Episode 321: 06-18-15
On this week’s show we sit with Sidney J. Feltenstein as he discusses his career in franchises and sheds light on the industry, NFL football trainer Terek Maddox shares his summer fitness tips, and Jim shares his South Florida retail market analysis.
Sidney J. Feltenstein is the past chairman of the board of Yorkshire Global Restaurants and a member of the International Franchise Association’s Hall of Fame.
Feltenstein began his career at the Procter and Gamble Company then he held senior positions at Dunkin’ Donuts and Burger King Corporation. He then led an investment group that bought A&W Restaurants in 1995. Under his leadership, the chain grew from 450 to nearly 1,000 units in five years.
In 1999, Feltenstein and his investment group purchased Long John Silver’s and formed Yorkshire Global Restaurants. Company sales grew five times, and its operating profits grew 40 times. He sold this company to Yum! Brands, Inc., in 2002.
After leaving Yum! Brands, he founded Sagittarius Brands and acquired Captain D’s Restaurants and Del Taco Restaurants. Both totaled approximately 1,100 locations and $1 billion-plus in revenue.
We will discuss his fascinating career path and the benefits of owning a franchise.
Terek Maddox trains future NFL Hall of Famer Frank Gore and the Miami Dolphins’ Lamar Miller. Hear his summer fitness tips.
It’s summer. It’s hot. And Jim has a white-hot South Florida retail market analysis for us.
Episode 321: 06-18-15 (To download, right-click and select “Save Link As”.)
Announcer: 880AM The Biz. South Florida’s only all business station welcomes you to Fried on Business. He grew up in South Florida. Has been in business here since the early 1990s and as closed over one billion dollars in deals. He’s seen it all. He always ha an opinion and he’s always ready to share it. Informed, entertaining and connected, he has his finger on the throbbing pulse of South Florida’s business community. He’s Jim Fried. Exclusively on 880AM The Biz. To talk to Jim and his guests call 305-541-2350. That’s 305-541-2350. Now here’s your host Jim Fried.
Jim Fried: We’ve got a super show for you. Welcome to Fried on Business. We’re going to get going real fast. We’ve got Sid Feltenstein.
Sidney J. Feltenstein: Hello. Great to be here.
Jim Fried: Sid’s here. We’re going to talk about franchising. Sid is a Hall of Fame member of the International Franchise Association.
Sidney J. Feltenstein: Association, yes.
Jim Fried: Has been all of kinds of franchises. Will introduce Sid, but he is built up over a billion dollars worth of businesses. Will talk about how franchising can be your future as you grow your career. Will also going to talk about the Miami retail market and we’re going to have Terek Maddox at the end of the show floor fourth quarter. We’re going to talk to Terek about how to stay fit and healthy this summer.
The market went up probably in response to the feds discussion about interest rates increasing. Stick with us. We’ve got a great show. Will be back after this. Dee it’s yours.[Commercial Break]
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Jim Fried: As you know by now when you’re looking to buy or lease a car you want to give every advantage that you can. I always do. That’s why you have to check out Warren Henry Land Rover, Range Rover, and Infiniti, and Jaguar. There all exceptional cars and they all come with the Warren Henry Advantage. That means complimentary dent repair, key replacement first service and a personal assistant that you can call for anything anytime for four years. Always the best price. Always the best service. Always Warren Henry.
Announcer: South Florida’s only business radio station.
Announcer: Part of the Wall Street business network.
Announcer: 880AM The Biz. You’re listening to Fried on Business. To talk to Jim and his guest call 305-541-2350. That’s 305-541-2350. Now back to your host Jim Fried.
Jim Fried: We got a great guest for you today. Sidney Feltenstein is a Hall of Famer in the franchise world and I got to tell you wish you were here today because he brought his lovely wife Lisa. Hi Lisa. Vivian, Lisa says hi. Now Sidney has a wide ranging career from corporate executive to successful entrepreneur. He supports a whole bunch of nonprofits and we’re going to get right to.
Sidney has been involved with everything from A&W Restaurants to Long John Silver’s where he grew revenues by 40% of profits. He told the company to Yum! Brands. He then founded Sagittarius Brands which acquired Captain D’s and Del Taco. That organization has 1,100 locations and billions of dollars in revenue. He then begin his career at Procter and Gamble in managed several brands there. Sid welcome to the show.
Sidney J. Feltenstein: Thank you. What nice to be here. Thank you for inviting me.
Jim Fried: Thank you for bringing Lisa because now I know who to invite next time.
Sidney J. Feltenstein: That’s the best part of the show.
Jim Fried: A 100%. Now Sid, you got your start at P&G. It’s a place for every outlaw. Lot of good marketing people get their careers started. What did P&G help you learn as far as your franchising business later on?
Sidney J. Feltenstein: Well, Procter and Gamble is a great place. It was really my first job. It was a great place to go and learn and how to think analytically and it would also was wonderful and it was also wonderful from the standpoint and it gave me a great marketing background because I was in there marketing group. I was brand manager at one point. I did other businesses particularly as I got into franchising. I was able to bring a traditional consumer packaged goods approach to a retail business and in this case my first job in franchising was at Dunkin’ Donuts and in those days, when I first started there, what was fairly unique. Marketing was simply just advertising as opposed to looking at advertising as one marketing element and a complete marketing mix.
