Give Your Clients A First-Class Experience, with Terry Pham
Published DateAuthorDan Sullivan and Strategic Coach
Terry Pham has been an entrepreneur for 20 years, and this year, his bubble tea and mochi donuts business is becoming a franchise. In this episode, Terry shares all that has led him to this point of success and what he predicts the future holds for him.
Here's some of what you'll learn in this episode:
How a lot of Terry’s entrepreneurial approaches and attitudes come from being “a latchkey kid.”
Why Terry long resisted the idea of his company franchising.
How joining The Strategic Coach® Program has been a transformational experience.
The inspiration Terry gained from seeing his mother work in a convenience store.
How Terry gets past his biggest limiter—himself.
In a new situation, you can learn a lot by figuring out how you can adapt instead of just sitting and waiting for it to be over.
When you have something, you franchise it. That’s the American story.
Hospitality is about how you make people feel.
Focusing on hospitality means thinking about guests’ needs before they know what their needs are.
Even more important than thinking tools is unlocking the way you think about things.
Big problems are easier to deal with if you break them down into smaller pieces.
The first few years of a new project might only be about figuring it out. If you can reframe your thinking and approach problems differently, there are going to be breakthroughs.
Loved ones can provide you with the confidence to pursue your goals.
Customers will go out of their way for excellent hospitality.
If you haven’t truly experienced hardship and struggle, you may over-amplify the magnitude of what your problems really are.
Dan Sullivan: Hi, this is Dan Sullivan and I'd like to welcome you to the Multiplier Mindset podcast. Hi, it's Dan here, and it's a great treat to introduce an example of one of my favorite subjects, and that is immigrants who come to the United States and they become entrepreneurs.
This is Terry Pham, and Terry has a fast-food business in the Dallas area, and he is going to tell a story about his plans for expansion. He expanded in a very, very interesting way during COVID, when there was lockdown and people couldn't come to the restaurant. He talked about how they took the restaurant to the people, and it gave him an idea of expanding even further than his original restaurants in the Dallas area. And now, he's going through the process of translating his Dallas idea into a franchise that can go regionally and nationally. It's the American story, this is what you do when you have something, you franchise it.
Terry Pham: My name's Terry Pham. I'm one of the co-founders and CEO of Fat Straws Boba & Mochi Donuts. So, we have a bubble tea and mochi donut brand here in Dallas; we've been around for 20 years, we have five locations. So, my wife and I have started that; we started that six months after we got married, which I thought was a great idea, for some reason. I've been an entrepreneur for 20 years.
We're actually getting ready to franchise, so we're going through that process this year, which is going to really speed up our growth process. So, it's very exciting, but a big shift in what we've been doing. It's been interesting, because I think I've shied away from it for many years because I didn't really see franchising as an opportunity for others. And that's really our company's core focus, is around building relationships to create opportunity for others and make impact in people's lives.
I saw it as a way that we can make money—everyone was telling us, "This is all the ways you can make money." But I didn't really see an opportunity that we got to create for others, until there was a reframing of my thinking around it recently. So that's been an exciting journey of getting exposed, to see some folks actually who were doing it in a way that aligns with who we are.
I'm in my second year of Coach; had a really good friend who's been in the program for 16 years and has been very consistent about encouraging me, I say pulling, not pushing me to join Coach. Made the jump a couple years ago, which has been a transformational experience for me. I love being able to create space. Entrepreneurs are very busy, sometimes overscheduled. To be able to create that space and get away and spend time and work on the business, and then just be able to collaborate with other entrepreneurs, to hear and share what they're doing and how they're going on this journey with you, has been just so much fun for me.
It's funny, because people always talk about the tools, but it's really been the mindset shifts, thinking about my thinking, as they say. Hospitality is about how we make people feel. A great server in a great restaurant that’s focused on hospitality really thinks about anticipating the needs of the guests before they even know what their needs are. So, to me, there's a lot of customer service and technical things that just happen really well behind the scenes at Coach. But what I think Coach does a great job is is really in the hospitality side.
So, from the moment of my first engagement with Reggie, who was enrolling me in the program, and then the minute I signed up—this was even during COVID—and so the way that they’ve thought through, “How do we create that personalized touchpoint?” I got a box full of books, I got a bunch of things to actually dig into right away, and then just the professionalism of the way that they engaged, it just blew me away. So, all my experiences with the staff have been first-class.
