What you’ll hear in this episode:

• Starting from humble beginnings
• Growing success in America and abroad
• Advice to founders

Frank Krasovec began his business endeavors as a paperboy in Lakewood, Ohio. He cites this experience as his first lesson in the industry. He was the first in his family to go to college where he attended Ohio University and then attained his master’s degree. After this, he began his career at Pittsburgh National Bank, now PNC. His illustrious career didn’t stop there. Since then he has financed major US and European cable companies, dabbled in the promotional products business with an emphasis on koozies, bought a drinkware business which he, later on, took public, and brought American chains Subway and Dominos to the Chinese market. In 2017 his company became the sole Domino’s partner in the China market. He shared with us that now he’s ready to step back from running things, but still wants to be active and mentor others just as he was.

His desire to become an entrepreneur began while working at Pittsburgh National Bank, through watching the entrepreneurs he worked with and claiming they all seemed happy. From there he decided he didn’t want to work for a big company but create them. He wanted to love what he did and help others by creating jobs.

Krasovec stated that he believes innovation is one of the most important aspects of staying current with regard to marketing. He claims it is needed to differentiate yourself from others to continue to grow. To hear more from Krasovec about his vast history and advice to other founders, tune into the twelfth installment of the entrepreneurial podcast, Masters & Founders. If you like what you hear be sure to share with friends and colleagues!

Masters & Founders is a founding_media podcast created in collaboration with foundingAUSTIN.

Host: Dan Dillard

Guest: Frank Krasovec

Transcript:

this week we have a great opportunity to learn from a true business visionary Frank president has founded built and monetized several successful companies over the last thirty years in several puts it lightly from his involvement in bringing companies like subway and dominos into the Asian market to his work on building up the business capital for folks that eventually founded Comcast Franks economic and financial acumen has allowed him to grow his career and the careers of thousands of people along with him let’s hear how Franco to start and where he is now

