Shoukat Dhanani, 60, isn’t the type of entrepreneur who courts publicity, but his company, Dhanani Group, has gotten too big to ignore.
Dhanani Group is the largest franchisee in the Popeyes system, as well as a giant Burger King franchisee, making it the nation’s third-largest restaurant franchisee, with 2015 revenues of $871 million, according to trade publication Franchise Times. But those numbers capture only a piece of the group’s businesses, which include convenience stores and gas delivery, as well as the franchised restaurants. In a recent conversation, Dhanani told me that “if you add everything up, it would be over $2 billion” – an amount that would likely qualify Sugar Land, Tex.-based Dhanani Group for FORBES’ list of America’s Largest Private Companies.
Dhanani’s story is a classic tale of entrepreneurship, and how a hard-working family can build a giant, and highly succcessful, business without venture capital or private equity money. The group today includes 130 convenience stores in the Houston area, 502 Burger Kings and 170 Popeyes. It remains 100% family owned and operated. “We always believed in staying low-key and under the radar,” says Dhanani. “That’s what our dad taught us.”
Dhanani’s father, Hassan Ali Dhanani, who died earlier this year, was a born businessman and the family’s guiding force. Back in Pakistan, Dhanani recalls, his father started working at age 13, rolling cigarettes by hand and packing them for sale. “He could smell the money everywhere,” says Dhanani, who immigrated to the U.S. to attend college. “He saw opportunities and he guided us. He taught us business.”
The business, which dates to 1976, began with convenience stores. Dhanani moved into restaurant franchising in 1994, with Burger King. “In those days, co-branding fast food and convenience stores was just being talked about, and I thought it was a great idea,” Dhanani says. He opened what he believes was the first one. “It was just a corner dedicated to Burger King,” he recalls.
Dhanani focused on buying struggling restaurants, and turning them around. “We consolidated pretty much the whole Houston market, where we are still dominant,” he says. “We bought those restaurants that were run by franchisees who were not doing well financially for some time. The facilities were old and tired. We remodeled all the restaurants.” He figures that when he bought restaurants, they averaged around $1 million in sales, and that his restaurants are now in the range of the national average for Burger King, around $1.35 million.
In 2012, Dhanani moved outside Houston for the first time, making a large acquisition of 100 Burger Kings in the New England area. “We doubled our size overnight,” he says. “We had to put the infrastructure and be ready for what to do when you are managing long distance.” Then, in November 2014, Dhanani acquired another 255 restaurantsfrom Blackstone Group, again doubling in size.