Jim Fried: How did he get up and make the donuts?
Sidney J. Feltenstein: Well, I really founded that.
Jim Fried: That’s great. That was you?
Sidney J. Feltenstein: Yeah. Well, I mean we had an advertising agent.
Jim Fried: Got to get up and make the donuts.
Sidney J. Feltenstein: I was the chief marketing officer of Dunkin’ Donuts when we did that.
Jim Fried: That was awesome!
Sidney J. Feltenstein: We won a whole lots of Cleo awards as a result of that.
Jim Fried: I think I might of remembered from what 30 years?
Sidney J. Feltenstein: Well, it was longer. I think it was a longest running advertising campaign in the history of the food service business. It was 18 years.
Jim Fried: Amazing branding.
Sidney J. Feltenstein: It was 18 years.
Jim Fried: Amazing branding. If I had a mustache I remembered the whole thing. It was great. You worked in Dunkin’ Donuts, you helped them with some marketing and then what?
Sidney J. Feltenstein: I worked at Dunkin’ Donuts. I was a chief marketing officer for 12 years, and we sold the company in 1991 to a British company called Allied Lions. Now it’s called Allied Domecq and I know of wanted to do something else and this really what brought me to Florida. I was offered the job as a world wide chief marketing officer at the Burger King corporation. Which is what brought my wife and I and my family to South Florida.
Jim Fried: So you helped us all have it “Our Way” is that the story?
Sidney J. Feltenstein: You helped to have it your way and it helped more people after I came in, more people had it there way than had been having it there way. Candidly, I always had the itch to do something a bit more entrepreneurial and one of the things that I had observed in the years I’ve been in the food service business was that restaurant brands, food service brands, rarely disappear. They fall on hard times and they make mistakes, they close units, they lose money, they make a little money, but it’s very rare the name of brand that ever disappear.
Jim Fried: Yeah. That’s true. Even the in the real estate businesses a brand or a project deteriorates, we call that an opportunity.
Sidney J. Feltenstein: I felt you could build a very large successful business. I thought you could built a large successful business on the backs of brands that had been struggling and that would the injection of the right management, the right strategy, and the right capital structure, they could be made to become bigger and better than they ever were. I decided to really pursue that as oppose to stay at a very large company environment with all the politics and everything and one finds a place like Burger King. No slighted Burger King, but big companies…
Jim Fried: No. It did have a very beautiful office in…
Sidney J. Feltenstein: It was great. The pink palace. It was great until hurricane Andrew came along.
Jim Fried: Hey, now Harry created a nice development opportunity.
Sidney J. Feltenstein: It was an opportunity for the construction business in South Florida. It’s about 50 million dollars worth of damage in 1991.
Jim Fried: But you left there. You went in…Did you….
Sidney J. Feltenstein: At A&W restaurants. I bought A&W restaurants for some private equity fund partners. That had been a brand that had been around actually before McDonald’s. Twenty years before went…They were the first really franchised brand there was. Started in 1917. Twenty years before we bought it. They were larger than McDonald’s, but they made a whole bunch of mistakes. Probably not worth going into, so when we brought it, when we bought it, it was really on the down slide.
I saw that as an opportunity because there’s no amount of money that you could spend that would generate the kind of brand awareness that they had. Even with the difficulties that they were having. We bought it in 1995. We bought it in 1995. Had a great deal of success with that and then in 1999 we bought a company called Long John Silver’s which had also, we bought it out of bankruptcy. It was a great brand name.
Jim Fried: I know exactly the unit in my neighborhood was up on 441.
Sidney J. Feltenstein: That’s right. It was a great brand name, great product, but through some financial stakes that had been made, there were spending more time restructuring that had left the business. We saw that as an opportunity. We bought both companies. We bought that company and added it to A&W Restaurants and so we held small portfolio and then we increased the profits very quickly at Long John Silver’s because we really start focusing on the business and not the balance sheet and so sold it in 2002 to the Yum! Brands which owns Pizza Hut, Taco Bell, and Kentucky Fried Chicken.
Jim Fried: You know I wanted go through all that because I wanted to set up your bona fides because we’re going to talk about the future of franchising. When you made that transaction, what did you do next?
Sidney J. Feltenstein: When I sold that company, I had a non-compete, so it didn’t do much of anything.
Jim Fried: Lisa probably liked that.
Sidney J. Feltenstein: I sat on a couple of awards. I was invited to join a couple of awards, but i was not running a business and I didn’t really want to run a business. But when my non-compete expired, my partners in Long John Silver’s in A&W, were interested in buying a company called Captain D’s, which was a Southeast based seafood chain as well, so I got involved with them on that one. That’s my non-compete expired, we bought that and then we then on top of that bought a company out of the West coast called Del Taco, which at the time was the second largest quick service Mexican chain and put that together and then recruited as CEO because that’s not something I wanted to do at that point and its done very well. It’ been a good investment.