hello everybody and welcome to the masters and founders podcast today we are here with Frank cries of back serial entrepreneur businessman philanthropist Frank I typically like to throw people right into it can you tell the audience a little bit about your story from the beginning to maybe a little bit where you’re at right now and we’ll get there but however you feel appropriate okay well thank you and thanks for yeah sure thank you Sir this opportunity I started in Lakewood Ohio where I was born and got my first chance to be a business person as a paper boy and I learned a little bit about leverage at that time because I realized if I held what I paid the newspaper back a little extra money and I could do something with that money so also had to collect money and deliver papers include responsibility and also just about you know how life really was the young kids also had one building that had like a hundred and twenty customers in it which was nice when you guys when you live in the Cleveland area there’s a lot of snow yeah yeah yeah kept me warm and and safe but I came because I grew up in a working class family so everybody it I kind of grew up poor but didn’t know it because my family lived with the screens and expectations were reasonable I was the first son to go to college which how university wound up there as a student that need some help and then got a view small scholarships one on to get a master’s degree to teach their one year and then started my career in Pittsburgh in a traditional major corporate banking relationship with Pittsburgh National Bank now call PNC gave a great opportunity to travel all over the country we made loans to media television energy companies but we got involved with the cable television really odd so they gave me a chance to see religion origin work this is a in the late sixties early seventies so I want it moved to Texas in nineteen seventy four partnering with some of the pioneers in the business so high it financed and they they gave me an option to really learn business because I thought I was smart till I met them and I realize how much I didn’t know and so they were very helpful and giving the operational excellence I’ll call it financial savvy and learning how to lead in many situations and so our portfolio of companies was a U. S. cable TV company it was public a European company it’s what’s on that was private that we build so to actually the second largest a cable TV company the dramatics big part of your we should of real estate partnership with some English folks one American centered on which our summarize it’s here in Austin early on venture capital the original venture capital company was evergreen capital then rest capital that rush benchers then Austin ventures so it’s there’s a history here of having scale businesses that we were involved in media real estate a venture capital I stumbled into a weird business in the promotional products area I didn’t know anything about the business but I saw a very seasoned distribution channel where people who ouch Miller’s would sell products to all kinds of corporate to award to give and thank you sh two companies and somebody in the process of so we had a small company in San Antonio called radio cap started with seven people a small order processing company did hats headwear yeah but the cruising business sense again Texas merchant in with that developed a little of local coffee mugs drinkware business that was in bankruptcy in Austin what it moved to San Antonio that business eventually went public its sales about four to seventy million lower on the nasdaq we had Jan operations in the US and sourcing operations in Asia and so it was a fascinating experience I learned a lot about operations finance technology and and also got me into trying to and so after I sold all of that didn’t the two thousand three two thousand four era I help another company that was in my business in Europe come to the US and help them build the same business and then was looking around stumbled into China opportunity with subway foods but ten years ago and we were looking actually to do something with domino’s pizza which did not have any presence over there of of any consequence so subway let us to domino’s about seven years ago we bought eighteen stores in China shut down sixteen of them for domino’s pizza we were in Beijing Shanghai and about a year ago we received the exclusive rights for all of China Hong Kong Macau so we’re now the sole partner for domino’s pizza school dash brands domino’s China the board I we used to be the largest shareholder would raise capital and so on the largest individual shareholder in have a good solid board illustrations middle easterners a few Europeans involved let us a lot of Americans and so we think we have a chance to build for five thousand stores in China wow finish this year with about a hundred and eighty eight hundred ninety so we’re just getting our our acres and and set in that we just heard about a year ago our first Chinese CEO a woman who had been with that she child ation she had been with mackenzie in the U. S. and I got recruited by McDonald’s and without also put her in charge of five hundred storage and at before she left and so we had a chance recruiter fabulous the young lady she she’ll help us go public in about two or three years so I have a couple of the things I do but that’s taking up the majority of like a cold my emotional time like I work two shifts they yeah they sent me much emails evening they’re up and I wanna go have a cocktail we have the careful answering the right so up but I’ve I’ve learned that I don’t wanna run anything anymore but I want to be active in the business I had can make it have an influence collect a mentor the way I was majority and and I like to have companies with good that work the right values in if you do what do what’s right because nothing goes up straight there’s always some within the Rhodesian right yes after go through that so I know operations finance leadership and something about my future so I like to stay busy and I measure myself by Michael handicapped and that I’m not doing well because my index is going up a little bit so I wanted to play a little more golf

fantastic my sure that’s so lots of information of store I have so many questions I want to go back to paper Welsh burner ism and then that takes you to actually going to work for someone which is up at the bank right at that that at some point you went back into entrepreneur is I guess when you move back into taxes when her it was there any was this already a yes I’m going to do this or was there any fear about jumping off and being on four verses working for someone else I think Jim this is a great question because I he did not think I could it was a train to start my own business but when I was a banker I saw so many businesses big medium size and small and I saw people great things and especially the cable TV business and so the entrepreneurs that were in that business for example Brian Roberts who runs Comcast we loaned his father money when they had about fifty thousand cable subscribers while I’m at right when he was fourteen he was groomed yeah they were a bunch of brothers in the family but there he was groomed he wound up running all of Comcast’s not so what I was able to do and when there’s an opportunity in Texas I saw that I didn’t want to work for a big company I wanted to I saw it was working hard but I want to see the people rewarded and the obviously finance rewards were there but it was more the financial that psychic income that they were always happy the mind you know that they had to work seven days a week there wasn’t a complaint it was a a building something I’m doing something I’m I’m creating jobs for people and so that resonated with me once I get into it it’s like the fire in my belly never left and about how old were you at right when this fire in your belly kicked off well I I’ll give it to fires my bill that that this is the one I just described was between for those twenty eight twenty nine ash was moving here and I could see had been working for about seven years I couldn’t really see that somebody know how to do it real fire in my belly came the day graduate from high school and I was not a great I school student and in terms of academics like sports and that’s around and I learned that that take my my grandfather crest of it because my father Senate passed away and here’s a man who emigrated from Slovenia for for twelve cents an hour jail steel and he saved up about four thousand dollars and gave it to me to go to college and he passed away you know the right one at the graduate high school so I thought here’s a man who did everything in his life for me never asked for anything the least I could do is get a good education and do something good and that’s when the real fire started and then hit re ignited when I was twenty nine so the culture of her still there sometimes if they’re still come a little bit but if you get old but I love city fire my belly

