How did former pizza delivery guy Gary Lamerton fund his first franchise?

“I sold my car (my only real asset), borrowed from family and friends, obtained a small loan from the bank, backed by the seller, and was able to buy my first Subway store in 1996,” says Lamerton, who had started as a Pizza Hut delivery driver at 16 years old. He worked his way up to store manager, and eventually area manager.

At that stage he nearly made a career detour – signing up to join the police force. But he deferred his entry for a year as he was intrigued by the franchise sector. “I wanted to become a business owner, then the opportunity arose to become the manager of the first Subway shop in Adelaide,” he says.

With his law-enforcement dreams fading, he spent two years as manager, opening three Subway shops for the owner. “He helped me become a franchisee in my own right.”

Franchise structure

Lamerton found he enjoyed the structure of a franchise and the support provided by the franchisor, as well as the opportunity to grow his business. So two years later he took the next big step in his franchise career, opening a second Subway outlet.

“Through training and growing my management team, I was able to buy three more Subway shops over the following three years. At one stage I had interests with partners in 13 Subway shops, and I am presently a partner in eight of them.”

Lamerton is achieving annual sales exceeding $5 million, and has about 100 staff members across his fast-food outlets.

Some of his team members have gone on to become franchisees themselves, some within the Subway network and others in different businesses. The ability to help staff grow within the business as it grew was an unexpected and pleasurable element of being a multi-unit franchisee, he says.

Staff management is crucial

Managing staff can be a challenge for many fast-food outlet owners; for a multi-unit franchisee, the obstacles are multiplied.

“Retaining great staff members is always the biggest challenge,” says Lamerton. “It seems to come in waves. I have had wonderful teams over the years. At one stage I had assistant managers ready to become managers, but no shops for them to take on. At other times, I have had more shops than great managers.

“I don’t know that it will ever be overcome. Retaining great team members, and giving them an ability to grow within the business, is the biggest juggling act ever.”

Cash flow can be a huge benefit when a business is flying and growing, he says. Access to cash funded his expansion. “The key learning is to not over commit. It can be easy to grow quickly when you have an abundance of great team members and high sales, but when things become tight, banks can be very quick to come knocking. Fortunately, I have not had this issue, but I have seen some friends experience this.

“While financing in the past few years has become tighter with more regulation, it makes me look more closely at my own numbers, which can only be a good thing for my business.”

Lamerton says he has had many highlights over the past 20 years.

“Subway has become a whole new family for myself, my wife and our two children; they have grown up knowing nothing different, and many of our closest friends are Subway franchisees, support staff at head office, and businesses and suppliers to Subway.

More than a franchisee

“On a personal level, a highlight was being named Subway Franchisee of the Year in 2002 for Australia/New Zealand. This was the same year I became a development agent for Subway in Western Australia.”

This role focuses on developing and growing a region for the franchise. Along with three partners, Lamerton took on a territory of 51 Subway stores and they have grown it to more than 150 outlets.

“We became Subway Development Agents of the Year for International (all territories outside of North America) in 2005. Last year, I took on the development rights to east Victoria and Tasmania, and have relocated to Melbourne to oversee 190 shops.

“My current focus is on helping franchisees in east Victoria and Tasmania become better business people, while I continue to have a hand in guiding and developing the business in Western Australia.”

But, as they say, that’s not all. There is simply no holding Gary Lamerton back.

“As Melbourne has become my new home, I am looking to buy existing Subway shops and become a multi-unit operator in the territory. While Subway franchisees have seen many challenges and competitors in the past few years, Subway corporate is facing these head on, and I believe we are again heading in the right direction.”

What does it take to be a truly successful multi-unit franchisee? Lamerton is quite clear: “Structure and accountability. Being accessible to your team is of vital importance. Each team member should know and understand their own responsibilities.

“Having a strong structure in place allows not only growth for your team in the organisation, it also allows you to enjoy a healthy work/family balance. Holding everyone accountable for their own responsibilities can be the difference between success and the opposite.”

Gary Lamerton’s stores:

• Beeliar
• Perth Airport
• Haynes Plaza
• Tuart Hill
• Fiona Stanley Hospital
• Flinders University
• Gepps Cross Home HQ

You can read more of these Empire Builder stories in the Jan/Feb edition of Inside Franchise Business, out in newsagencies now.