Spreading Happiness One Gourmet Pop at a Time with Cliff Kennedy

Cliff Kennedy, CEO of Frios Gourmet Pops, the nation's largest ice pops franchise, discusses how he and his team transitioned the company's brick and mortar locations to vans during the pandemic. He shares the biggest challenges he's had to face from transitioning from a franchisee to a franchisor, the secrets to building a successful team, how to cultivate a company's culture, and what it means to him to spread happiness with every Frios pop. 

Key Takeaways

1. It's important to make sure that the franchisor has your best interest rather than their best interest, and that they listen and support all the franchisees. 

2. Vet potential franchisees to ensure that their goals and vision align with the company's culture and vision.

3. Don't be afraid to hire those whose strengths are your weaknesses. Know your core strengths and be able to ask for help where needed.

Transcript

Cliff Kennedy: I will never say COVID was a great thing for the world and the economy and the illness and death that has happened, but I'll say it from a business aspect, COVID was the best thing that's ever happened to us.

Matt Levin: Inspirational stories, actionable business tips, and real-world strategies.

Join us as today's guest shares how you can make your business more resilient in an unpredictable world.

Hi everyone. I'm Matt Levin and you're listening to The Resilient Restaurant podcast.

Today I’m joined by Cliff Kennedy, CEO of Frios Gourmet Pops, the nation's largest ice pops franchise. We're going to discuss how he and his team mobilized the company's brick and mortar locations to vans during the pandemic, and the biggest challenges he's had to face from transitioning from a franchisee to a franchisor.

We'll also delve into the secret to building a successful team, how to cultivate a company's culture, and what it means to him to spread happiness one gourmet pop at a time.

About Cliff Kennedy and Frios Gourmet Pops

Matt Levin: Thank you so much for joining us today.

Cliff Kennedy: Thanks for having me, excited about this.

Matt Levin: To kick us off a bit, can you tell us a little bit about your background and how you got involved with Frios?

Cliff Kennedy: Yeah, so for me just getting involved in Fritos: I’d get stuck in traffic every day, and I saw this Frios trailer there and I'd see people lined up getting pops, and I stopped one day and tried the key lime pie, and I was like, “Oh my God, this is the most amazing thing I've ever had.” I'll never forget that day and that experience.

And then from there, I became a franchisee a couple months later, and took over a large territory. That was May 1st, 2018. And then I didn't like how the company was being run and then through some negotiations, December 21st, 2018, I took over as franchisor. So, it was a whirlwind trip, but it's just the way I operate. When I see an opportunity and I like something, I put all my energy and effort into it.

Matt Levin: So prior to your conversion to a popsicle true believer, did you have any restaurant or hospitality operating experience?

Cliff Kennedy: None whatsoever. So I was selling safety equipment in the family business to the oil and gas world. So imagine steel toed boots, and hard hats, and safety vests, and gas detection. That was the only world I have known since my grandfather started that company out of the back of his car. Talking about resiliency: he couldn't get the equipment so he went with an eighth grade education, balled it all up and started selling it to the place he worked and then built out a great company.

Since I was five years old, I thought I was making a lot of money when he paid me a dollar to sweep out all the warehouses. Little did I know that he was getting the better end of that deal.

Matt Levin: What made you decide to pull the trigger and do a wholesale career change? How much was an Excel based financial decision versus a lifestyle decision versus something else?

Cliff Kennedy: Yeah. I mean, for me, it was just having an unbelievable product.

There's a hundred plus flavors that they were offering at the time. And I was like, this is an unbelievable product, how do I become a part of this? I was always looking for the side hustle, something I could do on my own. And then the opportunity presented itself to become a franchisee.

Once I got really involved in the business as a franchisee, the saying goes in the franchise world, “you go in business for yourself, but not by yourself,” there's infrastructures and plays that support you and teach you the things you don't know how to fully run a business. And those weren't there at the time.

And I was like, “there's something missing here”. I'm talking to smaller franchisees and trying to find their numbers. There was no central line of communication where we could all talk to each other. There were no platforms in place. And I was like, “wow, there's just so much potential here.”

