- Front Page
- Biz Tools
NEW YORK CITY — David Melton bakes pizzas, a lot of them. But among entrepreneurs, he is better known for taking minimum wage deliverymen and kneading them into millionaires. That fact has helped motivate the 120 employees of his Domino’s multi-unit franchise to focus on enhancing customer service and friendliness because they see the connection between pleasing the customer and achieving the American dream.
The results? In an industry that has employee turnover above 100 percent a year, Melton’s pizzerias have had 0 percent turnover among frontline staff. The general managers alone of his establishments have been with the company over eight years on average. Where others in the Big Apple are constantly starving for new talent, Melton has a waiting list of candidates clawing for a chance to work with him — at minimum wage. In a recessionary year where other eateries are struggling just to survive, Melton’s company aims to grow revenue by 10 percent.
His efforts have helped raise the New York market to the point that last year it became Domino’s largest metropolitan area by sales. Melton was not only restaurateur of an ever-increasing pizzeria empire, but he also raised the profile of Domino’s in New York City as the president of the area’s franchisee advertising cooperative, a position he has held since 1993.
“I think we have produced something that is pretty decent,” comments Melton. Each of his six establishments delivers $1 million in dough.
His franchisor thinks things are "pretty decent" too. Tim McIntyre, co-author of Hire the American Dream and vice president of communications for Domino’s Pizza declares, “Name an award presented by Domino’s Pizza, Inc., and Dave has probably won it. In his 20 years as a franchisee, he’s won the prestigious ‘Franny’ award 12 times." The Franny recognizes the top two percent of franchise owners in Domino's global network of restaurants.
Melton, the other co-author of Hire the American Dream, sits down with Blue MauMau to share with fellow small business owners and restaurateurs his two-decade-old, secret recipe of helping others achieve the American dream.
BMM: How did you achieve zero employee turnover in the fast-food industry and turn minimum-wage employees into millionaires?
Melton: That is our story. A bunch of guys started working for me as delivery people, pizza makers, and others, making minimum wage. Now they can buy any car they want. They live in million-dollar houses. They are millionaires now.
Take, for example, Anthony Maestri. A bicycle messenger in Manhattan, he walked into my store in 1991. While in college, he delivered pizza using his girlfriend’s car. He spent the rest of his time skating in the park. Smart, a lot of energy. He wanted to be part of something. Tony got into our management training program, where he worked 60-hour weeks for years. He had his own innate skills and perspectives in managing. He took the reins and rode hard. He increased sales, cut costs and in the process he made money for himself. After a couple of years of being general manager, he was able to buy his own franchise. Two years after that, he bought another one. And soon he had six stores.
He has a nice house in a beautiful community. Tony is living the American dream.
BMM: I can’t imagine it was all smooth sailing. What was it like during your first months of opening your first store?
Melton: When I arrived in New York in 1990, the market was a disaster. Stores had opened and closed. There were many stores owned by people in other states. There was no one here that said you have to hire good people, make pizzas quick, make the store look right and manage the business. The owners often thought as passive investors: that their business here was going to run itself.
The New York market turned around. It is now the number-one market for Domino’s.
I built these stores. I had never been to New York City before I came up to open the business.
It was 18 months after the start of our business before we picked up the core of what we have now, a crew who are a third generation removed from that original one. You can trace who knew who. But what I have now, largely immigrants, cannot be traced to who we first recruited during our first store’s first 18 months. Those recruits were locals who really wanted to get as much from the company as they could while doing minimal work. They didn’t look at their job from the perspective that if the business is successful, they would succeed. Their mentality was, "How can we get everything as quickly as we can, and then get out?"
BMM: Was there a point in those first 18 months where you realized you had to do things differently?
Melton: What made it turn was the luck of getting a couple of good guys, young immigrants. The first group felt more like it was okay to steal as long as they weren’t caught. They thought it was all right to argue with customers and not worry about keeping them.
I was lucky enough to get a couple of people who were the right guys who wanted to be part of my team. They were there to learn. These good people brought friends who they thought would be honest and work hard. They viewed the newer recruits and their own referrals as an extension of their own reputation.
BMM: What do you do with problem employees?
Generally people want to know where they stand. As a store manager, you know the problem guys. Give your dependable go-to guys the best breaks. Give them the best schedules and recognition. If an employee is in the bottom 10 percent they need to know, and they need to know why. They are not a bad person, but they are not meeting management expectations. Look at the bottom 10 percent and tell them what they need to work on. If they can’t perform, they need to know that there is help. If they won’t do it, then it is a disciplinary situation. Don’t be scaring away customers that the rest of us want to have. We are here to make money, to be part of a good business. If an employee is doing things wrong, scaring away customers, then they are costing everyone money.
That creates peer pressure to take care of the customer.
BMM: Do you think to yourself, “Can I make this person a millionaire? Do they have that seed of greatness?” when you are hiring someone?
Melton: No. The most unlikely people can become successful. You cannot always tell at the beginning who is going to be a millionaire. However, you can tell who is going to be friendly and comfortable with customers.
I think you can size up someone. The reality is that the interaction between the pizza delivery guy and the customer is about a minute.
Yesterday afternoon at my store at 89th and Columbus, the manager introduced me to a couple of new delivery people. With both of these guys, they smiled. They had an easy-going personality. If these two were at my door, I would feel good about it. That is what I am looking for. It does not take long to figure that out.
I told the two new recruits that the day they were hired, they have been authorized, they are expected to, and have the ability to make decisions to make the customer happy. They can give a customer a pizza free of charge. They can give customers back their money. They can try to take another order from them. It is the employee’s call.
BMM: Why is it important in business to try to develop millionaires out of entry-level employees?
Melton: It creates an environment where there is not one owner in the business, but rather there are a hundred. People think like an owner. I suppose that if I could clone myself to make every pizza, interact with every customer, my business might be more successful. Frankly, by creating a business with little owners, it is a little bit more of me in every interaction. There’s a little more pride in how that pizza looks. There’s a little more enthusiasm to make the moment of interaction with customers a more positive experience.
I want our team members to realize that the more the customer says, “Wow!” the better it is for the employee’s own pocketbook.
The customer’s experience lets us pay rent. It lets us pay paychecks. It allows us to continue to be here so that we all have a job here next week and next month.
BMM: Why do you think you were able to successfully tackle New York's market where others struggled?
Melton: I had a great mentor. I took a job where I worked at minimum wage at a pizza store for fifty hours a week. But I had the good fortune of working for Frank Meeks, one of the most respected franchisees in the Domino’s system.
I came from a legacy of operating from the best that there was. I also worked for a franchisee in Virginia, Dave Wood, who is one of the smartest business people that I’ve ever met. I worked for almost eight years in operations and development positions with these guys before I became a franchisee. I helped them build their businesses. So I had a bunch of experience apprenticing under great mentors that I think prepared me especially well to enter the New York City market as a franchisee.