Sanjay discusses the value of enterprise risk management, compliance, and consistency. He also shares how to run a successful franchise by following brand processes and adjusting to the shift towards digital, loyalty-driven operations.
Sanjay shares how to run a successful franchise by following brand processes and adjusting to the shift towards digital, loyalty-driven operations. He also discusses the value of enterprise risk management, compliance, and consistency.
Welcome to Elevating Brick and Mortar. A podcast about how operations and facilities drive brand performance.
On today’s episode, we talk with Sanjay Jain, the Chairman of the National DCP Board of Directors and independent franchise business owner. NDCP brings global expertise in strategic sourcing, distribution, restaurant solutions, business services, and supply chain to serve Dunkin’, one of the world’s leading restaurant brands.
Guest Bio:
Sanjay Jain serves as the Chairman of the National DCP Board of Directors. He brings 35 years of Accounting, Finance, and Information Technology experience with Fortune 500 companies to the supply chain management cooperative.Jain joined the NDCP Board in 2016, representing Series C. Prior to becoming Board Chairman, Jain served as the Treasurer, co-chaired the Sourcing Committee, and spearheaded the Internal Audit function at NDCP through his role on the Finance/Audit Committee.
He currently owns a large network of Dunkin’/Baskin Robbins stores in Queens and Long Island, New York. As an elected District Advisory Co-Chair franchisee from Queens, he is actively involved with the Development Committee, Compliance, NY Sales Taxes and the Wage Group. In his capacity as a member of Dunkin’s Brand Advisory Committee, he works with the Menu Management and Development Advisory Sub-Committees.
Jain’s work as a financial executive and certified public accountant in the retail, food and supply chain industry has included an emphasis on internal controls, financial reporting, tax, and risk management. As the Executive Vice President and Chief Internal Auditor of Abovenet Inc., Jain helped turn the Company from bankruptcy into a publicly traded company on the New York Stock Exchange by working closely with the Audit Committee and the Board of Directors. He developed their annual strategy, conducted risk analysis, and developed corporate plans for both domestic and foreign entities.
He also has ten years of public accounting and consulting experience. In his role as Audit Director at Ernst & Young and BDO Seidman in the Metro New York area, Jain helped clients streamline both their operations and control processes, managing and leading groups of professional auditors worldwide that saved his clients millions of dollars. He has been actively involved as a Board member with the Institute of Internal Auditors and has presented at the American Institute of Certified Public Accountants forum.
Jain has a Management Information Systems degree from the University of Hartford, a Master of Business Administration degree from Dallas Baptist University and a Master of Commerce degree from the University of Rajasthan in India.
Timestamps:
13:45 - About NDCP
05:17 - Sanjay’s venture into franchise ownership
08:53 - Following brand guidelines
10:24 - Handling consumer expectations
20:31 - How do you ensure consistency?
28:35 - Dealing with scarce human capital
33:49 - The consumer of the future
39:35 - Advice for franchisees
41:13 - Where to find Sanjay
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[00:00:00] Welcome to elevating brick and mortar. A podcast about how operations and facilities drive brand performance.
[00:00:06] On today's episode, we talk with Sanjay Jain, chairman of the national DCP board of directors. Sanjay will explain how the NDCP successfully offers savings to its members. So they can always offer high quality products to their customers.
[00:00:22] Here's your host industry and FM technology thought leader and chief business development officer at service channel, Sid Shetty along with our guests, Sanjay Jain.
[00:00:32] Sid Shetty: Hello everyone. Welcome to Elevating Brick and Mortar. Thank you for joining us. I'm here today with Sanjay Jain, Chairman of the National DCP Board of Directors, which services nearly 10, 000 Dunkin restaurants in the U. S. and 41 other countries. Sanjay, welcome. So for folks in our audience who might not be familiar, can you share some
[00:00:53] insight into NDCP?
[00:00:54] Sanjay Jain: I'm glad to be here. NDCP is a full service supply chain, and as you said, we service to 10, 000 restaurants, 41 countries, and we do full blown sourcing, procurement, distribution, and whenever you see on that road the truck saying NDCP, that's who we are.
[00:01:17] Sid Shetty: Wow. So, so Sanjay, you know, for folks who might not be fully familiar with it, how did NDCP start and why did it get started? And would love to understand, like, How you became part of it.
[00:01:30] Sanjay Jain: Oh, that's very interesting. So, in the 80s and then going into the 90s, there were regional distribution co ops, okay, and in 2012, the regional co ops determined that if we really wanted to be serious and we really wanted to do business on the long run and for the cost savings, of our franchisees, we all need to come together.
