Michael D. Weinberg went from Baker Botts associate to doughnut entrepreneur.
Image: Mark Graham

Last fall, Michael D. Weinberg joined bank presidents, corporate real estate executives and hedge-fund types for a breakfast presentation at Dallas' tony Crescent Hotel.

Then he left, changed clothes, and went to his other job, at Dunkin' Donuts, pouring coffee alongside $7-an-hour employees.

A former big-firm lawyer and hedge-fund manager, Weinberg now co-owns three of the coffee-donut franchises -- he opened his most recent store on Sept. 29 -- and he has grown accustomed to pitching in where help is needed, even when it's behind the counter.

"I am living in the world of the small businessman, yet coming out of a world where it's all Wall Street and lawyering," he says.

Weinberg knew that owning his own business was his ultimate goal as far back as 1986, when he graduated from the University of Texas, and he knew it as a student at the University of Texas School of Law. He had opted for a JD over an MBA, he says, "because with a law degree, you can always go into business, but you can't be a lawyer with a business degree."

Yet somewhere in there, he ended up not in business -- the result, he says of "following the path" typical of law students. He did well, earned clerkships, passed the bar exam and in 1989 joined Baker Botts as a new associate in the Dallas office's real estate practice group.

"When you're offered something from the big firms in Dallas, you can't turn it down. It was a lot of money, and it was the natural next step," he says.

He says he remembers his first day, "sitting at my desk thinking, 'Why am I here?' "

Weinberg notes that the problem wasn't the firm or any of the people there. In fact, he says he has remained friends with some of the lawyers in his new-associate class. He just didn't like the big-firm experience, and he didn't like the work.

"Things have changed now, but I went in before the technological revolution, and my first job was redlining documents," he recalls. "Three years of law school to be able to compare two documents and note what was different using a ruler and a pencil."

Then came a series of three aha moments. The first two were more like realizations: He found his work neither interesting nor challenging, and he felt compelled to be billing all the time.

Then there was the exchange he had with a more senior associate at the firm. Weinberg says he went to the colleague, who was two years away from making partner, and said, " 'I want to talk to you. Can you tell me whether it gets better? My friends in investment banking say the first years are hell and then it gets better.' The colleague responded, 'No, it doesn't really get better. You just resign yourself to [the notion that] this is what you do, you resign yourself that this is an easy, safe way to make a living.' "

That advice, Weinberg says, "was just one of the most depressing things I'd ever heard. And I remember thinking, 'I gotta get out of here.' "

Until then, he'd hoped his exit would happen organically. "I chose real estate and corporate [work] so I could meet someone and something would happen," he says, admitting that he had hoped a business client would "walk into my office and whisk me away." But no one did.

"You think you're going to meet people on deals, but you don't, because you're just the one doing the paperwork," he says. "I realized I was going to have to make something happen."

In 1993, he started sending his résumé to private equity companies, investment firms and the like, but says he was getting nowhere. He considered going back to school for an MBA and decided to study to become a certified financial analyst. Problem was, he says, "as a lawyer, I couldn't interview and study for the GMAT or the CFA, a very important credential for an investment job." There simply weren't enough hours in the day.

Then a friend from high school decided to go to business school and offered Weinberg the chance to help run his import-export business during his absence. Weinberg "decided it was now or never" and, taking a 60 percent pay cut, bid farewell to his law firm and entered the business world.

"A lot of people thought I was very brave. I knew a lot of other lawyers in a similar position, but they felt like they couldn't take that kind of risk," Weinberg says. "I just thought, 'Well, I'll figure it out.' I had a very good education between undergraduate and law school, and I knew how to figure things out."

He also had no student loan debt, no kids and a wife with a good job, so he decided to go for it.

Although he was still busy, he says he was much happier. "It was like a great weight had been lifted," he says. "I didn't know where I was going, but I knew I was going somewhere, whereas in law I knew I was on a path I didn't want to be on." Meanwhile, his wife supported the two of them until he could merge completely onto that right path.

