Why would you leave a 1,800-unit chicken wing chain for a salad upstart?
This week’s episode of the Restaurant Business podcast A Deeper Dive seeks to answer that question. It features Charlie Morrison, now the CEO of the nearly-60-unit Salad and Go.
Morrison is the now-former CEO of Wingstop, which he led for nearly a decade, growing it from 500 locations to about 1,800 units and helping to turn it into a powerhouse, one that would spawn dozens of competitors during the pandemic.
We asked him about that decision to leave that position to head up a chain of drive-thru salad restaurants that was relatively little known for the most part outside of its core market. He explains the move. And then we spend a lot of time talking about Salad and Go.
Morrison talks about the concept and why it’s able to sell its salads for just $6. He explains the growth strategy and why now is the time for a drive-thru-only salad chain.
How was Taco Bell able to get its latest prototype from idea to operating in less than two years?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Mike Grams, the chief operating officer for the Mexican fast-food chain, to talk about a variety of topics, from franchising to the reaction to its Mexican Pizza.
That includes its fancy new Defy prototype, the one that features four drive-thru lanes, three of them for mobile orders. The prototype was opened this summer less than two years after the local franchisee brought the idea to Taco Bell.
Grams talks about that story, which is interesting and helps explain the chain’s success. Taco Bell franchisees have generally been with the brand for a long time and the value of their restaurants is at record levels, in part because of the company’s willingness to let them lead the way on some of its new store ideas.
Mike also talks about labor issues and how these new stores fit into that. He also talks about the Mexican Pizza, why that was taken off the menu and why the company had to pull it back. He discusses supply chain issues, food costs and other topics.
Shahpour Nejad came to the U.S. to get his college degree. Instead he became a pizza guy.
This week’s episode of the Restaurant Business podcast A Deeper Dive features Nejad, the CEO and cofounder of the Sacramento-based Pizza Guys, who discusses his personal history, the formation of his chain and its growth strategies.
Nejad’s parents sent him to the U.S. in the late 1970s when he was just 16, so he could go to school. The Iranian Revolution kept him here, and he ended up working with a pizza concept. We’ll let him tell you the rest of the story on the podcast, but it ultimately led him to create Pizza Guys out of Sacramento.
Today, the west coast chain has more than 70 locations and after years of slow and deliberate growth it is planning to get much bigger.
Nejad talks about the company’s story and his reasons for that slow and deliberate growth, and what his plans are going forward. But his personal story is fascinating.
Subway has made yet another massive change to its menu. Will it work?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Pat Cobe, the senior menu editor for RB, in a discussion about Subway’s latest menu chane.
Subway last year overhauled its menu with an “eat fresh refresh,” an upgrade of numerous ingredients, including its bread. Some longtime operators who recall the chain’s decision in the late 1990s to go with a more traditional split bread approach—rather the trench it used to dig into the bread—as a bigger deal.
This month, the company introduced a set of 12 new sandwiches that are designed to operate as its core menu. The company will work to focus customers’ attention on those sandwiches, rather than its countertop with all its ingredients. The goal is to shift away from the customized menu that had been its trademark.
Will it work? It may be vital for Subway’s future. Subway has closed about 6,000 units in the past eight years. Its unit volumes even after improving strongly in 2021 remain low and a number of locations are still underperforming pre-pandemic levels. Getting more people into Subway more often is vital.
In this case, that could mean going away from customization, which Pat and I talk about at length. The two of us attended a tasting of its new menu and we talk about what it could mean for Subway’s future, and why a fully customized Subway menu may not be quite as beneficial as people think.
How do you turn a well-loved local restaurant into a hot national concept?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Garrett Reed, CEO of Layne’s Chicken Fingers, to talk about his efforts to take that step.
Layne’s was founded near Texas A&M in College Station, Texas, in 1994. Reed and a partner later purchased the brand, intending on turning it into a franchise. The company currently has nine locations but has deals for many, many more.
