In the Fast Lane

Despite the rocky economy, quick-service restaurants are holding their own. In the U.S., sales for the top 500 quick-service chains rose to $230.2 billion last year, up $7.6 billion from 2007 according to Technomic Inc., a research and consulting firm that tracks the food service industry. Though sales growth actually slipped to 3.4% from 5.0% the previous year, it’s clear that people enjoy eating at places like Burger King. Among those riding the trend is Valerie Daniels-Carter, founder, president, and CEO of Milwaukee-based V and J Holding Cos. (No. 52 on the BE Industrial/Service companies list with $90 million in revenues).  The “V” stands for Valerie and the “J” stands for John, her brother and financial partner in the company.

Daniels-Carter went from being a child entrepreneur to leading one of America’s largest black-owned businesses. Through trial and error and a lot of hard work, Daniels-Carter now enjoys the benefits of being in one of the few industries faring well in this economic climate. Far from finished, she’s on the verge of taking V and J Holding international.

V and J Holding boasts 141 restaurants throughout Massachusetts, New York, Ohio, Michigan, Minnesota, and Wisconsin. Daniels-Carter’s quick-service empire is made up of Auntie Anne’s, Burger King, Coffee Beanery, Häagen-Dazs, and Pizza Hut. Her rise in the industry is due to her three-pronged approach: employee development and training, customer focus, and unwavering faith.

Granted, no business is immune to downturns in the economy. Still, as budgets shrink and belts tighten, more consumers are dining at these restaurants, making competition for the owners a lot tougher. “Anyone who sells pizza, hamburgers, ice cream, pretzels, or coffee is a competitor,” says Daniels-Carter. She has responded by offering promotions and giveaways at her stores. For example, in June, V and J offered free meals for a year to 12 customers by raffling off Burger King gift meal packages. “There’s definitely a lot more pressure for operators to discount and give away free product. There have been some innovative ones, but there have been a lot more than there usually are. And the negative about that is it decreases profits for the owners. But there are a lot of restaurants that are closer to being profitable than being unprofitable,” says Juelene Beck, president and CEO of Juelene Beck and Associates, a chain restaurant consultancy.

Kool-Aid Kidpreneur
Daniels-Carter has always been a boss. In her first business she sold Kool-Aid from a stand at the age of 5. Later she started a business walking neighborhood children home from school. These small steps became the building blocks that led to where she is today.

“I’ve had an entrepreneurial spirit ever since I was very young,” says Daniels-Carter. Her father, who owned a heating, air conditioning, and refrigeration company, sparked her interest in entrepreneurship.

Prior to founding V and J Holding, Daniels-Carter spent nearly 10 years in banking. After receiving a bachelor’s degree in business administration from Lincoln University in 1978, she served as a management trainee at First Wisconsin National Bank (now U.S. Bank) in the retail and commercial lending department. Then in 1981, she worked at MGIC Investment Corp. as an auditor in the underwriting division. After studying the finance industry closely for a few years, Daniels-Carter noticed a growing number of bank mergers, which meant workforce downsizing would not be far behind. Before someone else could determine her fate she decided to take control and make her move. A year later, in 1982, after receiving her master’s degree in management from Cardinal Stritch University, she was ready to strike out on her own.

Daniels-Carter’s entry into the quick-service industry was hardly spur of the moment. The CEO had been mapping out a plan from the very beginning

of her college career. She took business courses and worked in banking to gain the knowledge she would need to one day own a chain of restaurants. “Banking and finance provided a strong foundation so that I could put together a business plan for my organization, learn how to finance it, and understand how to create my strategy,” she says. “That was a strategic choice to enhance my skill set. I knew that ultimately I would own my own business.”

A combination of personal savings, contributions from investors, proceeds from the sale of her car, and a bank loan gave Daniels-Carter the $900,000 in startup cash she needed to open her first Burger King in Milwaukee in 1984. Close to $700,000 went toward construction costs and about $200,000 went toward the franchise fee and other soft costs. “At the time it seemed like a lot of money. I saved as much as I could,” she recalls. Revenues at the end of the first year of operation were close to $1 million.

Daniels-Carter never let obstacles hamper her progress; she even sold personal assets to raise needed funds. “You have to face a plethora of things as a person in business, but you have to understand whether that’s really who you are and what you’re designed to do. If it is, then it just comes down to exercising your ability and will to make it happen. That’s the kind of person I am.”

Once you’ve decided that you’re CEO material, Daniels-Carter recommends developing a thick skin because challenges are often waiting around the corner. One such challenge came to her in 2005 shortly after Hurricane Katrina, when oil and gas prices soared. Because V and J depends largely on natural gas to run equipment, the company’s utility costs increased by $100,000. Daniels-Carter cuts costs by running fewer fryers when demand is lower. She also starts up equipment at intervals to avoid creating a surge, since utility companies charge at the highest surge rate of energy.

Striving for Excellence
Although quick-service restaurants attract customers by offering inexpensive meals, data from the NPD Group, a research firm that conducts studies about the restaurant industry, shows that it’s excellent service that really keeps customers coming back. Daniels-Carter and her team have made excellence their focus. They’ve ramped up employee training programs at each restaurant so that customers will experience the best service possible.

“As far as training, we came up with a guest-service class,” says John Draper, president of operations at V and J Holding. “In the class, employees learn how to handle conflicts with guests and how to be more attentive. We also made the general training more specific.”

Daniels-Carter believes employee training and customer satisfaction go hand in hand. She makes sure customers come first and that her establishments make a good impression. “It’s about the experience customers have. If they don’t have a good experience, they won’t come back.”

Daniels-Carter is adamant about her staff’s training and ability to uphold the company’s standards of excellence. Her motto, You Are the Standard of Excellence, or YATSE, the acronym used within the company, is often quoted and used to motivate her workers. “That’s been our motto for 25 years. It was just something I crafted based upon the standard that I wanted to set for employees to

aspire to,” says Daniels-Carter. “You represent your definition of excellence. We try to impress upon each individual that the organization has a standard, and that standard represents a level of excellence that we want to deliver every day. Either you can sit back and watch destiny pass you by, or you can walk with it.”

The CEO stays grounded by engaging in local and international philanthropic projects. On the

campus of her church, Holy Redeemer, she’s opened a 150,000- square-foot community center that houses a Boys & Girls Club, adult learning center, senior center, and medical facility. And she’s partnered with other Burger King franchisees, her church, and Save Africa’s Children to open three orphanages in Kenya and Ghana for children whose parents have died of AIDS.

International Intentions
Daniels-Carter plans to take V and J Holding international within the next five years. “We want to grow and expand our brands,” says Draper. “Our plan in 2007 had us in the Dominican Republic, Puerto Rico, and Africa by 2009, but when the economy pulled back we had to delay those plans. We hope to expand in those areas in the near future.”

Daniels-Carter offers this advice to budding CEOs: “Make sure it’s what you want. Understand what your passion is and what you’re good at. You have to decide whether you’re the employer or the employee. You may not want to work 18-hour days or make all the necessary sacrifices. Owning your own business isn’t for everyone. The right thing is what fits your personality, skill set, and God-given directive.”

Those who want to succeed in the quick-service industry must also anticipate the needs of the restaurants they manage, especially during times of economic uncertainty, says Draper. “Internally, we had to make sure we ordered enough food, but not too much. We made a point of purchasing the products we used at the restaurants more efficiently. We also split cases of cleaning supplies among restaurants.”

No matter the challenge, Daniels-Carter says she is determined to stay in the franchise game. “Nothing is ever going to knock me out unless I choose to leave. I’m never going to allow man to define who I am or where I should be. To me, that’s a God thing.”