ENDICOTT — In 1984, at age 16, Larry Wilson walked into BSB Bank and asked for $300,000. This wasn’t a holdup; the teenager wanted a loan to start a video business. His collateral was $42,000 of Victory Markets stock he had parlayed from a $3,000 investment. BSB said yes to Wilson’s request, and three years […]
ENDICOTT — In 1984, at age 16, Larry Wilson walked into BSB Bank and asked for $300,000. This wasn’t a holdup; the teenager wanted a loan to start a video business. His collateral was $42,000 of Victory Markets stock he had parlayed from a $3,000 investment. BSB said yes to Wilson’s request, and three years later loaned him another $2.1 million. The entrepreneur sold the 33-store chain, Video King, to Blockbuster in 2006.
In 2005, Wilson and his partner Scott Searles opened their first Moe’s Southwest Grill franchise restaurant in Vestal. On Dec. 12, 2013, they opened the most recent location at 7560 Oswego Road in Clay. Moe’s is a rapidly growing, national, fast-casual restaurant chain headquartered in Atlanta that appeals to young people with its signature dishes such as the Homewrecker burrito, the Close Talker salad, and the John Coctostan quesadilla.
Wilson and Searles now have Moe’s restaurants in Auburn, Binghamton, Camillus, Cicero, Clay, DeWitt, Ithaca, New Hartford, North Utica, Vestal, and Clarks Summit, Pa. The pair will open a location in Rome in February 2014 and are projecting more openings later that year. “Moe’s is on fire,” says Wilson. “Our units have the second highest volume [in the national franchise], and we are opening stores at a [blistering] pace … The store footprint is around 2,800 square feet, and we [generate] 15,000 single transactions a month … The average sale is $8.78 [which yields] … more than $1.5 million annually per store.”
FOCUS Brands, Inc., which owns the Moe’s Southwest Grill chain, is careful to find qualified candidates for its expansion. Each franchisee must have restaurant-management experience as an owner or operator, have a net worth of $1.5 million and liquid assets of $500,000, and be capable of opening a minimum of three restaurants, according to the Moe’s website. The initial franchise fee is $30,000. In addition, the franchisor charges 5 percent for a royalty fee and another 4 percent for marketing. The marketing fee is returned to the franchisee if his marketing is approved by the home office. “When we started with our first Moe’s, it cost $350,000 to open a store,” says Wilson. “Today, it’s closer to $650,000. We generally lease our space, but I bought the [7560 Oswego Road, Clay] building, which was originally occupied by Friendly’s [Ice Cream, LLC]. The … store cost $1.7 million for the land, the building, and the build-out.”
The national office recommends that Moe’s be sited in “strong anchor centers or highly visible convenience centers” that offer a strong retail synergy. Within a two-mile radius, there should be a minimum population of 30,000, of whom 15,000 are employed. The median income is $50,000, the “median age is 40 and below, and the household size is 2.5+,” according to the Moe’s site. While Wilson and Searles generally follow the guidelines, “we prefer to be in neighborhoods where families live, play baseball, and go to school,” says Wilson. None of the Moe’s has a drive-through. The DeWitt store offers catering, of which 90 percent is to area businesses.
The reasons for Moe’s popularity are many. The chain insists on fresh foods including cage-free chicken, steroid-free pork, grass-fed steaks, and only fresh produce. Moe’s uses no microwaves or freezers, no trans-fats, and no MSG. For those who favor vegetarian, low-calorie, or gluten-free selections, there are plenty of choices, along with a kids’ menu. On Mondays, Moe’s features the $5 burrito. Many of the menu items are named for popular TV and movie characters, and the background music suggests a “hip” atmosphere. Convenient locations and ease of parking also ensure Moe’s popularity.
Wilson and Searles established Southwest Grill of NY, LLC in June 2004. Headquarters is located at 111 Grant Ave. in Endicott. Each location is incorporated separately. Wilson and Searles are the two principals in the business.
Diversifying into yogurt
Last year, Wilson’s son Christian, now a freshman at Binghamton University, came to his father with another idea for an eatery. The concept was to create a frozen-yogurt venue where the customer picked the toppings and paid for the dessert based on the weight. The key was to use fresh dairy products and real fruit purees cut fresh daily. Keeping to the healthful theme of yogurt with its vitamins, minerals, and pro-biotics, most of the flavors would be gluten-free and certified kosher.
Twenty-four toppings would add variety and flavor.
Not one to dawdle, Larry Wilson opened his first Hoopla! Frozen Yogurt store this year on Aug. 1 in Binghamton. More stores followed in Cortland, Auburn, and North Utica. The New Hartford store opened Dec. 20, with additional store openings planned. Wilson and Kevin Blake are the principals in this company, along with investors Travis Hayes, Todd Mansfield, Scott Searles, and Christian Wilson. “We see a synergy between Moe’s and Hoopla,” says Wilson. “That’s why we plan to locate the two franchises together. Both [restaurants] focus on fresh food and appeal to the same people … Eat at Moe’s and have your dessert at Hoopla … The Hoopla footprint is smaller than Moe’s, around 1,500 square feet. We get the same traffic count, about 15,000 transactions a month, but the average sale is only $3.89. Where Moe’s stores average $1.5 million a year [in revenue] Hoopla’s stores average around $700,000.” Wilson says he hasn’t decided yet whether he and his partners will become a franchisor of Hoopla, but the answer is “probably.”
By February, the two principals will have opened 12 Moe’s stores, following the Rome opening. “We’ll have 15 open next year and 19 by 2015. Combined with Hoopla’s growth, our revenues should double in the next 36 months to $45 million a year … That means the current 450 full- and part-time employees are projected to grow to 1,000 by 2016 … Our [expansion] strategy will take us south to Lancaster [Pa.] and York. Next, I’m looking at Cleveland,” Wilson says.
For Wilson, training is a key to success. “We bring up a trainer from Moe’s in Atlanta for two weeks of every month, both for in-store and class training,” declares Wilson. “It’s a [sizable] expense, but that’s what really separates us from the competition. Our employees need to know not only our [offerings] but also the Moe’s experience. You don’t come here just to eat Mex–Tex. It’s the fun atmosphere [that sets the stage]; customers come for the total experience.”
Never one to miss an opportunity, Wilson incorporated Southwest Grill Maintenance, LLC in June of this year. He is the sole stockholder. “We do all of our own build-outs, now,” says Wilson. “Currently, we are working on four locations [simultaneously].”
Wilson attributes the success of Moe’s, in large part, to the management team, which includes Wilson, Searles, Joe Tebsherany as the store operator, and Chris Heirman as CFO. He also notes his long-standing relationship with M&T Bank. “They are fantastic,” says Wilson. “They have never said no.” He has also been a client of Binghamton–based Piaker & Lyons [,P.C.] since he was 16 years old and has relied on The Law Office of John G. Dowd Attorney for his legal work. “Our major food suppliers are Rinehart Food out of Sunbury [Pa.] and Syracuse Banana for our fresh produce,” avers Wilson.
At 45, Wilson says he will work five more years. “Then I would like to turn it over to my three children … I want to help the kids run the business,” says Wilson. “Life is great. It’s been a blast … My father always told me to give the customers what they want and when and how they want it. It’s great advice that I’m passing on to my children.”
Wilson and his partners are on a tear to open Moe’s and Hoopla stores. At the rate he’s going, the companies could hit $100 million in sales by the time he retires.
Contact Poltenson at
npoltenson@cnybj.com