Once I recognized the opportunity, I had to go ahead and take that shot and see if there was a chance to take over the company and really put in and inject some energy and new systems to really take it to the next level. And so that's what it is, it’s always looking for the opportunities that are out there. And just that little insight when I became a franchisee and to see, and for me to whiteboard myself what's missing, what can I do better, or what can the team do better? That's what it was all about, it was just seeing the opportunity and taking a shot at it.

Shifting from a Physical Location to Mobile Vans

Matt Levin: Tell me about the shift in the physical location that you undertook in your business, this switching from brick and mortar locations to vans. What did this transition look like?

Cliff Kennedy: Yeah, so during the pandemic we had 28 physical locations - brick and mortar locations - across the country. And, we're in a bit-based business at the same time. So we have all these carts that mobilize and go to music festivals and go to corporate events and go to - everything that's outside - ball fields. Where the people are, that's where we go.



During the pandemic, obviously, no one's getting in their car and saying, “I'm going to get a Frios.” The franchisees are like, “what do we do?” We're always talking with them about how we can support them. Several of them started to mobilize and go into the neighborhoods, pulling around a cart, jamming music, and saying here's some happiness.

They were lining up outside their homes waiting for us because we’d announce where we're going. People were like, “this is the greatest thing that's happened to us all day. We've been locked inside.”

They would have sidewalk chalk of “Thank you Frios for coming to our neighborhood today” or they'd write us letters and say, thank you so much. We still have some of them in the office.

So we realized this is it. We're a company that goes to the people. You're not necessarily getting in your car to say, “I'm going to Frios.” Now we just go to the neighborhoods, go to the parks, go to them.

So it's easily accessible. For us, for COVID to bring about that “aha moment”, for us to know that we need to transition, we're strongly set up for the future now and it's just been a wild success so far.

Matt Levin: Oh, that's great. So how long did this actually take overall? Like from mid-March 2020 when the world shut down, how long was it until you had this mobile operation up and running?

Cliff Kennedy: It took us probably about four or five months. Because once we were in the weeds - I mean, we were all looking at the TV every day of like, what's next, the cases are rising and everything else, what do we do?

I'm trying to figure it out and then I’m like I've gotta get masks, we gotta do this. I came from a safety background, so I'm talking to my mom and dad as well. They're like, “we're sending so much equipment to the hospitals.” I was getting inside intel from my parents.

Are we going to shut down? How bad is this about to get? And then all of a sudden the resiliency comes out and it's like, okay, we need to go mobile. We need to have a franchise system that's not a brick and mortar contract. We need a van contract. So late June, early July, we launched it and then quickly signed up six or seven franchisees and started getting the van on the road as quickly as humanly possible.

It was a quick four months change. FDDs usually take a couple of months to put together. I mean, we were pouring through that thing with my lawyers and getting that thing turned around as fast as possible so we could get out a new FDD.

Matt Levin: How long did it take after you made this shift before you got enough data and feedback and said, you know, I really feel like we've nailed the next phase of this business and this is going to be the future of how we are.

Cliff Kennedy: It was when I started to look at the cost of ownership for the van versus a brick and mortar and being a single product company. It really started to resonate. So Jeff, my COO, he's the numbers guy, he starts crunching these numbers and looking at like, “wow, we're controlling more costs, they’re lower, if it rains we can shut down, we don't have to have somebody in a store when no one's coming out. This just makes so much more viable sense for the long run.”

So it didn't take us long. Once we rolled it out and we had our own numbers rolling in, internally we were like, “this is it, this is the future.” We're all in at that point. So I'd say in launching it in July, we probably knew about August/September that this was the future.

Making Your Voice Heard as a Franchisee

Matt Levin: There are of course endless stories about frustrated franchisees and struggle with getting their feedback heard by corporate or having decisions made unilaterally that change the economics of their business. So having been on both sides, how do you recommend franchisees deal with corporate HQ. Should more follow in your footsteps and try to become franchisors?

Cliff Kennedy: No, I wouldn't suggest taking the big leap that I did. It's a big role to take on. When I became the franchisor and it was official, I said: alright, I've got all the answers. I knew this. I was a franchisee and I just started throwing money at problems. Bringing in consultants, doing this, and all of that.

