FSR-QSR March Combo Issue 2024

NO. 123

FULL-SERVICE RESTAURANTS : SETTING AMERICA’S TABLE | INDUSTRY-WIDE ISSUE

THE DELIVERY DILEMMA

SPB’S CULINARY MAESTRO

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EDITORS’ LET TER ®

EDITORIAL EDITORIAL DIRECTOR

Two Segments Collide

Danny Klein

In the post-pandemic era, quick-service and casual-dining restaurants are looking more like fierce competitors battling for guests’ attention.

dklein@wtwhmedia.com QSR EDITOR

Ben Coley

bcoley@wtwhmedia.com FSR EDITOR

Callie Evergreen

cevergreen@wtwhmedia.com A S S O C I AT E E D I TO R

Sam Danley

sdanley@wtwhmedia.com

BRANDED CONTENT STUDIO DIRECTOR OF THE BRANDED CONTENT STUDIO, F O O D A N D H O S P I TA L I T Y

Welcome to the fourth edition of our annual combined

QSR/FSR issue, a time where we dive in and show just how similar quick- and full-service restaurants are becoming in terms of menu, models, and convenience.

With the pandemic seemingly in the rearview—at least according to the federal government’s standards— we’re monitoring the latest evolution of fast food and casual dining.

QSR MAGAZINE

CEVERGREEN@WTWHMEDIA.COM FSRmag

LOOK FOR

QSR

FSR

Since we’re reporting on both service formats, check out our gauge to see where a story falls on the QSR/FSR scale.

B R A N D E D CO N T E N T A S S I S TA N T E D I TO R

Ya’el McLoud

Callie: One of the largest shifts

ymcloud@wtwhmedia.com

the restaurant industry has seen recently is the redefining of what “value” means to guests. It boils down to quality, portion sizing, and an elevated experience when dining at a full-service establishment.

A relaxed atmosphere and comfortable seating are some of the most important considerations Ben: Taking one month out of the for consumers deciding where to year for a combined QSR/FSR issue dine, according to a recent study by makes sense for a lot of reasons.

King-Casey (page 68). The report It’s a reflection of what the industry revealed evolving preferences of dinlooks like in today’s time. Fast food, ers, especially in the case of NextGen fast casual, and casual dining used Casual concepts—the rising segment to live in three silos, and customers would use each one for specific reaknown for mixing the full-service sons. Fast food, obviously, was the sector’s focus on hospitality with value play. You want something quick the technological advantages and and convenient without much thinkconvenience of quick-service and ing. Fast casual had longer wait times, fast-casual concepts. but that was in exchange for elevated One revealing outcome from the food and atmosphere. Casual dining survey: Though quick-serves foster was where you spent more for the the most frequent visits, full-service experience and additional service. restaurants earned the highest levels Thanks to COVID and inflation, of customer satisfaction, surpassing things aren’t as separated as they fast casuals, as well. The net satisfacused to be. One could easily find an tion score of quick service was 56 peroccasion where it’s cheaper to dine cent, fast casual 60 percent, and fullat a full-service establishment than service 71 percent. NextGen Casual a fast casual. In another scenario, a experts provide their insight on what guest may find that a fast-food conthe data means for restaurants movcept rolled out a burger that’s superior in taste and quality to a fellow ing forward, including leaders from fast casual. Want convenience? You Firebirds Wood Fired Grill; Ginger could likely get that at a fast casual, Brands Hospitality Group; Another considering how many are shifting Broken Egg Café; Black Bear Diner; toward drive-thru pickup lanes.

Tupelo Honey Hospitality; Snooze, No one may understand this an AM Eatery; JINYA Holdings; The more than Flynn Group, the world’s Greene Turtle; Heritage Restaurant largest franchisee. The company is Brands; and more (page 80). the biggest operator of Applebee’s Though competition remains as but also has a sizable hand in Taco fierce as ever in this business, you Bell, Panera, Arby’s, Wendy’s, and don’t have to look far to find restauPizza Hut. Having that crosssegment view makes CEO Greg Flynn rant execs willing to share their best practices and tips for the sake of a better operator, but his opinion is the same as most in the industry—the creating a better industry for all.

FSR is a registered trademark of WTWH Media, LLC. FSR is copyright © 2024 WTWH Media, LLC. All rights reserved. The opinions of columnists are their own. Publication of their writing does not imply endorsement by WTWH Media, LLC. Subscriptions 919-945-0704. www.fsrmagazine.com/subscribe. FSR is provided without charge upon request to individuals residing in the U.S. meeting subscription criteria as set forth by the publisher. AAM member. All rights reserved. No part of this magazine may be reproduced in any fashion without the express written consent of WTWH Media, LLC. FSR (ISSN 2325-2154) is published monthly by WTWH Media, LLC, 1111 Superior Avenue Suite 2600, Cleveland, OH 44114. Periodicals postage paid at Cleveland, OH and at additional mailing offices. POSTMASTER: Send address changes to FSR, 101 Europa Drive, Suite 150, Chapel Hill, NC 27517-2380.

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restaurant business is as hard as it’s ever been to compete.

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MARCH 2024 / QSR-FSR CROSSOVER CHEFS & INGREDIENTS

FE ATURES

17

ELIVERY DILEMMA D How is the relationship faring between operators and third parties in the post-COVID era? BY SAM DANLEY

24

GEN Z AND THE PUSH FOR ALCOHOLIC INNOVATION

Younger guests are urging companies to focus on diverse flavors. BY SAM DANLEY

33

CULINARY MAESTRO

DRIVES CROSS-CONCEPT COLLABORATION

This chef is bringing innovation to Logan’s Roadhouse and all of its sister brands. BY CALLIE EVERGREEN

DEPARTMENTS

43

W ILD THYME LOOKS TO GO BIG TIME Learn how this budding group balances full-service and fast-casual ocassions.

