Two’s Company: Kevin Charity & Andrew Guy
Our Two’s Company series explores the relationship between CEO & Chairman. Here, Stuart Rock speaks to Kevin Charity, founder and CEO and Andrew Guy, Chairman of The Coaching Inn Group.
My parents were in the hospitality industry, so it was natural for me to follow. My teenage years were spent watching my Dad run a pub. At one stage, I was the youngest licensee in the country; I wasn’t much past my 18th birthday when I obtained the licence for the Town Pump in Boston. It was a great learning ground, although sadly it’s gone now.
I built up that business, then acquired another freehold and became an operator of a multiple pub business. In 1996, in partnership with Mark Porcher and a couple of investors, we set up the Bulldog Pub Company. Mark and I still work together – it’s been a very strong relationship.
The Bulldog Pub Company got to be pretty diverse. We had freehold and leasehold pubs, a couple of nightclubs, even a ten-pin bowling centre. It was very profitable, although it didn’t make much sense as a group.
In 2007, we decided to offload pretty much everything. It was a big strategic decision. Costs were rising and our margins were narrowing – and measures such as the smoking ban didn’t help. We couldn’t find the right freehold properties. And I was spending too much time on the sites that caused us problems. We had a fabulous property in Cromer that I didn’t visit for months because it was doing so well; meanwhile I was having to discipline nightclub doormen at 1am for smoking.
We decided to focus on coaching inns with their three revenue streams – food, drink, and rooms. Every market town has one. Many coaching inns are still in individual ownership and haven’t had a lot of capital investment over the years. We were clear in our plan; we wanted historic high street properties with a car park and a minimum of 20 bedrooms. We could then invest in them and give them the right amount of love. It has been plan perfect, really.
From 2007, we built up our portfolio to ten properties. We were reinvesting profits but we needed more capital; freeholds for coaching inns are expensive and these properties require considerable capital expenditure.
I needed a finance director who could help raise that fresh capital. I knew Edward Walsh and had known his father, who had run a great pub business. When I asked him about joining us as FD, he said he wanted to invest in the company and be a shareholder. Edward joined in 2014. We get on really well and he was central to our deal with BGF. We spoke to BGF in November 2014 and by March this year the deal was done. BGF gives us patient capital; it was, without doubt, our best option.
We originally thought that we would need a chairman with a hotel background. After meeting a couple of candidates we realised that we actually needed someone from the food and beverage sector who had managed rapid growth. We could hire in expertise to deal with room management.
Andrew and I had already met at an industry event but our first real chat was at Ed’s Easy Diner in Euston. From the word go, I felt completely relaxed with Andrew. He really knew his stuff but he wasn’t corporate and full of himself. We have come from very different backgrounds in the hospitality industry but we have similar philosophies.
Last year, our monthly board meetings were more informal. There was just myself, Mark Porcher and Lily, who is our HR director. Now there are six around the board table, as we have added three people with very different backgrounds. The dynamic is totally different and it’s good. It’s not been an uncomfortable change; it’s rather like wearing a new pair of shoes.
Andrew talks about the things that matter. He is not interested in the salts and peppers, he’s interested in the bigger picture. I get clear good advice from him, not interference. That is brilliant. He will always find the time for us. When he first said ‘call me anytime’ I had wondered what I would need to call him about but soon afterwards I did call to run an idea past him.
We have rebranded ourselves as The Coaching Inn Group. Our initial plan was to double the size of our estate in three to five years. It looks likely that we’ll hit that target sooner. Growth is exciting, so this past year has been a life changing experience. And we have a chairman who knows how to get the best out of us.
I have always been in the restaurant business. I was 25 when I joined Berni Inns, which was then the UK’s largest restaurant group. In 1979, I was elsewhere running a managed pub estate when I got the opportunity to open an English pub for a company in Houston. That was the start of several years running restaurants in Texas.
I returned to London in 1985 and met the legendary entrepreneur Bob Payton. He was looking for an operations director for his company, which included The Chicago Pizza Pie Factory, which he had opened with enormous success in London. We rolled out a chain of them across Europe.
Bob Payton was a remarkable man to work with. He was a pioneer. He was the first in Britain to demonstrate that we were not just in the restaurant business, but in the hospitality and entertainment business.
My career has been rolling out restaurants. In the mid-nineties, for The Restaurant Group, a team of us dreamed up the concept of Frankie & Benny’s; there are now 250 outlets in the UK.
For a business to be successful for its shareholders, it needs to be moving on and ahead, and growing. If it is a good idea but stands still, someone else will catch it up and use its ideas. So a successful restaurant business must identify and own its niche. Yo! Sushi is conveyor belt sushi; no-one else can grow to their size. The same is true for Wagamama and noodles. The best way to move ahead is to dominate your niche.
That’s been our approach with Ed’s Easy Diner. A group of us bought the business in 2009 when it comprised three diners. Today it has 48 from Inverness to Plymouth and from Norwich to Cardiff – while our nearest competitor has seven. So Ed’s has become synonymous with the concept. To own your niche is a huge boost – not the least of which is that landlords contact you, rather than the other way around.
I had always intended to have a couple of non-executive positions as I wound down from being a full-time CEO, but I didn’t want a mass of them. I had turned down some offers because I didn’t think I could bring anything to those businesses. I wanted to be involved with a company where my experience could add some value.
I had known Mark Freer at BGF for a couple of years when he approached me about being non-executive chairman of Kevin’s company, which was then still called the Bulldog Hotel Group. Mark thought very highly of Kevin and his team, and I could see the detailed due diligence that BGF had done.
Kevin and I got on well straightaway. He’s a smart man. He’s encouraged his FD Edward Walsh to be heavily involved across the company rather than just be an FD. My job as chairman is to manage the board in such a way that it gives give the two of them space to grow the business.
The founders of restaurants are creative and driven people but many don’t know how to build a company. They may know everybody’s name in the kitchen but it takes a different skill to move from having a handful of outlets to owning ten, or 20.
You need systems and you have to delegate responsibilities. Some people can’t make those changes, but Kevin is one who can. That’s because he is open to suggestion and change.
Kevin is an entrepreneur. He’s done incredible things by himself. But the decision to bring in an investor means making adjustments. Millions of pounds of new funding doesn’t come without accountability and changes to your systems. Kevin has been smart enough to recognise and adapt to that.
I told Kevin from the beginning that he would have to split his job. A wise chairman of mine once said to me that a CEO should spend 60 per cent of their time on the future and 40 per cent or less on the present. Kevin was doing it all. He needed someone to help run the today’s business today. We have discussed the job brief and we’re now actively seeking an operations director.
Restaurants are all about brand and image. We knew that The Bulldog Hotel Company wasn’t right for the business today and the vision for the future. Together, we came up with The Coaching Inn Group. We believe it can become the most recognised operator of coaching inns in lovely market towns. Nobody has put their mark on this space – so we can own it.