It was just falling flat. And I was just like, “What is going on here? These are the answers. This is right.” But what I never did was: I didn't listen to the franchisees, the others that I'd really never communicated with. Their voices should be heard. They have a vested interest in the bigger picture.

I'm only as strong as my franchisees. I wake up every day saying, what can I do today that makes my franchisees better than they were yesterday. As a franchisee, make sure your voice is heard. Like my franchisees, they've all got my personal cell phone number and email address, but we do have people that they can report directly to.



But I said, if it's something so important, call me. We call it the Frios family. Make sure that even if you're a former franchisee or looking into a franchise business, make sure that the franchisor has your best interest rather than their best interest. And that's the way we operate here with Frios. It's not about what I want as the franchisor, it's about what makes my franchisees successful.

And then in turn, the company will be successful. So we put all energy and efforts into systems and processes. We're launching our new free bootcamp, we're excited about that. We're still getting better every single day. Listen to the franchisees and let them voice their concerns, ideas, strategies.

We have different platforms now, Facebook groups, and monthly Zoom calls. We get amazing ideas! They’re on the ground every single day selling Frios pops across the country. I can't keep up with all those amazing ideas internally and come up with them. I love seeing the ideas and different strategies and who they're selling to and how they're selling to. So that's the biggest thing is: listening to the franchisees will set you up for success.

Challenges Becoming a Franchisor

Matt Levin: What were the biggest challenges for you with the leap from franchisee to franchisor?

Cliff Kennedy: The biggest challenge was the manufacturing facility of all the Frios pops was 400 miles away from where I live.

And at the time, the biggest hurdle was convincing my wife, who was pregnant with our third child, that I'm going to leave a very good business, my family business, and I'm going to go make popsicles for a living and something I've never done.

And so the support of her was amazing to start. It always takes a team. And then the biggest hurdle was, number one for me, assembling a team. I can't do this myself, never will claim it. I have an unbelievable team that's not behind me, they're in front of me every step of the way. I surround myself with people that are much smarter than me.

So from Jeff, my COO, to Alison, Director of Franchising, to the marketing department, the people that are making the pops. It's all about assembling the team and creating the culture. So that was very, very important to me as a franchisor.

But then, I told Jeff, “We've got to figure this thing out. We got to move a facility to Mobile. So it was just putting the pieces together and as they say, getting under the hood and seeing what was what and really cleaning up the books. Franchisees were set in a certain way of what their expectations were, but I had a different way I was going to run it.

So it was also letting the franchisees know, “Hey, this is the way we're going to work. This is the way we're going to operate,” and making sure they understood the vision of the future that we were setting with them to set us up for success rather than failure.

Matt Levin: You mentioned the concept of vision and I think that's a really crucial part of leadership management, as well as building a trusted consumer brand. When you became the franchisor, were there major shifts you needed to make like cultural or messaging changes?

Cliff Kennedy: Yeah, that was the most important thing for us, so they could understand my vision and why I became the franchisor rather than franchisee.

I wanted to shift the culture of what's in the best interest of us and put it on them, support them like they've never been before. And so that was my vision saying “You've all invested your time and money into this company, I’m going to support you every step of the way.” Because now as the franchisor, when I put my head on my pillow at night, I'm worried about just my family and supporting my family.

I've got to support all the other families that now work for me. And so that was what was most important, making sure that we built this culture of understanding and listening to them and setting them up for success and letting them communicate and learn from one another. I mean, it's so simple. It's not like some complicated system. It's just honestly listening to people and understanding what their needs are.

We're a little here at Frios: here's the idea of success, but when you come into a Frios franchisee and you buy into our system, I want to know what your idea of success is. So I have some franchisees that want to give every dollar profit to their charity. I have some that want to have 10 locations across the country and sell it for millions of dollars. I have all different ideas of what their success is and some just need a hobby.

I want to support what their idea of success is. So it goes back to listening and support. They can all be successful franchisees, but success to me is supporting them and making sure they found their idea of success.

Enforcing Company Culture

Matt Levin: What's your strategy for creating an enforcing culture?

