Start it up

Andrea McGinty ’84 propels two companies – a dating service and fast-food chain

By John Walsh

One doesn’t have to be a vegan, or even a vegetarian, to like vegan food. And that’s why Native Foods Cafe, a vegan, fast-casual chain restaurant, is expanding quicker than Joey Chestnut at a Nathan’s hot-dog-eating contest. Three years ago, only three locations existed. By year’s end, 22 stores – from Santa Monica, Calif., to Washington, D.C. – are scheduled to be operating or under construction. Another 16 are expected to open next year. And the three-year goal is 200 stores. That explosive growth is fueled by Andrea McGinty ’84 and her husband, Daniel Dolan, who own the majority of the chain.

The Native Foods story starts in the Golden State. After living in Chicago for 15 years, McGinty and her family moved to Palm Springs, Calif., in 2001. While in Southern California, McGinty came across Native Foods Cafe accidentally. She was looking for a quick bite to eat for lunch and ended up becoming a regular, eating there once a week. She got to know the owner and chef, Tanya Malch, who was looking for business partners to expand her restaurant idea. Malch displayed table tents stating, “If you have money and want to invest in my store, call me.” McGinty inquired and learned Malch raised $20,000 but needed another $100,000.

“Tanya said I should be her partner because I know how to grow a business and I have money,” McGinty says. “But I didn’t really know the restaurant business; I just liked eating in general, especially there.”

McGinty

McGinty

After additional discussions with Malch, McGinty conducted her own research, which included flying to New York and San Francisco to identify trends, conducting focus groups and online surveys to gauge the public’s view of vegan food, and hiring a market research company. She discovered most people had bad reactions to what they thought was vegan food, which meant a business opportunity existed. So she and Dolan bought a majority of Malch’s business in 2009.

“The goal was to attract mainstream America,” McGinty says. “Ninety percent of our guests aren’t vegan or vegetarian.”

But Native Foods isn’t McGinty’s first business; she’s done this before.

Exposed to retail
The oldest of six children, McGinty was exposed to the retail business through her father, who was the president of Higbee’s department store in Cleveland.

“I loved retail,” says McGinty, recalling stocking boxes in the store around Christmas time at age 8.

Years later, when she was about 14, she helped her father conduct analyses of store sales as they related to weather patterns.

“There was no Excel in those days,” the Mentor, Ohio, native says, adding she did anything her dad asked of her to help out in the store.

McGinty followed in her father’s footsteps and attended Carroll. (Her father didn’t graduate. He worked his way up from a stock boy at Higbee’s to president of the company.) Wanting to be an English major, she chose accounting instead and interned at Ernst and Young.

“It was dry stuff,” she says, admitting she didn’t think she would practice accounting, yet says her Carroll education was a fabulous background for business, enabling her to read profit-and-loss statements easily at board meetings. “I was confused as a kid. I wanted to go into retail, but my family discouraged that.”

McGinty chose retail anyway and moved to New York City after graduation and worked for 1928 Jewelry (the Mel Bernie Co.), selling a jewelry line to department stores. She continued her merchandising career in Chicago because that’s where many of her friends from JCU lived. Not long after she arrived in the Windy City, her career and life changed considerably.

Let’s have lunch
In 1990, McGinty was engaged to be married, but five weeks before the wedding, her ex-fiancé changed his mind. A devastated McGinty returned to the dating world and concluded her friends weren’t good at setting her up. After enduring one too many three-hour dinner dates, she devised the idea for It’s Just Lunch, a business that arranges lunch dates set up by professional matchmakers. McGinty, who never thought she would own a dating service, had difficulty selling the matchmaker idea to banks for financing. After spending a lot of time at the Chicago Public Library, she wrote a business plan for It’s Just Lunch, and in 1991, started the company with one investor, a friend who she bounced the idea off of, and $6,000.

“I thought, ‘Why waste time dinner dating,’” she says. “It’s so much easier to talk to an executive recruiter. One month later, the Chicago and national media jumped on it.”

