Entrepreneur builds empire on revamping struggling businesses
Entrepreneurs can fall into several categories, ranging from inventor-founder to business plan innovator to new segment pioneer.
One of the most interesting, and perhaps underappreciated, is the turn-around specialist.
Shoukhat Dhanani’s first gas station-convenience store was as humble as his upbringing in
Pakistan. But today, his family empire of 1,100 restaurants, 125 convenience stores, two multifamily developments and a wholesale fuel distributor demonstrate what hard work and attention to detail can accomplish.
Dhanani and his brother, Ahmed, came to Houston in 1972 to attend South Texas Junior College. They attended classes full time, but also needed to work full time to support themselves.
“I started out as a busboy in an Italian restaurant, he was a busboy in a French restaurant,” Dhanani said. “We both used to work at a Tenneco gas station, and the reason we lasted there the longest is because he would work at the gas station in the morning, and I would go to school, and then I would finish my classes at one, get there by two, and he would go attend school in the evening.”
In 1976, the brothers decided to buy their own gas station, taking over a Shell at the corner of Hillcroft and Bissonet on Houston’s west side. They were short of cash, but Shell agreed to finance the first shipment of gasoline and the business took off, Dhanani said.
For the next 20 years, the Dhananis acquired other underperforming gas stations, fixed them up and brought them up to their potential. Then in 1994, flush with cash, they decided to
build gas stations from scratch and become a fuel wholesaler.
At about the same time, a Burger King franchisee offered to sell him two of his restaurants. That deal fell through, but only after Dhanani was approved as a franchisee. That’s when he decided to put a Burger King inside his newest gas station.
“Back in those days, co-branding with food and gas was being talked about, but no one had done it,” Dhanani said. That was the company’s first restaurant, and today it owns 510 Burger Kings, 290 Popeye’s Fried Chicken restaurants and dozens of other, including Sonic Drive-Ins, Dairy Queens, La Madeleine bakeries and Cyclone Anaya Mexican restaurants.
Throughout the expansion, Dhanani kept to his philosophy of purchasing underperforming assets. The Dhanani Group bought its first two Popeye’s in 2010 when then-CEO Cheryl Bachelder was starting to revamp the brand, and the restaurants needed rehabilitation.
Today, Dhanani is Popeye’s largest franchisee, owning 12 percent of the company’s restaurants as the brand’s spicy chicken sandwich craze takes off.
When Burger King headquarters decided to sell off its corporate-operated locations in New England, they asked Dhanani to take them over in 2012. Ahmed is semi-retired, so Dhanani sent his son Zohaib Dhanani to oversee the renovation of all 101 restaurants before the arrival of the vegetarian Impossible Whopper.
The company’s 40 La Madeleine locations are Dhanani’s latest attempt to turn around an underperforming brand.
“You want to buy businesses that you can afford and that have an upside, whether it was mismanaged or whether it needs some capital expenditure to fix it up nice,” Dhanani said. “You have to be willing to work hard because there is no shortcut, and you have to be determined.”
Dhanani also believes in holding people accountable, including himself and his sons, who are working their way up in the business. Dhanani puts his name on everything they operate.
“We want them to be something we can be proud of, to say, ‘Hey, that’s ours,’” Dhanani said.
The fast-food industry, though, has come under fire for serving unhealthy food. Industry analysts warn that the advent of electric vehicles could hurt the gas station and convenience store business. The Dhanani Group is diversifying into real estate, hotels and other areas, but Dhanani said he thinks his company’s core business will be around for a while.
“From the brand side, they’ve introduced healthier options, and before the Impossible Whopper, we had a veggie burger, but nobody bought it,” Dhanani said. “People who come for fast food know what they are buying, they know what it’s going to be, and that’s what they want.”
The Dhanani Group generates more than $2 billion a year in revenues, and the Sugar Land headquartered company is looking to expand further, Dhanani said. The privately held company is divided into subsidiaries, with a family member running each.
Dhanani is proof that entrepreneurship comes in many different forms. Sometimes strong acumen and hard work to turn around underperforming assets can take you to the upper echelons of business.