I find that through the story that you’re telling the it was it took many as you said earlier that not straight up into her arms and pivots and so on so forth and new things I mean it’s going from like you said selling widgets and and and things to pizza and I mean just different variants of anything is it is it exciting to try new things I mean what what what inspires you to like to try something new at at I think the what I’ve learned is that you have to know your core business my core business region was banking and finance now when I moved to Texas it became more cable TV and media and so I really know those businesses and we scale them and then as we went into other businesses and my partners were the ones who lead on that initially the commitment was always run a professionally if they if you can’t scalable don’t be don’t get involved in it just wasn’t working was how do you make this a leader in this sector region and so that’s where you thought so in China for example down a subway was the original idea but they didn’t want to get big they want the franchise all over the country were domino should we like one Parker per country per region just so happily be we’re we’re the biggest country took us about four years to get the right so I when I wake up with domino’s is how do we get how do we get public two or three years how do we become as big as you wish operation in China such a big country there’s no limit on the size so it really gets it’s it’s making sure you don’t focus on too many things but what you focus on his very scalable and then you have to learn that you can’t runnable so you need to at some point when you’re not running if you’re investing in overseeing make sure you have the right people to run them it’s like you’re a businessman scaling it takes a leader right and then you have to put the tools in question capital behind and then the it’s working smarter as well as hard pushing for prison inmates

any favorite stories of a long all of these all of these winds that you’ve had is there any like stories that you can I really like this winter this will really excited about you show us you know that’s always there coincidences and and how things develop the I guess the choosy story yeah I’m interested earlier about the the story I always wondered how did somebody put that product together in there when we bought the company was doing about two hundred thousand a year yeah giving it stores they didn’t have any promotional products was instigated Texas so we met with the owner and said have you come up with this idea the civil like go to San Antonio to watch these construction workers and they would cut off so pipe insulation at the end of the day interesting I thought well what I put a lot of money on marketing he didn’t think about that the promotional work at run time so we bought that end up he yeah we we want of doing over fifty million a cozy should we went back to him a couple times it said what we found this little tag line it was blurred at the bottom on old Uzi and he said yeah I said for some reason I was always one why you wouldn’t use a tagline hi Cybill can you clarify it should still be sound really property uses a notion that we used to have a technician nothing better than a cold beer thank you see okay that might fit business world but I thought that was always interesting people think just to put another coincidence we when we built a real estate company we didn’t know we we know how to spell really stated no a lot more that we’ve done a few things and we’re looking for a partner so I was doing with the bank in Zurich Switzerland S. young banker was twenty five years old I said if I’m looking for a partner in the US you really say can you help me they’re just as the two companies in London one became a partner it was it turned out to be a three hundred million dollar type of partnership well the all in central Texas a little bit more scene in DC yeah you never saw like a cold call you make you never know what you find on the surface and the last thing I thought I’d be doing is I’m in a speech in China but I got a call from a gentleman who’s an Israeli immigrant and they used to serve on this board and he called me and said Hey my son’s working for a friend in China he’s still interested I said I am and the long hold here we are in the grand ugh boots Decorah doors in the end yeah it turned into a very successful business person is on right now there are other stories about my wife in a blind date wonderful lady you’ll be there shortly you know especially that happen to me this one