Jim Fried: Dee, what do we got a couple more minutes here? In this segment. Alright, we got three more minutes, so what was the big lesson that you learned in putting all those companies together and maybe we could talk about how it might relate to opportunities that the everyday person could have.
Sidney J. Feltenstein: Well, it’s not so much of a lesson that I learned. It’s more of a function, at least i think in terms of what i was able to bring to those companies that began to make them successful. I taken approach in the franchise business i think any franchise executive should, is that when your run a franchise business, when you own a franchise brand like Long John Silver’s, or Dunkin’ Donuts, McDonald’s, you are really not in the burger business so the donut business, so the chicken business, you’re in the business of making people successful.
Jim Fried: Of course.
Sidney J. Feltenstein: That’s the business you’re really in because your success is only a function of their success.
Jim Fried: You’re talking about the franchisees.
Sidney J. Feltenstein: The franchisees. Correct. If they’re not successful, and if their not doing well, and if you’re not marketing the brand well on their behalf, then you can’t make money and you can’t be successful as a franchiser or I have always had that in the forefront of my philosophy about how to be a successful franchise or and I brought that to the party we had with the various branches that we bought and as a result I think they did fairly well.
Jim Fried: Well, we a guest on this show on a regular basis, Bruce Turkel. Bruce would give you a high five right there because Bruce’s thing is all about them.
Sidney J. Feltenstein: It is all about them. It is all about them. I never, when I was chief marketing loss of donuts of Dunkin’ Donuts, i never sold a donut. I never sold a donut to a customer then when I joined the companies and started training. It was the franchisee. They’re the ones at the front line.
Jim Fried: But what you did, you let me as the customer know that it would always be somebody up that I would like making the donuts and they’d be fresh everyday and that person was working hard and deserve by support.
Sidney J. Feltenstein: That’s exactly right.
Jim Fried: You know it was great. I really enjoyed that. We’ve only got a minute in this segment left, so I want to just start our next segment, we’re going to have Sid on. We’ve talked about Sid’s experience in the franchise business and in the next segment, we’re going to talk about why Sid thinks franchising is going to continue to grow in the United States and why you might consider being a franchisee. Can you stick with us for another segment?
Sidney J. Feltenstein: Happy to. Thank you.
Jim Fried: That be great. Lisa, you can stay too? Alright, I got a smile for her. Will be right back after this. Dee, take it away.
And don’t you feel good walking on sunshine. You’re also going to feel good when you’re looking to buy or lease a car and you go to Warren Henry because you want to get every advantage that you can when you buying a car. That’s why you have to check out Warren Henry Land Rover, Range Rover, Infiniti and Jaguar, they’re all exceptional cars and they all come with the Warren Henry Advantage. That means complimentary dent repair, key replacement, first service, and a personal assistant that you can call for anything, anytime for four years, so join me as a member of the Warren Henry family. Always best price, always the best service, always Warren Henry.[Commercial Break]
Announcer: This is the Wall Street business network.
Announcer: Florida’s only business radio station. 880AM The Biz. You’re listening to Fried on Business. To talk to Jim and his guests call 305-541-2350. That’s 305-541-2350. Now back to your host Jim Fried.
Jim Fried: Alright. Not only do I think I’d be great, I know I’d be great. Oops! Sorry. We’re back on the air. We’re back with Sid Feltenstein and his lovely wife Lisa’s here making sure that we stay on topic and that it’s a beautified lovely place. Sidney Feltenstein, wide range in career, corporate executive, successful entrepreneur, Hall of Fame franchise member. Welcome back to the show Sid.
Sidney J. Feltenstein: Welcome back to you.
Jim Fried: And professional guest on my show. Now Sid, we talked about it earlier on the segment that when you ran the big companies from the top, but really what you were doing was marketing, creating traffic, and brand identity, so that the people in the field, the franchisees could make money. In other words, you were taking responsibility for your franchisees and their families. God bless you for that. Why should somebody today become a franchisee. Any company. It doesn’t have to be a specific one.
Sidney J. Feltenstein: Well, franchising is may or may not be for everybody and I’m not saying it’s for everybody. Somebody once asked me, how did you become an entrepreneur and I really said, “I really had no choice. I couldn’t find job.”
Jim Fried: High five. That’s America.
Sidney J. Feltenstein: And in today when it becomes more difficult to refer people in their careers, franchising is a wonderful opportunity to be in your own boss. In fact I usually like to say, you’re in business for yourself, but not by yourself and so, it’s a wonderful way to get into business for yourself and be able to make your decisions. What hours you want to work, who you want to hire, who you want to fire, and things like that as long as if you’re a franchisee, you run your business according to the franchiser and can be very rewarding and the difference in success rates between independent small businesses and franchise small businesses is enormous. Franchise business is a far more successful because they have a tremendous amount of infrastructure support behind them helping with marketing, with operating procedures, with purchasing, and all the thing that are necessary to become a successful small business person.
Jim Fried: So it sounds to me like this is really something that can help out middle America because as we continue to get more efficient in our manufacturing, and other things there are qualified hardworking people that just need a place to go to make a life.