[00:01:56] All these five regional co ops decided to merge together Chicago, New York, Boston. So that became the NDCP, National Distribution Cooperative Program, which was at that time called Coffee Program. And the idea was we buy in big bulk. and be the lowest cost provider to our stores. That was the focus.
[00:02:24] Sanjay Jain: The mission was always twofold, which is be the lowest cost provider and provide the best service. They started with the goal of wanting to save 200 million in 2012 and now we have saved 2 billion to our franchisees.
[00:02:45] Sid Shetty: Wow. That's phenomenal.
[00:02:48] Sanjay Jain: Yeah.
[00:02:48] Sid Shetty: when you look at the number of members you have, that's huge, that's 10, 000 locations. How many operators does that include?
[00:02:56] Sanjay Jain: So right now we are somewhere around 1100 franchisees. Uh, but what is happening is there has been consolidation. We were around 1200, 1250. So somewhere around 1100 we are up, uh, franchisees who manage these businesses all across the country.
[00:03:15] Sid Shetty: Got it. And as, as chairman of the board of directors, what are you responsible for? What is the board in general, you know, responsible for?
[00:03:25] Sanjay Jain: The number one thing is governance. Okay. And compliance is second one. And third one, I would say enterprise risk management. Uh, when you're on a board, you need to make sure that there are programs that govern a 3 billion company like a proper public private company. And that's your responsibility as a board member. And, and you need to initiate programs that are compliance, whether, whether it's fraud related, whether it's environment related compliance programs. And the other thing is, you need to have a whole overall enterprise risk management for any kind of things that may happen or may not happen.
[00:04:13] Sid Shetty: Got it. And is NDCP focused on one brand, which is Duncan, or do you do Baskin Robbins as well?
[00:04:21] Sanjay Jain: So, NDCP is primarily sole provider to all the stores of Dunkin across U. S. and overseas. And, and that, that's what our focus is. That's what we do.
[00:04:35] Sid Shetty: Got it. Got it. Now, you're also an independent business owner yourself and have multiple franchises. So, which brands do you have and how many locations do you, um, own?
[00:04:46] Sanjay Jain: I am involved with Dunkin Baskin Buffalo Wild Wings, and now Jimmy John's. I own a few dozen stores. Uh, across the metro New York and, uh, my, my background, uh, as a CPA with Ernst Young and BDO coming from that side of the shop was primarily to, to start a business on my own. And actually, I, I, since you asked this question, I have to digress and then come back, but that's the sole, uh, running piece of my operations is my wife, uh, Neerja. She runs the whole operations for this company.
[00:05:26] Sid Shetty: Lovely.
[00:05:27] Sanjay Jain: This, any business, you have to have a very strong leg of operations and finance. And that's how our starting happened.
[00:05:38] Sid Shetty: Did you decide from, you know, a long time ago that you wanted to get into, um, the franchise business or be a, you know, a small business owner or, you know, was it organic and it started with one and then now you've got a dozen or so?
[00:05:54] Sanjay Jain: You asked me a question which is very dear to my heart. We wanted to do business and we started, um, even before Dunkin', 20 years back, we had stores in the mall and we were dealing with a smaller franchise. And what happened to us at that time that franchisor became bankrupt. So we, we carried the stores at different malls and then, then, then both of us came to realization is, next time we're going to do business, we're going to do it with a bigger franchisor who have processes in place and also, we carried through those stores even though the franchisor had become bankrupt as an independent operators. So that was a starting with a bigger one. And then, that's when I decided the balance sheet and the financial of the franchisor is equally important.
[00:06:50] Sid Shetty: Yeah. Is it different to have, you know, different brands as part of your company or is it the same team, you know, just a different product and a different brand that you're, that you're servicing?
[00:07:03] Sanjay Jain: So I'm going to talk from the franchisee perspective and then I'm going to talk from the customer perspective. So, so from the customer perspective, they're looking for value, quality, good service, and good food. And from the franchisee perspective, we are looking for how to run it efficiently. So every brand has its nuances, I would say. They do it differently. Some things are better with one brand than another, but overall, overall, the business model is pretty, pretty much the same. What you're trying to do is you are trying to run a business like a business and your two major costs being food and payroll. So you have to manage your, whether it's Buffalo Wild Wings or whether it's, uh, It's Dunkin or Baskin, any of those. So those are the ones you have to pay attention to.