Cliff Kennedy: It goes back to our company that there's a very simple system. They sell Frios pops for a living. It's just actions that's all it is. If I say I'm gonna do something, I'm gonna do something.

And so I want to lead this company through the actions that I have and how I operate, how I hold myself, and how I present myself to all my franchisees. Do I fail at times? Sure, I forget to call them back or email and everything else. But you know what, I try my best to make up for it and lead this company through examples of hard work and passion that I have and just the excitement and enthusiasm of what we do.

We make sure to vet franchisees and potential franchisees, making sure they're connected into their community, they want to give back to the community and share and to give back. So we try to create and implement, but they've got the excitement. Our franchisees ride around in tie-dye wrapped vans, it's hard not to have fun. So that's what we need is that vision of spreading happiness one Frios pop at a time. That’s the simple culture that we try to create around here.

Industry Labor Shortages

Matt Levin: Have you been affected at all by the labor shortages that are playing in the restaurant industry?

Cliff Kennedy: We're really lucky in what we do. We sell a frozen product out of tie dye wrapped vans and carts around the country at events and corporate events. So for us, a lot of these people are owner operators because they're looking for that escape from corporate life, so they do want to be on the van, they want to become locally known as the pop king or queen or whatever have you. So for them, they're paying themselves, but they get their family involved. If you look at our social media feeds across all of our locations, you'll see their kids working and then all of a sudden it's their brands working it.

So for us, we're very very lucky in a sense where the labor shortage hasn't affected us because 75% of our franchisees have kids that want to work it or go out and work it themselves and make a little extra money. There's always that high schooler where the franchisee can park the van and then the high schooler can work the event for three or four hours. So we've been very fortunate for that.

Finding Great Employees

Matt Levin: Do you have any tips or secrets for finding really great people and bringing them into the business?

Cliff Kennedy: When I first went out to get my team I knew exactly what I was going for in Jeff. So, we were on a foundation board together and he was just my beer drinking buddy.

And I'll be like, “Hey, man, I need you.” Cause I knew without a shadow of a doubt that he had all the knowledge of what I didn't like to do and didn't have the knowledge to do. So he was the numbers cruncher, knew operations. So hire people that are much smarter than you. I know what my core strengths are and I know exactly where my weaknesses are. Go out and hire all your weaknesses. Make sure that at the top they understand your vision of where you're going and they want to be along for the ride and let them be great.

For me it’s about my team first always and setting them up for success and my successes will come later through all of them.

Trends in the Food Industry

Matt Levin: So if you look at the landscape as the world emerges from COVID, what kind of trends are you seeing in the restaurant, hospitality, or food and beverage industry overall?

Cliff Kennedy: I wish I had a crystal ball and could tell you that I knew that answer or really saw something. I think just in the franchising world, I think you're going to see record numbers of franchises being sold because people, with losing their jobs and losing the uncertainty over the last year, want to kind of control their own destiny and not have to depend on someone else.

You'll see different sectors in the franchising world be more successful than others and grow faster than others. Home services, things that are home, family oriented products, I think those will sell well just because even as we come out of it, we've all got that little bit of fear that this can happen again and we try to protect ourselves from something like this affecting you in the future.

In general, the franchising business model, be it restaurant, franchise, anything, I just think people want the support of a franchise company, but they're going to want to run it themselves and the freedom to do that.

Matt Levin: That's really interesting. So your thesis is that there is going to be a major increase in people interested in becoming franchisees, but potentially with a changed or different outlook or philosophy.

Does this essentially mean that there's going to be some sort of disruption coming in the landscape with different types of franchise operations set to become bigger winners at the expense of others?

Cliff Kennedy: Yeah. I just think, with us especially - I will never say COVID was a great thing for the world and the economy and the illness and death that has happened, but I'll say it from a business aspect, COVID was the best thing that's ever happened to us.

And in our corporate history, it will always be the pandemic changed the way Frio operates. We had brick and mortars and people would come to us, but through the pandemic we mobilized and went to the neighborhoods and brought happiness to the people.

