done in my career where I go and there's a four lease sign in the window,  zero. I mean, really, you, you will not for a good piece of real estate. And again, we're in the quick service food business. That's where I've been my whole career. It is about top of mind. You need to be front and center.

You need to have the best piece of real estate or, or minimally outposition your competitors. And in, in, in that arena, I put in Chipotle, you know, sweet greens, you know, pick your fast, quick, fast, casual guy. It doesn't matter. I don't, if they're easier to get into  there, that's an advantage, right? I mean, sometimes they're looking for cafe zupas, sometimes they're looking for Chipotle.

So it doesn't matter, but more often than not, it's, it's, it's You know, you're flying down the road like, Oh, I really want a sandwich. Boom. I'm just, you know, easy in, easy out.  Um, that's critical. So we, we have to have the best real estate and, you know, listen, we've all made mistakes that, but I, you know, I'm, You know, there's a lot of,  a lot of times when you do a deal and, you know, it takes a while to get things built.

And, you know, you get phone calls from, you know, your peers, your buddies in the business, like the hell did you get that site? And those are the best phone calls you can ever get, right? Because it just validates. All right. You know, you know, I beat out Chipotle. I beat out Starbucks, whatever, you know, and they've got much deeper pockets.

They're much, you know, better credit. Um, but you know, it's, you got to be nimble. You got to go, got to go dig it out of the corner of key. You got to dig it out of the corner. 

Exactly. Yeah. So you're, you're slightly competitive. Maybe that's another reason.  I experienced your competitiveness today on DU's Magnus arena.

So I know for a fact, um, I felt I still have a stick mark across my back. I'm kidding. Um, but, um,  that's interesting.  I did have a question and it's probably way too, uh, specific for this point in time, but when I was preparing for this, I was, I was thinking about a specific location that we had and it was in a great center. 

Super high traffic  and our franchisee location was in the, in the corner of an L 

the crotch. We like to call it. 

Oh yeah. Well, I, I think, I think I know the answer to your question that I, that I think I know what you're going to answer is like,  even with all those, you know, the, the, the co co tenants that are rocking and rolling, like you're sitting in this like little dark spot in the middle of, in the corner there and.

Is that the kiss of death? 

I mean, it depends on the use, obviously. But yeah, I mean, it's, you know, you need to be visible. And, you know, in, in that business, I imagine, you know, access to parking right in front of you is, is important. And, you know, so when you get into those, you know, corner spaces. It's just really tough to, to get close proximity with parking and, you know, you're not getting that much walking traffic.

You want to, you want to be up on the street, you know, in a multi tenant building, or you want to be at least in a position where, you know, I imagine in, in the franchise business, you're looking at, you know, grocery stores are good co tenants, you're not going to the grocery store and then the nail salon necessarily, but you know, you're at the grocery store three days a week, 

and 

I want to be able to see it.

Hey, when I need it, I know where it is. And so co tenancy is huge. Visibility is massive. So your sign's got to be visible. You know, we have with all the brands, I've been a high degree of, um, you know, branding that we want to try to impact on the exterior of these buildings, even in a shopping center, kind of, we take very few inline deals.

I mean, I'll take end caps, um, or freestanding buildings, but I mean, the number of, uh, inline deals again, you know,  few and far between. Really? Um, okay. It's interesting. You know, and, and so kind of going back to the market piece again, this is  in the persistence. So you know, I was at  Potbelly for,  oh geez, I don't know, seven, not eight years, maybe I was at Einstein for four years before that.

And there's a donut shop in Detroit. In dearborn, michigan right on the main drag cool building and potbelly if you're familiar with it It's kind of an antique themed sandwich joint and it's I loved it I mean, I think it's you know slipped a little bit But I think it's I hope it's coming back because I still love that brand bang down the door for einstein Bagels in the detroit market for the four years.

I was there  at potbelly You know driving by this door one day and I you know, I look at my my broker. I'm like, hey We need to go talk to that guy again. So he and I walk in there, talk to the guy and he knew us. Cause we'd banged on the door for four years prior to that. And we didn't get to Detroit with potbelly for probably  four or five years into my potbelly days.

So this is almost 10 years later. And we walk in the guy's like, Oh yeah, I remember you guys with Einstein. Like, Oh, I'm with potbelly now. I would love to talk to you. And he's like, you know, today's the right day. He goes, I've been talking to my partner. And, you know, this is a top business. Uh, you know, we'd love to go back up to Traverse city where we have a place and live there full time and just collect the rent check. 

I'm your guy. And so we sat down there, banged out a deal, and you know, my brad, my broker, Detroit goes to his office and he was a senior guy. He goes, this is why you knock on doors, because we've been looking at this deal for 10 years. 

Yeah. 