[00:08:02] Sid Shetty: Your focus is building efficiencies, um, focusing on customer service while also kind of growing your business. So how important is kind of building the right team and how do you, you know, keep that team motivated as you think about just expanding into other brands and other locations?
[00:08:23] I'll talk the existence of NDCP, how it has helped us, and then I'll go into the other brands.
[00:08:31] Sid Shetty: Yeah.
[00:08:32] Sanjay Jain: The whole existence of NDCP has been is to provide lower cost of goods sold. Okay, food cost is so critical, and to have a good quality is so critical, and that's what NDCP's whole mission is and function is, and they've been able to do that.
[00:08:48] And then you translate that to the other brands you're looking for, for standardization, and also a cost that is not exorbitant, and then you deploy your labor to create that business model. And, I mean, obviously, meat is more expensive than this thing, but once you go in, then you do your analysis, what works for you.
[00:09:13] Sid Shetty: So Sanjay, as, as you know, within the franchise world, right, there are certain brand guidelines that each brand will have that they will, you know, kind of hold the franchisee accountable to how much of that is, when you look at the whole business, how much do they say, here are the things that you have to do, and how much of it do they just let you figure it out on your own?
[00:09:36] Sanjay Jain: it is very critical that you follow that brand's processes. The shortcut of that processes in that brand will lead to either not a quality product being served to the customer or, or shortcutting those processes will not be best for your business.
[00:09:57] Thank you. So, so it's, it's a, it's a thing that is a whole training each brand has and, and you go through that process, uh, which I have gone and obviously Rijay in much, much more detail. Baskin has their own training process. Duncan has their own training process. But what brings go has their own training process.
[00:10:17] You go and assimilate and you get the best, best of the world over there. Then you try to apply to your restaurant all those that, uh, training tips that you have learned. However, I must say that it's all operational. Okay? One has to have enough knowledge on the other side, which is the back end, and to be able to manage your business from cash flow, P& L perspective, to make the tool work.
[00:10:44] Sid Shetty: Well, there's been a lot of change in consumer expectations and, you know, some really interesting macro trends, which I would love to get into as well, especially that has happened over the past few years. How has that changed how you run your business in the past, you know, couple, two, three years?
[00:11:03] Sanjay Jain: I think the biggest change that I have seen is from COVID onward now, And the biggest change that relates to is, it's more digital, it's more loyalty driven, it's more drive thru. Those are the very huge changes. I remember we used to have digital 10%, 8 percent of the business. Now we do 30 percent of our business is digital. Very loyalty driven, drive thru. 70 to 80 percent of the customer don't want to come back outside of their car when they're in a drive thru. So those are the big huge changes in this industry that have happened. It's not going back either. So if I was to say future, it's going to be more digital, more loyalty, more drive thru. And you see the trend. Look at the Starbucks. Starbucks is closing their regular corner stores and putting small drive thrus.
[00:12:02] Sid Shetty: Right.
[00:12:03] Sanjay Jain: that's, that's the nature of the game. Yeah,
[00:12:06] Sid Shetty: made a massive comeback after COVID, you know, cause customers figured out, you know, this is pretty good. This is easy. They kind of got used to it during COVID and it just stayed. Right. And so, you know, I presume businesses are having to adapt, um, in terms of construction and design, how they build their locations, but also where they build their locations. Right. Can you share your thoughts on that?
[00:12:30] Sanjay Jain: Parking is also equally important. So what has happened over the years, parking, drive through, digital, loyalty are the key drivers of your business now. Earlier we would, we would be in any shopping mall and we would have a store in any shopping mall and it would be successful. I don't think it's the same thing now. Now, now our real estate has to either provide sufficient parking in and out, easy access, or a drive thru. That's that, that is the name of the game. Otherwise the customer will see, go to the next store and say, that's easy for me to get in, get out. I will do that. And that has changed.
[00:13:15] Also, people are on their calls, conference calls, or doing other things while they're in the car. They'll just pick up stuff from their drive thru and, and, and they, they go their merry way. They don't want to get out of the car. It's raining, it's snowing, you have kids in the car, you don't want to do that. So, so that, that's a big, big change in this, uh, after COVID. It was building up, but I think it's, it's really hot now.
[00:13:38] Sid Shetty: As someone who owns restaurants himself, and then as, you know, the chair of NDCP. What else are you hearing in terms of things that you could do to better be prepared for this changing consumer demand and expectations and figuring out how to meet the customer where they are?
