LA Business Podcast

34. Johnny Baklini, COO of Cedars Group

Johnny Baklini LA Business Podcast
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In this episode, we discuss with Johnny Baklini business start-ups, franchises, and the acquisition of Little Caesar franchises.

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Intro: [00:00:00] Welcome to the LA business podcast, a forum for business owners and senior executives to share the experiences about the elements that drive their success. Your host is Robert Brill, CEO of an inc 500 company. Delivering the power of hyper-local advertising. Robert writes for Forbes, inc, and ad trade publications. Our goal is to bring you the stories about successes and failures of people who are making big things happen in marketing, entrepreneurship, and management.

Robert Brill: [00:00:36] Hey everyone, welcome to another episode of the LA business podcast. We are here today with Johnny Baklini, chief operating officer of Cedar’s group, a franchisee. Welcome, and thanks for being on the show. We’re in the same entrepreneurs organization, and we’ve known each other for a couple of months now, and I’ve really had a cool chance to get to know your story a little bit better. It’s great to have you on the show, tell us a little bit about what Cedar’s group guts.

Johnny Baklini: [00:01:06] First thank you for having me, Cedar’s group got established last year. We’ve been in business for one year and we acquired Little Caesars Pizza franchise. We started in California and around mid last year we acquired six stores in Yuma, Arizona. So, our current portfolio is seven stores and, we’re trying to adapt more this year hopefully.

Robert Brill: [00:01:35] What was the impetus for going into that type of business?

Johnny Baklini: [00:01:39] Our family has been in business since 1986 with the first of these users that we opened in Bakersfield, California. As a family oriented business, , we have over 14 stores in Bakersfield, California. As cousins, we decided to branch out and do our own thing. And so while we still manage the big, mother company, we manage our own company, which now has seven stores. So in total we manage 21 seasons location.

Robert Brill: [00:02:14] That’s nuts. So I imagine does operational excellence play a part in your success?

Johnny Baklini: [00:02:22] Oh, it’s all about the operation, especially when you’re trying to scale and especially when you’re dealing with people. So we have about 500 employees and, operational excellence is the core. You have to have the best operation to be able to maintain, elevate, and grow the company.

Robert Brill: [00:02:42] Can you talk a little bit about that? And I’ll give you a little bit of context of why I’m asking about that. We hired last year, a fantastic head of operations. His name is Tony Price. I always call out his name because I want people to know who he is. He’s really fantastic, professional and a friend that I’ve had for 20 years. And he’s taught me a lot about operational excellence. And like, it’s so challenging, right? As a business owner, and I imagine you’re the same way, all we want to do is just, we want to grow and scale and sell and meet customers.  But then the actual fulfillment of that work has to have a process. And if it doesn’t have a process, a lot of things fall apart.

Johnny Baklini: [00:03:26] Correct. you know, we’re getting with people business. Before we are a business, we are people, individuals that come together as one and help elevate the business as well as the revealing ourselves. So to have the operational excellence, you really have to have a family feel. You really have to take care of a few people first. And once everyone is taken care of the hard work shows up, the productivity shows up. Once you work in a group and you share the same feeling and then you share the same vision and you share all those ethical family feel that we have, then it’s easier to scale because you’re working with people that you can trust. It’s tough. It’s very hard to achieve, but once you bake all those, Layers, and you have someone that you can call family, then you can scale and the sky is the limit once that achievement is done

Robert Brill: [00:04:23] What does operational excellence look like for your business, like what types of things are in the operations process that you think are best practices for your organization?

Johnny Baklini: [00:04:43] Well, as I said, number one is a family feel. So in our vision, actually let me grab it real quick. In our core values, we have family first. I’m not sure if you can see , but family is what we built on. Let’s just say, you know, one of our managers is having a bad time. We are first in line for them and things in the field of that is what’s going to make our business better in the future. Also integrity and honesty was to establish a family that is also honest. And now you can operate on the basics of honestly, when you have a vision, you’re looking at the operation stuff that we already have.

[00:05:33] Then we have commitment to excellence. So, we don’t just do it because you want to do it. We believe in it. And once we do, when you do something that you believe in average is not okay anymore. You always want to be number one. So you always push to be the best, and we look at the stuff that we’re not excellent at, that we’re not good at, then we start to achieve a better level. The most important thing I would say about operation in any business is follow up. Cause once the leader stopped following up, and the leaders in any level of the organization, it does not have to be the CEO. It’s every level of the organization.

