Henry McGovern is the founder and Former CEO and Chief Emotional Officer of Amrest.
Amrest’s motto “Anything is Possible” is a clear reflection of Henry McGovern. A motivating leader, he’s one of the most successful businesspeople in Europe (among the top 5 according to Forbes Magazine, in 2008).
Henry McGovern’s Life
Ahead of diving into his storied career as a successful restaurant industry executive, here’s a bit more about Henry McGovern’s background.
Henry McGovern was born in 1966 in the United States. He lived in Germany when he was young. At age 13 he ran his first business: Kimberly’s Tennis Shoppe.
He attended Georgetown University as a pre-med major and dropped out before the final semester. He also completed a semester at the London School of Economics.
In 1989 he started the Student Housing Association Inc. which became a leader in off-campus housing in the DC area. He later sold half of the company to fund his exploration of Central Europe and look for business opportunities there.
From ARS to AmRest and Beyond
McGovern Relocated to Poland
Acquired Rynek 48
Through an auction, made an acquisition of a prime real estate position in Wroclaw’s market square.
Founded American Retail Systems (ARS)
Together with Donald M. Kendall, Donald M. Kendall Jr., and Christian R. Eisenbeiss.
ARS Opens its First Pizza Hut
Initially, Pepsico (the precursor to Yum! Brands before the restaurants division was spun out) declined Henry’s offer to rent his retail space — so the company offered him a franchise instead.
McGovern Named CEO of ARS
ARS Rebrands to AmRest
Standing for “American Restaurants”, ARS rebranded itself to what we now know as AmRest.
AmRest Goes Public
With an IPO on the Warsaw Stock Exchange,
McGovern Steps Down as AmRest CEOCEO
McGovern Serves as AmRest’s Chairman
AmRest Starts Trading on Madrid Stock Exchange
Sold Stake to Finaccess Capital
Mexico-based private equity fund Finaccess Capital purchased McGovern’s shares in AmRest Holdings (via a separate holding company ) for $300 million.
Investment in Vapiano
Getting back into restaurants, McGovern made an investment into German-based Italian concept Vapiano.
Investment in Getaround
Via a Series E financing, McGovern invested in the #1 contactless car-sharing app.
Investment in dean&david
Further expanding upon restaurant involvement, McGovern purchased a 49% stake in German-based health-oriented chain dean&david.
AmRest is the leading restaurant operator in Central and Eastern Europe, with restaurants in the quick service (franchisee of KFC, Pizza Hut, Burger King, Starbucks), casual dining (La Tagliatella), fast-casual, and virtual brands segments (Pokaï, Lepieje, Sushi Tone, and more). The company has headquarters in Madrid since 2017.
From starting with a single Pizza Hut franchise and now has more than 2,300 restaurants in 26 countries as well as other investments (in 2019, the company invested $25M in Spanish food delivery company Glovo for a 10% stake).
I’ve been blessed over my career to have met a lot of fascinating and accomplished people in the global restaurant industry. On my shortlist of coolest (and most accomplished) restaurant industry CEOs is Henry McGovern.
In May 2011, I made a trip to visit with Henry McGovern at his then-corporate headquarters in Wroclaw, Poland. The CEO, his team, and the story of his company made such an impression on me that I couldn’t wait to write up a brief profile and share what I learned and took away from our meeting.
In my professional opinion, AmRest is one of the greatest modern success stories to be found in the global restaurant industry. Both the CEO and his company should be on the radar of any respected industry media members, analysts, and investors.
The company’s “Anything is possible” motto has netted results garnered by the way of thinking that speak on behalf of AmRest and its founder. In 2020, the company’s revenue exceeded $1.5 billion USD and its capitalization now hovers around $1.5 billion USD. Henry achieved impressive growth, profits, and overall success with AmRest, and got it ready to hit its full stride.
Some takeaways from time spent with Henry and the AmRest team …
Not Restaurant Guys
When you meet the AmRest top-brass you notice something, and they’ll be the first to point it out: there isn’t a “restaurant guy” among them. What does that mean, given that they’re running one of the most successful restaurant companies in the world? It means that these are men succeeding in spite of deep (pre-AmRest) restaurant industry experience, rather than because of it.
There’s a saying we frequently use when working with consulting clients: “The world’s best swordsman need not worry about the world’s second-best swordsman — he need worry about the guy that’s never picked up a sword before; because he’ll do something he ought not do and the world’s best will end up on his sword”.
The point is that often those who best innovate and turn a competitor (or industry) on its head are those who look at it with fresh eyes, more curiosity, and more determination; not necessarily those with the longest resumes or most experience.
You will not hear an AmRest executive bragging about how smart or accomplished he is, how entitled he is, or how “right” he is based on that experience. What you will notice, however, is curiosity, humility, logic, reason, and a deep desire to leapfrog rather than benchmark.
I’ve been very privileged to have worked with some amazing emerging-brand concepts, companies, and CEOs over the years, some of which have gone from ‘emerging’ to ‘emerged’. I’m noticing a pattern here. When you look at the list of “emerging brands” curated/tracked around the world you will notice there are a lot of companies led by executives that are, like AmRest’s executive team, “not restaurant guys”. This may also be in part why, as a consultant, I have seen them. It seems these types of companies partner with those who can best help them accelerate their skills in certain areas (proven best practices, shortcuts, technical stuff, etc.) but lead with a notion of being industry outsiders, rather than insiders.