[00:13:58] Sanjay Jain: The name of the game is value. And everybody is wanting to provide value by quality, by low cost, and by pricing. And these ingredients, easy, easy access. So you put those four things together, that's the real value. Whether it's Starbucks, whether it's McDonald's, whether it's us, whether it's Burger King or Tim Hortons, each one of us are wanting to provide our customers with that value. And it's greater quality of food, easy access, and good pricing, and consistency. Day in, day out. If you're not going to be consistent, you'll be out of this business.
[00:14:46] Sid Shetty: That's right. That's right. Especially as you look at multi location brands and franchisees, you know, no one, no one wants to go to a Dunkin in Long Island somewhere and have one type of experience and then go to another Dunkin in Deer Brook, you know, Chicago, uh, Deerfield, Chicago, and be like, Oh, this is another experience. Like you want some level of consistency. And when you walk into a brand, like you want familiarity, right?
[00:15:15] Sanjay Jain: You nailed it. Actually, one of the things earlier on you had said is about the training and each brand. That's where you'd get the consistency. The coffee in Chicago better taste the same in Florida or in Boston or in California. Otherwise, why would you go to the Dunkin for another experience? Because you are going there, you are expecting the same cup of coffee and same sandwich or donut.
[00:15:41] Sid Shetty: That's right. Now let's pivot a little bit from like the product itself. To everything that surrounds it, right? Which is the actual physical space, you know, the ambience, how it feels. A lot of the folks in our audience are from construction, design, facilities, operations. You know, do you think folks give that, those functions, the, the attention and credit they're due in terms of how you deliver on a brand promise?
[00:16:15] Sanjay Jain: NDCP, again, uh, we started this Restaurant Solution Group. And this Restaurant Solution Group is involved in, in all the stores across the country that are coming for the remodel for the, called the Next Generation level of Dunkin. You may have seen, or you may not have seen, the tap system, the front donut case, and digital. Well, these stores coming with those, those. And the reason for that is exactly what you just said, is customers are looking for a different level of experience. When you see the donut case right in front of your eyes, all, all the different kind of 14 types of, or 18 types of donuts. You, you tend to say, okay, I like this one today. And I,
[00:17:01] Sid Shetty: The impulse buys. Yeah,
[00:17:03] Sanjay Jain: And, and when you have the tab system and you have the same consistency of drinks every day, you said, Hey, you know what? I tried this one. I'm going to try this one, but I know exactly how it will taste and I'm going to try that. So those are, those are that when you also the third one, which is very big is you order through your app.
[00:17:22] And, and, and by the time you come, your order is ready. You just, You don't even want to interact anybody. You pick your order and you, you are, you're out the way. So that has become very big, especially with the younger generation.
[00:17:34] Sid Shetty: Yeah. And you know, I'll talk about that in a second in terms of the, the omni channel experience, but to kind of finish the thought that you were just talking about in terms of the actual physical space, I agree with you, and that's a big part of the conversations we have on this show, which is folks today want consistency and they want an elevated experience, no matter the brand.
[00:17:57] Right? It doesn't matter if it's a luxury product, a, you know, a food item, um, and whether it's quick serve or full service restaurant, it doesn't matter. When you walk in, there's a certain expectation you have today of cleanliness, of, you know, how the facilities are kept, um, you know, you don't want to walk in, To a location where the doors are shaky and you almost feel like it's going to fall off its hinge, um, or it doesn't work, um, or it's hot in the restaurant or there's stains on the ceiling tile.
[00:18:30] Like nothing's worse than that. Like you just, you just feel like if that is what's happening and it's in, you know, in my view, what's happening in the kitchen, right? And so they say about bathrooms too, right? If the bathrooms is dirty, how, how, uh, how could the kitchen be?
[00:18:45] Sanjay Jain: So you may have seen a lot of these new quick service restaurant have an open kitchen so you can you, you can see how their food is being prepared, how their drink is prepared, and the beauty is. Not only you go inside, you see that, but there's another factor that is driving the sales, which is the digital that I talked about, which is DoorDash, Uber, Grubhub.
[00:19:12] Today, if you want to say, hey, I feel like having chicken and I don't want to drive. So you go to your app and you order. I want to have iced coffee and donut. You go on your app. So you're sitting. in your privacy and you will have exactly what you wanted through the apps. So that's, that's a big huge change and, and that, that's, that's the, that's the growth or the future of QSR or non.
[00:19:42] Sid Shetty: That's 100 percent right. You know, I think some of the interesting stats that I've heard is that pre COVID, maybe takeouts represented like 5 percent um, of restaurants, you know, business. Post COVID, that's upwards of 25 30 percent and it could be higher depending on the type of restaurant, right?
