Kevin Hern owns 10 McDonald’s restaurants in the Tulsa area and started as a franchisee in North Little Rock, Arkansas, in 1997.
1. McDonald’s is often seen as this big conglomerate. But most of the franchisees are small-business people. What’s the climate for businesses like yours right now?
Every franchisee is a small-business person that pays royalties to the franchisor for the use of their operating systems and trademarks.
Throughout the McDonald’s company, we have a deep commitment to serving our local communities — it is a symbiotic relationship. We all live in our local communities alongside our customers who visit each day, so we recognize needs locally and can respond personally. We are neighbors, so our franchisees and our company as a whole is deeply committed to our community and supports local activities. And of course in Tulsa we contribute thousands of dollars helping classroom teachers and athletic programs every year.
The community support from our McDonald’s locations help support our Ronald McDonald Houses. The house provides families with critically ill children a place to call home while their children are getting treatment. My family is involved, as well as employees from our McDonald’s locations — neighbors helping neighbors as they face such a challenging time with ill children.
2. What are the biggest obstacles you face as a small-business owner?
Government regulation is stifling. We are constantly getting new regulations from the government that create a threat to true entrepreneurs having second thoughts about starting a new business or staying in business. Free market ideas and capitalism are under constant attack.
3. Why, in your opinion, is Tulsa such a good market for fast food? It seems like everything is tested here.
I believe it is a great city for all types of foods. The folks in Tulsa appreciate the opportunity to have a variety of food offerings with convenient locations.
The median income and diversity of our city has significant influence on the mixture of quick service restaurants, mid-level and high-end dining locations.
As the finance chairman of our U.S. franchisees, I work to get our McDonald’s restaurants to serve as the test market for a variety of initiatives. The exterior and interior designs were tested in Tulsa 10 years ago and now are the global standard for all 36,000 McDonald’s locations. In 2014 and 2015, we saw a change in the menu pricing designs. In late 2015 and currently, we are the test market for the expanded All Day Breakfast menu and All Day Happy Meals. The 12 franchisees in the Tulsa market are very seasoned business leaders and work to give very robust input to all of the tests.
4. When you eat at your restaurants what do you get?
For breakfast, I usually eat an Egg McMuffin or bacon egg cheese biscuit and coffee. For lunch, a Big Mac or Quarter Pounder with cheese, fries and a diet soft drink.
5. We’ve talked about your roots and how you came to own your restaurants quite a bit. Could you give our readers a decent-sized version of how you came to own your restaurants?
In the summer of 1985 while still in college, I had the opportunity to work for a construction company that built McDonald’s restaurants. During that period of time I met the franchisee that owned the restaurants in Little Rock. He talked to me about coming to work for him in a management role after I graduated. At the time, the offer didn’t interest me. I was pursuing an engineering degree and wanted to work in the aerospace industry.
After graduation in 1986, I went to work for Rockwell International as an aerospace engineer and attended Georgia Tech in pursuit of a Ph.D. in astronautical engineering. Little did I know, the entire aerospace industry was on the verge of a total transformation. The space shuttle Challenger disaster in 1986 brought the industry to a halt. I became a junior engineer without a job. I called the franchisee in Little Rock and asked him about getting into the McDonald’s Franchisee Program.
In December 1986, I began my McDonald’s career path to becoming a franchisee. Like all franchisees, I started on the ground floor as a manager trainee. The training took me 24 months to go from manager trainee to director of operations. I needed a $100,000 down payment to purchase my first restaurant. It took me 11 years to save the money.
On Jan. 17, 1997, I became a franchisee with the purchase of one restaurant in North Little Rock. In March 1999, my wife and I were given the chance to purchase two restaurants in Muskogee. We sold our restaurant in North Little Rock and moved to Muskogee.
Over the next 17 years, I grew the number of restaurants in my organization to 18 in the Tulsa area. Along the way I have diversified into many other industries.
The success of these investments has allowed me to sell eight of the restaurants in Muskogee and in northern Oklahoma. We currently have 10 restaurants and 425 employees. The business has always been rewarding due to all of the great employees and franchisees I have been afforded the opportunity to work with over the years.
My wife and I have been very involved in the different communities we serve. We have truly enjoyed the opportunity to see young people grow their skills and move on to management in our company or onto other career paths. Many employees have taken our education classes that has helped them finish high school and/or to achieve college credits.
McDonald’s had truly taught me a lot about being a small-business owner.