Sarasota's Mr. Friendly

Sarasota's Mr. Friendly

From Sarasota to Orlando, Steve Sandor and partners are opening new Friendly's restaurants and discovering success. Their first location, in Sarasota, is third in the national chain in annual sales.

By Sean Roth

Real Estate Editor

The past two years have been exciting times for empty-nester Joe Sandor. Since 2002, Sandor has become a co-owner of 12 restaurants with contracts to develop 28 more over the next 14 years.

Sandor's growth vehicle - the Friendly's restaurant franchise - is proving highly successful. Ultimately, his newfound success boils down to timing and having the guts and business acumen to act on his dream of moving to Florida and opening a restaurant.

In January of last year, Sandor, Joe Camera and Carmine and Fred D'Ariano opened a Friendly's at the southwest corner of Lockwood Ridge Road and University Parkway in Sarasota.

The restaurant turned more than a few heads at the Wilbraham, Mass.-based Friendly Ice Cream Corp. The location set sales revenue records for both opening day and opening week. And in the company's 2003 ranking, the startup was third in total sales of all Friendly's franchises in the nation.

Late last year, the partners opened a second location at 6606 S. Tamiami Trail, Sarasota. And they are currently under contract to develop three more restaurants in the Sarasota-Manatee county market within four years.

In the meantime, officials at Friendly's Ice Cream Corp. were searching for ways to increase the corporation's presence in Florida. Sandor, the former Friendly's regional manager David Buchman and eight minority partners agreed to buy 10 stores in the Orlando area for $3.15 million. The partnership, called Central Florida Restaurants LLC, also agreed to develop another 25 restaurants over the next 14 years.

Sandor takes the recent excitement in stride. "It was all part of our plan for development," he says. "It has taken a long time to get to this point. When the kids got old enough to move out of the house, it was our dream to move to Florida and do this."

The success of the first two restaurants and the additional 10 locations surpassed expectations, he says.

A New Jersey native, Sandor held various roles at restaurants, eventually progressing to owner of a seafood restaurant called the Clam Casino in the early '80s. But Sandor found the time demands of the restaurant too consuming. So in 1987 he sold it to become a manager of a Perkins restaurant.

After years of vacationing on Longboat Key, Sandor and his wife moved to Sarasota in 1995. He purchased a restaurant and opened his first Half Baked Cafe, a family-style restaurant. That same year, he purchased a second larger location in Venice, about 6,000 square feet, with the added advantages of a full-liquor bar and room for a night club.

"We ran both restaurants for a couple of years," Sandor says. "But I was not pleased with the numbers at the Sarasota location. So I decided to sell (in 1997) to focus on the Venice location."

Then the Friendly's bug bit.

"I was looking for a concept that would allow me to grow," Sandor says. "A concept that would be systematic and easy to grow. Something that could handle the seasonality of Florida. So I thought how about ice cream in the summertime? Coming from New Jersey, I was familiar with Friendly's as a concept."

The problem was the cost of a Friendly's franchise. On average, a freestanding franchise restaurant costs about $2.1 million to build, including the cost of the land, construction, furnishings and other extras.

Luckily, Sandor bumped into Camera, a retired New York businessman and a Half Baked customer. Camera had built a shopping center and supermarket deli business in the New York area before retiring to Florida.

"I discovered we had the same marketing philosophy," Sandor says. "I told Joe I was going to fly up to Wilbraham to look at the Friendly's franchise and asked if he wanted to come with me."

After a presentation by the Friendly's crew, he says, "I asked Joe, 'What do you think?' And he said: 'Let's do it.' "

Camera and Sandor were granted an exclusive contract to develop five franchises in Manatee and Sarasota counties.

Meanwhile Fred D'Ariano of New Jersey was looking into developing a Friendly's restaurant concept in Florida. To finance the deal, he partnered with his father, Carmine D'Ariano, a retired New Jersey businessman who had retired to Longboat Key.

When they contacted Friendly's about buying the franchise contract for the Sarasota-Manatee market, they were told that the market had already been sold, but that they could contact the new owners - Camera and Sandor.

"After several phone conversations, we decided to formed a partnership with the four or us," Sandor says. In 2001, he sold the Half Baked Cafe Venice restaurant to more closely follow the future Friendly's site development.

After searching for locations for the debut restaurant, the owners decided to buy a 1.2-acre parcel next to a brand new Carmike Royal Palm 20-movie theater at the northwest corner of State Road 70 and U.S. 301 in Bradenton. The owners put a contract on the property. While driving on University Parkway, Sandor found a second site on the Lockwood Ridge/University area.