[00:20:02] Sanjay Jain: Exactly right, exactly. We have seen it even in the Duncan world and, and I mean even in Buffalo Wild Wings Go world. It's, it's a lot of, a lot of it is to go digital for the same reason. And all these third parties are delivering food on daily basis to the clients that they are serving.
[00:20:23] Sid Shetty: Now, how do you ensure that the demand is coming? You've got the customers who Have driven to your facility in the drive thru. Then you've got the customers who have parked their car in your
[00:20:36] Sanjay Jain: Right, right.
[00:20:38] Sid Shetty: And the ones who are ordering Uber, DoorDash, online, no matter where they are, all customers want the same experience, right? The omni channel experience has to be consistent, the same. No one is giving you any leeway of saying, Oh, I'm in the restaurant, so the experience might be X, and if I'm in my couch, I'm okay if it's slightly worse. No, they expect the same high level of consistency, right?
[00:21:05] Sanjay Jain: They expect and we should deliver. What was happening is soon after COVID, we noticed our digital businesses is moving faster. So somebody would order coffee and a donut. So they would have two packets. And they would come and pick it up and they would only pick up coffee and, uh, or they would pick up donuts and one would be left out.
[00:21:25] Now what we have done, we have changed the procedure in such a way that it's, it's a one package for them so that nothing gets left out. And so each one of us, knowing, knowing what the customer experience is, whether the customer is over there, Whether the customer is, is just picking up or whether it's customer order through any of the third party, they better have the same quality of product, the same value proposition, the same freshness of the food delivered to them.
[00:21:55] Sid Shetty: I've seen a lot of restaurants because the demand has gone up. You cannot compromise on the wait times of the customer who's in your drive thru because you are servicing the customer who's on their couch, right? And so many customers are also creating dedicated lines for, you know, the, the different channels where they are, they are meeting their customer.
[00:22:19] Because you don't want to have one overshadow the other, and you know, they're making their kitchens bigger. They're also having a separate section for seating for the actual drivers who are waiting for the food. So all these different things, you know, impact how the drivers perceive you, how the customer perceives you, right?
[00:22:39] And this is all tied to the physical space, so you can deliver on the same brand experience.
[00:22:44] Sanjay Jain: so, just for example, now where we have the drive thru, we have another coffee, Coffee machines. We have another set of donuts over there near the drive thru window. We have the front donut case for the same reason. They should be able to be delivered fast to both the customers. And then we have a separate section for, for the pickup window, which, which has the pickup side.
[00:23:10] So all three should have the same experience as a customer. That's the name of the game.
[00:23:18] Sid Shetty: right. And is that something which comes from the franchisor or is it your initiative?
[00:23:23] Sanjay Jain: I'm very involved with the franchisor. I'm at, uh, uh, the brand advisory committee. I'm with the, with the construction and remodeling committee. I co chair that and, uh, and menu management. And, and the beauty of Duncan as a brand, it really is, um, 99 percent of the franchisees are like me, meaning that corporate owns, uh, 30 plus stores and rest all are.
[00:23:57] So when we are all sitting together, we all want to resolve the same issues that we are struggling through. And that's a very powerful, very powerful way of working with the brand. The franchisor and franchisee working together. And really, as far as Duncan is concerned, We do it, so Telken is the brand that owns their, the franchisees own their own supply chain, and we work with the brand for all solutions, so those, those are very helpful and that's the reason why, why we are able to provide to our customer, uh, cost of goods that are, that are lower.
[00:24:37] Sid Shetty: I love it. I mean, that's a symbiotic coexistence, right? You have to have both working towards one singular goal. Otherwise one doesn't exist with the other, without the other, right?
[00:24:47] Sanjay Jain: Exactly right. Yeah.
[00:24:48] Sid Shetty: Just, just so you know, like my, You have two big fans of Dunkin like, in the Shetty household, like, my two kids, four and six, you know, huge Dunkin Donut.
[00:24:59] Sanjay Jain: Wow.
[00:25:00] Sid Shetty: um, to the point where, like, it's, it's a problem, you know, they want donuts all the, all the time, and when I travel, and I travel a lot, I will find myself door dashing
[00:25:13] Sanjay Jain: Oh, wow. There we go.
[00:25:15] Sid Shetty: To come to my house as a way to like, let them know that daddy's thinking of them and you know, it just shows up at their door.
[00:25:22] So, you know, I very, very much appreciate the fact that if I'm going to have my kids enjoy your donuts, uh, much to the annoyance of my wife, you know, I get them all sugared up when I'm not at home. I want it to be quality and I want it to show up when I've asked it, you know, to be show, do show up, right?