After the first year in business, McGinty bought out her friend and business partner. After the second year, realizing most start-ups don’t survive two years, she had four stores – two in Chicago, one in New York, and one in Washington, D.C. When knock-off companies sprouted in Dallas and Southern California, she bought them out.

Then in 1994, she met and married (within three months after their first date) her husband, who was a partner in a law firm in Chicago.

“I had so many clients from his firm, including him,” she says.

Because Dolan has an MBA and a background in dealing with mergers and acquisitions,
McGinty asked him to be her business partner in It’s Just Lunch. By 1997, they had 20 units in 20 cities.

“I wanted to grow through debt because I wanted to own 100 percent of the company,” she says.

Throughout the years, lunch dates through It’s Just Lunch led to more than 11,000 weddings. McGinty attended her first wedding as a result of her company after it had been in business for just five months. Eventually, the business expanded to more than 100 branches in the U.S. and overseas and had more than 30,000 clients.

“The franchise model worked well because I had a dedicated owner, especially overseas,” she says.

Right before McGinty sold It’s Just Lunch in 2007, she was working 20 hours
a week, focusing on the public relations aspect of the business, not doing day-to-day jobs.

“The company was on autopilot,” she says. “Internet companies such as Match.com and eHarmony helped us rid the stigma of a dating service.”

After being approached with several offers to buy her company, including one from Match.com, she sold It’s Just Lunch to a private equity group when sales topped $50 million. After the sale, she served on the company’s board of directors for six months. Since then, she hasn’t had any ties to the company.

“After selling the company, I wanted to hang out with my then-2-year-old daughter, travel, and play golf,” she says. “I took three years off.”

NF LOGO FINALMaking vegan mainstream
Comparatively, the Native Foods business model is more complex than the one for It’s Just Lunch, mainly because of all the ingredients needed to make the food on the menu – 750 SKU (stock keeping unit) numbers make quality control difficult.

Even though procurement and distribution are difficult, the most challenging aspect of running a fast-causal chain is finding people who are good at managing each restaurant, McGinty says, adding it takes much longer to train employees. Because all dishes are homemade, employees need to be able to make everything.

“We want to hire excited people who can explain the food,” says McGinty, who worked as a cashier for a while in the Costa Mesa, Calif., store to better understand the details of the business. “We want to hire people like me – those who have high energy and are excited about people.”

McGinty recently hired John Hartung, former CFO of Chipotle, as CFO of Native Foods.
Not only are there operational difficulties with Native Foods, there are personal challenges when working with a spouse. McGinty cites an alarming statistic about spouses who work together – 95 percent of married couples stop working together or get divorced. Despite that, McGinty and Dolan find ways to make it work.

Because all the dishes are homemade, Native Foods employees need to able to make everything.

Because all the dishes are homemade, Native Foods employees need to able to make everything.

“My office is as far from my husband’s office as it can possibly be,” she says. “I’m located in the marketing department near human resources, and he’s located near the finance department. We also have little rules, such as no phones near the dinner table, and at 7 p.m., we turn off the Native Foods button. We also go to movies, see friends, ski, and eat dinner out at least once a week to balance the work-personal aspect.”

Much like with her dad, McGinty brings her 8-year-old daughter, Dagny, to work to
do little tasks such as distribute table tents at the stores and assist with cooking demos. Dagny also comes with her mom to the office on Sundays for a couple hours and assists with recipe ideas in McGinty’s new cookbook that was scheduled to be published in January.

“Dagny says the office is boring compared to going to the restaurants,” McGinty says. “I agree – the action is in the restaurants.”

A couple years ago, McGinty and Dolan moved the Native Foods headquarters from California to Chicago to use the new location as a jumping board for growth on the East Coast. Surprisingly, the No. 1 store isn’t in California, it’s in Chicago, which is a foodie city, McGinty says.

Currently, McGinty can’t do anything else but focus on Native Foods.

“I have to keep my eye on the ball,” she says. “However, I’m interested in starting other businesses because I like to be involved in the start-up stage. Once Native Foods is running smoothly like It’s Just Lunch, I can turn my focus on to something else exciting.” JCU


Comments are closed.