Sidney J. Feltenstein: Absolutely. The fact franchising is a booming, booming business today in terms of more, more people and factually one in every eight jobs in America is a function of the franchise business. A franchise businesses today.
Jim Fried: Now we were here talking about food and beverage franchises, but there’s a lot of other franchises out there. Furniture, what are some of the other things?
Sidney J. Feltenstein: Absolutely. There’s health-care, there’s cleaning, there’s food and beverage, there’s edible fruits, there’s…
Jim Fried: I love that one, by the way. When it cam out. I said, “What the wtf is this?
Sidney J. Feltenstein: Edible arrangements. There are so many different classifications of franchise businesses. Most people when they think about a franchise business, they think about food service, but that’s just one of, I don’t even know how many businesses classifications are represented in the franchising industry, but it’s enormous.
Jim Fried: So then if I want to have a business that’s I can get up early and done with it, I can do donuts? If I want to do something that’s all around the clock and I like food and people I can to hamburgers. If I like to work from 9 to 5 there’s something that I can do that’s from 9 to 5?
Sidney J. Feltenstein: Well, that’s one way to look at it and that’s true, but it’s been my experience that people don’t wake up in the morning, people aren’t interested doing a franchisee, they don’t wake up in the morning and say, “I want to be in the burger business, I want to be in the donut business, I want to be in the health-care business.” They say, “Look I’ve got x amount of dollars of capital to invest.” It could be 50,000, it could be 100,000, it could be a million dollars and when and so it starts with the capital and then one would begin to look at various businesses that their capital allow them to get into and then they’ll decide, do I like this business or that business. For example, if you want to be in the burger business, but you have $50,000 available capital, probably not going to work.
Jim Fried: You’re not going to built a McDonald’s for sure, right?
Sidney J. Feltenstein: Well, almost any burger. I mean, that’s….
Jim Fried: No, no, no. I’m thinking it’s great because may be out they’re going, “Okay, I’m interested in doing a franchise. This guy knows what….So where do I start? I guess the first thing starts with how much money I got.
Sidney J. Feltenstein: One is how much money do I have to invest? Another thing I would do if I was doing that, the International Franchise Association has its own website. It talks about all their members. www.ifa.org. Some of these should go to that and they can begin to get a sense of the businesses that are available. Also in cities around the country. There’s one in Miami, there’s one in New York, there’s one in Washington, there’s one in California. Of course, they have the international franchise expo.Whereas franchisers go and they all have booze. It’s wonderful to walk around those.
Jim Fried: Wow!
Sidney J. Feltenstein: You can really get a sense of the businesses that are franchising and begin to understand what that world look like.
Jim Fried: So that actually brings up another slant on this which is I can come up with the business, I’m doing my business and then I could take my business and have it expand with using other peoples capital.
Sidney J. Feltenstein: Well, that’s franchising basically does that.Franchising does that and is successful only when it’s a win-win. When it’s a win for the franchisee and as a win for the franchiser, but it’s not just you could-I have a business, I have one or two units success I’m going to franchise and I’m going to make a 1000 units over the next three months. It doesn’t work like that. There’s a tremendous amount of work that has to be done in creating the infrastructure and the support systems for the franchisees etc. and I’ve seen lots of people not make that upfront investment to become a franchiser and sell a bunch of franchisees and lots of people got hurt that way. You got to be very, very careful.
One of the thing you should get if you’re interested in a particular franchise which really you need to get, is every franchiser has a document called the franchise disclosure document. Which really outlines the whole program actually, in so once you get their hands on that as they pursue this.
Jim Fried: Yeah, yeah. To me I would think that the first thing you want to do is make sure that the franchise or the business that you’re looking to get into is well capitalized, correctly capitalized. To me it’s the same thing buying a condo. If you want to know what’s going in the condo, you read the Minutes. If you want to know what’s going on in the franchise, you read the…
Sidney J. Feltenstein: Franchise Disclosure Document, which you have to. I mean, and you need to have good legal council and you need really do your due diligence once you honed in on a concept that you think would be good for you.
Jim Fried: Now you’re…
Sidney J. Feltenstein: Hall of Famer.
Jim Fried: Member of the Franchise Association International Franchise Association, what are some of your favorite concepts and it doesn’t have to be something everybody knows about. I guess a successful concept would be…. Everybody knows about.
Sidney J. Feltenstein: Anything that makes money is my….
Jim Fried: Oh, high five. You’re on the show again, Sid. You’re coming back.
Sidney J. Feltenstein: Okay. Anything that makes money is my favorite concept. I think it’s more of function of like I said, if it’s successful at the unit of economics are good and other words, that if the capital invested provides a great handsome return, so I really don’t have a favorite concept, I have a categories that I think are going to be expanding in the years to come.
Jim Fried: I’m going to pull it out of you. Come on. The future of franchising. We got two minutes. What expanding? What’s…
Sidney J. Feltenstein: I think that if you look at the pizza category today, there are a lot of new pizza concepts and what we call the fast casual segment where it’s like a subway line. You get on line and you pay one price for a pizza. You put your toppings on and they cook it and it’s ready in three minutes. I believe the donuts are going to have a huge resurgence. When you look at Dunkin’ Donuts, when you look at Tim Horton and you look at the big chains. They’re really not in the donut business anymore. They’re really in the coffee business and they try to expand to other day parks. You’re beginning to see in various places that what I call artisan donuts. Thinking donuts do a whole other level. Similar to a Starbucks when they initially when into business 25 or 30 years ago in Seattle.
