He's opened hundreds of restaurants, but this one represented a milestone for Texas' undisputed franchise king. It marked the 1,000th location in Perales' franchise empire that now spans eight states.
On a steamy 90-degree July day, Guillermo Perales stood ready to cut a celebratory ribbon in front of his newest Popeyes cajun fast-food restaurant in Dallas.
Surrounding him were his wife and business partner, Adriana, as well as executives from Popeyes Louisiana Kitchen and Burger King's parent company, Restaurant Brands International, which only months earlier sued Perales, seeking to close dozens of his restaurants in South Texas.
He's opened hundreds of restaurants, but this one represented a milestone for Texas' undisputed franchise king. It marked the 1,000th location in Perales' franchise empire that now spans eight states.
His Sun Holdings Inc. and its subsidiaries operate at least 80% of the Burger King, Popeyes, Krispy Kreme, Golden Corral and Arby's restaurants in Dallas-Fort Worth.
Guillermo Perales, a 57-year-old Mexican immigrant and businessman who's called Dallas home since the late 1990s, is widely regarded as one of the most successful Latino business owners in Texas.
His newest Popeyes location propels him into an exclusive club. With 1,000 stores and nearly $800 million in annual revenue, he's one of the top 10 restaurant franchisees in the country, according to trade publication Franchise Times. Another ranking by Franchising.com names him the third-largest franchisee in the country, excluding Target, which operates more than 1,000 Pizza Huts.
But Perales' Dallas-based business wouldn't exist if it weren't for the lessons he learned early and the relationships he's built over two decades.
From Mexico to Dallas
Perales got his start in Mexico, where he wanted to open a Golden Corral in what he considered a favorable market for the brand and with less competition than in the neighboring U.S. When the bank he was working with pulled out of the project, he asked the buffet chain if he could transfer his development agreement north of the border.
Golden Corral split up a Dallas market where an existing owner was behind on development and gave several stores to Perales, he said. His first Golden Corral restaurant, made possible by a roughly $1 million Small Business Administration loan, has since moved to Plano.
Guillermo Perales, a 57-year-old Mexican immigrant and businessman who's called Dallas home since the late 1990s, is widely regarded as one of the most successful Latino business owners in Texas.
His newest Popeyes location propels him into an exclusive club. With 1,000 stores and nearly $800 million in annual revenue, he's one of the top 10 restaurant franchisees in the country, according to trade publication Franchise Times. Another ranking by Franchising.com names him the third-largest franchisee in the country, excluding Target, which operates more than 1,000 Pizza Huts.
But Perales' Dallas-based business wouldn't exist if it weren't for the lessons he learned early and the relationships he's built over two decades.
From Mexico to Dallas
Perales got his start in Mexico, where he wanted to open a Golden Corral in what he considered a favorable market for the brand and with less competition than in the neighboring U.S. When the bank he was working with pulled out of the project, he asked the buffet chain if he could transfer his development agreement north of the border.
Golden Corral split up a Dallas market where an existing owner was behind on development and gave several stores to Perales, he said. His first Golden Corral restaurant, made possible by a roughly $1 million Small Business Administration loan, has since moved to Plano.
Taco Bueno needed an invigorating new vision, Perales said. He decided to wade in.
Perales struck a deal to buy Taco Bueno for a fraction of the original $120 million asking price and paid down its debt. Sun Holdings is now remodeling locations while Perales mulls potential menu changes that could reinvigorate the chain.
Kat Tidd, a Dallas attorney specializing in franchise law who has also worked industry-side in Mexican fast-food franchises, said Perales will have to overcome some hurdles to turn the Taco Bueno brand around post-bankruptcy.
"It's tough," Tidd said. "Part of it is staying on top of it and not stagnating with the menu, with operations, with the image. ... You have to make the brand profitable."
'Should've diversified'
Perales admits he isn't the type to unwind on weekends. He prefers to use Saturdays to do the kind of thinking he doesn't have time for during the week. He goes over weekly reports, analyzes costs and assesses problems that need addressing.
He's not overly concerned about healthy-eating trends among American consumers or the potential for a minimum wage hike.
"I have too much to worry about," Perales said.
And he doesn't see a time when convenience and speed don't reign supreme. When he reflects on his career, he only wishes he had moved faster.
"I should've diversified and been more aggressive," he said.
Sun Holdings isn't just in the restaurant business. It's also added more than 100 T-Mobile locations and 80 GNC stores to its portfolio in recent years.
If Perales' name can be tied to one particular brand, it's likely Burger King. He operates about 300 Burger King locations across Texas and Florida. The burger chain represents more of his portfolio than any other brand.
There were over 17,000 Burger King restaurants worldwide as of 2018, and only 50 are still operated by Burger King, according to market research firm Statista.
With the acquisition of each new restaurant, Perales was building up a company that could withstand the bumps and bruises of a scaling business.
"The larger you get, the more immune you are," he said.
Still, Perales acknowledges, 17,000 employees means 17,000 opportunities for something to go wrong.
"There's more bureaucracy, you become slower with reacting. There is no perfection," he said. "Your mistakes are more visible."
And Perales is no stranger to crisis in his restaurants.
In 2004, a 15-year-old working at one of Sun Holdings' Burger King locations in Euless alleged she was sexually assaulted multiple times by a supervisor in a nearly $1 million lawsuit that extended over a decade. At least one of Sun Holdings' subsidiaries sought bankruptcy protection in the process.
"Instead of caving, we decided to fight it," said Perales, who viewed the lawsuit as a cash grab on his business in its budding years.
Looking back, Perales said fighting the suit was a poor decision because it distracted him from the growth he should've been focused on.
'Out of line'
Earlier this year, Perales found himself on the opposite end of another serious lawsuit — this one by Burger King's parent company.
A Univision TV station's investigation discovered rats living in the food at a Sun Holdings Burger King in Harlingen.
Restaurant Brands International Inc., owner of the Burger King and Popeyes brands, alleged "gross neglect" in its lawsuit and wanted Perales to essentially forfeit several dozen of his stores in the region for breaching its standards agreement.
Perales, who sees his relationship with franchisors as not unlike a marriage, views flare-ups with brands as almost inevitable, this one included.
"Sometimes you get to rough spots," he said.
As a franchisee, Perales doesn't own the brands, he merely owns the operations. So he relies heavily on his relationships with brand owners to meet their requirements. In attempts to catch up with rival McDonald's, Burger King has been trying to close underperforming locations as franchise contracts run out and replace them with newer, more profitable restaurant concepts.
There can be various motivations for brands wanting to push out franchise operators, Tidd said.
"If [the brand is] unhappy with a particular operator, there are tools in the franchise agreement that could be used if the operator doesn't stay in line," he said.
To Perales, the lawsuit "got out of line." He felt his record as a steward of the Burger King brand had spoken for itself, and he considered pushing back. But he chose not to dig the hole any deeper by fighting the litigation.
"It's not healthy," Perales said.
He closed the Harlingen store until increased inspections showed it was safe to reopen. He reached an undisclosed settlement with Burger King's parent and the suit was dropped.
"We probably understand each other better," Perales said after the opening of his 1,000th store — the one where the Popeyes president and the CEO of Burger King's parent joined him to celebrate. "It really meant a lot to me."
With the milestone under his belt, Perales said he's looking forward to his next conquest: adding even more brands to his portfolio to grow Sun Holdings into a $1 billion-a-year franchise giant.