Reed discusses that transition and about how the company has sold so many franchises this quickly. He also talks about the brand’s unique franchising strategy and how that should, hopefully, maintain culture even as the concept grows. He also discusses why that culture is important to a brand like Layne’s.
Everybody talks about having a good corporate culture. But what does that mean?
This week’s episode of the Restaurant Business podcast A Deeper Dive features James Pogue, the CEO of the leadership consulting firm JP Enterprises, to talk about culture and inclusivity.
Pogue is a former researcher and administrator who now works with companies—including many restaurants—to help them attract and retain younger employees.
We speak with him because we’re curious about what it means to have a good corporate culture, one that promotes inclusivity and diversity. Pogue is as good as anybody to talk about that topic.
He quickly notes in the podcast that a company has a culture whether it tries to have one or not. And he talks about how to promote that culture—particularly in a time when so many things are so divisive. He talks extensively about promoting an open and honest culture at a time when political divisions are raging.
How does a mall concept do well in stand-alone locations? With chicken wings.
This week’s episode of A Deeper Dive features Charley’s Philly Steaks President Candra Alisiswanto, who talks about Charley’s growth strategy.
Charley’s operates 670 locations. Most of those have traditionally been in mall settings. But more recently, the company began expanding outside of those shopping centers and into stand-alone locations, many of which have drive-thrus. It has done so in part with an expanded menu that features chicken wings in addition to its traditional menu of steak and chicken Philly sandwiches.
We spoke with Alisiswanto about this strategy, and why chicken wings have helped the company intensify its growth.
He talks about the difference between operating in malls and operating standalone locations and what it takes to make that transition. He also talks about technology and bringing kiosks and mobile apps to the malls. He talks about franchisee demand and how drive-thrus fit in Charley’s future.
How many restaurants does Subway need to close?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Trevor Haynes, president of North America for the Milford, Conn.-based sandwich giant, to talk about the chain’s future.
Subway remains the largest chain in the U.S. by unit count. But it has been shrinking for years. Franchisees have closed about 6,000 locations since the brand peaked at 27,000 restaurants in 2014. Restaurants have low unit volumes and franchisees on average own just two locations.
Haynes was acting CEO in 2018 and 2019 before giving way to John Chidsey. He talks about the likelihood of more closures ahead. But he also says the closures open opportunities for new locations, though the restaurants may be different and could feature things like kiosks and vending machines.
Haynes talks about the company’s plan to recruit larger franchisees and the future of business developers, the sometimes controversial operators who act as master franchisees and take on some of the roles of the franchisor. And he talks about the company’s efforts to build unit volumes.
How do you create a restaurant concept when so much about the business is uncertain?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Jack Gibbons, the CEO of concept incubator FB Society, to talk about concept development and the industry’s future.
FB Society, formerly known as Front Burner Brands, is known most for creating Velvet Taco, which has since been sold—though FB still has an interest in the chain and is a licensee. The company has created several other full-service and fast casual brands including Sixty Vines, Mexican Sugar, Whiskey Cake and Son of a Butcher, among others.
Gibbons talks about how FB Society thinks when it creates a concept right now and what things they consider when developing full-service and fast-casual brands.
He also discusses consumers’ continued desire for service and the demand for high-quality restaurants and what kind of takeout consideration full-service restaurants should have. And he talks about whether fast-casual restaurants should focus on the dine-in business at all.
Gibbons also takes some time to talk about how best to win the labor shortage and about rethinking unit economics when everything costs so much.
How do operators overcome rapidly shrinking profit margins?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Jim Balis, managing director with the investment firm CapitalSpring, to talk about the rising cost environment and how operators can overcome these problems.
Labor costs are soaring right now, with wage rates up more than 13% over the past year. But food costs are up even more, rising more than 16% according to federal data. Add in the higher prices for construction, equipment, real estate and interest rates and it’s difficult to improve profits. Menu prices are up 7.2%, not nearly enough to offset the higher costs.