Jim Fried: That’s a for custom donuts.
Sidney J. Feltenstein: When they took coffee to the whole other level. I think you’re gong to be getting-you’re going to start seeing that over the next several years.
Jim Fried: Oh God. You’re a genius. My wife is starting to bring me these donuts from a French bakery on like Miami Beach. It’s just an amazing product.
Sidney J. Feltenstein: I was in a donut place in New York called Dough Donuts. They sell Dough Donuts for $3.00 a piece and it was a bargain.
Jim Fried: Oh my God!
Sidney J. Feltenstein: I mean they’re just phenomenal and of course, I think health-care and all the off shoots of health-care as the population ages and the need for in home care and the changes in the medical law and the Affordable Health-care Act and all the medical laws are going to be spawning and making grow a lot more health-care franchises.
Jim Fried: Well Sid, this has been awesome. Even if you haven’t brought Lisa, I would of have a great time. With Lisa, it’s been terrific and I want to thank you so much for coming in. You know, it was very informative. I that a lot of people got some good information. We’re going to be putting this up on our website. It’s just absolutely terrific. How to build your business. How work for yourself. Hey if you’re fed up with Mr. Big, here’s some ideas for you. Thanks so much for coming Sid. Lisa thank you so much for coming too. I got to kiss. Oh my God! My days are made, but that’s until I get home to the real Mrs. Fried, she’s the best. Will be back after this. Take it away Dee. Sid, Lisa thank you so much.
Sidney J. Feltenstein: Our pleasure.
Jim Fried: All right. Alright, alright, alright. No put ons here. We had a great show that first half. Sid Feltenstein. Wow! That’s information you could put to use right now. How to make money for yourself. How to get rid of Mr. Big and start thinking about your life and you know what else? When you’re thinking about buying or leasing a car. You want to make sure that you have every advantage that you can get and that’s why you had to check out our friends at Warren Henry. Join me as a member of the Warren Henry family. Land Rover, Range Rover and, Infiniti, and Jaguar, there all exceptional cars. They all come with the Warren Henry Advantage. That mean complimentary dent repair, key replacement, first services, and a personal assistant that you can call for anything, anytime for four years. Always the best prices, always the best service, always Warren Henry.[Commercial Break]
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Announcer: South Florida’s only business radio station.
F. Announcer: Part of the Wall Street business network.
Announcer: 880AM The Biz.You’re listening to Fried on Business. To talk to Jim and his guest call 305-541-2350. That’s 305-541-2350. Now back to your host Jim Fried.
Jim Fried: Alright. We are back. I’m sorry everybody. Sid left the house. Sid and Lisa are gone, but hey they’re positive energy remains. I’m getting text from all over the state. I got one from Tampa. Hey guys in Tampa, thanks for giving the high five to Sid and out content today. Well, now we’re on to the second half of the show and that always starts with UHealth. UHealth that’s the University of Miami Health System. They bring us our brightest minds and best health-care right here in South Florida and everybody knows UHealth is big and its includes more than 300 specialty doctors. Dozens of locations from Miami to Beach Palm Gardens and of course we know by now UHealth is also in Plantation. What sets UHealth apart is the comprehensive approach they bring to health-care. You might have several doctors for a couple of different health issues, but they never talk to each other or cross reference your symptoms and medications to make sure your care is second to none. Well hey, at UHealth they do. More than collaborative care, you UHealth is powered by the University of Miami’s Millers School of Medicine where research and clinical trials bring state of the art treatments to our community. Seriously, these are some of the best rated hospitals in the country. UHealth includes the Bascom Palmer Eye Institute. Ranked number one by U.S. News and World Report for 11 years in a row and of course, you know it also includes the world renowned Sylvester Comprehensive Cancer Care Center. But if you want to see what health-care is going to look like in the future, just ask these folks. You know you can learn more about UHealth through the UHealth Discovery series now online at UHealthdiscovery.com. It focuses on the different departments, doctors, and patients, that make UHealth great and the breakthrough discoveries. They’re changing health-care for the better everyday.
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Jim Fried: Alright. I feel nice like sugar and spice and we’re going to talk about sugar and spice because we’re going to talk about retail. Retail in South Florida. We’re going to talk about all the different aspects of retail and I hope that you stick with us. We had a great segment with Sid Feltenstein about franchising and this a nice little add on and then after this we’re going to have Terek Maddox. He’s going to talk about things you can do to make sure you get a good workout this summer.
Well first of all, here in South Florida when you’re talking retail you got to talk new vs redevelopment and I’ve been involved with both. I helped finance the Sunset Harbour Shops over in Miami Beach. Ground floor retail over a parking garage. That’s the latest urban retail phenomenal is these infill sights where they’re building a project either or parking garage, office building, apartments, and then ground floor retail. Why ground floor retail? Because as we all know it’s getting tougher and tougher to get around town. All you folks in the car, you sure know that especially if you’re over by those traffic jams they were talking about. Well, in the new ground floor retail, we’re trying to create totally integrated retail environments, so you don’t have to leave your neighborhood and redevelopment, I’m involved in those too.
