Petro’s Director of Operations gives insight on what brand looks for in franchisees
By Kailyn Lamb, Marketing Content Writer and Editor, PYA
Since first coming to Knoxville for the World’s Fair in 1982, Petro’s Chili & Chips has worked to become a nostalgic brand for the region. After some early attempts at expansions and franchising, Alex Widmer, Director of Operations for the restaurant, said they have a better grasp of what makes them successful.
The nostalgia around getting a Petro (Fritos chips topped with chili, cheese, tomatoes, sour cream and green onions) at the University of Tennessee stadiums helped to launch the brand early on for franchise interests. “From a branding effort, people think we’re so much bigger because of that exposure,” Widmer said. Later, he added, Petro’s tried to replicate that in university stadiums throughout the Southeast, but it didn’t have the same effect. Outside of Knoxville, people didn’t know what Petro’s was.
Petro’s got its start when a couple from Washington state brought the chili concept to the World’s Fair in 1982. Widmer’s father and uncle, Dale and Keith Widmer, enjoyed the Petro so much that they helped the couple bring the chili to the next fair two years later in New Orleans. After that, they were hooked. Dale and Keith negotiated to buy the brand and build a brick-and-mortar location in Knoxville. It opened at the West Town Mall in 1985. Petro’s opened a few other mall locations, including Johnson City, Chattanooga, and Nashville. Eventually, the company began to branch into out-of-state territory, including northern Alabama. Once again, educating customers on the brand was a problem for stores. The quick expansion also meant that the restaurant had not spent as much time on business fundamentals.
“Malls were the big thing in the late 80s early 90s,” Widmer said. “If you expand too quickly and you don’t have a foundation of values, operating systems, procedures, or troubleshooting, it’s really hard to manage when things go awry.”
Widmer said the early mall expansions were all corporate stores. It wasn’t until the 2000s that Petro’s explored franchising opportunities. Some of the first were the stands in Neyland Stadium at the University of Tennessee in 2001. Widmer remembers working as a kid plastering flyers about the new location, saying “we had all this visibility, but people didn’t know what it was.”
This was when the brand took a step back and looked at what made its Knoxville stores successful compared to the expansions and new franchises. Part of the success was its unique product. But at the same time, people don’t think about chili in the same way they do about pizza or burgers. The real key, Widmer said, was the passion of the employees behind Petro’s. The company now has three franchise locations in North Carolina, two in Knoxville, and one opening in Chattanooga at the end of March 2022.
In franchising, you may be unsure how a person is at taking the product to market or operating a store. Widmer says that Petro’s doesn’t necessarily advertise its franchising opportunities for this reason. It’s a balance of looking for quality over quantity, he added.
“That does make franchising a little bit scary because you are entrusting your brand, even with a franchise fee, but you’re entrusting it to someone who may not be a 10 out of 10 on a scale of passion of your brand as you may be,” he said. “You have to be 10 times more passionate about educating people on what it is that you are and what you’re not.”
Widmer also said that people can sometimes get “trigger happy” when they see the success of corporate stores. One lesson Petro’s learned from expanding into the University of Tennessee was that just because a store is successful in one market, doesn’t mean it will be successful in another.
“You make the mistake of thinking it’s the same in every market. You don’t get to dictate what the market says is right or wrong,” Widmer said.
Part of knowing the market is recognizing that even though Petro’s product is unique among fast food, there are still a lot of options out there for customers to choose from. Consistency from one store to another is important. But, Widmer said he thinks the overall experience and how staff treats customers is key.
Because of that, Widmer said Petro’s store owners need to be involved in the community they’re in.
“We look at our franchise as very owner-operator based. For us, we want the owners to be there,” he said. “We have not afforded the model to make you a passive investor.”
Although the chain is particular about business skills and looking for people passionate about the brand, other facets of opening a Petro’s franchise are simpler. The location does not need extensive specialty cooking equipment, and outside of cutting fresh vegetables, Widmer said not much culinary knowledge is needed.
“You can sell a simple model because that’s what people want when they open a franchise,” he said. “We would love to give you an operating system that’s proven to work. It’s simple, and the barrier to entry does not mean that you need this culinary knowledge.”