in and all the years you’ve been doing business something strikes me and I I really want to learn because I come from a long lineage of entrepreneurs as well how has the market changed and not only products but really stay out of you from back in the sixties when you were doing business how’s it changed to now and how do you approach you know all your promotion and marketing tactics now compared to back then is it all still the same they’re just different ways of of executing just parts of the question first part I think is when we when we were starting businesses you had to find make sure you know the business go find the money the debt and equity and then you had to put fun go borrow the money for your own equity wouldn’t have much to speak of me my partner system but I had that part so you learned that have what they want all this money out there that you go ray if you had to go do it yourself so it kind of put you in a real true ownership position with your risk usually the guarantees of the that’s changed today your back was against the wall yeah yeah you’re always in the corner long as you perform your fight so that didn’t bother me at those had confidence in myself and had long money so we actual banks could manage it since changed the mortgage change on the marketing and sales side when I found you know when I did cable TV lending and investing that was kind of the cutting edge that we have this coaxial cable and it was going to change everything and you were gonna be a little you know order your movies on on line and all that well it’s all happened and so what I have found in the digital world is at its still marketing it’s still sales it’s just a question of the tools that are available to get you to the end result and if you don’t stay ahead of the curve every time you get comfortable you look over your shoulder you look out because somebody’s coming up behind is what I found is just stay current stay with young people because they got usually when the moxie and they see it they they buy it they use it and that’s kept me in good stead I just think of if you you know Warren Buffett to says you don’t know anything about technology but he sure as heck knows how to manage and so he uses technology and everything and I just think of I watch what’s going on in China we three up three three years ago people paid by cash they couldn’t you couldn’t use a credit card because they couldn’t process in their stores now everything is by way of mobile phone nope no credit cards they just can’t pay for it and their order and they’re they’re ordering system also allows them to buy products like I Amazon and we chat so when you look at comp countries are leaping ahead with technology and sometimes some of that comes back here sometimes we leave they had used elsewhere so I just think it’s staying current making sure that you never get compact complacent with what you’re doing

and how important you think innovation is to staying current it’s it’s where everything is I mean if you don’t innovate in that they it does doesn’t have doesn’t mean you have to get real fancy but you have to convince the customer that you’ve got something better a golf balls golf ball right but somebody hasn’t figured out a way to make it feel better market it better same golf clubs now I just to I think it’s like blackberry how would it look like Berkshire they lost their innovation yeah hi you blockbuster blockbuster I mean he once you get that if it’s like Amazon how do you stay on top we are to get up to the number one harder to stay sure I mean we see this with with hotels and Airbnb and taxi services and over I mean the taxi service could of easily done went over to him I mean it would have been very simple transition and they decided not to do it for whatever reason and that’s probably a lack of innovation right so well they get complacent because they had expected ship any cable TV used to be exclusive and then they opened up to the not extractions separating it every service you know and we today most young people stream yeah so we have to what it what happens to music right other rights you have to be careful with all that stuff but I think what what I’ve found is there’s people that say they want to be loved or but again you wanting to be in taking the risk to me is that there’s just you cannot put failure in your vocabulary yeah well I mean you hear when X. question was how you feel about failure well I’ve had a bunch of the road and if it’s really a bad strategy then you better shut it down if its execution and you better change people so most of the time if you do your homework with strategy and and have a good plan of execution then it’s making the right people right capital and you could in the leadership to get through it I just find in today’s world everybody should will probably I have a new app for X. Y. Z. and so it’s going to go to make a profit I mean I just I don’t that doesn’t resonate with me and I probably missed a lot of things in my life but that’s not a business plan right okay and so we’ve had a lot we have a lot of easy money going into those fields so we have to be careful I just I’ve just found common sense yeah this is something someone once I love coming since it’s taken me pretty much my whole entire ride it’s it’s not that difficult if you just sit back look at it for a little bit analyze it and you can pretty much tell if it’s going to work or not or it has a shot at working with the right executions a lot of people get caught up with fears doubts failures fear of failure fear of trying new things all these things stop them so hearing your story it’s truly inspiring because it’s like not even stop you just keep going keep going keep going doing different things and really really love that