So, it was interesting to see, even going through it the first year in COVID, and then going through this last year in-person, it's been great. I'm not a Zoom guy all the time, I'm really very relational, it's a big part of me, but I was still impressed with the way they were able to create breakout sessions and create opportunities for connection. But in-person, it's just been fantastic. I love coming in the night before, and we have dinner, and then get to go through the experience together.
But the biggest thing for me really again, has been the mindset shifts. I think I can get hung up on a lot of the tools, but it's really been unlocking the way I think about things. I always say my biggest limiter is myself, so if I can reframe the way I think about things or I can approach problems differently, there's going to be breakthroughs. There's a reason I think they call it bottleneck, because it's the top of the bottle and that's usually where I am, at the top of the company. So, I'm, oftentimes, the bottleneck. And so that's what's been great is unlocking some of those things for me.
Both my parents came from Vietnam as refugees. So, I always tell people, and sometimes it's easy for me to forget, I tell my kids, "Imagine if we had to pick up and we had to move to another country where we look like nobody else, we don't speak the language, and we literally have the clothes on our back, and you have to start over. And that's what my parents had to do." So, my dad, unfortunately, passed away two years after we had moved here, in a plane crash. And so my mom was left in a foreign country, barely speaking the language, to raise four kids by herself. So that also meant we had to help pitch in and do more.
So, I think a lot of that entrepreneurialism comes from being a latchkey kid and being a figure-it -out, not having someone bail me out all the time. I was outside, running around playing all the time. If I had to deal with conflict, if I fell down and got hurt, I couldn't just call my mom and say, "Mom, come get me." So, I had to deal with a lot of things on my own. But she raised us working at 7-Eleven, which is a convenience store chain, and so I grew up in that retail environment. I got to see my mom really have an impact on the community, because whenever the store was underperforming, they would move her because she could usually bring it back up. But what always impressed me, even at a young age, was to see her customers move with her.
So, it's kind of funny to think about, this is before Starbucks and Dunkin’ and all the coffee buzz, that's where people got their coffee. And so for them to move out of their routine, their commute, it's because they wanted to see her and her team. Again, it was a hospitality thing, it's the way she made people feel. She knew what their drink was, and if someone always wanted to make sure they had Diet Coke she would keep it there for them. And so I got to see that from her, really, is just how she served and loved people.
And then I went to college and had an IT career. Even in my corporate career, always just trying to figure out, how do we do things better? I just didn't fit in that corporate model very well. I'm very much a figure-it-out kind of guy, all about trial instead of research. I'll definitely jump off the cliff and build the parachute on the way down. So, that's what ended up happening when we got started, it was just like, "I'm tired of this corporate career." I left—and this is, again, six months after we had gotten married—and I told my wife, I say, "Hey, if we want to do something entrepreneurial and really take a big financial risk, now is the time, because all I have to my name is a ’99 Nissan Maxima. We live in an apartment, we have no kids, we don't have a mortgage. If we fail, I can always go get a job."
So, I think what was a key learning for me in that was not just having the confidence to go and take the risk, but where the confidence came from is really the encouragement of my wife. Because it was like, "Do you think I can do this?" She 100% supported me. Knowing that we were going to lose half our income, she was like, "You go for it. You can do this."
Not only did she support me emotionally, she would work her corporate job, and then come home and change and throw on a Fat Straws t-shirt, and come and sling tea with me, work until close. So, that's what we did, we were both in it all day, every day for the first several years.
It's funny, because even when people come and approach me and say, "Hey, I'm thinking of starting a business," or "Hey, I'm thinking about starting a restaurant," I find myself sometimes making sure they know what they're getting into. And so I probably spend most time almost trying to talk them out of it, to see if, even if I've talked them out of it, do they still have the capacity to want to continue to press forward? So, I think in that first sharing with folks, it's overcoming that initial inertia of very few people thought we were going to be able to do it, and that obviously made me want to do a little bit more. So, I think initially getting it started, creating it and building it, and then having the realization that, "Oh, so not only do I get to create it and build it, but I actually have to run the thing now." The retail business, it runs all the time, so weekends, vacations. So, I think probably one of the biggest first challenges as a company that we really face, though, was when we decided to open our second location.
So, we opened in 2002 and like I said, I really didn't know what I was doing. When I say I was figuring it out, when we were looking for a space, I literally just saw the phone number and I called and I asked the landlord and I said, "Hey, how much are you renting the space for?" They said, "It's $25 a foot." I said, "How big is it?" It's 1,000 feet. I said, "So, it's $25,000 a month?" They're like, "No, it's $25,000, you divide it by 12 and that's your base rent monthly." I said, "Oh okay," They said, "Plus triple nets." I said, "What's triple nets?"
