It was at this point Flynn and Pettinger realized they were on to something major.Ī couple of years later, Flynn contacted Strang again and bought the rest of his stores, swiftly expanding the footprint from 10 to 72 units. The group proceeded to open a ninth and 10th restaurant, which debuted with high volumes. Within half a year, average weekly sales grew to $60,000. Krebsbach launched multiple initiatives, such as leaning into the bar and late-night business, shifting promotions to different lines or products, and stacking employment to meet higher sales volumes. And to ensure everyone’s interests were aligned, the duo shifted his compensation heavily toward profit sharing and gave him an equity interest. And he said, listen, we can make it here in this market, but we need to do things differently than the way they’re done in the Midwest.”įlynn and Pettinger gave Krebsbach freedom to make operational and CapEx decisions. “He is perhaps the best restaurateur I’ve ever met in my life,” says Flynn, describing Krebsbach. Subsequent to the acquisition, he joined Flynn’s company as director of operations. Neither had much knowledge on running a full-service restaurant, but that void was filled by Dan Krebsbach, who spent years working for Strang in the Minneapolis and Seattle markets.
The restaurants earned about $45,000 per week.įlynn entered the venture with Brad Pettinger, who he recruited to build the World Wrapps business.
His Seattle outlets, however, were struggling due to expensive real estate, construction, wages, and food. He bought those Applebee’s restaurants from Cleveland-based franchisee Don Strang III, who owned roughly 70 units in Minnesota, Ohio, and Indiana, and was starting to develop New Jersey and Delaware. So he took out a loan and purchased eight stores in the Seattle market. In that era, the hottest segment was casual dining, and the leader in the category was Applebee’s, Flynn says. “And then once you do it, the customers already know you, employees know you and want to work for you, the landlords know you and want to lease to you, vendors know you and want to sell you equipment. “I looked at this and it’s like wait a minute, I can borrow all of the money on a non-recourse basis to do this,” Flynn says. “Basically, you have to come up with all the money to do this.”īut in the late 1990s, he became aware of a financing opportunity in which he could receive all the necessary funds to buy into a top-tier franchise restaurant.
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“And you can’t borrow a dime for it, except on a full recourse basis,” Flynn explains. Nearly all aspects were inherently more difficult, whether it was convincing landlords to lease space, vendors to sell their equipment, employees to come work, or customers to try the food. Flynn also recognized that because he was in the beginning stages of an independent restaurant transforming into a small chain, he was playing in the riskiest end of an already treacherous sector.
He learned to be a jack of all trades working in the front of house, back of house, construction, and other various tasks. Between 1995–1999, he opened 14 units, and was quickly introduced into the “school of hard knocks for running restaurants.” To accelerate development, Flynn agreed to build stores in Seattle, where he was growing a budding real estate business. “Everyone thought ‘oh my God, we’ve got the next Starbucks on our hands, and we need to bring this to market as fast as possible,’” Flynn recalls.
The first unit opened in San Francisco in February 1995, with lines around the block. The company was founded by a classmate from the Stanford Graduate School of Business, and Flynn decided to make a small investment. That journey Flynn speaks of began in the mid-1990s via World Wrapps, a restaurant that “started the whole wraps phenomenon,” he says.
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