And so for us, we completely changed into a mobile franchising system, in the tie dye wrapped vans. Obviously brick and mortar has been kind of going away, but it's just that open air space and what all that looks like. There's just so many unknowns and I'm not going to speak for anyone else, but there's just so many opportunities out there and not necessarily a different business model, or different sector, but it's just like, how are we operating and what sticks - what's really sticky? And then what kind of fades away as people loosen up again?

The Future of Frios

Matt Levin: So what's next on the horizon for you from a business perspective? Is it a Frios van on every street corner in America or the world? Is it physical products in every grocery store? What does the future hold?

Cliff Kennedy: Future is: right now we're at 49 locations. I want to have 150 locations by the end of next year. And the sky's the limit. The future is bright. I mean, people need happiness in this crazy world that we're in and people are looking for just simple systems that they can operate. Be it the husband or wife that's lost their job, it's somebody that's been forced into early retirement.

Frios has been for them. That's kind of the model that we put out there. We're answering a lot of questions of, “Hey, I want to do something with my family.” That's it. “I need a simple system.” It's literally a freezer and a van. Go to work. So we just give you all the structure. So we think the sky's the limit. Ifirmly believe that if we stay on this path that within the next three or four years, we'll have over 500 vans on the road.

Advice for Other Franchisees

Matt Levin: If you had to give one piece of advice, just one, to other franchisees or restaurant operators or folks in the hospitality industry, what would it be?

Cliff Kennedy: Life isn't a dress rehearsal. You get one shot at this. So if you're a franchisee, if you're an owner/operator, no matter who you are, life is not a dress rehearsal. Give it everything you've got every single day. Don't allow yourself to look in the mirror and think: “why didn’t I do that?” So if you've been wanting to write that book or start that restaurant or do whatever, take the shot because you never know what's gonna happen.

And so that's what I live my life by. It’s this Stoic saying through Marcus Aurelius: “You can leave life right now. Let that control your actions, thoughts, and words.” And that's how I live my life. I never know what's going to happen to me later, but I'm going to give every conversation I'm in 100%, I'm going to give my job 100%, my franchisees 100%, because anything less than that is a setup for failure.

And I could fail at 100%, but you know what? I can look at myself in the mirror and say I gave it everything I got. That's all that matters. So for any franchisee, restaurateur if you do it, just give it 100% to everything you have.

Matt Levin: So giving a hundred percent all the time might sound daunting to a lot of people, especially those in the hospitality industry who struggled mightily over the last year and a half with shut downs, and lost revenue, and they're still struggling with stress, crazy supply chain issues, bad customer behavior, and constant labor challenges. What advice would you have for them how to focus, shut that out, and dig in and give that 100%?

Cliff Kennedy: You gotta take time for yourself. The one thing I did was I got an executive coach to help me cope with all the stress that I was dealing with because I used to love to wake up at 4, 4:30, go for my run, but then when I took over this business, I felt guilty if I woke up and I wasn't immediately working for the business and turning this thing around.

And I just kind of lost focus and stopped taking care of myself so much. But when I got my life centered again, no, it's all right for me to have some “me time” in a sense where if I want to read or if I want to go for an exercise, that's okay.

If you're the owner of your restaurant, you're a CEO. You're running that restaurant, all the people. I'd highly suggest reading The Hard Thing About Hard Things about Ben Horowitz.

There's no training class, there's no college class to be a CEO. You learn when you're in the seat and you're pulling money out of your bank account to support the business and make payroll. Ben Horowitz does an amazing job in his book talking about what it takes to sit in that seat and the responsibility.

So when you think you're doing it, and you're the only one that's in this position, there are hundreds of thousands of people that are in that same seat going through it with you. Find your support group, find the other people that are doing it with you, reach out to the restaurateurs and have your weekends together or calls together with “Hey, how are you doing with this, how are you doing that?” That's what I would say.

Outro

Matt Levin: Awesome. Well, thank you so much for joining us today. This was a super insightful conversation with nuggets of wisdom all the way from the ancient Stoics to our modern day venture capitalists. I really appreciate you sharing your enthusiasm and knowledge with us.

Cliff Kennedy: No,I really appreciate you having me. I enjoyed the conversation. Thanks for having me on.



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This podcast was produced and edited by MarketMan. Music by Joseph McDade.