Souping up franchising: Zoup!

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BRossBelieving soup to be neglected by most restaurants, Eric Ersher decided to create a food service concept where it was no longer a bit player, but the star.

His first Zoup! restaurant debuted in 1998, and by 2013 the Southfield, Mich.-based entrepreneur had 57 store locations (three company-owned stores and 54 franchisees), more than 700 employees systemwide and $32 million in systemwide annual revenue.

With hundreds of recipes in its repertoire, Zoup! offers a dozen different soup choices each day, served with freshly baked bread. Salads and sandwiches are also available, but soup is clearly the main attraction.

The company moved into second stage around 2009 — a milestone that brought greater financial freedom. “Today we’re able to hire talent and specialists we weren’t able to before,” Ersher says. “We also can make greater investments in nurturing our culture, which we’re very protective of.”

Indeed, culture is the secret ingredient in Zoup!’s recipe for success — setting it apart from other players in the fast-casual foodservice arena. Just as soup evokes feelings of comfort, warmth and well-being, Zoup! blends these intangible qualities into its corporate culture. For example, the company follows 14 guiding principles, known as “Zoupisms,” which include:

  •  Be first to say hello.
  • Find ways to say yes.
  • Everything matters.
  • The customer is always the customer.

“The customer isn’t always right,” says Ersher. “But it’s not about being right or wrong. The customer is the customer and deserves to be treated with respect and provided with a great experience.”

To preserve its culture, Zoup! is highly selective about bringing on new franchisees. The company has six members on its leadership team, and each has a veto vote, Ersher explains: “If any one of them thinks a franchise candidate is not a great culture fit, that’s it — it just takes one veto vote.”

Yet once a franchisee has been accepted, Zoup! bends over backward to support it. “Helping other people become successful business owners is top-of-the-mind for us,” Ersher says.

As a second-stager, Zoup! has been able to offer franchisees more resources. The company has beefed up training and in-store support, improved its technology platform and increased communications with front-line employees. For example, it hosts an annual franchise reunion, encouraging employees throughout the system to attend.

To fuel future growth, Zoup! introduced its first retail product in 2013 — Good, Really Good Broth — which is sold in grocery stores. On the restaurant front, Ersher looks to add between 20 and 30 franchisees a year. “Yet this is not about chasing dollars,” he stresses. “We believe that numbers don’t lead, they follow.

“We may do some things that aren’t directly profitable, but if it helps our franchisees and the brand, then it pays off in the long run,” he explains. “I’m really proud we’ve created something that not only provides customers with high-quality food and a high-quality experience — but enables other people to become business owners.”

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Second-Stage Rockstars

Because second-stage entrepreneurs are so focused on their businesses, their contributions often go unnoticed by the media, policymakers, economic developers and community stakeholders. With that in mind, celebrating growth entrepreneurs and communicating their value is part of the foundation’s entrepreneurship mission, which it carries out in a variety of ways.

Among these is Second-Stage Rockstars, a series of online articles that examines the ongoing impact of second-stage companies. These stories chronicle not only second-stagers’ economic growth, but also how they may be transforming their industry, creating empowering workplaces or excelling as corporate citizens. Below are some recent Rockstars; others can be found in our archives.