[00:25:42] Sanjay Jain: That's exactly the new digital age is where, where, where kids or elders want an instant gratification. I want this now. And that, and that is what is happening.
[00:25:55] Sid Shetty: That's right. I mean, I'm sitting in a plane about to take off and I'm ordering donuts to be delivered home, right? That is the beauty of the time you're in.
[00:26:03] Sanjay Jain: That's that.
[00:26:04] Sid Shetty: So, so Sanjay, you, you've, you know, built a successful business around you. You clearly have a huge impact, you know, within the Dunkin brands through NDCP.
[00:26:15] What has been the key to your success? Like, how did you get to where you are?
[00:26:19] Sanjay Jain: I think, uh, my, my personal life changed, uh, uh, when, um, after Ernst Young and BDO director, I, I helped the company to get out of bankruptcy. And that company was in pink sheets. And then, uh, then we went through the process of getting compliance and back on New York Stock Exchange. And, uh, And that made me realize that, um, that I really loved to bring something back to life.
[00:26:54] And, and that was the starting of my true business career. I had decided then that my next move is going to be back in business because that's what I love. So, so for me and, and, and, and the advantage that I had On top of it, that I had a very strong, uh, being a CPA, very, very strong financial background.
[00:27:20] My wife had a very, she, marketing MBA, she had a very strong operational and marketing background. So I think we really, uh, became a team, from running a business, uh, I could say that a perfect team because, uh, We, we carried, uh, uh, uh, the whole side of whether it's marketing, whether it's, uh, distribution, whether it's customer service, whether it's p and L's accounting taxes. So, uh, so, so that, that's how, uh, we geared towards it.
[00:27:53] Sid Shetty: that's amazing. Well, congratulations to you and your wife on doing that successfully and making a huge and big impact. Sanjay, let's talk about a couple of challenges that are existing in the space right now, right? I mean, there's a massive labor shortage. Um, and there's also, there was also a supply change issue, you know, post COVID, how did that impact your business?
[00:28:18] How are you combating it today? And then from what I understand, like you've also, uh, NDCP has opened its 10th distributing distribution center or is about to open it next year. I'd love to understand, like, how are you solving some of these problems that, you know, every single operator, whether you have one location or 12 faces.
[00:28:39] Sanjay Jain: so I'll separate the two out, but I'll answer both, both things. First thing is labor. That is, that is right now the number one issue for all franchises. Doesn't matter which brand it is.
[00:28:50] Sid Shetty: Human capital is not, is, is, is, is really, is, is scarcity right now.
[00:28:55] Sanjay Jain: it is, it is. So you have to put programs in place for your organization that allows the incentives for them to be with you.
[00:29:05] I've had people for 15, 20 years with us.
[00:29:08] Sid Shetty: Hmm.
[00:29:09] Sanjay Jain: and and and also you have to treat your people with respect. If you expect respect, you have to treat them These are very important things that you have to put put a whole infrastructure for your organization Where where somebody is listening to them? Hiring and training has to be continuous.
[00:29:32] Sid Shetty: Right.
[00:29:33] Sanjay Jain: It's not a one day job. It's a country. We have, uh, in this industry, turnover of 30 to 50 percent every year. Okay. And in some cases it goes above 50 to 70%. So with that kind of turnover rate, you have to constantly looking for better people. You're constantly training them.
[00:29:55] And what works is train the trainer. You train, you train your people, they train others, and the others train others. And that's how you get everybody on the same page. Now you, now you touched on a little bit on the real estate side, DC on NDCP side, we are opening our 10th distribution center. I have a change in strategy for NDCP.
[00:30:19] Uh, we, we have been renting and we've been leasing, uh, the other dcs. And the strategy has been for since I became the chairman is we're going to be owning and we started in Burleson, Texas. We're building on first distribution center and that's the route we're taking. And the reason is twofold. It's very simple for the stores or for the DC.
[00:30:44] When you own your own real estate, you're not going to have a double digit increases in the rents and the leases. Okay. You manage your goals and you manage your objectives and expectations much better if, if you own some of this real estate. And, uh, we are doing the same thing with our trucks and tractors. We were leasing them for NDCP. Now we are buying them. We have them because we can get more out of them.
[00:31:11] Sid Shetty: That's fascinating. Did it, um, help you during COVID that you had your own distribution centers and, you know, you were able to maybe feel the impact a little bit lesser, you know, for you and your members?