And different brands, right. And you know, but they can, you can never take the market knowledge away from you.

And, you know, fortunately I've been, I've done a ton of work in a lot of really good markets and doing the market plans, you have to get to the granular, granular level. So, you know, I get phone calls all the time from this, Hey, you know, if you ever think, are you happy at Zupas? You know, we'd love to talk to you about coming over to, you know, Cobb or Sweetgreen or whatever.

Um, you know, cause you know, the market knowledge is cannot be taken away. 

Right. Yeah. And the relationships and the 

relationships in those markets. Yeah. 

People in franchising and real estate, you know, development like you, you tend to know, like I was talking to a guy that owns a, um, A franchise system down in Florida.

And I told him I was in Denver, you know, we're looking at, you know, buying into the system  and he goes, yeah, like, you know, North cherry Creek park meadows, you know, those would be good areas. And I'm like, Oh, you're familiar with Denver. He's like, no, I just spent a real estate a really long time. Like you get to know like the best places in every city.

Don't you? Like, you can probably tell me like where to go in Philly. Or you could tell me where to go in, uh, Sacramento, right? 

Yeah. Well, maybe not Sacramento, but Philly.  I've done work in Philly, nothing in Sacramento, but it's funny cause you know, my parents were in DC once and they're going to, uh, you know, a party and I get a call and like, Hey, we're going to this party and we don't have any wine.

You really want to pick a bottle of wine, you know, any ideas? I'm like, well, where are you? And they told me where they were. I'm like, which is, you know, right on Rockville Pike and Rockville, Maryland. Like, oh, if you go up to this intersection, there's a shopping center with Best Buy. There's a liquor store in that shopping center.

And they're like, Oh, thanks. I'm like, and my wife's like, what do you, what was that? He goes, Oh, my parents are looking for a liquor store in DC.  And that was pre Google. I mean, this is back when we dotted maps with those little fricking dots. 

Right. 

Oh my God. Well, tell 

me, uh, if, since we're talking about tech, well, you mentioned Google, um, and you've been in this, this game for a long time, You know, where's it all going with, with, um,  you know, like getting to know a market, how much easier is it to get to know a market, you know, from a data perspective.

And, you know, is there anything that's coming down the pike where it's like, Oh, this is, you know, we're still dealing with land. Sorry, I'm answering my own question. We're still dealing with land. Like, like, yeah, you can't AI land. You can't. Tech land, like, you know, um, but you could maybe, I just remember I was down in Phoenix, the Phoenix area, and I was going on way out West, like towards Goodyear,  and this is a few years ago.

And in the middle of nothing, there was a lifetime fitness, 110, 000 square foot. I know exactly where it is.  You know, it, there was nothing around it. You know, I was back there. Wait till you go back there. Right. And I was like, how did Brom, you know, Cardi, you know, like, like, how did he know that that was going on there?

You know, like, is there any areas like that? I mean, you probably don't want to give it away. 

I mean, well, no, I mean, so from our standpoint,  You look at the grocery stores and guys like lifetime  and maybe less lifetime in the grocery stores. The grocery stores are out there land banking  dirt,  you know, 10, 15 years out.

I mean, if you go out, you know,  I'm not, I can't even  West of Goodyear. I mean, now, I mean, we just did a deal in Buckeye, you know, which is West of, you know,  Well, West of Goodyear, we've got a deal, two deals in a surprise, you know, so we're past Goodyear. You know, it's, it's, it has grown beyond that. It's unbelievable.

It's growing south of there, but anyway, grocery stores will buy kind of guests. You know, not gas, but do some, you know, decision logic on, you know, where we can buy these big tracts of land. And, you know, it's a lot cheaper. Their margins are tough. They can't go in and buy a pad at cherry Creek. Right. I mean, that, that, those economics don't make sense for them, but if they can go by, you know, 30 acres.

At, you know, two, three bucks a foot. Um, they'll keep their when the when the market eventually catches up,  they will keep their 10 acre pad They will sell off the peripheral stuff for a to a developer that will build a shopping center And so they're gonna be in the dirt for nothing  You know, and so they have dirt.

Every grocery store chain has got dirt  all on the edges of every market that they're in and hoping that, you know, they're in the path of growth before their competitors are, but, you know, it's based off of, you know, where the road systems go and how the, what are the highways look like? You know, so they're making educated bets on this stuff, but, but they are out there, I mean, I can't do that, right.

We don't have the capital to start, you know, buying stuff out there. And I need, 

I 

need the, I need to open, you know, at max volume. And you know, those guys, you know, Panda is a good example. Panda does a bunch of stuff on the fringes. They'll always be first. You know, if you go out in the edge and you see a new development, inevitably there's going to be a Panda there.