The Big Break

Weinberg remembers the classified ad he saw one day in the spring of 1994. It was small but contained all he needed to know: A Dallas-based hedge fund called Greenbriar Partners was looking for a "bird dog analyst." He saw the ad on Friday and spent the weekend reading up on the fund's owner, Frederick "Shad" Rowe.

"On Monday morning at 8 a.m. I showed up at his office with my résumé and a cover letter. He had given his fax number [in the ad] but I showed up, because I wanted to be the first résumé in the office," says Weinberg. He got the job.

"I was thrilled. I thought, 'I finally broke in!' " he says. And his experience as a lawyer actually helped him.

"Baker Botts has such a great reputation, so that was a positive," Rowe says of his initial impressions of Weinberg. Rowe believes Weinberg's legal training contributed to his thoroughness and also says Weinberg has a talent when it comes to reading people and in determining risk.

Weinberg stayed at Greenbriar for two years before moving to Richmont Corp. in Dallas, the investment arm of Mary Kay Inc., for four years. There, he says, he was responsible for managing a portfolio of hedge funds and stocks. He had similar responsibilities at his next position, with Dallas-based hedge fund Carlson Capital in November 1999. He spent eight years as the director of special projects, he says, managing a portfolio of outside hedge funds. He loved his position there and, although he is no longer a full-time employee, he remains connected to the company as a consultant.

But he says he always wanted to own his own business. While at Baker Botts, Weinberg says, he had briefly entertained the thought of opening a Boston Chicken franchise.

It wasn't so much that he loved chicken or even Boston. The appeal, he says, was that "it was a very unique concept. The company was one of the first to be doing that sort of 'meals to take home' thing. It's popular now, but at the time it was pretty unique.

Back then, he said, the chain of comfort-food take-away meals was virtually unknown. Ultimately, however, he decided not to do it, because the brand was too new and, as a just-graduated lawyer, he was too green when it came to the ways of business. Advising him to take that pass was family friend Burt Srebrenik of Hollywood, Fla. Also a lawyer, Srebrenik left the practice after about six years to join his family's business, which owned Kentucky Fried Chicken and Taco Bell restaurants in Florida.

"He talked me out of Boston Chicken, but we began a relationship of looking at restaurant investments together -- we just never did anything about it," Weinberg says.

Until two years ago, that is, when Weinberg says he was talking to someone in the Carlson Capital office about his dream to put his own business deal together, and the person mentioned Dunkin' Donuts.

Weinberg concedes that he does have a soft spot for fast food -- his first job was at a taco joint at a mall -- but he it was just a coincidence that he also had looked into investing in Boston Chicken.

"I loved the economics of Dunkin' Donuts," he says, "and with [Boston Chicken] it was the same sort of thing, it was different at the time. I have never looked into Jack in the Box or McDonald's or Burger King, just these because they were unique concepts."

Regardless, Weinberg remembers saying, "No. that's an old-school thing. Why would you want to do that?"

But he looked into the chain anyway and liked what he saw. "When I looked into Boston Chicken, it was an unknown name, but this is a very recognized name," he says. He also liked the relatively simple operation -- "you don't have a kitchen, you're not frying chicken" -- and that the emphasis is now on coffee and other breakfast options such as bagels and egg-white flatbread sandwiches rather than just doughnuts and Munchkins.

Where there's coffee, he reasoned, especially good coffee and specialty drinks such as lattés priced below places like Starbucks, there will be regulars. "If you sell them a good cup of coffee, you'll see them everyday," he says.

But the biggest draw is the brand itself, Weinberg says. "It's a national brand that's not national," he says.

Dunkin' Donuts' marketing manager for Texas, Chandra Grant, agrees. Of the brand's 7,000-plus stores across 34 different countries, there are just shy of 5,800 stores in the United States -- and only about 75 of them are located in states west of the Mississippi. So Dunkin' began a "big push to expand westward," she says, "and with that, we were looking into large-area developers," or LADs, as the best way to "radically expand," including the chain's presence in the Lone Star State.