Robert Brill: [00:06:14] It’s the, on the ground person who is transacting with the customer. That’s the leader in that equation.

Johnny Baklini: [00:06:21] Like every single employee is a leader, so they have to follow up and most important is they have to own it. So let’s say we made a decision. If I just make a decision without anyone else being part of it and without them owning it, it’s not gonna see any light. Every single individual in our organization have to own it. And for them to own it, they have to be part of the decision making. So we give everybody a chance to make a decision before we make it official. That way, when you make your own decision, it’s easier for me to follow up on you and it’s easier for you to follow up back on me because now we made the decision together.

Robert Brill: [00:07:02] So there’s accountability, right? Like no one is being told what to do, connecting on their projects together and making a sound decision to go. I like that alot

Johnny Baklini: [00:07:13] Yeah, and also to conclude this with is play hard, work hard. Yes, we want to work hard. We want to be the best, but at the same time, we want to have fun. So in our stores, even though we operate little Caesar’s pizza and you go into and make pizza, we want to have Disneyland feel. We want customers to walk in and they actually enjoy and have an experience. So in our store, the essentials is, we try our best to, push, work hard, play hard. We’re here to have fun. Forget the dilemma at home. Everyone has dilemma. Let’s just come here and enjoy it.

Robert Brill: [00:07:44] How do you do that? That seems, I can’t even imagine, how do you create that feel at a little Caesar’s ?

Johnny Baklini: [00:07:51] It’s a lot of work, but I want to start with selecting people. When you hire you’re very selective. It’s as simple a question as this, and I heard it from, an entrepreneur back a year ago, and this question really changed my business. It was from 1 to 10, how lucky are you? And so anyone that was below seven, we immediately disqualify them because we want to hire people that are positive and the positive create those values and create a feel and create a nice atmosphere.

[00:08:26] We don’t want negative people come to work with us. We want someone positive. And so when you decide to select, you’re never going to be successful a hundred percent, but you’re always going to have some sort of success rate, right? So once you select the positive people, then you build on that and it’s fun. You know, you might work with someone that’s always negative, you know, always find an excuse of why not to do it. I want someone to find the excuse why yes, we should do it. So it’s a different perspective here.

Robert Brill: [00:08:56] I qualify them as yes people and no people, but it’s the same type of thing, right? It’s like, is your disposition no or is your disposition yes. What’s interesting about that is operationally, it’s so critically important to have to have process. And part of that process is enforcing a timeline and a procedure that is actually designed to get the best possible outcomes. I actually don’t have an outcome for this particular question, but it’s just interesting to me. Like one of the challenges that we had within our business to give you some context is we would say yes to requests that I felt comfortable that we could deploy, but then actually activating on those requests was sometimes difficult because I would say yes, because I know we could do it, but then I wouldn’t give ourselves enough time to make it work. Like instead of giving it a two day deliverable, it would be a three day deliverable or a five day deliverable and setting those frameworks that are important.

Johnny Baklini: [00:10:12] So sometimes it’s okay to say yes, we can do it in this timeframe rather than jumping on something and not actually delivering.

Robert Brill: [00:10:21] So Johnny, what goes into the decision making process as to  making the decision about how many franchises or how many stores you’re going to onboard? Like, I think you probably have some goals about how many stores you want. Like, how do you make the decision?Do you say, no, I want one store additional this year, five stores or 10 stores, like, what are the economics or the decision making? Your business is such a very different business than mine is, right? Like I can’t even imagine how to even go about testing, whether or not it’s the right thing to do to expand, like how do you make those decisions?

Johnny Baklini: [00:11:04] So at the beginning of the stage, we had a meeting with my cousin, then the shareholder agreement, we did all that and we decided that we want to grow 10 stores a year, which gives us a hundred stores for the next 10 years. And that’s our goal. But I think we were too naive in terms of quantity and not quality. So now after a year and a half of updating our stores, we decided to not worry about the quantity, but more about the quality. Cause sometimes you can acquire that business that’s doing very good. let’s just say one store doing very good. And you can buy three stores that do the same as one store. So quantity doesn’t mean anything.