Now they love to buy their real estate. Um, they have an exceptionally wealthy founder who is a real estate, you know, developer and he'll buy it and, and then kind of lease it back to the company. So he, they own, he owns a lot of their real estate that they actually operate out of at all that, you know, sometimes the bill won't sell and they still want the best real estate in the trade areas too.

So they, you know, they'll lease spaces and in addition to just buying their own. But  yeah. And as far as tools go.  You know, there's all these, the, the Buxton's and the, um,  uh, you know, a couple others that are out there, you know, and they have really interesting data, um, you know, the, the,  there's a restaurant trends, it's got restaurant volumes that aren't very accurate.

You know, they've got, uh, you know, a lot of the cell phone data and I'm no expert at that, but my understanding is that they really try to, they take a very small percentage of that population and they just try to extrapolate into, into, into traffic. And so I'm not a huge, you know, fan of that. And we had one of those companies do they, they, um,  I don't remember what it's called, but they, they kind of outline your building with, uh, you know, geocode our buildings and they tracked the data and they came back to us with, Oh, here's, here's kind of how your revenue should line up.

And I'm like, Nope,  

not even close. No, 

no, somewhere, somewhere on it, you know, but they ranked them, I think one to 40 at the time. You know, and maybe they had, you know,  I mean, they didn't have our top one at the top. Um, and they had some poor performers under, you know, 

yeah. Yeah. 

So 

100 percent reliable, 

not 100%. 

Um, you know, Google earth or maps and street view is fantastic to kind of, you know, get quick. You know, at least introductions to kind of the executive guys, um, you know, so I can, you know, I don't have to wait for them to go to Phoenix. I mean, there's no benefit of doing market plans, but, um, you know, so you can at least  refresh your memory on a piece of real estate that we're looking at.

You know, I just got the phone on a site that we were able to kind of crack the door open on in Las Vegas and, you know, had a five minute conversation, you know, they're on their phones and, you know, Google maps like, oh yeah, no, I love that. And so, just to kind of refresh their memory, but, um, I mean, nothing beats driving.

In the car, you know, and you need, I would tell you, you need a broker, um, to get to local knowledge. You know, everyone's talked about, well, you know, the fees and the deal, the fees in the deal anyway, you know, if there's a landlord broker, you know, there's a, there's a broker, there's a, uh, uh, commission agreement.

On the listing side. And if you have a tenant broker, you know, that commission split. 

Yeah. 

Um, and depends who you are. I mean, the Chipotle guys, the Starbucks guys probably can, can, you know, leverage out a little bit more money, but you know, Starbucks doesn't, I mean, that's fine. Right. Right. They, they get the, and on top of that, if you're using, I would go with a, you know, I'd love a junior guy that, you know, was hungry, but that works with, uh, you know, the guy that's doing the Starbucks or the doing the Chipotle so that You know, I know what's going on, you know, if you go, if you go out on your own or, you know, and I'll say this as positively as I can, you know, your, your, your best friend's,  uh, partner is a, is a realtor.

Um, so they, they're going to negotiate the deal for you. Whoa. That's not a good idea. You know, they do not know what's coming up. They do not know, you know, what the best opportunities are, and they don't know what the actual economics are of these deals. The Starbucks guy, the Chipotle guy, you know, anybody that's doing tenant work in whatever market you're in,  they know And, you know, they may not want to deal with a one off, you know, a single unit franchisee, but their junior guy will.

And so they're trying to get that person trained and, and have them make a little bit of money. So I always loved going to the junior guys and I could drive them hard. I can lever it, lean on the senior guy, you know, um, you know, for knowledge and meetings and whatever. 

That's really interesting. Cause one of the challenges we had when we had Frenchies was like, we're in general, 1500 square feet.

Right? And so we'd go with a national company in a market or something like that. And inevitably we would get the junior guy or the junior Gail, you know, and they weren't really good at their jobs yet. Right. But one of the things that we could have said is like, like who are you working with at the firm to learn all this stuff?

Like, I'm not going to make you look bad or anything like that by making them be at every meeting or anything like that, but I'd like to know who you're working with. It's a fair 

question. You know, they've got no challenge. You know answering that stuff for you, so 

Yeah. I, to be honest, this is, I never did that.

You know, I'd just be like, Oh my gosh. 

I have never  in, in all of the years worked with a national network of brokers  ever. Um, because  I want the best person in that market for me. And that may not be the best person for you, right? But somebody that I can get along with somebody that, that believes kind of in the way that we're doing it, the way that we're attacking it was willing to knock on doors.

So that's, so if you go with the big chain links or X team or whatever CB across the country, you may have a great broker in Denver, but your guy in Dallas is a total. Piece of crap. Um, and you're stuck with them because you've got this network agreement.  Just, you know, get referrals, you know, from your great guy in Denver.

