Canada: The Daniel Group: From Ice Cream Cart To Restaurant Empire

Daniel Frankel is President and CEO of Daniel Group, a Vancouver-based company whose roster includes the explosive Tap & Barrel brand. Tap & Barrel has two locations in downtown Vancouver, at both the Convention Centre and Olympic Village, with a third 'Shipyards' set to open in North Vancouver's Lonsdale Quay. Daniel attributes his success to determination and commitment, but reflecting on his experiences, it's apparent that Daniel has a gift for dealing with people and a natural entrepreneurial spark.

Daniel's first entrepreneurial endeavor was in grade nine, when he started an ice cream cart business in Stanley Park. He recalls with pride how he built the cart himself, completing it with a "metal frame, wood, a big four tube freezer, extension cord plug-in, and wheels..."

Daniel comes by the business naturally as the son of seasoned takeout restauranteur, George Frankel, who grew up in New York and moved to Israel before settling in Vancouver. In 1984, George won a public tender for a spot at Prospect Point in Vancouver's Stanley Park., where he then built a concession. This is where Daniel had his first summer job scooping ice cream.

Daniel observed tour buses that brought visitors to the scenic look-out by Prospect Point to enjoy the view and then continue on. He recalls thinking, "We are not capturing that market. There is a massive market that does not come back to consume anything." A strategy was born: "If I had sort of an interruption point there, where they could actually buy something..."

It was after two summers that Daniel approached his dad and put forward his proposal: he would build the cart, buy the ice cream from Prospect Point, and remit a percentage rent based on his ice cream cart sales. "It was like a 14 page proposal and it worked. This little ice cream cart, back then, was doing anywhere from a terrible day at $250 to my best day at just over $1,000" recalls Daniel. "I hired my first employee and ended up making a fair bit of money for a nine year old."

After high school Daniel followed his passion for the arts and music as he had always been exposed to world-class artists at a very young age. "My father taught me early on that in New York, you get to see the second half of the play for free" he says winking, "and this exposure to thinking outside the box and being creative was invaluable." Daniel still does all his own interior design work, "from sourcing materials, designing lighting, furniture and every little detail – because it's all about the details."

Daniel was continuing his immersion in arts and film when someone showed him a newspaper ad for a Parks Board Request for Proposal (RFP) at the soon-to-be open Coal Harbour Community Centre.

"I looked at it and thought: this is really cool and could use a change of pace - why don't we open up a little café?"

And so the Daniel Group was born.

Daniel was determined. He drove to Costco for supplies and found staff by persuading his girlfriend to help out. "It was hard," he explained. "We got up really early and went to bed late with only a few hours of sleep. Coal Harbour wasn't what it is today, there was only one building [in 2001], and we opened one month before Sept 11th. All of a sudden it was really hard. People weren't spending or going out, they were both financially and socially hit. We were opening up at 6am, getting home at 11pm when we would start to do the accounting. It was 2am by the time we went to bed to get up again at 5am. We were lucky to sleep three hours per night."

Then two things happened almost simultaneously. First was a call from the Parks Board. By now they had a strong relationship, and the board let him in on a space that was going to be put up for tender as a small coffee shop. Daniel jumped at the opportunity to expand.

The second was an offer from Daniel's dad, George. "He saw me working really hard and said how would you like to run Prospect Point? I'd love you to help out; it looks like you know the business and I'm really impressed". Daniel seized this chance too. He continued to purchase and build restaurants, developing a sizeable fleet under the Daniel Group.

Now, running a larger empire, Daniel continues to hold steadfast to his values. "From the very beginning, business is a choice, not a necessity. And you have the choice of who you do business with. You need to ask: do they have the same moral standards? We've done business with people that were more expensive, but it came down to: who do we want to be friends with and who do we want to spend our time with? Who do we want to build relationships with?"

For Daniel, confidence has been pivotal to his success. "You have to be confident with whatever decision you make, even if you fail at it, you have to own it. I'm often wrong, but never in doubt."

Another is surrounding yourself with good people. "My aspiration, as I grow the company, is to be the dumbest guy in the room. When you are surrounded by really smart people, that's when you know you've succeeded. I love it when I can say: how did they come up with that? They're brilliant!"

Daniel also looks to industry leaders: "One of my favorite quotes is from New York restauranteur Danny Meyer who said, 'Business is all about how you make people feel. It's that simple and it's that difficult.'So I have great relationships with my bankers, my purveyors, my food suppliers and that ensures that I get the first call, the insider info and keep my finger on the pulse. People are always calling me to ask 'Daniel, do you want to get in on this?'"

The biggest challenge that Daniel has faced is "the people and the culture." As the business grew from six different restaurants with varied identities, "fast forward to Tap & Barrel where I realized I was doing everything wrong. I needed focus and leverage, to do everything I loved but within one brand. What do I love? Everything local. I want to support local economy, breweries, wineries, and even our own internal growth with environmentally sustainable programs."

Daniel talks about the need for culture to be clearly defined, especially as the business grows. "The focus moving forward is number one the people – let's find phenomenal people with our core values, that's where it begins. Number two – let's build systems that when followed, we cannot fail with, period."

"Bringing financial expertise on board was a big shift for me" Daniel admits. "Let people know about the numbers so they can do better, and give them performance-based incentives". That along with financial transparency was key for continuing motivation.

Daniel's advice for those interested in entrepreneurship:

"Find something you are passionate about and just do it. Don't be afraid of failure. So many people are afraid of change and failure. Fail a few times and embrace that as your education.

"A mentor or a coach is invaluable. If you want to become an entrepreneur, talk to as many entrepreneurs as possible. Be a student of that world, see what other people do, read a lot of books. Get out there, do and explore, and don't give up.

"Don't be afraid of hard work. I've heard from a lot of people that they want to open up a chain and get investors and hire a president. But you have to do that all yourself before you hire a president!" Daniel laughs.

"So many people just see the end result and say - that's what I want. Blood, sweat, tears – you can't be afraid of it. It's what builds you."

What is next for the Daniel Group? "We have an aggressive growth plan; our internal mantra is "25 X 25": 25 stores by 2025 with the Tap brand. We have number three opening in 2015 and we need to find another 22 locations in the next 10 years - that's an average of 2.2 stores a year. It's aggressive but it's also attainable" he describes excitedly. "If we can share our vision with our leaders internally, then really our business is to create leaders who develop leaders who develop leaders... and become sustainable."

Their training program "Tap University" was created for just that reason. "We're looking at our company not just as a training company or restaurant company but a training, development and leadership company churning out great leaders" Daniel explains. "When we look at people to identify leaders, it's about personality and details – because at the end of the day, how you do anything is how you do everything. If you don't care about the small details then how could you really care about anything else –it translates to how they treat their guests, their level of respect and their commitment.

"We want to build a very important, self-sustaining company that allows people to live their dreams. I feel really fortunate to be in this place where I am. We were at an unbelievable crossroads and we've made the right turn."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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