In addition, a potential recession could push more consumers to shop on price, which may hurt operators’ ability to keep raising costs.
Balis is an operational expert and discusses strategies restaurants can use to offset the higher costs without simply raising prices. But he also talks about price strategy. And he talks about the technologies that could do the most to improve operations down the road.
What is the state of the restaurant industry this year?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Lance Trenary, the CEO of Golden Corral and chairman of the National Restaurant Association, to discuss the general state of restaurants.
Trenary joined the podcast from the association’s recently completed show, the first one in three years. The show was held just days after Congress could not muster enough votes to approve a package that would have provided $40 billion in funding for the Restaurant Revitalization Fund.
Trenary talks about what that means for restaurants that had been counting on receiving their grants. He also talks about the numerous challenges facing the industry, notably soaring labor and supply chain costs, and what impact this is having on operators. Trenary also talks about how his own chain, Golden Corral, has been able to deal with these issues.
Why are grocery prices going up so much?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Christine LaFave Grace, the executive editor of RB sister publication Winsight Grocery Business, to talk about last week’s consumer price index data.
The CPI rose 8.3% in April. Food prices have soared, rising 9.4%. That includes 7.2% at restaurants. But at grocers, prices are up 10.8%.
This affects restaurants in two ways. First, it increases overall costs for the base consumer, which may cause them to cut back on spending. Yet they also see the prices and start dining out instead, especially given the 3.5% gap in pricing between the two industries.
And indeed, restaurant and bar sales have continued to thrive this year.
We talk about this issue from the retailers’ perspective. Why are grocery prices increasing so much? How are consumers reacting when they do shop for their groceries? And how long is this all expected to last? We also provide some context on what this means for restaurants.
Restaurants aren’t the only businesses with labor problems. Distributors have their own challenges that are also driving up costs for operators.
This week’s episode of the Restaurant Business podcast A Deeper Dive features Terry Walsh, the president of small California distribution company Southwest Traders, to discuss the impact of the labor shortage on distributors and how that affects restaurants.
A lack of truck drivers has been an increasing problem for distributors for years but was worsened during the pandemic, which has played a major role in an increase in supply chain costs while causing problems with delayed or even cancelled deliveries.
But a warehousing worker shortage has also caused problems. Terry talks about these roles, why companies have had problems getting these workers, and what distributors are doing about it. He talks about their impact on operators and overall costs and what steps operators can do to make life easier on drivers.
Walsh has more than 30 years in the distribution business and has president of Southwest Traders since 2016. He has spent 14 of those years on the board of the International Foodservice Distributors Association.
How did Crumbl Cookies go from an off-the-wall idea between two cousins into one of the country’s fastest-growing restaurant chains in just five years?
This week’s episode of the Restaurant Business podcast A Deeper Dive features Jason McGowan, the CEO and cofounder of the fast-growing cookie chain, to talk about its history and its growth.
McGowan founded the brand with his cousin, Sawyer Hemsley, in 2017. The brand has since grown to more than 400 locations that largely sell just cookies (as well as some ice cream). It was the fourth fastest-growing restaurant chain in the country last year, according to the Technomic Top 500 Chain Restaurant Report. Sales are up nearly 500% since 2019.
But there is a real foundation here. Crumbl’s locations average $1.7 million and generate more than $350,000 in net profit by largely selling just cookies. It also has a massive social media following.
McGowan talks about the company’s unique formation, its quick rise and the strategy behind its success. He talks about the company’s franchising strategy, which has thus far completely avoided any sort of advertising.
What can operators do to avoid raising prices too aggressively? Or should they?
This week’s episode of the Restaurant Business podcast A Deeper Dive features John Gordon, a restaurant consultant out of San Diego, to talk about the industry’s historic level of menu price inflation and whether consumers will ultimately respond.
Restaurants are raising prices at historically high rates, including 6.9% year over year in March, continuing a high run of price inflation. Restaurants are doing this because their own costs are soaring. Consumers at least thus far have yet to reject these higher prices.