I wonder during that time whether business used to hold most of those those businesses or do you have you sold them off and at what point the second quarter question what point decide it’s time to sell that one off and go somewhere else couple things on the in the original business cable TV what we found is that we made our money by building grading selling and then turning over in doing the same thing at that time it was the capital gains rates were about twenty percent and they made it attractive they didn’t come down for about forty five percent and so it was just a way to get comfortable where you had you built a little that worth and you could reinvested have to reinvest everything so the I mean it could have been a real estate venture capital promotional products I’ve I’ve owned in the problem in the cable TV business we own maybe four to four four companies but was over twenty five year period so it’s really staying in the business because we knew it in the promotional business I’ve had three or four different partners over about a twenty five year period real estate maybe fifteen years couple different forms so you would sell to one sometimes take your your venture sometimes take care yourself for both where you want to monetize sort of like China is a great example I’ve been in it now ten years seven years dominoes the goal is to get a public where if I want to sell like and sale of somebody wants to sell but if I I’d rather keep it because I think the compounded growth rate is is there I find it I think you need to hold something for five to ten years to make it really worth spend scale it mmhm more in some cases we recapitalize the business so you take some money out the if I could do it all over again I don’t I would’ve sold really yeah they just the businesses were read or incredibly scalable and so but you know find sites twenty twenty twenty or so and it also the energy level to build a mis a little less when you get older not a lot but a little less so you kind of think will face a list yeah start something up again probably a little more reluctant to do that today than I was ten years ago

we do for fun I love golf phone travel is fun for me yeah but I the Gulf is kind of a a couple of non contact competitive sport of that to good buddies or play with in the end I I’ve got yeah I have two two kids with the couple grand children and I and of the beautiful wife so I I’d say I state fun for me asking myself intellectually engaged interesting situations and people and staying healthy you know I mean I’ve always done some work out of some kind just to good lord been good to me I just hope I can stay that say that stay healthy and can give back

definitely you know a lot of our listeners are or either thinking about doing a taking the leap jumping off the cliff we can say however we want to say it and what what’s your one single best piece of advice that’s that you’ve ever really thought of that you’ve maybe never told anybody or you told your kids are or your family lives by I’d like to I’d like to give the value to our listeners from somebody that’s accomplished so much well no matter what I’ve done you have to have the right value system and the value system stayed with you in whatever you do doesn’t matter which business whether it’s pizza cable TV promotional products and when the value system is being tested it means you need to get out break away don’t compromise your values I guess of the my my main message to great when we haven’t had that one yet I actually really like I do we do as