Simple it wasn't.

Several months later, the partners obtained building permits to start construction on the S.R. 70 location, but it was not to be. Before the partners could buy the land, Columbus-based Carmike Cinemas filed for Chapter 11 bankruptcy protection.

"The site went south on us," Sandor says. "The Carmike site had mechanics' liens on it and because of the way the parcels were arranged the lien affected our site as well. We couldn't get a free and clear title. It was disappointing. We had a considerable investment in that property."

Instead, the partners decided to develop the Lockwood Ridge site first and then a site on South Trail.

By that time, however, the Lockwood Ridge property had run into trouble. The property was small, about 1.3 acres, and landlocked, which meant the engineer and architect had to design creative ways to deal with the county's building requirements.

"Our biggest problem came from water retention," Sandor says. "We eventually had to take it underground. It was a long process. There were a lot of permitting challenges. It just took a long time to start development."

The Sarasota office of R.E. Crawford Construction started construction on the restaurant in September of 2002. When the restaurant opened in early 2003, the partners' fortunes changed.

"It took 20 months to develop," Sandor says estimating that the delays and extra requirements added an extra $200,000 to the cost of construction. "But if you asked me, knowing what I know now, would I do it again? Absolutely."

On the restaurant's first day, the crew planned to put a "Now Open" banner on the building. From 7 a.m. until 11 p.m., the restaurant saw a steady stream of people.

"We never even had time to put the banner up," Sandor says. "We opened without any marketing and we broke the franchise record. We didn't spend a dime on marketing for the first six months and we did great. We had to have a truck with a freezer running out back just to keep up."

Sandor says the Lockwood location produces annual revenue of about $750,000 more than the average Friendly's location, which typically has annual sales of about $1.7 million.

Compared to the problems with the Lockwood Ridge property, the South Trail location, which was merely a renovation of an existing restaurant location, opened smoothly. While demand has not been as high at the South Trail location, it has met projections and revenue is above average for a Friendly's.

Sandor wanted to expand, particularly into Florida's East Coast, but he knew he needed someone with local market experience in Central Florida. Enter Buchman. The local franchise consultant for the partnership in Sarasota also supervised the Orlando market stores in the '90s and knew their strengths and weaknesses.

"He was a really experienced guy ... just a real good operator," Sandor says. The two became partners and put together a group of eight additional backers, including Bob Crawford of R.E. Crawford Construction.

So Buchman and Sandor met with Friendly's officials and laid out their case.

"We knew they wanted to grow quickly in Florida, and we also knew their corporate growth outside of the New England market had been slow," Sandor says. "We suggested that local operators had the personnel in place and the local market knowledge to grow much quicker."

The Friendly's corporation sold the 10 partners on developing in the Orlando market, which includes Brevard, Flagler, Lake, Oceola, Orange, Marion, Seminole, Sumter and Volusia counties.

The deal allowed the 10 partners to take over the 10 existing stores for a song - roughly a fifth of the initial development cost at $315,000 per store. But for that price the partners were obligated to open 10 franchise stores the first seven years and 15 in the following seven years.

Asked if the development schedule worries the partners, considering their prior commitment to the Sarasota-Manatee market, Sandor says, "No. It was pretty much where we had wanted to go in the first place following our business plan. David would run the operations in Orlando, and I would focus on the development and finding the areas to expand."

As for the 10 stores bought by the partnership, Sandor says they were all revenue positive when they were purchased. And in the first three months under new ownership, all 10 have reported double-digit revenue increases over last year.

As for future growth, the Sarasota/Manatee County group his signed a contract to build on State Road 64 across from a new Wal-Mart Supercenter, which is now under construction. The Wal-Mart, which will be built by Palmetto-based Zirkelbach Construction Inc., is set to open in May of 2005.

"It's exciting," Sandor says. "The biggest stumbling block is human resources. We have really good infrastructure (i.e. bank backing). Money is not really tight right now. We are grooming people in the existing stores."

The local four-person partnership banks with Bank of Commerce, and the 10-person Orlando market group uses GE Franchise Finance for development and banks with Bank of America. There is a still a lot of room to grow the company in the nine-county market, Sandor says.

"You just have to beat the bushes," he adds. "You just have to find what new development is coming. We tend to follow the big boys. While the interior of Orlando is built out there is so much growth on the outskirts - just 15 to 20 miles outside of Orlando. To me rooftops are the key. Traffic can help or hurt you, but your bread and butter is the local family that makes you their spot to go."