[00:11:50] So we decided to go with quality of life now. Anything scalable for us, you know, we can not just go to Nevada and open one store. So we look at the cluster of stores or restaurants, and even more, we look at people who’s going to manage those stores. Who’s going to take over on that market. Do we have the right people? And, is that market for us. And is it scalable? We don’t just want to acquire that market without being able to scale it and serve the community the way it should be served.

Robert Brill: [00:12:23] So, so Johnny, let me ask you this. When you said you want quality, what are some of the factors that goes into making one store be a quality store? If you have one store, then you have three of them that have the same numbers as that one. What are some of the factors that play there?

Johnny Baklini: [00:12:45] So sometimes you buy off of potential. A business that’s doing average and you know you can bump it up. Maybe they have bad customer service. Maybe they have a bad sales. Maybe they have not enough training. Maybe they don’t have the culture, maybe its their staff. We  don’t know. What makes the decision for good or bad store in any business is the bottom line. So is this bottom line worth our investment to go to a new market, invest in new people, having a team in UHR, new laws, everything changes. So because we’re not just in one state, we’re in different States. So anytime we go to a different state, we have to learn all those new laws, all those new job related decisions or laws that we have to adapt to. It’s a huge, huge decision, but we look at the bottom line, we look at the internal investments and we look at, the potential.

Robert Brill: [00:13:41] So do you find yourself in a situation where, let’s say you meet a person who wants to sell their store and you can tell the owner’s a no person or that person, if you ask them that question that you talked about earlier, they’re like a three, but like, can you automatically go into that meeting and be like, all right, this person is a no person, which clearly means that their customer, their culture is not going to be strong. Which therefore means the massive opportunity that you’re buying is the ability to revamp the culture. You then revamped the culture, and now you’re going to get, I’m making it up, 25% more sales or a hundred percent more sales. Is it that simple? Like how do you develop that feel like, how do you know when you go into a meeting? Like, okay, this is a win, this is loss.

Johnny Baklini: [00:14:32] It’s knowing your enemy, it’s knowing the store and knowing what you do. If you want to be successful in anything, you u have to love what you do and know exactly what you do. A lot of people try different things, but that’s a different topic. First, I visited the stores, for an image of the management, right? So you can see the feed. You can actually know what you can or can not do better. So before I meet the person, I’d rather walk, meet them at their location so I know the vibe, and I know how things are happening and I can see, people reacting to the management being there. And I can see all that stuff in front of me that gives me the better knowledge to negotiate. I mean, we don’t negotiate on potential because I’m not buying potential. I am making some potential. So a value that I’m going to add in the future. I don’t go to a meeting and tell them, hey, this is what I can do, therefore, that’s how much I’m going to be paying. No, I look at what that they already have. I look at the numbers. I look at the bottom line, the potential I have. It’s good for me. And then I negotiate off that and make things sound a little bit more dangerous, and it seems like, Oh, this is happening. You’ve always got to have something to negotiate.

Robert Brill: [00:15:52] So that’s really interesting. Why do you go to new States? Why aren’t you expanding into the markets that you’re currently in? Are there some like capital limitations there?

Johnny Baklini: [00:16:04] No, I mean, in California, sadly, the new laws are not favorable for the business. But it doesn’t matter, we’re looking to pursue this right now in California, so it’s not really making us change the decisions that we want to do or not go to that market, but we’ll look for opportunity. It doesn’t matter where, it could be in India. It could be, it doesn’t have to be in USA, it could be anywhere once there’s an opportunity. And once you know, you can improve it and make a change and help people go with it. Cause it’s all about people and elevating people. If you can elevate people and help them grow in any way you can and make a change, then we’re all for it. Remember, business is not just a way to make money. It’s also a way to elevate others and go others. And that’s how we look at it.

Robert Brill: [00:16:56] That’s really interesting. What’s interesting to me, is that a lot of what you’re telling me about how you’re growing your business and making each store more profitable, it’s really about the people and the culture.

Johnny Baklini: [00:17:11] Yes, I mean, look at it this way, the more you make money, the more you can spend money. So the more you can pay your people, the more that you elevate them, you can invest in the education. We have people that  started with us with nothing, and not being able to afford a car. And now they are directors and now they are supervisors and now they make money and that’s because we invested in them.