So, I'm literally calling the person to give me a real estate lesson on how to lease a place. So just figuring it out. Going through that journey the first few years was just figuring it out, and then once we had started to hire staff, we opened our second location, and this was even a bigger jump, because the first location was an existing store and really minimal investment and easy to get open. We were going to build one from the ground up and that means you're going into a center, but you're putting in the AC, the plumbing, the HVAC, everything—significant, significant expense.
We opened that, that was in 2007, and so shortly after, 2008, 2009, we literally saw tenants, every few weeks pulling out, leaving. I also was pretty aggressive on the front end; not only did I sign that lease for the second one, I had actually signed a lease for a third location, but we hadn't even started construction because I had used all the money for the first one, because I went 100% over budget.
So, I had a lease that was due at a store that I was trying to grow, a recession that was starting to come, and so I'm lying in bed sleepless nights wondering, do I tell Jennifer that I'm going to have to probably file bankruptcy today or tomorrow? For some reason, there was just this strange moment of lying in bed and literally, feeling my heart pounding at 3:00 in the morning. I'm like, "My body thinks I'm going to die, or my body thinks I'm like going to be attacked by an animal. But I'm safe and I'm in my bed. I'm in my house and they can't take my house. I'm going to be okay. So what can I actually do? How do I break this big problem apart in pieces, instead of trying to be overwhelmed by it?"
So, the next day I went and I met with that landlord who was wondering when we were going to open, and I looked him straight in the face and I just told him the truth. I just said, "I'm really sorry. I thought I could do this, and I've just mismanaged it. I went over budget and I'm out of money and there's no way I can actually open the store. I know that I signed a lease and I owe you rent." He stared at me for what felt like an eternity, and then he just tore up the lease in front of me. It was a five-year lease. "No need to squeeze a dry lemon," is what he told me, and he smiled at me. That was such a blessing that he was able to do that, because he could've put me under. So then, I was able to free that up and then I was in the store and the recession's hitting, customers that used to come every day, now are coming once a week, coming every other week. The center's empty, we're not getting that synergy from other businesses or the restaurants, they're all closing. And so I just sat in here and realized we can't just build it and they will come.
So, what we did was I just started a hustle. I just got a bunch of free drink coupons, and I just pounded the pavement. I went to all the local businesses, there was a Hilton office. And so we started to grow the business that way. We were just relentless about focusing on the hospitality and the guest service. I had a big meeting with the team in '08 and just sat them down and said, "Hey, we're in an unprecedented financial crisis right now. We can't just assume that that customer's going to come back. They're voting with their dollars and maybe money's tight. We've got to really make sure that they have a first-class experience here."
So, we were actually able to grow from '07 through that recession, which was crazy, and rode that and had several good years. And then I think we started really hit our second phase of growth much, much later, and had family and things, so it slowed down the growth base. But once 2016 hit, that's when we opened the next three stores over the last six years.
There's this hypothesis that a lot of the anxiety that people are dealing with now, it actually comes from a place of not having truly experienced hardship and struggle. And so we can't delineate between what's really life-threatening, fearful, catastrophic; we may over-amplify the magnitude of what our situation's problems really are. Because we haven't been tested, truly. We haven't been shot at, we haven't been on a boat for two weeks like your grandfather.
We were fortunate, because my dad was an Air Force pilot, so he went to the Embassy; we flew on a plane. A lot of my family, literally escaping pirates, getting skin diseases on boats. My cousin, his dad, my uncle—pirates working on a ship were coming by—they wanted to go through the night and make sure he wasn't crying; he gave him a sleeping pill, but then he was afraid he gave too much, and then he didn't wake up, his mom thought he had killed him.
It's just crazy to think about what people do to come here. And so that's where I'm creating opportunity for others. There were so many sacrifices that were made for us to be here, and so I have a deep, deep responsibility and privilege to really pay that forward to others, because we do have a lot of immigrants that work for us, as well. It's really cool to be on the other side of that and see people have built a life. And that's what makes it amazing.
COVID was, obviously, a big year for us, as it was for everyone, so not just for us, I know the whole world was impacted. But that was another stressful time because they were shutting down businesses and we weren't sure if we were going to be considered essential. We were able to stay open, we just couldn't have our dining rooms open.
Really, it was my wife, who, in that moment of crisis, had the vision to just say, "Hey, I have an idea." So, she got on some Facebook groups and just shared, "Hey, we're open. We'd love you to come support us." And then in this group, this group started to grow, and people—they're in a suburb 45 minutes away where we don't have a location—and they're saying, "Hey, would you ever deliver to us?" This is in the height of the lockdown. "Would you ever deliver to us?" My wife says, "Hey, do you want to go and deliver to Arlington on Saturday?"
