Meet Derrick Hayes; he is the founder and CEO of Big Dave’s Cheesesteaks. Following the success of his business in Atlanta, the entrepreneur wants to create opportunities for blacks to become franchise owners of his business.
Hayes wants to open 100 franchise locations by the end of 2025 and he has begun accepting official applications to purchase a Big Dave’s Cheesesteaks franchise. According to him, franchising is something that has always been part of his vision and the time was now rife.
“I’m a visionary, I’m a dreamer,” Hayes told CNBC Made It. “Franchising is something that I thought about years ago, but I didn’t have the experience or the team to do it.”
Data from the International Franchise Association shows that only 8% of franchise owners are Black. What is more, the data also shows that black franchisees have revenues 220% higher than independent Black-owned businesses on average.
Hayes said he is exploring the franchisee model to help black entrepreneurs escape hurdles, including those who do not have a college degree or lack the experience to follow their dreams of owning a business.
“I wasn’t an entrepreneur, I wasn’t a businessman. I’m making it for the people. If they want to get involved with what we’re building, we are going to help them up,” Hayes says.
Hayes started Big Dave’s Cheesesteaks as Big Dave’s Water Ice, as Italian ice is known in Philadelphia. It was first launched in a gas station in Dunwoody, Georgia, in 2014. However, the business was renamed after Hayes’ late father, who inspired his passion for entrepreneurship.
“I watched my father die in front of me. He asked me to make him a promise,” Hayes said, recalling his father’s final words. “I don’t want you to work like I did my whole life and have nothing to show for it.”
Hayes switched to cheesesteaks after his frozen treats failed to gain traction. However, his latest move did not become an instant hit. He struggled for traction until rapper, actress and TV host Eve, also a Philadelphia native, stopped by for a cheesesteak.
“I’m cooking this chicken cheesesteak like my life depended on it. I said, ‘There’s no way that I’m going to have this opportunity right now and drop the ball,’ because I don’t have another opportunity. I don’t have another resource.”
According to him, when Eve took a bite of the cheesesteak, she was impressed and took to social media to share “that the real deal cheesesteak is in the South, he’s from Philly and y’all make sure you support this brother.”
The next day, customers flooded his shop ostensibly to have a bite and that was how his cheesesteak business took off. In 2019, he opened his first location; however, the pandemic forced him to temporarily close. That was how Pinky Cole, founder of Slutty Vegan, came to his aid to rebuild his business and the two are now married with children.
According to Hayes, in his first year of operation at the gas station location, he brought in less than $100,000 in sales. However, his flagship location in downtown Atlanta alone has brought in over $2.3 million in revenue over the past 12 months.
He plans to expand the business by opening additional locations. He opened two in Georgia in 2020 and three inside Mercedes Benz Stadium. He also opened another location in suburban Atlanta, and this fall, he is set to open the first location in Charlotte, North Carolina.
Hayes did not have a rosy upbringing. He was raised in an impoverished neighborhood and found himself in a life of crime to provide for himself. He was arrested for selling drugs and appeared in court. However, his case was dismissed because the detective who intended to testify against him at his trial did not show up. Hayes also attributes this to his sister’s continuous prayers for him.
Hayes, who is also a philanthropist, fed some 40 hospital workers during the pandemic. He also provided food to more than one thousand customers in his neighborhood and raised funds to help Black-owned businesses in Atlanta.