Fresh-Slicing Franchisor

EMERGING SYSTEM
“I need people who aren’t afraid to
work long hours, enjoy what they do,
and interact with customers and staff.
We need lively, energetic franchisees.”
Even in his first days working in restaurants, he was
always on the lookout for best practices and ideas for
franchising. “I was travelling all over the States,” says
Krallis, describing his quest. “My sisters live in Atlanta,
and I would drive down and stop in different cities and
look at different concepts. I zeroed in on sandwiches and
the sandwich concept. I took the best of everything and
combined it.”
Building a unique concept and strong culture
Krallis says he got his inspiration for Dagwoods’ standout
feature, on-site sliced deli meats, from convenience
stores in Vermont, where he used to vacation. When he
observed how strong the customer demand was for the
fresh approach, he knew it would be a hit in a restaurant
setting. “I saw that concept and said, ‘Let’s eliminate the
whole convenience store, but just slice cold cuts fresh in
front of customers.’” His travels also inspired him to come
up with Dagwoods’ signature sauce, which he even mixed
himself in small batches for his first 10 restaurants.
Ever the researcher, before he even started Dagwoods,
Krallis sought to educate himself in the ways of
other restaurants, with roles at Burger King, Giorgio’s,
and even as a partner in a Pizza Pizza franchise. But it
was as he started opening more of his own restaurants
that he realized that he wanted to build not only a restaurant,
but an employee culture. “I opened my first location
and it did well, then opened up a second and a third and
realized I was having fun doing this with my employees,
and I had created a good culture,” recalls Krallis.
By the time he reached 20 locations in 2006, he decided
to take that culture and make it the heart of his operation.
He sold his first five franchises to his own employees,
whom he financed to buy existing locations. “The guys
jumped in there wholeheartedly,” recalls Krallis. “They
had been working at Dagwoods for five or six years.”
While a couple of those early franchisees are still
with the chain, Krallis even takes pride in the success
of those who have moved on. “Of those first five franchisees
that came on, two of them started as franchisees at
age 22 and 23, and at 27 and 28, paid off their stores and
sold them for $300,000,” he says. Today, Dagwoods is 100
per cent franchised.
Now Krallis has taken that culture and formalized it
in his stores, with regular staff events and outings, and
motivational programs that award the top stores with a
bonus and staff party. “We try to do at least one big bash
a year for all of the employees. We go out to a hockey
game or dinner. We spend a lot of time in our stores, and
we’re very close with our franchisees. Our franchisees
know each other and talk amongst each other, and it’s
good for morale.”
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