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Derek Doke, CEO, Original Joe’s Franchise Group Inc.
By Shayne Stephens
March 11, 2011
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Derek Doke is an entrepreneur. And a good one at that.
While attending the University of Saskatchewan, the Saskatoon native balanced not only his course load, but also the books of his many side businesses. As luck would have it, one of them – a uniform company that supplied to a number of restaurants – introduced him to a couple of very important people who would forever alter the course of his life.
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“Thanks to that business I got to know a few people in town and was fortunate enough to run into a couple of men who enjoyed my entrepreneurial enthusiasm,” chuckles Doke. “They were the group that had brought Fuddruckers to Western Canada, and luckily for me, they were looking to grow their business, so I followed my entrepreneurial instinct, left school and they brought me on board full time.”
It was there, under the tutelage of the late Peter Golf, (a former CRFA Director), and his business partner John Remoundos, that Doke was first introduced to the restaurant industry.
“They were such excellent operators,” reminisces Doke. “They really exposed me to all the details and key variables that are so important in this business to stay successful. In many ways, I feel like I graduated from their school, because I was able to learn about the world of hospitality based on the restaurants they were running and that they had run in the past.”
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While with Golf and Remoundos, Doke worked in the franchise development area and then on branding and franchising the group’s kid-centred amusement venture Ruckers, where he successfully doubled the locations to 22 across three provinces.
In 2000, Doke branched out on his own, starting FranWorks, a new franchise consulting company that saw him hunt for concepts he felt had a niche in a market and the potential to grow at the rate he was accustomed to with Ruckers. While not all of the concepts fell under the hospitality umbrella, one concept in particular caught Doke’s attention.
“Original Joe’s was essentially a pub-style restaurant that I felt had a niche in casual dining, but not in what I call the ‘tier one’ level, which is the great operators at the Earl’s, Moxie’s and Cactus Clubs out there,” he says. “When I approached the two brothers that started the company, it only had two locations, so I showed them what it could look like if we grew the brand and we put together a partnership structure.”
Doke spent the next few years working on the development side of the business, trying to package it up to where it could grow aggressively and in 2006, through FranWorks, bought the company outright, knowing that the concept had tremendous potential for growth.
“It had a good model for potential growth because its capital expenditure to get in was a lot lower,” says Doke. “The rooms were also quite a bit smaller than your typical casual-dining restaurant, which meant it was much more manageable, even from behind the bar, and we would be able to bring in independent owners and train them on a manageable system.”
And he was right.
A rapid expansion, however, would be tricky without the proper people in place. Thus, not wanting to be caught off guard, Doke hired a number of key individuals as an investment into the chain’s future.
“In hindsight, it was really important for us to hire ahead of the growth curve so we could actually manage the growth that we were about to take on,” says Doke. “We also brought some fantastic franchisees into the mix and started looking at different equity equations with our joint venturing. Even some of our management partners took equity pieces, which I feel has been one of the keys to our success, because we have a huge feeling of ownership on so many levels.”
Today, Original Joe’s has 37 locations – which in 2010 earned it the No. 11 spot on PROFIT magazine’s list of Canada’s Fastest Growing Companies – and according to Doke is set to hit another impressive milestone at the end of 2011.
“We’re entering into our 13th year as a concept and looking at a 2011 that will see us add 13 stores,” says Doke. “That will get us to 50 stores by the end of the calendar year, which is really exciting.”
And what then is the secret to the chain’s success, given that it’s seemingly come through the recession unscathed? A number of things, actually.
“There are a few levers that we have been able to pull that have been important,” says Doke. “Having the right people in the right places in our organization has been one. The way we position ourselves against our competitors – due to our lower price point, people will buy down to us from the ‘tier one’ in a struggling economy – has been another. And I think the way we’ve been disciplined with what our brand stands for over all these years, and not swaying from it, has been really important, because it’s very tempting to make adjustments based on what your customer is doing or the latest trends, but you don’t want to confuse your customer. Original Joe’s is about comfort, genuineness, people and community … and it always has been.”
Having focused on volume for the first two-thirds of its life cycle and counting a higher cost of sales and lower margins as one of the company’s main challenges, Doke and his team, knowing they now have the size to do so, have recently brought on a full-time purchaser to develop great relationships with suppliers and really be on top of the numbers.
“Ultimately, we’re hitting our volumes, and in this business, volume is key,” says Doke. “Do we have the best bottom line in the industry? No. Not by any means. But it is providing a significant return on investment. There are tradeoffs. The struggle is figuring out how to increase those margins moving forward while still maintaining that value concept in the consumers’ mind, because they see it and appreciate it.”
To Doke, understanding what is happening in the industry is extremely important. As matters of concern he cites commodity pricing, minimum wage, HST, nutritional disclosure and potential ingredient regulation, offering that while not all bad things, all will require foodservice operators to do some major adjusting.
“We certainly need to be lobbying for the benefit of the industry and that’s where the CRFA is our workhorse,” explains Doke. “We need to continue to be in strong alliance with them so that we’re protected long term. In some ways, I think that restaurants don’t get a whole lot of respect from government, and I think that we really need to be voicing our opinions louder, considering how significant we are in this economy.”
Married, with a six-year-old daughter and an eight-year-old son on whose hockey team he “plays” assistant coach, Doke seems too young to be such an industry vet. At 40, he’s been there and done that, thanks in large part to his entrepreneurial spirit and the help of some great mentors. Is there a lesson he’d like to share with the rest of us?
“Sure,” he laughs. “What matters most, and always will in this business, is the quality of your food, the quality of your service and the environment that it’s contained within. If you can hit all the details, and there are literally hundreds and hundreds of them, if you can make sure that you are applying yourself consistently to all of those areas within your four walls, you will have a lot of success.”
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