Currently there are 29 Dunkin' Donuts stores in Texas, with three more slated to open in November, Grant says.

Grant says most of the stores "that used to be in Texas and the [DFW] Metroplex were small mom-and-pops, with just one store and one owner rather than an LAD with a five store-plus commitment," she says. "Some of these stores had been around since the 1960s, and the owners just retired."

Glazy Days

Enter Weinberg. He quickly formed a partnership called D3FW Management along with Srebrenik, who says he actually had been trying to do a Dunkin' Donuts deal in Florida for years when Weinberg called to ask his thoughts on opening a franchise in Texas.

Once they shook on the partnership, they set out to convince Dunkin' to let them do the deal, Weinberg says. "When we first went to them, the West was closed, and they were deciding how to open it," he recalls. "We spent a lot of time trying to convince them to come to Dallas, and waiting for them to make their decision."

Together Weinberg and Srebrenik raised $3.5 million from family, friends and colleagues in the financial industry and, once they got the go-ahead from the Randolph, Mass.-based company, they began purchasing Dunkin' franchise rights.

They opened their first store last November inside a newly constructed Wal-Mart in Denton. As a brick-and-mortar business newbie, Weinberg says he knew he'd eventually encounter a legal issue such as a slip-and-fall or an employee injury from the meat slicer or the toaster. He just didn't figure he'd be dealing with a legal problem within minutes of swinging the doors open.

While the Dunkin' cashier was helping a customer -- the second customer in line, he notes -- the shelf holding up the cash register drawer broke, and the falling drawer sliced the cashier's hand.

"Within the first 10 minutes of that first store opening, I was on the way to the hospital with our first worker's comp claim," he says. The employee recovered, and Weinberg says she did in fact file a worker's compensation claim, because he helped her complete the paperwork.

A second Denton County location followed -- this one in Frisco -- and on Sept. 29, he opened a Tarrant County Dunkin', the first in the county.

Weinberg says his company plans to open 25 more stores -- two are currently under construction -- in the next six years.

It's a time frame he says he's sticking to despite the credit crisis. He says the crisis is affecting his company, but not in a completely negative way. He acknowledges that "it's clearly going to get much harder to get bank financing and the terms may be changing as we speak." But he also says the downturn has opened new real estate possibilities for the company. "We are getting a lot of calls on real estate we thought was not available because leases are being cancelled," he says. "What's also happening is we're seeing centers where [the developers] dotted in areas like, 'This is where the Starbucks will go' and Starbucks or another high-end coffee brand is not taking the leases now, it's totally falling through."

So while a bad economy is "not good for any business," Weinberg adds that "in a bad economy, I'd rather be on the value-conscious side of a business, I'd rather be the coffee at the lower price point."

But the business isn't purely economics -- Weinberg says his legal training has come in handy. "Now all that experience drafting partnership agreements and structuring investments has paid off," he says. "All the legal stuff kicks in."

That's certainly helped the relationship he has with D3FW Management's attorney, David A. Wood of Wood & Sartain in Dallas. "It's great," Wood says of working with a client who's also a lawyer. "You don't have to educate them on what an LLC is, they actually read the documents and they understand about paying bills," he says. Wood, who has known Weinberg since they were law school classmates, is looking forward to helping grow D3FW from a small business to a mid-size business once all the stores are open. But he says he still expects to pay for his own coffee. "I am a big supporter," he says. "It's good to keep your clients in business!"

Meanwhile, Weinberg is spending a lot of time in his car. "The biggest role I have right now in Dunkin' is real estate and finance. I am looking at sites, looking at leases," he says.

But he's glad to do it, in part because his three school-age kids approve. "For years I've worked in things I've never been able to explain to my children," he says. "But now I am in a business they understand, and it's fun. I make doughnuts."

"Life After Law," a series of profiles of attorneys who have left the practice of law to pursue a passion or simply to try something new, appears periodically in Texas Lawyer.