“Making Lemonade Out of Lemons”		«BACK
	by Dennis L. Monroe
	from February 2004 Franchise Times

This column regularly reports on new financing and acquisitions techniques. Aslam is a walking/talking expert on creative techniques in acquisitions and taking advantage of acquiring under-performing stores at attractive prices. Before I get into his philosophy, which Aslam sums up in one word – ATTITUDE –, let me review his background.

Aslam was born in Pakistan and left home at the age of 14. After putting himself through school, he got his first break by getting a job in the American Club at the U. S. Embassy in Pakistan . He rose through the ranks to become the Club manager and became very skilled at running the food and beverage portion of the Club. During his seven-and-one-half year association with the U. S. Embassy, Aslam was very impressed with the American system, and he decided to come to the United States .

Although he came to the United States with only a few dollars in his pocket, Aslam saw this as a land of tremendous opportunity. Aslam came across the Church’s Chicken concept, and he interviewed for a managerial position. Since he was unable to produce local references, Church’s Chicken turned him down. Aslam was not deterred and decided to pick up a job in a local Church’s Chicken as a team member. Management saw his immense talent, and within a few weeks, Aslam was running the restaurant. From there he developed expertise as both an operator and marketing person and quickly rose through the corporate ranks.

Aslam then spent a couple of years with KFC operations in Los Angeles.

Aslam next took over a Los Angeles Church’s Chicken opportunity through Royal Capital, one of the largest Church’s Chicken franchisees. He turned these restaurants around in a matter of two-and-one-half years (from a losing proposition to one of the best franchise companies in the Church’s Chicken system).

After this success, Aslam had the opportunity to acquire a 100 unit group of restaurants in the Midwest that were also losing money. Aslam bought these troubled stores and quickly turned them around. Aslam acquired the Midwest stores with the help of Sentinel Capital, a well-known private equity group that has been active in the franchise sector. Sentinel invested in Aslam and helped him finance the acquisition of these stores.

Aslam’s philosophy is unique and one that industry people can learn from:

• 1. Aslam looks at acquiring underperforming stores and then turning them around by getting back to basics. He first tackles the food and labor costs. He has developed tight controls and virtually eliminated theft.
• 2. Some of the key points of Aslam’s philosophy:
• a. Management by consent;
• b. The Restaurant General Manager (“RGM”) is responsible for his or her profit or loss;
• c. Aslam views every restaurant as an independent profit generating entity;
• d. Keep the management turnover to a minimum after the first year; and
• e. Provide quick feedback to the unit manager (daily, weekly and monthly).

• 3. He has developed an internal state-of-the-art internet based over-store reporting system so each market manager has a store performance report by 6:00 a.m. each day for the previous day. This report includes the items that should be looked at, which are called “exceptions.” The manager needs to address these “exceptions” by noon that day. Aslam has taken this internet technology a step further. He has a team who works through the night to make sure all IT issues are resolved so the reports are in the managers’ hands as promised by 6:00 a.m.
• 4. One of the key elements to Aslam’s success is his ability to hire talented operators. Aslam has tapped a tremendous wealth of talent by being highly resourceful in where he finds talent.
• 5. What makes Aslam’s story even better is that his last acquisitions (Falcon Holdings) came at the request of the lenders. He is the lenders’ operator of choice for many quick serve restaurant opportunities. By being such a solid operator, he is given many opportunities to review potential acquisitions.
• 6. Aslam believes the franchise finance industry has a 10 year cycle where it goes from a very strong financing climate to a deteriorated climate and then back up again. I agree with his assessment.

Aslam recently was asked if he could sum up in one word the reason for his success since coming to the United States. His one word is “Attitude.” “I had an attitude that I was going to succeed. I had an attitude that I could do whatever it took, in terms of hardship, to succeed.” He was able to start as a dishwasher and move up. Aslam was able to take the ups and downs of a turn-around situation and make the best of it. His attitude was always to be mindful of the details, make sure every store was profitable and that every manager was pulling his or her own weight. In my time of being with Aslam and his office personnel, you could see his attitude, his desire to succeed, and his mentoring of other people to succeed is organization-wide. He will continue to be a success and make many more acquisitions.

In thinking about Aslam and his Church’s Chicken franchises (which are part of AFC), it should be noted that the securities and financial reporting issues surrounding AFC have been addressed. AFC restated its financial statements and filed its10-K. Hopefully this is good news to Aslam and other Church’s Chicken franchisees, as well as the rest of the AFC system.