Recently help put together the financing of the redeveloping with the old Hollywood Fashion Square. It used to be where I used to go up to Burdines and get really cool stuff for school back in the days of disco. Well, fast forward 40 years and it’s been torn down and redeveloping into a Walmart and so that’s a great lead in to what’s going on here in retail and the number one thing you’re seeing is a changing in the way that’s being developed because we’re seeing the change in the anchor tenants.
For years it was Publix and Winn-Dixie. Winn-Dixie and Publix. Winn-Dixie is not doing much anymore here, maybe they’re refitting their stores. Publix is playing defense. They’re buying their locations, they’re building freestanding deals and fact, in Edgewater they built a ground floor retail. I did actually one of the first urban deals,which was a spaceship deal with Rooftop Parking. We did that at Broward County about 50 years ago. That’s how it paid for my wedding.
So you’re seeing a change in the anchor as Publix slow down, there is fewer and fewer developments needed. As that happen fewer and fewer people were in retail development, so today there’s not a lot of people in retail development. A lot of them are still in retail leasing and the people that are in ground floor and restaurant leasing and retail, well they’re printing money. That’s the number one thing to do and if you’re doing Walmarts that’s the way to go. If you want to do multiple deals and hey, guess what everybody? I’m doing Walmarts.
We’ve provided preferred equity on the Walmart transaction up at Broward Boulevard and I-95. We’ve also done that for a portfolio of Walmart up in Jacksonville and I’m getting prepared to do systematic financing of a Walmart development program of single-tenant Walmarts and multi-tenant Walmart Supercenters across South Florida and into North Florida and what we’re seeing is, the nature of the tenant in the shopping centers that are being developed is changing. Today the developers wan to have tenants that our defensive to the Internets. So you see health-care, you see food and beverage, you see pet related.
If you can get on the internet, I don’t necessarily want you in my shopping center anymore. Unless you’re going to be a showroom, so it’s fascinating Publix, Walmart,and other centers that are being developed, but the big dinosaurs, the power center, the that’s focused around a couple of large tenants, that’s a dinosaur. People like Best Buy are scaling down. They don’t need as much retail space. They don’t need as much stock on the floor anymore, so they want smaller stores. So you’re seeing the vulnerability of shopping centers that are based on tenants that are under assault by the internet. Now, I alluded to it earlier, what we’re seeing in retail is an incredible pushed to develop in the in town locations. Not so much on the perimeter, the infill is really what are people are focusing on and my firm as an investment firm, that’s what we’re focusing on too.
We’re looking to invest in these urban infilled deals. We’re doing these Walmarts here. Up in South Carolina we’re doing Publix, but we’re doing development. We’re doing preferred equity and we’re doing permanent financing. In fact, we’re all doing this transactional. We don’t develop, we work with the developers, so we’re seeing an incredible demand. The institutional investors can’t get enough of these shopping centers of Walmart, of Publix, and they’re calling us on a regular basis asking us, how we can get them into a programmatic development scheme for retail because in South Florida retail is extraordinarily strong. So as you’re starting to see the condos delivering.
You’re going to see even in the apartment buildings delivering which we talked about last week. This week we’re going to talk about the retail because after the residential comes to retail. In fact, in some cases the retail comes first because Publix will build up in a green filled area to try to deter some of their competitors. It’s really interesting to see what’s going on.
Another interesting implication is everybody wants this urban retail in their building, but it requires parking, so when you add your urban retail and you get that value for that, you have to realize that there’s parking implications that come in. Perhaps you may not have enough parking in your original design, so there’s a balance that needs to be done between apartments or condos, office, or hotel, and ground floor retail. It’s something that we do all the time and we’re evaluating it all the time. Now in Dade County rents are rising and occupancies strong, which is a great fundamental formula for retail development and you’re seeing it.
For goodness sake, you’re seeing it everywhere even with triple five out in the Northwest that wants to do their big fancy amusement park, theme park, shopping center, destination tourist resort. Hey, I’m all for that. I’m all for anything that’s new that draws people out. It gives them excitement, it gives them a place to go, and I got to say this way and hopefully it’s close to where they live, so they don’t increase traffic too much because the thing that will impact us the most is we all know everyday is traffic. We got what I call the pre-traumatic stress syndrome just thinking about going into traffic and then the post traumatic stress syndrome after we’ve been in traffic, Traffic, traffic, traffic, traffic. Well, it;s going to save your life from traffic is retail.
