From the Corner Office

In each issue, we interview a President/Owner of a small or medium sized business to talk about their business perspectives and their company's direction. Each issue will feature a sampling of some key questions every business owner must consider. This month we sat down with George Naddaff, the CEO of KnowFat Lifestyle Grille. 

He has a long history of success in a variety of industries.  He developed Boston Chicken/Boston Market into a national franchise brand and in 1992 sold it to a group of Blockbuster Video executives. In 1993 he shared in its record-setting IPO (143% first-day increase). Naddaff has founded and/or been significantly involved with several other successful concepts including: Mulberry Child Care Centers, which had over 90 company-owned childcare centers when it was sold to KinderCare; Sylvan Learning Centers, the nation’s leading after-school learning facilities; Ranch*1, a New York-based chain of grilled chicken sandwich restaurants; Living and Learning Schools, which operated more than 50 upscale childcare facilities and was sold to KinderCare; VR Business Brokers, the nation’s largest business brokerage franchise with over 350 offices, which was acquired in 1986 by Christies, London. Naddaff began his career in food service when he co-founded International Foods, which operated 19 KFC franchises in the Boston area and was sold in 1970.

Q1 – You have been very successful in a wide variety of business ventures. Can you share with us what brought you to each of these industries?

In each case, I came to the company as a result of finding a need and filling it. For example, in 1971, I was looking for a nursery school for my child.  He was three years old – and needed some additional help with communication.  My next door neighbor had put three of their children at Green Acres in Waltham, and they told me that this was the only place I needed to put my kid – it was the best in the area.  So I went over there to see about placing him – and found out that there was a three year waiting list – over 350 families were on that list.  I checked into other schools around the area, Brookline, Wellesley, Newton.  But as fate would have it, they were in church basements, and the like.  I became disenchanted with the search.  I kept thinking, what is more important than your child, and giving them a good early education experience? So, I went back to Green Acres and talked to the owner, Mrs. Mitchell, who happened to be the mother of F. Lee Bailey, the attorney. I spoke with her to see if I could get my kid in the school.  But she said it wasn’t possible – there were so many other people that were ahead of me with similar needs. I had asked her what her education philosophy was.  She told me it was, “I am, I can.  A child learns to become a person.”  Now I really wanted this for my son.  I asked her if she had ever heard of Maria Montessori and she said that she had. At the time, I owned a chain of Kentucky Fried Chickens, so I knew how to build things. I made her a proposition.  I told her I would like to build another school and have all the people on the waiting list be able to go there.  She told me to leave my card and she’d think about.  I think she just wanted to get rid of me! Later she called me and asked where I would build a school.  She didn’t know it, but she had just given me a mission.  I found a great building in Waltham, and we went from there resulting in 48 schools. The timing was right.  The workforce in 1971 was 15% women and growing.  Daycare was becoming more of an issue. Women were terrified of leaving their kids all day.  We ended up as the 4^th largest daycare change east of the Mississippi.

As far as the restaurant business goes, back in 1967 my partner and I bought the exclusive rights to Kentucky Fried Chicken in the greater Boston area. That’s where we started. I left there to do the day care business in 1971.  Then in 1988, my wife called me and asked me to pick up some dinner on the way home.  She wanted me to go to Boston Chicken, which was a little rotisserie store in Newtonville.  I reminded her that there was a KFC around the corner.  She told me that she didn’t want any of that ‘fried stuff.”  She wanted rotisserie and also some steamed vegetables.  Steamed vegetables?  Yes, spinach and squash, and also some fresh mashed potatoes and cornbread.  I went over there to this little shop – and found a line out the door. In February. I thought I’d freeze to death before I got inside. When I finally got in – it smelled unbelievable.  I could see the chickens rotating on the rotisserie.  The steam table had 13 different side items. You could take the whole meal home, AND you could put that meal on china, not cardboard plates.  An average meal was $13.75 per person. You could get a chicken and all the sides and have a great meal for 4 people for a very reasonable price.  It occurred to me that this was very much like the day care business in that the women that were now in the work force still had to put a meal on the table at the end of the day. I did this analysis while I was waiting in line.  And when I got up to the counter, I gave the owners my card and told them, “you have something here.  This could be franchised.”  I took my meal and went home and it was GREAT – hot, flavorful.  I couldn’t sleep that night. I tossed and turned. I kept thinking this could really be the next big thing.  I want right back there the next morning to talk to them.  They were nervous – they found out that I was the “chicken” man and thought I just wanted to steal their marinade.  After 7-8 months of negotiating with them, including letting them keep their original store (which was really important to them) the Boston Chicken franchise operation was born – and it had a record setting IPO in 1993.