[00:17:41] We have a family feel. So what I mean by family feel is if your son come to you one day and tell you, Johnny, I got a C, you don’t just fire them. You invest what elevates them to get an A, and that’s how we are, we don’t fire or just give up. And if someone is failing, that’s because we fail. So we invest in them, elevating them because their success is our success. That’s why I think we are very successful.

Robert Brill: [00:18:06] So Johnny, I can tell you’re the type of person who I would want as a boss. I can tell you that very, very specifically, because I’m the type of person who I would not want as a boss, I’d much rather work for you than work for me.

Johnny Baklini: [00:18:22] I think you’re a great person. I think you undervalue yourself.

Robert Brill: [00:18:26] Thank you, so let me ask you a question here. The challenge is like, I think it’s very hard. To hold the power of culture to grow a business. Because either it’s an expression of who you are, or it’s not an expression of who you are. If you’re the type of person where it’s hard to cultivate culture, you got to buy culture. And that’s what we did within our organization. When I say buy culture, I just mean like I hired someone, our COO, who he thinks about culture much more than I do, I think about the business, but I’m enamoured with the business side of things and I love the work that we do. So Johnny, are there any other business practices outside of building culture that you use to grow your business by? Do you do marketing and advertising, or is it purely about culture and like that’s how you grow your business and how, and what are the levers that you pull.

Johnny Baklini: [00:19:23] So we are a national company. We are a franchisee, we are a small part of a huge company that invests a lot of money in marketing and all that stuff, and we’re very glad for the effort they do and they very successful. As a local owner in the local business. I focus really on local stuff. I mean, we advertise just to share the new products, we advertise to show people what we have, but what we do really is be part of our community.  Without the community, we’re nothing. What we try to do, and we do it because it’s in us, it’s our value, it’s our ethics. We don’t do it for that return. We do it because we want to do it. And all our employees are welcome to join us anytime they want, and we all go do it together. So we serve the community by providing pizza for the less fortunate people, during the pandemic we served more than 12,000 pizzas to essential people and first responders to everybody.

[00:20:26]I’m not sure if you remember the earthquake, during the big earthquake that hit the very next day. I went with a lot of coworkers, family members. I called them, we went, we opened that store, even though everything was shaky. We opened that store and we served, I think about 1300 pizza free for everybody because they didn’t have means to cook. They didn’t have means to actually have time to do that. So whenever there’s something you need, we are the first people on the line to be with our community, hold each other hands and elevate everybody. It’s all about people. As I said, yes, the culture start within your organization, but it doesn’t mean that you can spread it outside. And that’s what we try to do. I feel every person has a reason why they were born, there’s a reason why I was born. There’s a reason why I’m doing this, and my partners are doing this with me because we have a mission. Our mission is, in my opinion, my personal mission is to, draw a smile on people’s faces. So anything we can do that can make someone smile, we’re all for it.

Robert Brill: [00:21:31] That’s incredible, man. I love this, like this is a great vibe.

Johnny Baklini: [00:21:39] Tony Robbins was a hundred percent right when he said, the secret to happiness is giving. The more you give, the more happy you’ll feel, and that’s proven with my experience. Every time we do something, the amount of happiness that we feel and I feel is just enormous, and that it’s almost like an addiction and you want to do it more and more and more because really nothing else in life matters.

Robert Brill: [00:22:03] I love it. So Johnny, as we wrap up, you’re in the food business, are there any specific types of foods that you love? I’m a big foodie. What should I be eating if I’m in your neck of the woods?

Johnny Baklini: [00:22:15] Well, other than little Caesars obviously I was going to say, I love sushi. I’m a big fan of sushi. I do have it maybe once a week. Italian food too. I’m a very big fan of Italian Restaurants

Robert Brill: [00:22:28] Well, how should, if people want to reach out to you for more information or to see your store, how can people reach out to you?

Johnny Baklini: [00:22:39] I can give you my email, [email protected]. You’re free to email me.

Robert Brill: [00:22:45] Very good, Johnny Barkley. Thank you so much.

[00:22:52] Thank you for listening to this episode of the LA business podcast. If you like what we’re doing on this podcast, please consider subscribing on Apple or Google play. Leaving a five star review and sharing with your friends. If you have any questions, comments, or recommendations for a guest you’d like to hear on this podcast, please email me [email protected] .

Thank you. Have a fantastic day.

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