When the retail gets close to were you are, you don’t have to drive as far that will take you off the road and make your life better. Retail, it’s all about you. All about the consumer. So as our taste change, retail is changing. McDonald’s turn to Chipotle. It just happens. Healthier eating. Look at the menus. Look at what’s going on, so retail, new development vs redevelopment. Anchors are changing. Non-internet vulnerability. Our firms investing, development, preferred equity, permanent loans, credit tenant leases, we’re doing a lot of that. If you want to know what that is just give me a call 305-938-8639. I never give out my direct dial, but I just did. If I can help you with some retail or any other retail question. Give me a call Jim Fried 305-938-8639. The Aztec Group, Mayan Properties. We’re investing, we’re financing, we’re the group you want to talk to if you’re doing retail and now will be back after this with Terek Maddox on how to work out and stay healthy this summer. Dee, it is all yours.
Oh yeah, Dee. Good timing because I’m a believer and if you’re listening to what I’m saying you better believe her too because I know what I’m talking about. At least that’s what I’m told on the text.
You know it’s always good business to give your customers what they want. The Warren Henry, the family of auto dealerships, you know Land Rover, Infiniti, and Jaguar, they know this and that’s why they always give their customers more when I leased my Infinities from. I knew I was getting the best price because they guarantee it. Their best price guarantees is part of a package of benefits called the Warren Henry Advantage. You get complimentary dent repair, key replacement, first service. Hey! You even get a personal assistant that you can call for anything, anytime for a whole year. If you buy or lease any new Land Rover, Range Roger, and Infiniti, and Jaguar from Warren Henry or even if you buy one of their preowned cars you too will get the Warren Henry Advantage. Add in the exceptional service. They deliver and you’ll see why their name is been in business for over 35 years, so join me as a member of the Warren Henry family. Always the best price, always the best service, always Warren Henry.[Commercial Break]
Jim Fried: Alright everybody. You know this is when we talk about Lauren’s Kids. Go to LaurensKids.org. They got posted a new Florida poll that documents the widespread prevalence of sexual abuse towards our children. The number one thing that could prevent child sexual abuse is education, so parents go out there and get educated. Go to LaurensKids.org and help protect our most valuable asset, our children today.[Commercial Break]
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Announcer: South Florida’s only business radio station. 880AM The Biz.You’re listening to Fried on Business. To talk to Jim and his guest call 305-541-2350. That’s 305-541-2350. Now back to your host Jim Fried.
Jim Fried: Alright. We’re back again with Terek Maddox. Terek thanks again for coming to the studio today, man.
Terek Maddox: Thank you Jim. Good to be here again.
Jim Fried: Alright. Well, listen now we talked about tips for summer. What are we going to talk about now?
Terek Maddox: Today we’re going to talk about eating a well balanced diet.
Jim Fried: Awesome. Eating a well balanced diet.
Terek Maddox: Yes.
Jim Fried: Alright. So what makes a well balanced diet? Mine food groups are carbs, carbs, sugar, and carbs.
Terek Maddox: You want to be careful with carbs Jim. Especially doing your early morning parts of the day, but I mean, wake up in the morning, breakfast is your most important part of the meal of the day. You want to definitely not skip breakfast until having your oatmeal and your juice and your water, and your carbs and protein in the morning. A little bit of carbs, not too many.
Jim Fried: Well, so not too many carbs. We’re eating in the morning. I don’t do a lot of carbs in the morning. I drink that perfect food that Victor Franks gave me all these, I guess it’s the green plants, the probiotics, and stuff like that. That’s the way I start my day. It fills me up all day and for lunch I like to have a little protein and maybe some starch. I have a sandwich. That’s not necessarily the best thing is it?
Terek Maddox: I mean, not really you definitely want to have your some all natural sugars. They’re coming from food. A little bit. Everything in moderation. You definitely want to have a little carbs and protein around lunch time when you start feeling sleepy to try to bring your sugar levels up and keep yourself going. For the rest of the day.
Jim Fried: Okay. How about dinner time? I usually don’t get home until like 7:30, sometimes I don’t eat until 8:00, 8:30. Sometimes it’s the biggest meal of the day. Is that good?
Terek Maddox: That’s really good, Jim. Especially heading towards bedtime. You want to have less. You don’t want to eat, you don’t want to have a big dinner before you got to bed because those calories are sitting in your stomach. You’re going to get your food time to digest before you lie down. So it’s very important to keep your meals a little bit on the smaller side during the nighttime.
Jim Fried: Well, okay. How do like people wake up in the middle of the night are they like crashing for sugar and getting a little snack or what?
Terek Maddox: If they’re not going to use the restroom, they’re usually craving sweets, sugar alright. Waking up for some odd reason. I don’t know being that you’re interrupted by your cravings, but I would replace your cravings with a glass of water. That would set that off.
Jim Fried: Okay, so we’re talking about eating, healthy eating, and we talked about the different meals sizes. How about things to include in your diet?
Terek Maddox: Alright. Things include in your diet, your diet should be very colorful. Let’s say vegetables are green peppers, red peppers, mushrooms, or what have you and obviously you’re going to try to keep some leafy lettuce in there and some spinach.
Jim Fried: Okay. Well, it sounds like it’s a pretty broad diet. What if somebody lives alone. They don’t have somebody that goes shopping for them. Is this stuff that people can just pick up pretty easily?
Terek Maddox: I mean you got to feed yourself, you got to get there, you got to nourish your body otherwise you’re going to be dead tired, low on sugars and no energy, so you got to make it out whether you take a walk to the store, take a cab, or what have you. You got to eat.
