In a Family Franchise Business, Don’t Delay Planning for the Next Generation

Since opening his first Zaxby’s restaurant 26 years ago, Gary Avants knew he wanted to create a family business that would outlive him and his children. Avants Management Group has since grown to 33 locations. “People ask me, ‘Gary, why do you keep growing?’ And I say, well I was growing to get my children involved in the business,” he said. “But now I’m growing for the grandchildren. My plan is for AMG to be around 100 years.”

Avants’ children, Melissa Crowe, MaryStuart Hulsey and Jordan Avants, work for the company as vice president, head of marketing and director of human resources, respectively. The Zaxby’s operators have been succession planning for three years to keep the business in the family. The group voted and ultimately chose Crowe to take over when Gary Avants retires, which he expects to happen in a few years.

Franchisees can plan for succession in different ways, but preparation is key. When it comes to franchisee succession planning, it’s not as simple as handing off the business to your next of kin, said Jennifer Pendergast, executive director of John L. Ward Center for Family Enterprises at the Kellogg School of Management at Northwestern University. The franchisor needs to approve new franchisees in its system.

“They don’t automatically grant the right that your franchise would be allowed to pass to the next generation,” Pendergast said. “They’re not necessarily going to approve that next owner, and they’re looking very carefully at that person. They want to get to know them very well.”

The situation is different for the Avants children, as they’re already part owners of the company. “We’ve already been approved as licensees, and that came for me 14 years ago,” said Crowe, now 37. When her father started the business, she was 10 years old. She considers taking over the company to be a privilege. “I want to protect our business. I want to grow our business. I enjoy our business,” she said.

For franchisors approving a franchisee’s succession plan, Pendergast said a best practice is to ensure one person has the sole decision-making rights of the business. If you have parents who pass the business onto their three kids, rather than just one, it’s easier to run into issues, she said. “All of a sudden, I have this one person that I felt was qualified and capable, and now it’s gotten a lot more complicated because I’ve got three people involved,” Pendergast said.

On the franchisor side, succession planning can be a bit easier on that front. But for J.R. Galardi, Wienerschnitzel’s CEO, taking over the position from his mother in 2022 took plenty of planning—and the approval of his mother and the company board. He spent the better part of a decade working his way up the Wienerschnitzel corporate ladder to learn the ins and outs of the business. “I’m a big, big believer that if you want to change things or control things, you need to understand things,” he said.

Galardi’s father founded the company and served as CEO until he died in 2013. As a kid, Galardi worked in a Wienerschnitzel store, where he spent time learning all the positions (the drive-thru was his favorite). After graduating college, he was iffy on staying with the family business. “When he got sick, sometimes the world just kind of forces your hand,” Galardi said, in reference to his father, John.

In 2012, he started out doing some lower-level marketing work, including tasks like switching out stickers on menu boards. “So, it took about eight to 10 years from putting stickers on the menu board to CEO,” he said. He ultimately worked as the brand’s president before his mother retired from her position as acting CEO in 2022.

“There was a plan in the beginning. But as Mike Tyson says, ‘Everyone has a plan until getting punched in the face,’” Galardi said. The initial plan had a five-year timeline set for him to take over, “but five years really isn’t enough to truly understand the business,” he said. “I think 10 years is a good amount of time. Twenty is better.” He continued, “I never pushed to be in a leadership role faster. I was very eager to just learn everything I could.”

Two of the three Lee brothers were promoted recently to C-suite positions at their father’s Korean restaurant business, The Flame Broiler. Eldest brother Daniel Lee worked as the head of brand and technology for more than eight years before he transitioned to chief technology officer and chief marketing officer in January. Middle brother Christian Lee was promoted from head of business operations—a role he worked for five years—to chief operating officer in January.

The pair grew up in the business, learning the different in-store positions and, once they were old enough, learning more about the corporate side of things. The team had been asking the Lee brothers about taking on more official leadership roles for “a while, and we kind of put it off because we felt like we had a lot to learn,” Christian Lee said.

He’s worked for a few different companies, but he didn’t feel the same about the culture as he does with Flame Broiler. “We all have a shared vision and values, so we all want the same thing,” Christian Lee said. That mission? Serving healthy, good-tasting food to communities. “If the relationship and the shared vision wasn’t there, I probably would have been a lot less inclined to” stick with the business.

When the time was right, the Lees said they felt ready to take Flame Broiler to the next level with an expanded leadership team. “We started with our skillset and dedicating the past decade-plus learning all the ropes of the business and all the intricacies of what goes on in a successful restaurant franchise, and we’re ready to do that,” Christian Lee said. “Growth is something that’s driven by our people. When our people grow, our company grows.”

Whether a franchisor or franchisee, succession planning—if that’s the goal—should be top of mind early and discussed often to ensure no aspect gets overlooked.