[00:31:22] Sanjay Jain: Yeah. Yeah, definitely. As opposed to, and I've heard that, and I've known that, the, the, the companies that were doing third party distribution had a lot more trouble in, uh, in getting the foods to the stores as opposed to us. In fact, uh, we recently did a, um, a third party study on us, uh, what we did. And then among the 23 Companies that are involved in distribution, supply chain business, we are among the top quartile, um, that are, are perfect order, are, are distribution, are, are, are each one of the benchmarks are above, above most of those 23 companies that we looked at.
[00:32:09] Sid Shetty: Interesting. And is, do you only use your distribution centers for food or do you also build an inventory of certain critical assets and it's available, you know, team members to purchase, you know, like coffee grinders or, you know, fryers and things like that. how do you leverage that?
[00:32:27] Sanjay Jain: So, as I said, we started this, uh, uh, two years back, uh, about owning ours. So, we have different tranches of trucks and tractors that we have implemented ours now, and other tranches are coming in. Our first DC is going to be opening in, in Texas, Dillard. The others are leased locations, but that's the route we're taking.
[00:32:47] And personally, also, I believe in the same thing. Uh, I'm believe in asset management and wherever I can and I will, I have my own drive thrus, I have my own stores and my own real estate. Uh, and also wherever we can, we can, uh, leverage the real estate with different brands as long as there is separation.
[00:33:09] For the same building, if I could have Buffalo Wild Wings to go and a, and a, and a Dunkin and a Baskin, I will because that, that helps the bottom line.
[00:33:18] Sid Shetty: Got it. Got it. Now, um, let's pivot a little bit and talk about the future Sanjay, you know, as a business owner. As a chairman of NDCP, but also as a consumer, what excites you about the time you're in?
[00:33:33] Sanjay Jain: I think there are a couple of things that really excites me is, uh, this new generation, for whatever reason, they don't cook much food at home. So they're always looking to go out and buy food and buy drinks and buy things. And we're in the sweet spot. We're in the sweet spot of drinks, beverages, uh, you know, depending on where we are located, anywhere 50 percent to 60%.
[00:34:01] We sell beverages. So that really excites me and then the plus one, which is whether it's a sandwich or a croissant or a bagel or bagel bites. And the diversity of food that we have provided to our clients is huge.
[00:34:15] Sid Shetty: Yeah, it's interesting, right? Because it feels like, especially post COVID.
[00:34:19] Sanjay Jain: Yeah,
[00:34:20] Sid Shetty: There's a lot more desire for social interaction. folks are very, very interested in going out and interacting with others, you know, in a social environment, which is kind of making the experiential part of dining become even more critical, you know, and when we say experience, it's not always kind of something that has to be fancy, it can be.
[00:34:45] Convenience. Convenience is also an experience, right? Speed is also an experience. Like you can, you can deliver on all the different expectations of a customer, as long as you're listening and you're adapting. Right.
[00:34:57] Sanjay Jain: you nailed it actually. Convenience and easy. That is very important to a customer. It's no longer that a customer is looking every day to dine out, sit and dine out, but they're looking at fast, easy, quick food that is wholesome, has quality, and not very expensive.
[00:35:17] Sid Shetty: Yeah. In terms of technologies, you know, There's more technologies today that are becoming ubiquitous than I think ever before. And they're finding their way into restaurants and retail spaces, right? So you think of, you know, robotics, you think of AI, you think of drones, autonomous vehicles, like they're making their way into all sorts of businesses, you know?
[00:35:40] So what are your thoughts on how that's going to change how we interact with consumers? Cause some of this might be, you know, Back of house because you need it to augment, lack of, of, of skilled, you know, uh, labor or, you know, folks that are, can, can be in fact with the, you know, with, with your food.
[00:35:59] And then also there's folks that, are using it in front of house to interact with the customer, right? How you take orders with this kiosks or with an associate. And, you know, I would love your thoughts on, on, on that. And what do you see looking into the future?
[00:36:17] Sanjay Jain: I'll separate the three pieces. There's the back of the house. The more efficient and more consistent our equipment is and with AI technology, I'm hoping that it's less manual because even now, a lot of our orders are custom orders and each is done manually, piece by piece by piece. So I'm hoping with robotics and AI, we can automate some of those processes that is not sent manually.
[00:36:46] Thank you. You may have seen at the front of the house, however, you already see that there are kiosks and there are digital boards. You can now order everywhere. You go to Taco Bell, you go there, you have, you, you can order right there. So that thing is already coming, um, slowly but surely, and in, in most, most of the retail business now what you see is there's always a self check, check out, uh, And that started happening in the QSR industry.
