Coconut’s Fish Cafe brings Hawaii to the mainland

The Franchise Times

After retiring to Hawaii at 40, Michael Phillips started a fish restaurant and then brought in his daughter and son-in-law to franchise it. The family motto is one reason it works:  Mistakes are ‘tabled forever,’ once rectified.

Michael Phillips has frequently been in the right place at the right time. The successful entrepreneur began his career at California’s first Pizza Hut, and later started his own pizza chain before getting in on the ground floor of the cell phone revolution in the 1980s—the days of bag phones and $5-per-minute calls.

Phillips later owned a chain of cell phone stores for 11 years before retiring at age 40 to move to Hawaii. Right place. Right time.

As with many entrepreneurs, retirement wasn’t a natural fit. Phillips’ short retirement ended in 2009 after tiring of driving “clear across town to get something good to eat” in his new hometown of Kihei.

He opened Coconut’s Fish Cafe in 2009, a counter-style, affordable restaurant focused on Hawaiian flavors, including recipes from his mother and a few creations crafted by his two business partners—his daughter, Frances Oney, and son-in-law, Dan Oney.

In the following six years, the trio has built a budding franchise system that transcends the logistics of transcontinental travel, divergent career paths and working closely with family members—both by blood and marriage.

Fish tacos and Hawaiian ingredients are the crux of Coconut’s food.

The crux of Coconut’s is fish tacos made with wild-caught fish, authentic Hawaiian ingredients, milk- not cream-based seafood chowder, macadamia-crusted mahi-mahi and kid-friendly items like chicken pasta, spaghetti and quesadillas.

After opening the first location in Kihei, on Maui, Phillips found success from his intended target: Locals eager for affordable food that was verifiably Hawaiian.

“I opened the restaurant for fun, more than making a national chain out of it,” or having his kids work for him, Phillips said. “I wanted to do something for like two hours a day, I wanted to have a fish sandwich, and I also wanted to deliver something that was unique and very different for my community and friends—I mean that sincerely. That’s not just a tagline.”

His daughter, Frances, was skeptical of her father’s plans.

“Hawaii is a very service-based economy,” she said. “It was the height of the Great Recession, and people weren’t coming to the island.”

Phillips weighed his daughter’s point of view, but continued unfazed.

At the same moment, their family was about to grow. Frances, who first came to work with her dad at the age of 2, began dating her future husband, Dan, back in California where they both had promising full-time careers.

Coconut’s quickly had lines streaming beyond the front door. Locally influenced food was the key, but Phillips said his local relationships aided its success, particularly in attracting the recommendations from locals when tourists asked, “Where should we eat?”

Interest in franchising from diners came almost immediately, although Phillips shot them down while constantly reiterating that he was still doing this for fun.

As his Coconut’s workload increased three years in, that fun diminished and he reached a crossroads. At 55 years old, he was burning himself out and jokingly says he considered handing the keys to the next customer that walked in the door.

Frances and Dan were still in California, and grew increasingly troubled at Michael’s long hours. They decided to detour their careers to help him manage the restaurant.

Dan bravely went first, “going mobile” with his consulting job and flying to Hawaii to train in the restaurant for a month—dirty kitchen duties, busing, dishwashing, cutting up fish and all—before Frances joined them on Maui a month later.

“We saw the opportunity to grow from this one unit and expand a concept that we all believe in,” Frances said. “We can really help genuinely impact my dad’s quality of life … because he was working himself to a premature grave.”

Dan was learning the business with his future father-in-law, while they all began thinking about how to recreate the Coconut’s system and writing down anything that could help replicate their success in another location.

Being the newest member of the family, Dan picked up knowledge from the people who helped him cut his teeth during his initial months of training. “Because Mike made sure I worked alongside everybody back there and proved to them I could do their jobs as well, they were willing to work with me on that next step of the process,” Dan said of the transition from running the kitchen to planning to franchise.

Frances and Dan worked with a consultant to draft the requisite documents and manuals, while simultaneously streamlining kitchen procedures to make the business ready to replicate.

The first licensed Coconut’s opened in Scottsdale, Arizona, in April 2013. Since then, they opened a corporate headquarters in Reno, Nevada, as well as a franchisee-owned location in Dallas, Texas, a state where it plans to open eight restaurants within two years.

Joseph Bargas, a senior franchise consultant with iFranchise, was hired to help Frances and Dan write operations and training manuals. As part of the project, he shadowed the team in Hawaii, impressed by the long lines and lack of a fishy funk in the kitchen. Bargas feels the family is doing a good job of supporting its nascent franchise system and growing in a measured, not rushed, manner.

Michael says they all focus on enjoying the process and quickly moving beyond arguments or problems.

“When people make mistakes, we don’t need to talk about them once we’ve rectified them,” he said. “Once they have been discussed, they are tabled forever and not to be looked upon again. In my family, that’s how we deal with situations.”