Jim Fried: Now I’ve cut out caffeine, I’ve found it to be really difficult. It’s pretty addictive drug. Anybody with a Starbucks card can tell you that. But I still get tired during the day. How do I fight that?
Terek Maddox: Well, you haven’t crashed or cravings for caffeine. In order to cut back on caffeine, you’re not just going to stop. Right away unless you just that strong will. Usually the average person will have to cut back on their portions of caffeine throughout the day and you know three to four weeks you try to eliminate it completely from your diet.
Jim Fried: So once eliminated, how does somebody have a natural pick me up during the day?
Terek Maddox: Well, you know the natural sugars that we try to have. Maybe food, so a lot of natural things out there to replace with caffeine that you guys should start looking into.
Jim Fried: So then we’re talking about replacing caffeine. How about I drink sometimes a lot of Gatorade. It really kind of gets me fired up and then I seemed to crash right after that. That’s a sugar spike isn’t it?
Terek Maddox: Yeah. Definitely a sugar spike that you’re having, Jim, so cut on back a little bit which I know you’re already doing. You want to dilute that Gatorade with water just so that you don’t have too much sugar in your system to prevent you from crashing though out the day.
Jim Fried: So Terek we’ve been having such great conversations here about the food and the beverages and such. How about hydration? You talked a little bit in some past segments about hydration, how about hydration and eating? Should you be drinking water while you’re eating?
Terek Maddox: Yeah. You definitely should be drinking water while you eating. That’s going to help your food be saturated. You’re going to digest your food a lot easier and it’s going to help you get fuller a little bit quicker, so you don’t overeat or indulge in your meal.
Jim Fried: Well, it’s sounds really terrific. Terek, if people want to get your advise, I know you’re schedule is really busy. Thanks again so squeezing me on Saturdays, but if people want to get together with you. Want their person, their young person in their family or themselves coached by that person that coaches, Frank Gore, Lamar Miller and some of the other big athletes here in town. How do they get a hold of you?
Terek Maddox: You guys can always follow me at Terek Maddox in of course there’s over there at Twitter and you can also follow on IG which is Instagram at @TerekMaddox or you could shoot me an email at TerekMaddox@yahoo.com.
Jim Fried: Alright. Well, thanks as always Terek for being on this show. Look forward to your next segment in a couple of weeks.
Terek Maddox: Thank you so much for having me Jim.
Jim Fried: Alright.[Commercial Break}
Announcer: You’re listening to Fried on Business. To talk to Jim and his guests call 305-541-2350. That’s 305-541-2350. Now back to your host Jim Fried.
Jim Fried: Alright. Well I hope you all were here for our great show that we had today. I want to again thank Sid Feltenstein and his lovely wife Lisa for joining me and what was a fabulous segment about franchising and how to built wealth if you’re looking to get rid of Mr. Big and become your own Mr. Big. Well, franchising may be a way to go. I also talked about the retail market. Dee, how much time do we have left? Oh my gosh! I got plenty of time. Well then listen. I do want to talk about the franchising thing on my own.
A lot of people have been displaced. A lot of people are under employed, but they got a little money left. This might be what you want to do. Sit, talk about going around and going to the right franchising events. Meeting the different franchisers, checking out to make sure the franchiser have the right kind of capitalization and I will also say was there to support you. You mentioned what I thought was a fabulous thing which was in franchising. You’re in business for yourself, but you’re not alone. I thought that was the takeaway of the whole thing, so we had that great thing.
We had Terek talking about how I got to cut back and the Gatorade as you can tell from my pace on the radio show. That isn’t really happening and I talked about the retail market. The retail market was for South Florida is hot. It’s getting hotter. There’s not enough space. There’s not a lot of development going on because in the past, the development was based around the anchor tenants. Well, the anchor tenants aren’t really expanding unless you’re Walmart. If you’re Walmart, you’re expanding, but you’re doing freestanding stores where you’re doing these supercenters and the supercenters have tenants that are not internet vulnerable. So a lot of them are food based or services. The nature of the street level retail across South Florida is changing.
I thank our guests. I want to thank South Florida Business and Wealth Magazine. The rest of our sponsors. The CCIMs, Terek Maddox, UHealth, Warren Henry Automotive, the NFL Alumni, the Miami Dolphins, and the Miami Marlins. Social Media 305, the Aztec Group, the Bergstrom Center for Real Estate Studies from the University of Florida, and UHealth. Of course, I want to thank you, my listeners because it’s all about you. Without you I got no show. Please go to my Facebook page like the show. Talk to me. Tell me what you want to hear. Join our community. Give me feedback and comment. Twitter at JimFried@FriedonBusiness, Facebook, LinkedIn, YouTube, the website. If you miss our show it’s going to be up on our website probably in a day or so. This is Jim Fried for Fried on Business. Look for me next week on 880. Next Thursday at six. Why? Because I love doing this. Remember, this is not a rehearsal, this is your life. The person that wants to do something finds a way. The other finds an excuse. Now go out there and make it happen. Thank you. Thank you. Thank you everybody. Thank you so much.