New Breed of CEOs
I’ve noticed another pattern lately. Some of the fastest-growing companies are lead by CEOs who share a few distinct characteristics. A new profile is emerging — one of a hip, fun, visionary that is at once charismatic and self-effacing. Their charisma, humility, and sense of humor attract better and more engaged employees, partners, media, franchisees, investors, and business opportunities in general. Examples are Robbie Brozen of Nando’s, Lane Cardwell (numerous big-brands), Steve Ells of Chipotle (pre-scandal, of course), Todd Graves of Raising Canes, and naturally, Henry McGovern of AmRest. These are the types of leaders who are also driven more by giving and contributing to our industry than they are by extracting.
CPG-Types Are Incredibly Analytical
Marketers in the CPG (Consumer Packaged Goods) world are characterized by their sharp analytical and data-driven approaches. For now, I think this is a good way to balance the predominantly intuition-based management approach of the industry’s old guard, with the more modern (and often more radical) views of the industry’s up-and-coming innovators. Analysts can crunch the numbers and find patterns that yield entirely new ways of looking at the data. We have a few such analysts on our team; they are gifted code-breakers and fact-driven marketing practitioners.
When AmRest hired Chief Marketing Officer (CMO) Darek Drewnicki, it brought a similar background to the organization. At the time, Drewnicki was among the new breed of restaurant marketers who was far more data-driven than their predecessors.
In an era where everything can be measured, an analyst (such as those top CPG-types) is the restaurant marketing equivalent of a cipher. They bring an entirely new dimension and perspective to the chain restaurant marketing department.
Case in point: For years now I’ve drawn out for clients on a notepad a series of empty circles — four across by four down with just one colored-in square among them — as a tool to communicate our philosophy that humans are conditioned to see only what’s different and how that plays into restaurant branding. In all the years of performing that exercise — drawing it all out hidden from view and then suddenly revealing it while asking “What’s the first thing you see?” — I have never had anyone respond as AmRest’s CMO did. While most immediately (and I long thought “correctly”) responded, “The colored square”, Darek studied the sketch intently before replying that he was “looking for the pattern”. I was stunned. This was it. This was what I had been hearing/reading about. This was one of those CPG minds. One of those who look past the obvious to try and categorize the dots in a new way that reveals patterns. These CPG guys see things very differently and it’s pretty thrilling to have one on your team. By the way, he was equally humble, energetic, and as quick to deflect a compliment as McGovern was.
Globalization and the Importance of “Brand Translation™”
Restaurant franchise systems have long struggled to strike the perfect balance between strict adherence to standardization/consistency and adaptability to new markets. This challenge has become more pronounced as restaurant companies expand globally. On the one hand, part of what “makes” a franchise system is consistency — the Big Mac (for instance) tastes exactly the same no matter where you are in the world. On the other hand, a rigid and indiscriminate application of brand standards can snuff out the kind of innovations new entrepreneurs/franchisees entering the system can contribute. They may also open a hamstrung franchisee to potent attacks of more localized competitors who leverage localized market knowledge and business-building approaches.
One of the things that struck me during our site visits of some AmRest restaurants is that they had a lot of flexibility to blend the best of the global franchise systems with their own localized knowledge and business savvy. We refer to this as “Brand Translation™,” whereby the essence of a brand is kept intact but it is adapted (or translated) subtly into foreign markets (exactly the kind of work we love to do).
A few AmRest examples: Within their KFC business they conceptualized new non-core menu items (such as their B-Smart Box and Krusher’s non-carbonated drink line); sell fresh locally-sourced chicken versus frozen; and also sell beer on the weekends. Within their Pizza Hut business, they launched a successful by-the-slice concept (sold from a small window on a busy square in Wroclaw) for the late-night crowd and also focus much more heavily on fresh, locally sourced produce than any Pizza Hut you’d find back in the States.
5. Acquisitions and Partnerships
Over the years I’ve been approached by dozens of hedge funds, venture capital firms, and respected industry investors asking for help finding new acquisition/investment opportunities. Recessions often spur on even more interest and certainly a flurry of acquisitions, divestitures, and chain shakeups. Some are profit-minded and some are value-minded. You soon get the sense of which firms are just deal-hunting and which ones are looking to truly add long-term value for all involved. AmRest is not only a well-funded and growth-minded company, it is a company intent on growing into new markets around the world both through acquisition and joint-venture partnerships. If you’re reading this and are with an established/respected foodservice concept in an emerging market, you may want to start getting more familiar with AmRest. It’s a good company to know; especially if you’re growth-minded and believe in the motto “Anything is possible”.
6. Mottos and Manifestos
A motto is a “phrase meant to formally describe the motivation or general intentions of a social group or organization” (Wikipedia). A manifesto is a public declaration of principles or intentions. I believe a company should have both. Naturally, AmRest does.
McGovern has woven into AmRest a culture rooted in the motto “Anything is possible.” It is clear the company got where it is today by truly believing and behaving in a manner consistent with that motto.
Imagine going back to 1993 and sitting with Henry in that first little Pizza Hut in Wroclaw. If he had described then the AmRest of today how many people would have actually believed in his vision? When today they hear that he aspires to grow AmRest into one of the top 10 largest restaurant companies in the world, do they see that future for the company as clearly as they can trace it backwards from today?
As Henry Ford once said, “Whether you think you can or can’t, you’re right”.
Surround yourself with believers. Devil’s advocates and naysayers are much easier to find and much less useful than believers.
Biggest Take-Away from the Meeting?
If you’re tracking which companies and executives in the global restaurant industry that are doing something, you’ll want to add McGovern and AmRest Holding’s to your short-list of ones to watch.