[00:37:14] However, the back of the house is actually fairly cumbersome. And a lot, a lot needs and it's very manual. So I'm really hoping that some of that, with time, there will be more automation. We've
[00:37:31] Sid Shetty: in the restaurant space with a QSR full service that you're skeptical about that you're like, yeah, you know, this is like a fad, I don't know if this is going to be something that'll stick around for many years.
[00:37:43] Sanjay Jain: seen quite a few things that we've tried. So here's the thing is, uh, If, if it doesn't decrease the manual labor, but it's just an add on cost, then it's really, really not that successful. So what I'm looking for is when it really, truly is efficient and also saves labor and is also consistent. So, so maybe, maybe the example that I can give you is we have tap system which will give the same drink, so that's good.
[00:38:18] But has it saved manual labor yet? Not, not, not there yet. Yeah.
[00:38:24] Sid Shetty: Got it.
[00:38:25] Sanjay Jain: Yeah.
[00:38:25] Sid Shetty: For folks in our audience who service businesses like yours, you know, any advice to them on how they could be. You know, a better service provider or could help you grow your business. How can they do more to make a, make you a customer or anyone in an NDCP, right? Within your membership.
[00:38:45] Sanjay Jain: We have great relationship on the NDCB side with our vendors. Okay. And that is, uh, that's a very big deal for us to, to get quality product consistently all the time. Okay. And that's why we are creating those relationships. We have also started doing, uh, Uh, joint, uh, sourcing with other brands, actually, and seeing if we, if we buy in bigger volumes, what does, uh, how does, uh, NDCP benefit?
[00:39:17] So we're looking at exploring in those areas also from NDCP perspective. As I said, we are already in restaurant solution where we're looking at, uh, mass remodeling of the stores and, and we're already doing that, uh, and that business is also growing. So all those changes are inevitable and coming and helps the franchisees as well as the costs for the overall system.
[00:39:45] Sid Shetty: If, if you were to go back in time and do this over and start a franchise business, would you, and what would your advice be for anyone who's thinking about getting into the franchise business?
[00:39:57] Sanjay Jain: First of all, most of the people are hesitant to take that risk. When I got, uh, from this telecom company, when, when I got my stock options and, and, and I didn't know what to do as a next step. I had that same hesitancy. Should I do this or will I lose my money?
[00:40:20] And, and all those are very relevant risks. But once you are in, there's no turning back. Okay? You have to put your heart, soul, mind right into it. That would be my advice to anybody and, and if you can balance the operation and finance together for any business, not only QSR, you will always win.
[00:40:44] Sid Shetty: Amazing. So Sanjay, what's in store for you as you, as you look into the future? Are you, are you going to go into more brands? Is that something which, you know, excites you or, or you, you'd be in the same brands, but maybe more locations.
[00:40:59] Sanjay Jain: I think both.
[00:41:00] Sid Shetty: There you go.
[00:41:01] Sanjay Jain: Really, really, because, uh, as opportunities come within the brands , and other brands, uh, I'll keep on moving till the time, uh, I have that incentive and love and, uh, and desire to.
[00:41:17] Sid Shetty: There you go. There you go. Well, I love it. I love it. Well, with that, Sanjay, I just want to say a huge thank you.
[00:41:23] With that, I want to say a huge thank you to everyone in the audience. Thank you for joining us on this show, uh, of Elevating Brick and Mortar. And Sanjay, for folks in our audience who want to look you up and connect with you, where can they find you?
[00:41:35] Sanjay Jain: Uh, I'm on LinkedIn, they can send me a request over there and, uh, I'd be more than happy to talk to them and communicate to them.
[00:41:43] Sid Shetty: Awesome. Well again, thank you Sanjay, and thank you everyone. And we'll see you on the next episode of Elevating Brick and Mortar.
[00:41:51] I hope you enjoyed this conversation with Sanjay Jain, NDCP board chairman and independent restaurant owner. It was fascinating to hear and learn more about an organization like NDCP that is 100 percent owned by the members and has successfully offered tremendous value and savings in a world of high demand and constant change.
[00:42:13] so much. Sanjay confirmed what we've been hearing from other restaurant leaders, that today a large part of consumer demand comes from takeout or third party orders, and no matter the kind of business, if you want to stay in business and be successful, you need to react, adapt, and be prepared for the consumer of the future.
[00:42:35] With that, I'm your host Sid Shetty, and I'll see you on the next episode of Elevating Brick and Mortar.