Thomas Edison said it:  “Find a need.  Fill a need.”

Given the number of companies you have been involved with, do you think boards of advisors/directors are important for the growth of a company?  If so, why?

They are really extremely important.  In my current venture, colleagues have asked me why I got such a powerful board (and I have both a board of directors and a board of advisors) so early in the game.  They’ve asked me why I didn’t wait until I had 100 units instead of just 3.  It’s like this:  NASA spent billions of dollars to launch one rocket ship.  If they were off one degree at launch, it could have gone ninety million miles off the target, from the starting point.  I believe everything is in the early launch.  It’s so important that you get the best, seasoned, and educated team at the start so you don’t go that one degree off in the beginning.  The less time I spend fixing the one degree off, the more time I can spend perfecting the one degree on.  You need to listen to your board, in spite of the fact that they may be against some of your ideas.  You need to have a little friction on your board. You need to have people who will ask you the hard questions that delve into your rational.  People who join your board – they have to BELIEVE.  Why?  Because they have lots of other things to do with their time than to ride a horse with three legs.

How do you know that you have a good board?  How do you know that you don’t?

You get to know pretty soon in working with these people on where you stand.  How aggressive are they?  Who really cares about what you are doing?  Who doesn’t seem to care?  You pick up on who shares your passion for this.  You don’t want someone there to just keep up the business, or just wants to have something to do.  You know they are good when they roll up their sleeves and play the game with you.  Jeffrey Ross is on our board, and recently he did some workshops for us.  He’s in the game. That’s when you know you’ve got the right people.

With all the businesses that you’ve run – is there anything that sticks in your mind as having been a valuable lesson that you’d like to share?

Don’t get caught up with your own ego.  Guys who have succeeded sometimes think that they have walked on water, but don’t realize that is has to be frozen.  The combination of ego and not listening to others are real problems.  Sometimes some of the young guys can let an ego carry them a little too far.  So if you keep your ego intact and realize that you are not better than the greatest ball player, Babe Ruth, you’re all set. He had the best record for successes and failures.  You need both to succeed.

Tell us about your latest venture, KnowFat Lifestyle Grille.

Sometimes there are just quirky situations that happen in people’s lives.  I’m 75.  At 73, I was really thinking about just doing some consulting and slowing down.  But the reality is that I am a serial entrepreneur.  So one day, three years ago, I’m driving down Arsenal St. in Watertown.  I see a store with a long line out the door.  I have a habit of getting into long lines.  Sometimes they turn into soup lines!  But anyway – I notice this store. It has no parking.  It’s next to a tire store and a Toyota dealership.  Not a great location.  I parked 3 blocks away and walked back there.  They had a menu of food that was luscious:  healthy food with nutritionally values on the menu.  The original name was NoFat LowFat.  I looked at the people waiting in line – who where they?  Mainstream people – not obese, not Arnold Schwarzenegger. It was mainstream food prepared in a healthy way.  There was also a nutritional supplement store in the restaurant –a 2-in1 concept.  I spent 3 and a half weeks scouting the place.  It was just as busy at noon or 6:30 PM.  One out of five customers went to the supplement side.  I was so fascinated that I began to talk to the owners.  They were body builders who had opened up a supplement store.  One of them was also a chef at Harvard.  He started to make some healthy food for some of his friends on the side.  More and more of them asked him for this – which turned into the restaurant.  Later they opened 2 more – one in Shrewsbury and one in Woburn.  I kept going back and watching the volumes grow.  I thought that if ever there was a concept that was perfectly timed – this was it!  Think about it – living a healthy lifestyle is a big issue these days.  There are 7000 Curves locations.  There were 20,000 runners in the Boston marathon.  Everyone is running for their life.  Everyone is trying to eat more healthy.  So we decided to do business together.  Two months ago we opened a new one in Down Town Crossing.  Billy Crystal was in town doing his show.  He ate there every night he was here.  On the last night of the show, he brought the whole cast there.  It was in the Boston Globe and the Boston Herald.  We have some new franchises due to open in the Boston area very soon.

More Articles