I'm sure, you know, these, he's got a guy or gal in Dallas that they know that's really good. 

You know,  

or, you know, call me. I've got brokers all over the country, you know, that, uh, that I can call the phone, pick up, you know, done. Made a lot of deals, made people a lot of money. Um, you know, so it's, it, you know, and those are relationships are invaluable.

I need, I can't be in seven markets every day, you know, I'm on the phone with them every week, um, but they're in the trenches. They know where the new developments are going. You know, anytime I go to Phoenix, I've got meetings set up with the developers that are, you know,  Just, Hey, what's going on? We'll go have a few beers and more of a social thing, but, Hey, this is what I'm looking for.

You know, I was like, Hey, I'm working on the center over here. That might be good for you in a couple of years. Great. You know, just kind of keep that, those relationships going and who knows, I might be somewhere else and doing deals in Phoenix for somebody else. And that relationship is still there. That development is still there and it might be the right fit for me then.

It's interesting with all the technology and, you know, all the growth and, and all this, you know, like you're talking about data market analysis. I love it when it comes back to like, yeah, but it's really, um, also about like the industry knowledge you have in your head, like the experiences that have formed who you are and how you're going to move forward and the people, you know, And conversations it's really like, you can't like in, in this business or small business or entrepreneurship, if you think you're going to do it, like sitting behind a computer all the time,  good luck,  

it's not going to work.

It's not going to work. It's especially not going to work if you're young in this business, cause you don't know anybody. And, you know, you send emails to somebody who may or may not respond to it. You know, it drives me nuts, you know, and I, you You know, obviously I'm old like you, uh, and  it's pick the phone up, make a phone call, you know, call the guy, do not email him, call him.

Let's go meet. Let's go have a coffee. You know, face to face. It's really hard. To push a guy off. I mean, some, some people can do it. You know, I can't, you know,  it's uncomfortable to, you know,  but you know, well, I'll finish my coffee with you. I may not call you afterwards, but you know,  

I got to sit there 

for half an 

hour. 

Right. And maybe it comes into something. Right. Yeah. Right. You never know. Right. Well, this has been great. Thank you so much for sharing your perspective on development and, and leases and locations. Um, there is some gold nuggets in here that I think if someone listened to it, that's thinking about getting into something they might miss, you know, like not make some mistakes.

Um, and they might, you know, You know, have more conversations and, and who knows, maybe someone picks up the phone and says like, Hey, Edgar, I saw you on franchise business. Real talk. Could you, could you spend 10 minutes with me? Who knows? Happy 

to happy to do it. I mean, it's, it's a big decision. Um, in anyone's, you know, business is, is finding the right side.

I mean, it can absolutely make or break it. You know,  You know, again, I'm not going to say pay whatever it takes, but  you know, it's money. Well spent to get the best piece of real estate. The other thing, you know, you look at some of these people that just absolutely grind landlords to the final penny.  It is a 10 to 20 year relationship.

I promise you. That that landlord will get that penny back times a hundred because you treated him  poorly, right? You know be fair, you know understand what their needs are make them understand what your needs are There's no secrets in this right? I mean, no one's gonna outsmart me. I'm not gonna outsmart anybody else But let's find a path to the end Um and and make sure that he feel or she feels, you know, like they're treated fairly so because inevitably You're going to have an issue with your lease, with your building, and you want to make that phone call and you want them to answer and you want them to respond.

And if you were an ass, guess what? That response is not going to be as quick as if you were a great guy in the conversation. 

Yeah, absolutely. And I, I think it's, it's like, I know you're not in franchising, but it's also sometimes franchisees, which I'm one of them will kind of dehumanize the and be like, Oh, they, you know, they put this fee on us to like, Push us when we're down.

And I think a lot of people have that same impression of landlords, you know, it's like,  you know, like I feel okay trying to, you know, to nickel and dime them or, you know, push them as far as I can, because. In the end, they're, they always win and they're the king and I'm, you know, I'm getting a little blood from them or something like that.

And it's, you're right. Like, whether you believe that or not, you got a 10 year relationship at the very least, most likely. Um, it really helps if, you know, the property manager is going to come and go probably that's been my experience,  

but if they're 

like, when that property manager goes to the next level up and they're like, Hey, you know, anytime fitness and steamboat's got a problem with, you know, a leaky, um,  You know, ceiling or something like that.

They're like, yeah, yeah. You know, like take care of them. They pay on time. You don't push back on everything. Oh, guys. He's a great guy. 

You know, he's, he's really fair. 

Yeah. Yeah. As opposed to like, oh my gosh, they've been complaining about virtually everything, you know? So that's great. Great advice. Well, Edgar, thank you so much for your time on a Friday afternoon and pleasure.

I'll see you next Friday on the ice. Yes, sir. Yes, you will. All right. Take care.