Gordon discusses why consumers haven’t yet rejected higher prices. He also discusses how long this will last. There are growing fears that consumers will shift their spending habits in response to inflation.
Yet operators’ own prices continue to increase. Gordon discusses what they can do to avoid further price increases, and a potential consumer blowback, without having their margins hurt even more.
How did a small hot dog chain handle a sudden rush of customers after the pandemic?
This week’s episode of the Restaurant Business podcast A Deeper Dive features J.R. Galardi, the CEO of the Galardi Group, parent company of Wienerschnitzel, Tastee Freeze and Hamburger Stand.
Galardi was named CEO earlier this year but had been president and chief operating officer before that and has grown up with the concept, which was founded by his father and later run by his mother after he passed away.
He talks about taking over a family business, including some of the pressures, challenges and opportunities that presents. J.R. talks about what he plans to do with the brand.
He also talks a lot about the state of the business, including labor issues, supply chain concerns, franchising and expansion strategies.
Galardi discusses how much demand there was for the drive-thru after the pandemic, the challenges that presented, and what the company did about it.
What chains recovered the most from the pandemic?
This week’s episode of the Restaurant Business podcast “A Deeper Dive” features Joe Pawlak, managing principal with RB sister company Technomic, to talk about the latest Top 500 Chain Restaurant Report.
The 500 largest restaurants grew sales by 18% in 2021—and more than 8% over 2019, effectively recovering from the pandemic. They generated $361.2 billion in total sales.
Pawlak talks about why they’ve been able to grow more quickly than anybody anticipated.
He talks extensively about what sectors did best, notably fine dining along with some of the biggest chains in the U.S.
Among the companies featured in this podcast are McDonald’s, Burger King and, of course, Chick-fil-A.
What are consumers getting when they order from a virtual kitchen?
This week’s episode of the Restaurant Business podcast A Deeper Dive features our editors speaking of their recent taste test of a handful of virtual brands.
The project was spearheaded by Senior Technology Editor Joe Guszkowski, who wrote about the experiences in a piece last week. We are joined by Editor-at-Large Peter Romeo and Senior Independents Editor Heather Lalley.
The brands we tried were MrBeast Burger, Man Vs. Fries, Grilled Cheese Society and Another Wing by DJ Khaled.
We rated them on delivery quality, food quality and appearance and overall value. You should check out the piece, which ran last week.
The editors discuss the results of their orders, including which brands they prefer, which brands they disliked, and their overall value. We discuss how much this says about delivery charges, and whether we would order this in the future.
Wendy’s has some big plans to add a lot of restaurants.
This week’s episode of the Restaurant Business podcast A Deeper Dive features Abigail Pringle, the president of international and chief development officer for the burger chain Wendy’s. She talks about the chain’s numerous expansion strategies.
Wendy’s has a lot going on. The company has a deal with Reef Kitchens to expand into 700 ghost kitchen locations around the world. Pringle talks about the potential impact that deal will have on the company’s expansion strategy.
She also talks about the company’s move into international markets. Wendy’s recently opened units in the United Kingdom and is now targeting Mexico for expansion, among other locations. Pringle also talks about why Wendy’s has been behind its top competitors in international expansion.
She discusses the chain’s recently announced Own Your Opportunity recruitment effort, which is designed to increase the diversity of the Wendy’s franchise system. That effort includes considerable work on financing. Pringle talks about how that recruitment effort fits in with the chain’s development strategy.
Restaurants’ supply chain headache has evolved into a migraine.
This week’s episode of the Restaurant Business podcast A Deeper Dive features Keith Anderkin, the chief supply chain officer for the fast-casual chicken chain Zaxby’s.
Chains have been increasingly giving c-level status to their top supply chain officers. Anderkin took his position last year, and we wanted his insights into the challenges with the supply chain—why costs are going up so much, and what the company is doing about it.