I mentioned before the podcast we have a private Facebook recall matches and founders and one of the members are asked to ask you what’s next what’s next coming to work with us it measures and found by us and with all that background I’m a yes no I think you know I’m a what give your life this is a good question because it’s actually happening because of my relationships in China and because of my reporter real estate experience and because I have released our partners and in some of what I’m doing in China I was asked about two months ago to assist the a major middle eastern investment group to to find an asset management firm in the U. S. as a manager for meeting they for real estate so office buildings multi family retail they want to they they invest in real estate but they now want to manage it all themselves verses subcontracting out so you have everything from raising the funds to pay the asset management to property management to selling it so I thought about it for a little bit and I’d like and how much time do I have what I called a friend who has been retired now for about eight years and he ran a company that went from zero to eighty six billion in global asset management and realistic holy cow and we have met with the Middle East to people and they want to engage us to help build their U. S. model while in the global that’s also I put my brain to work where I said I don’t want to run it but I found somebody who can help me oversee it and we’ve got the person to run it because this person used to work for him so that the money that the people that the strategy and a scalable so that’s my next I love it so what you know what happened it seems like you were doing business in United States for roughly thirty put thirty plus years correct yes I mean we still do business here so yeah so what what is it like for those for those people listening that might want to do business in other countries what’s what’s what’s majorly different and both spaces because it is different right it’s different I I made my first trip to Europe and seventy four my first trip to China and Japan at eighty four but the European trip help cause me dramatically because it was in Switzerland primarily a little under and what I found was that each country has its own style if but if you do not respect their culture and they have their ways and they’re still in their approach you’re never you’ll never do anything with them then the water that in the end they generally get to where everybody gets the same objective they just come at a different like so if if you come across as the ugly American you’ll be the ugly American right now and here you have him China they’re smart as can be the Chinese training has always been get the job done our training is man get all the pieces done yeah so as we manage over there we have to respect the fact that their training to be a little bit more Asian and eastern and western and so where we think just get it done they gave me give me a specific goal what do you exactly want because it is so it’s respecting the culture and their education over there is much different than it is here correct they groom pretty much from age thirteen on upright they test really young to go and test and they it’s it’s called more memorizing but there they they have to do well yes score well aha where didn’t score well in high school but I score pretty good pretty well in college and then I’ve scored well afterwards so if I hadn’t had a chance to go to college that might not have they had a chance to score Mohammed so they there you got a system where if you if you don’t score well at the young age and you maybe you’re limiting yourself a circle yeah it’s a they’re the second that there will be the world power yeah I mean they’re they’re coming there are here yeah sure you said you wanted to scale two three to four thousand stores corrected me and China how how long do you think it’ll take you to accomplish that and you started seven years ago with with honors seven years ago we had eighteen stores had to shut down sixteen because the brand was holding back to two stores cancer with two stores it took us awhile to get going we will we will after this year will stay with just owning stores that French I’m sure we can open between fifteen hundred stores a year now that we have the right to the whole country franchising is the fastest way to grow but also carries a lot of risk you could franchise here in the US because you’re both business people if you said you want to own three or four shake up a subway Asian piece of whatever whatever the brand would be you could probably qualify and our legal system protects the franchise or the franchisee in China there’s virtually no training so you have to feed the system with your own store managers assistant managers area managers and that takes time and then the legal system is not set up there yeah to protect either the franchise or the franchisee so it’s coming so but if we could franchise we could be there we can be four five thousand stores in six seven years I think we’ll have if you’re free five years and I think we’ll have about six hundred stores and we will have a base the franchise five phones that’s why that base needs to get big enough for we can see the system on the U. S. dominos is fifty five hundred stores they own about five hundred and the rest are franchised they built along they they did this along the way I think we’re going to have to build the first five hundred and then we’ll just we’ll sell is legal assistance else like you have it will you build an entire system so when you sample and fifty or a hundred that means I’m thinking employees and thing and all the training and think of the seals are a lot of work to like put things in place and it was going to go through the system before you put enough right it’s much cheaper and and again you have to look at China Beijing Shanghai shins and one joke each city has thirty plus billion people you build core there of the billion forty million people maybe the real population today is for five hundred million that you could serve but you get that core it’s like being in New York Chicago LA in Texas if you were right now all of a sudden then you can expand from there then you can feed the regions with your people who are plugged into your systems and and what they need is so page right you’re providing that with all the products that the system radiance your for your commissaries things like that that’s awesome how is China taking to pizza well we reach up got there long time ago then they built restaurants in and so the category was kind of set up set up properly about all my market research is a very positive the one they like warm food they like to share it that’s healthy and the categories growing dramatically and we’re picking up market share so much it it’s you know in the major cities that they’ve all they’ve opened up the US primarily they know the peaches I know Papa John’s channel Pizza Hut so in all the prince that’s awesome well Frank I’ve I’ve really loved this interview yeah we’re going to go for all those listeners we’re gonna go pick Frank’s brainless yeah we’re going with there are some other things this thank you for for having me interview them honored to be a hundred program

thank you for all the listeners out there go to go check Franco online there’s a lot of interesting things that you can learn about him that’s open to the public thank you Frank for shit building empires and taking names Frank has a wealth of knowledge to share and we are so thankful for his time the way his mind works is just all inspiring and he still has that founders fire burning in his belly the masters in founders team includes me damn Dillard and producer right gossip thank you so much to all the folks at found in Austin if you enjoy the show so far please tell a friend we are available wherever you get your podcast please rate subscribe and share it all helps thanks for listening