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Business Observer Friday, Aug. 7, 2015 6 years ago

Super paella

An entrepreneurial chef turned a farmers market paella stand into a franchise catering operation that can feed hundreds of people at a time.
by: Jean Gruss Contributing Writer

If you've visited the farmers markets in Naples, you may have seen Paul Schmidgall stir up a batch of his famous paella.

Although the classic Spanish dish wins over the farmers market crowds who pay $9 for a pint-sized container, Schmidgall has harbored much bigger ambitions for the business he started four years ago.

Today, the Naples entrepreneurial chef sells franchises of Fire & Rice, the paella catering business he created that includes everything from the pans to a trailer to transport the equipment to parties, events and festivals. “They'll drive away with a business in a box,” says Schmidgall, who plans to ink his first two franchise agreements at an upcoming trade show in Atlanta.

Schmidgall's business has humble roots. In the beginning, he transported a burner, paella pans, a cooler full of ingredients and a tent to farmers markets in the area with his car. Since then, he reinvested in more equipment that included trailers with his company's logo.

The chef learned how to make paella while stationed in Europe with the Air Force. On a trip to the Spanish island of Minorca, Schmidgall learned to make the classic dish that combines rice with saffron and a variety of meats, seafood and vegetables in a single pan. “I'd never seen anything like that,” says Schmidgall, 45.

After leaving the service in 1994, Schmidgall attended culinary school, became a private chef to a Naples family and earned an M.B.A. degree. In 2011, he started making and selling paella at farmers markets in the area, perfecting the dish. He uses ingredients from Spain, including saffron that costs $1,000 a pound. “I just reinvested in the business,” he says.

While the farmers markets and other public events are profitable, the key to these events is to use them to garner catering opportunities. For a private party, Schmidgall charges $27.50 per person with a minimum of 20 people. During the busy season, he caters 40 to 50 events per month.

Part of the appeal of the business is that the initial investment is lower than opening a restaurant or buying a food truck. The Fire & Rice franchise fee is $25,000 and the equipment costs $25,000, including the trailer. “It's a low-capitalization business,” Schmidgall says.

Although franchisees don't have the typical restaurant lease expense, food-safety laws require them to rent space in a commercial kitchen to prepare the ingredients. Also, they have to rent space at farmers markets. For example, renting a space at a Naples farmers market for the winter season can cost from $700 to $1,000.

Cooking paella is simple: All the ingredients go into one large pan, one of which measures 5 feet across and can feed 175 people. The cooking process takes just 45 minutes and it doesn't require great cooking skills. After preparing a dozen paellas, anyone can cook one. “It's simplicity,” Schmidgall says.

But the process of franchising the idea was anything but simple. Schmidgall estimates he spent more than $40,000 to draft the franchise documents and marketing. Schmidgall, who provides three weeks of training, says he also requires franchisees to spend 5% of sales on marketing in their area in addition to the 6% royalty fee. Generally, franchisees will get the right to territories with at least 750,000 people.

Schmidgall says he projects selling 50 franchises over the next five years and 300 or more in the next decade. “We've invested four years to get to this point,” he says. “I've financed everything myself.”

Follow Jean Gruss on Twitter @JeanGruss

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