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Pancake Tower
By Sean Roth
Real Estate Editor
Big changes are happening at IHOP. The 50-year-old restaurant chainis new management group is transforming the company into a more traditionally structured franchise system. In the past three years, IHOP has made a dramatic turnaround from slacker to industry darling.
Itis easy to see where IHOP corporate found the model for its changes. Meet Bob Leonard and the North Miami Beach-based FMS Management Systems. As the largest IHOP franchiser, the chain owns 135 restaurants throughout Florida.
Leonard, 59, was hired by a South Florida family in 1981 to take over management of the IHOP concept in Florida. At the time, the family owned about 94 stores. Over the past 20 plus years, Leonard has replaced at least half of those stores and added another 41 restaurants, making the franchise one of the 50 largest franchise chains in the United States.
Leonard started in the industry when he was 14 as a dishwasher for Rastrelliis in Iowa. He worked there four years.
While at the University of Iowa, Leonard managed the Red Ram. After graduating from college with a business major in marketing and a minor in economics, he was drafted into the U.S. Army.
But his experience kept him out of Vietnam. Leonard supervised civilian cooks at a hospital in Fort Carson in Colorado Springs.
After the army, Leonard got a job managing a nearby restaurant while he looked for a marketing job. This brought about an epiphany.
iI realized I made more money running a restaurant than I would in marketing,i he says. iOne day I was looking in the mirror when I realized I enjoyed what I was doing. Most people donit have clearly defined ideas of what they want to do they are just going through the motions.i
A year later, Leonard moved to San Diego and took a job as national director of field training for Royal Inns. In 1973, he went to work for IHOP on the corporate level.
iI was probably supervising 17 or 18 stores in the Los Angeles market,i Leonard says. iThe farthest ones were probably 100 miles apart. I was successful with that, and I was promoted again. They put me in charge of an entire region.i
In 1978, Leonard became vice president of operations. Shortly thereafter, he was approached by a South Florida family.
iThey offered me a job helping them develop restaurants in Florida,i he says. iThe father of the family had been having some heart problems. It was one of those offers I couldnit refuse.i
The new job offered stability and time at home. As much as he enjoyed the national job, he was on the road a minimum of three weeks a month.
iI was in my early 30s and I thought if I ever wanted to have a life outside of work I needed a more stable environment,i he says.
Plus, it paid more. Although, the job was initially just to provide marketing and operational help to the company, Leonard was quickly promoted to president and CEO.
Asked what changes to the corporate level will mean for FMS Management, Leonard says it wonit change much. FMS Management is unique in the IHOP system in the way it handled its property and equipment.
Until 2001, when CEO Julia Stewart was appointed, IHOP Corp. survived mainly on rental fees. IHOP would find the locations, build the buildings and add the equipment. The franchises were then leased to franchise operators. Except of course for FMS Management, which always developed its own site and owned its own property and equipment. Now IHOP corporate wants all its franchisers to own their own properties and equipment and to pay IHOP a royalty fee.
iIHOP has evolved substantially,i Leonard says. iBut in our business the only constant is change.i
Leonard attributes his companyis success in Florida to the growing population and ibetter food.i
iObviously our staff has a lot to do with it as well,i he says. iThis is a great market. If a restaurant isnit here yet, itis coming. Consumers have a wide range of choices. But IHOP has a history as one of the oldest restaurant chains and of having very high standards for their food from day one.i
As for the Sarasota-Manatee area, Leonard says: iItis a good market. It really started going the past three years. For a number of years it was more seasonal than a lot of other Florida markets.i
Leonard plans to open another 10 stores this year.
iYou really need a blend (of a good location and the right people),i Leonard says. iIf you give a bad site to a good manger itis going to be underperforming.i
Leonardis main concern for the industry on the national level is government interference and litigation.
i(Both) have totally changed the way we do business from about 10 years ago,i he says. iTourism is another thing we are concerned about next summer. Are people going to be comfortable coming here next August or September?i
Similar to Leonardis own history, all of his chainis vice presidents worked their way up in the restaurant industry.
i(In this industry) you can go as far as your capabilities take you,i Leonard says. iNo one starts as a manager.i
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