business news - Deborah Burst

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Smoothie King Executive Vice President Richard Leveille will gamely indulge some straightforward business talk. He readily discusses how the Covington-based smoothie giant has surpassed 600 franchises, including dozens of shops in South Korea and Egypt. But there’s more on his mind than dollars and cents, and he bides time until the questions end and 14 September/October 2010 Business P R I V A T E C O M P A N I E S 3 Private Companies to Watch in 2011 Donahue Favret Contractors, FARA and Smoothie King — Find out how these North Shore companies have more than just weathered the financial storm SMOOTHIE KING A HEALTHY INTERNATIONAL PRESENCE AND A STRONG NEW ORLEANS CONNECTION YIELD SUCCESS IN A DIMINISHED LENDING CLIMATE By Ben Myers Staff Writer ben.myers@nopg.com he’s asked if he’d like to add anything. Then he gets philosophical. “We really feel there is a social purpose for our being,” Leveille says. That purpose, in Leveille’s telling, sounds like any ad campaign you might imagine for a smoothie franchise concept: providing a distinctly healthy product that is Adam Payne assists customer Maggie Miller at the Covington Smoothie King. Headquarters: Covington President and CEO: Steve Kuhnau Principal business: nutritional smoothie franchise Founded: 1973 Employees: 60 in corporate office; 600 franchises worldwide Why this company matters: Smoothies are a global phenomenon and Smoothie King claims to have invented them. 2009 2008 Revenue $162 million $148 million Employees 57 60 Source: North Shore Report staff research enjoyable in its own right. But Smoothie King’s history reveals some genuine health food credentials. Founder Steve Kuhnau devised a nutritional fruit drink in the 1960s to contend with his low blood sugar, and Smoothie King claims that’s the origin of the smoothie. In any case, the invention was beneficial enough that Kuhnau
opened the first store in 1973. Smoothie King is now global. Beyond South Korea and Egypt, new franchises are expected in Japan and Turkey. That international presence is helping to buoy Smoothie King in a lending environment that almost seems designed to hurt a franchise corporation. Smoothie King caters to first-time business owners looking for solid, straightforward opportunities, Leveille says. That means the pool of potential Smoothie King franchisees tends to evaporate along with small business loans. “It’s a challenge for the small business owner,” Leveille says, referring to the current The national economic crisis of 2008 and 2009 spared no victims, especially in the credit-dependent construction industry. The legions of sufferers included Mandevillebased Donahue Favret Contractors, which saw its volume plummet from $82.5 million to $44 million from 2008 to 2009. But contractors throughout the country are counting their blessings if they’ve emerged like Donahue Favret. climate. “The small business lenders have created a criteria that only allows lending to people that have been established in business for many years.” But Smoothie King also has a wild card in its pocket, and the company has played the card successfully throughout its existence: the familial culture of the New Orleans area. Leveille reasons that migration from the New Orleans area is the biggest reason for Smoothie King’s proliferation to Houston, Atlanta, the northeastern United States and elsewhere. As Smoothie King expanded to Houston in the 1990s, Leveille remembers ushering a franchisee around that city, trying to con- DONAHUE FAVRET CONTRACTORS 2011 COULD MARK A RETURN TO PRE-RECESSION VOLUME, THANKS TO A BALANCE OF PUBLIC AND PRIVATE PORTFOLIOS AND A CERTAIN $108M PROJECT For one thing, there were no layoffs, says vice president Maura Donahue. Sure, there was obligatory fat trimming, but Donahue Favret managed to keep its 45- to 60-member work force in tact. Secondly, the family-owned company, along with Florida-based Welbro Building Corp., just landed a very big deal: the renovation of the Hyatt Regency New Orleans. Completion of the $108 million project is vince bankers to take a chance. But no one knew what a smoothie was, and they were rejected nine times. Then the president of the 10th bank happened to be from New Orleans, and he went with it. Now there are 70 Smoothie Kings in Houston, dwarfing the 40 in the New Orleans market. “Many of our franchisees have come from New Orleans. They have been longtime guests of stores in New Orleans all over this marketplace, and then they’ve been transferred or moved, or they told a brother about it,” Leveille says. “That has helped our growth.” Donahue Favret Contractors continues work on the J.B. Lancaster Elementary School in Madisonville, to be completed in the spring. The company has found stability in balancing public and private portfolios. Headquarters: Mandeville President and CEO: John Donahue III Principal business: construction Founded: 1979 Employees: 48 Why this company matters: Donahue Favret will renovate the Hyatt Regency in New Orleans, another feather in the cap for the local company in an uber-competitive market. 2009 2008 Revenue $44 million $85 million Employees 48 60 Source: North Shore Report staff research expected by the fall of 2011. The Hyatt Regency is important not only as a high-profile milestone, but as a buoy heading into next year, Donahue says. But the crisis isn’t over. Katrina-related projects aren’t as abundant, and the halting financial market con- See PRIVATE COMPANIES, page 16 September/October 2010 15
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business news - Deborah Burst

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