We had just switched our point of sale over; we could do online orders. So, we created this portal so everyone put their orders in. That Saturday, I think it took three cars, we went out, it took us eight hours, we went door-to-door all over Arlington. It ended up being a weekend's worth of revenue, and so my wife's like, "Hey, we're onto something here." So we did it again.
What we realized, she was just like, "This is taking way too long. The gyms are closed, the schools are closed, so let's just park in front of this LA Fitness right off the freeway and tell everyone to meet us at noon," and we made a makeshift drive-through. You would pull up, you wouldn't have to get out of your car, we'd just say, "Hey, can I get your name?" It's like, "Oh, order number 54." I'd grab a box of donuts, I'd grab a gallon of tea, and if you didn't want us to touch it, we had gloves on and masks, we'd put it in your trunk; and we'd do this makeshift drive-through.
So, we started doing these pop-ups all over town. And what ended up happening was we were actually able to see where our customers lived and where we had some future potential. So, because of that, Arlington, which is a suburb of Dallas, in between Dallas and Fort Worth, was always our number one popup location, so when we started looking for a new site, that's when we homed in on Arlington.
So, we just opened, in July, location number five in Arlington, and it has our first drive-through. So, it's been doing really, really well. Again, that came through this terrible time of the pandemic, but we learned so much by not just sitting and waiting, but like, "Hey, how do we adapt in this situation?" Actually, through that, we added that adaptability as one of our company's core values. We really need to be adaptable, not just to the customer's needs, but just what happens in the market, what was happening in the world.
So, through that process, we opened number five and then we hired an integrator. We're an EOS company, so we use EOS, and we hired an integrator and we decided as a group, we can keep cranking out company units, but we said, "What's going to be not just faster growth, but what's going to create more opportunity, living into that purpose? What's going to really create more opportunity and not only impact, but scale impact for people?” Franchising is the path forward.
So, our vision is also not just that outsiders are coming in and franchising, but we have people we've built from within who are going to be owners of locations one day. So that's why we've been focusing on franchising. So, first part of the year, we're really focused on getting this new unit open and learning drive-throughs, all these new things we've learned, but building some foundational elements on our team. And now through the rest of the year, we're sprinting to get all of our legal stuff done, so that in Q1 of 2023 we're going to be ready. So, we're already taking requests and just people who are interested right now, inquiries. And so the responses have been really great. But we're going to start hopefully franchising in Q1—whole new world.
What's interesting is I may be a better franchisor than just business operator, because what I've learned over the last few years is what I actually really enjoy is coaching and mentoring and developing people—that's where I get really, really excited. So, a gentleman named Loren Goodridge, he's in my Coach program, he pulled me aside and says, "Hey, I hear you're franchising," and he said, "Why are you doing this?" I shared this purpose and he says, "I'm going to lead you with two things. If you don't love teaching and coaching people how to become entrepreneurs, don't do it." And then he said, "Number two, don't ever lose sight of franchisee profitability. They're in business with you to be profitable. If you're trying to just make profit off of them, you're not going to be successful." So then, when I started to realize it, "Oh, this is going to be really fun for me! I love coaching and mentoring and spending time with people."
We're going to start expanding around Dallas-Fort Worth, you can say DFW Metroplex, so we can make sure we can adequately support them and our new franchisees. And then from there, we're just going to start expanding out that circle. Five locations in Dallas-Fort Worth, suburbs near Plano, Richardson, and Arlington, and then Dallas proper.
I am very hyper-focused on growing Fat Straws franchising, but I'm also open to the possibility of what other opportunities are out there right at the moment. So, as I say, I don't believe in retirement, I just believe in doing more of the things I want to do, less of things that I don't want to do or have to do.
Dan Sullivan: I think entrepreneurs are immigrants, because so many entrepreneurs, your family is not an entrepreneurial family, or friends that you grow up with, friends you go through school with and everything else; they don't become entrepreneurs. So that there's this jump into a new world, and you have to establish your credentials just by being useful and valuable in the marketplace. I think that entrepreneurs—and there's actually long, long studies on this subject—that financially, most entrepreneurs do anywhere from 25 to 50% better economically after five years than native foreign people, and over the course of their lifetime, they do better. The reason is that they gave up their past and they had to create their future. And that's the same thing that entrepreneurs have to do. So, it's a great story on immigrants and entrepreneurs.