By Alan Dorich
Published June 2017
Since its start in the gas and convenience store business in 1976, The Dhanani Group has come a long way. Today, the Sugar Land, Texas-based company is one of the country’s largest franchisees for Burger King Corp. and Popeyes Louisiana Kitchen Inc.
The Dhanani Group achieved this status by being hands-on in its operations, CEO Shoukat Dhanani says.
“We are out more in the field than in the office,” he says, noting that he personally spends two weeks of each month at the company’s locations on the East Coast and in the Midwest. “That’s really and truly the main reason we can be successful.”
The company largely focused on gas and convenience stores until 1994, when it became a franchisee for Burger King. “We did the first co-branded unit in Houston,” he recalls, noting that The Dhanani Group initially saw the QSR industry as a side business.
But when The Dhanani Group saw its business surge after opening its second Burger King, it re-evaluated its focus. “We thought, ‘This is a good business and we should continue growing into this,’” Dhanani recalls, noting that it added more locations, including freestanding restaurants.
“Up until about 2009, we had about 45 Burger Kings in Houston,” he says, explaining that The Dhanani Group began acquiring more locations, including 20 units from a franchisee. In the following year, it acquired 65 more.
Doubling Up
In 2011, The Dhanani Group became a franchisee for Popeyes. Led by Amin Dhanani, it continued its streak of acquisitions. “By December 2012, we had about 85 Burger Kings,” Dhanani recalls, noting that the company set its sights outside of Texas.
This included acquiring 101 locations in the New England region from Burger King Corp., and 255 more from Heartland Foods in 2014. “We doubled our size overnight,” he says, adding that the company also made acquisitions in Minnesota.
“Right now, our unit count on Burger King is right around 500,” Dhanani says. “That makes us the second largest franchisee in the Burger King system.”
Although The Dhanani Group made some acquisitions of Popeyes franchises, Amin developed more units from the ground up in cities such as Phoenix, Denver, Salt Lake City and Austin, Texas. “Today, we are the largest franchisee for Popeye’s and have over 200 units,” Dhanani says, noting that the company enjoyed sales last year of $1 billion.
Healthy Turnarounds
The Dhanani Group largely focused on the acquisition of “sick” organizations, Dhanani says. This usually found the company buying companies that were not operating well, under-capitalized and not keeping up with the times.
“We’ve been able to turn them all around very quickly,” he says, noting that the company often re-staffed them. “We had to clean up from the senior management all the way down to the store managers.
“At the same time, we remodeled the stores and got the CAPEX needed to bring the restaurants up-to-date,” he says, noting that The Dhanani Group saw strong returns on its investments. “In one of the acquisitions that we made, we were able to double the EBITDA in 12 months.
“Obviously, it doesn’t happen overnight, but we were able to do it in good time,” he says, noting that The Dhanani Group plans to keep growing. “We are in the process of making more acquisitions on the Popeye’s side.”
The company also plans to continue updating its locations. “We are remodeling about 25 Burger Kings and building about 10 Burger Kings every year,” Dhanani says.
Staffing Avenues
The Dhanani Group is thriving in the current economic climate. “We are in pretty good shape,” Dhanani says. “We are comping positive year over year.”
The company also is coping with staffing challenges. “The wages are going up, but at the same time, the availability of staff is getting [lower],” he says. “It’s getting harder and harder to find and fill out the positions.”
The Dhanani Group copes by actively recruiting, Dhanani says. “We have to do a lot more recruiting than we have ever done before so we can have enough staff that we can keep the doors open,” he says.
This includes the use of internship programs through colleges. “We [also use] social media and every other avenue that’s available for recruiting today,” he says.
Looking Ahead
The Dhanani Group has been recognized for its work, which included a profile of Dhanani in Forbes and being named to Nation’s Restaurant News’ Power List. The company also has been very fortunate in its acquisitions.
“All of our acquisitions have worked out as projected or better,” he says. “There’s nothing more satisfying than that. That makes me proud of our group.”
But the company has not lost sight of the values that brought it this success, he asserts. “We’re still working hard as we ever did,” he says, adding that he sees a strong future for the company in the QSR industry.
“That segment is doing okay and is going to do fine in the future,” he predicts. “People need food and need it quick, and there will always be a demand for that.”
The Dhanani Group also plans to grow its reach. “We are looking into other brands to branch out into,” he says, noting that the company also is considering entering other industry segments. “We’re not only limited to Burger Kings and Popeye’s, and we’re looking into the casual and fine dining markets.”
The company also has established a succession plan so the younger members of the Dhanani family can step in and take over. “Obviously, it’ll take time, but they are on their way to moving into that leadership role,” he says.