Dustin Mullis was a 29-year-old loan officer and “broke as broke could be” in 2011 when a chance encounter with Zaxby’s co-founder Zach McLeroy changed the course of his career.
McLeroy, who launched the chicken restaurant chain in 1990 with Tony Townley, was meeting with the CEO of the Atlanta area bank where Mullis worked when, as Mullis recalled, he asked his boss to pitch McLeroy on the idea of opening a Zaxby’s in the northwest metro. That pitch turned into the opening of a restaurant in Marietta, Georgia, in 2012, with McLeroy becoming a mentor to Mullis along the way and that CEO, Greg Shumate, a partner as they eventually opened six locations.
Zaxby’s, based in Athens, Georgia, had roughly 500 stores when Mullis became a franchisee; it’s since grown to more than 900 restaurants in 17 states and is working to double that unit count.
Mullis, who in 2019 bought out his partners and now runs Coup Management with his husband, Brian McBrearty, said their seventh Zaxby’s is slated to open in November and three more are in the pipeline. His success as an operator and his ability to keep growing, he said, are directly tied to the “people-first mentality” cultivated in his restaurants and an emphasis on career development.
Zaxby’s franchisee Dustin Mullis says his group’s Leadership Development Program has been a game changer in a challenging labor environment.
“We hit a point several years ago when we realized we didn’t have a roadmap for people who wanted to grow in the business,” said Mullis, who got his start in restaurants at age 14 working in his local Chick-fil-A, putting in seven years there. In response he created Coup Management’s Leadership Development Program, which he likened to the farm system in Major League Baseball where young players are developed before joining the big leagues.
The eight-week program, which employees apply and interview for, provides additional operations and leadership training while also emphasizing soft skills such as communication and critical thinking. The program culminates in an ROI project, where participants identify an opportunity they see in their store, then research and present the return on investment to the executive team.
“It was honestly game-changing for us,” said Mullis, and more than 100 employees have completed the program. “It’s a way for team members to raise their hand and say, I want to grow with you.”
The Leadership Development Program, along with an “aggressive” pay and benefits structure, differentiates Coup Management as an employer, said Mullis, who believes in being transparent about pay and opportunities to advance. Pay ranges are posted in every restaurant—shift leads, for example earn $15-17 per hour and assistant managers earn $19-$21 and are eligible for profit sharing.
“It’s a Whole Foods philosophy I stole years ago,” he noted of the pay ranges being public. “Why not talk about it? Pay is no secret. We also have our road to $100,000. We want our GMs making north of $100,000. We’re not there yet, but when we get there, that means we’re all doing great.”
Mullis also provides employees a chance to become equity holders in the business. His first employee, Scott Neesmith, has an equity stake in a few stores and is now director of operations, and another employee, Stephen Hogg, also became an operating partner. Trevor Mosley, a long-time manager, is a 25 percent equity owner in the group’s new restaurant opening this fall.
Goldman Sachs Merchant Banking Division bought Zaxby’s for $2 billion in November 2020.
“We really buy into the fact that if you take care of your people, everything else will follow,” said Mullis, and his sales results back up that sentiment.
Average unit volumes at his six stores are “north of $3.3 million,” he said. The franchise system AUV is $2.66 million.
McLeroy, who stepped down as CEO and became chairman of Zaxby’s in 2022 following the sale to the Goldman Sachs Merchant Banking Division, described Mullis as a franchisee who “embodies the essence of continuous improvement.”
“He commits to talent development and guest focus while recognizing the value of investing in his leadership team and employees, nurturing their skills, and empowering them to excel,” said McLeroy in emailed comments. “By fostering a growth and professional development culture, Dustin has created an environment within his franchise where people can thrive. The mission of Zaxby’s is to enrich lives by focusing on those inside the store as well as the guest experience, and Dustin consistently upholds those standards of quality, efficiency and consistency across all aspects of his business.”
Chief Development Officer Mike Mettler said Mullis is the type of operator Zaxby’s wants as it accelerates growth under a new leadership team assembled by Bernard Acoca. Acoca came on as CEO in January 2022 after nearly four years as president of El Pollo Loco.
Related: New Zaxby’s Leader Begins Push for Speed on Way to Giant Growth Goal
Mettler, in the CDO position since May 2022, came to Zaxby’s from Orangetheory Fitness and before that held franchise development roles at Dairy Queen and Domino’s. He’s since built his own team, recruiting Andrew Bello from Inspire Brands as VP of strategic design and construction, and Bert Lane, another Inspire Brands alum, as VP of franchise sales.
Mike Mettler joined Zaxby’s in 2022 as chief development officer.
Zaxby’s is on track to open 34 new restaurants this year, said Mettler, double what it did in 2022. His aim is to “unlock growth potential” with existing franchisees and use “aggressive development incentives” to spur expansion. Introduced via an incentive program this year, Zaxby’s will refund the initial franchise fee of $35,000 and reduce the royalty to 2 percent for the first year and 4 percent for the second year on stores opened before December 25.
The incentives, said Mettler, are a “quick and impactful” way to stimulate growth. He also implemented Calibrate, an analytics tool, to evaluate new trade areas, along with other “leading edge tools” to manage the pipeline.
A new, modular restaurant design will debut next year that is “dramatically smaller”—1,100 to 1,600 square feet—than a typical Zaxby’s that clocks in around 2,300 square feet.
In July, Chicken Scratch Holdings, led by Russell Pate, opened the brand’s first franchise-owned, to-go-only restaurant in Hoover, Alabama. Also with a smaller footprint, it includes a walk-up window for to-go orders and an outdoor patio with four tables, but no dine-in seating. The double drive-thru layout features new digital menu boards, a payment window and a drive-thru delivery door for faster pay and pickup.
Zaxby’s opened its first corporate-owned to-go-only prototype in 2022, in Memphis, Tennessee, and earlier this year added another in Clemson, South Carolina.