BY SAM DANLEY

50

H AVING THE COURAGE TO HELP Corporate social responsibility is a crucial part of a brand’s culture. BY SATYNE DONER

109 A RE MULTI-CONCEPT

DEALS THE FUTURE OF FRANCHISING? Companies

with multiple brands to offer have a distinct advantage.

BY SAM DANLEY

112 M ARKETING AT

THE HIGHEST LEVEL

A growing number of CMOs are reaching the role of chief executive.

BY SATYNE DONER

116 T HE NEXT EVOLUTION OF

56

BY BEN COLEY

Already the world’s largest franchisee entity, Flynn Group is looking for so much more.

68 Here Comes NextGen Casual

BY DANNY KLEIN

A new breed of full-service restaurants are finding plenty of whitespace in the post-pandemic world of dining out.

120 START TO FINISH: SUSAN TAYLOR

FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

The Peak of Restaurant Franchising

SHARED KITCHEN SPACES

Using the term ‘ghost’ will likely be left behind. BY BEN COLEY

The CEO leads growth for the West Coast-based Juice It Up!

80 The Now of NextGen Restaurants

BY CALLIE EVERGREEN

Backed by recent data and insight from restaurant leaders, the emerging category is defining itself.

ON THE COVER

Greg Flynn and his team have a lot more growth on the table.

PHOTOGRAPHY: FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

2 EDI TOR S’ L ET TER

4

IND U S T RY- W ID E I S SU E

6 BR A NDED CON TEN T

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BRANDED CONTENT

IN THIS ISSUE

How A Family-Owned Restaurant Restaurant Thrives in Brooklyn

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Understanding global flavors and emerging customer preferences.

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M A R C H 2 0 24 / S P O N S O R E D C O N T E N T

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Experience is the Name of the Game

A record-breaking restaurant group aims to keep blowing away its customers with superior service.

BY DANNY KLEIN

The last 18 or so months for Xperience Restaurant Group have not exactly been normal. The multi-concept company reported its most successful year on record in 2021 and followed that with an even better run in 2022. Sales climbed double-digits on top of double-digits and by the time 2023 neared

M A R C H 2 0 24

QSR

FSR

close, XRG had debuted nine locations across a year and half and acquired two concepts—Rio Mambo Tex Mex y Mas and THE RIM scratch craft eats from RM Restaurant Group.

CEO Randy Sharpe says, like many operators in the space, it was difficult to gauge this post-COVID haze through

any accurate filter. Was it artificial growth? Pent-up demand? Where does the business stand? XRG has a muchfirmer grasp of that now as 2024 gets going. The company, known for concepts such as SOL Mexican Cocina, Solita Tacos & Margaritas, the iconic Las Brisas, and its longest-running brand, El Torito, boasts 72 units with a goal to reach 100, but there’s no dart on the timeline. XRG has settled into a more comfortable cadence of roughly two openings per year and an opportunistic eye on M&A if a chance to improve a concept, not just add to the portfolio, comes by. Or, as Sharpe puts it, “looking for evolutions, not revolutions.”

Alongside this more “normal” rate of expansion, Sharpe has a clear sense of where XRG, which was formed in

IND U S T RY- W ID E I S SU E

9

2018 after Z Capital spent $47 million to acquire Real Mex Restaurants out of bankruptcy, when it had 52 locations, should center its efforts. It’s no grand secret dining out has become pricier, helping drive the top line despite softened traffic for much of the foodservice field. But, in some respects, it’s an upside-down arena in full service. The price of an entrée at some fast casuals isn’t all that distant from what you might spend at casual eateries. First Watch, in one example, carried a per-person average of $16.35, execu-

tives said last quarter. Salads at sweetgreen run from $13.45 to $15.45.

“I’m a firm believer that you have to focus on the experience,” Sharpe says. “People are very discerning where they spend their money. I am seeing it louder and louder when the experience doesn’t meet expectations right now.”

Sharpe shares a story of a recent Las Vegas work trip. He dined at an experiential-theater-type restaurant he had tried before. Only now, prices were 30–40 percent higher. However, the show was materially better. The hospitality, 100 times over, Sharpe says. So even though it cost significantly more, since the experience was memorable, it exceeded expectations. “That’s free,” Sharpe says of surprising guests. “A person walks in the door, the manager ensures that guest and makes sure they get what they need. If we make it special, they’re going to come back.”

This isn’t a fresh mindset for Sharpe. One of the reasons he believes XRG enjoyed record sales out of COVID and beyond is because it didn’t drift from what core customers attached value to. Its concepts didn’t scale back menus. Rather, they looked for ways to provide more experience as soon as they could. This wasn’t an effortless—

10

IND U S T RY- W ID E I S SU E

 XPERIENCE RESTAURANT GROUP DIDN’T CLOSE ANY STORES DURING COVID.

or cheap—approach at times. One example was to take plated brunch, which was a staple at some of XRG’s upscale brands, and, instead of slicing it, reconfigure setups to make it work. XRG erected plexiglass and put attendants behind barriers at each station to guide guests through.

What it accomplished, Sharpe says, is to give loyal customers an experience they not only expected and remembered, but felt was worth leaving the house for during a time when traditional habits had become infrequent luxuries. XRG did the same with Taco Tuesdays. Pre-virus, it would lay out a large spread and people could buy tacos from servers and start building. XRG managed to keep the feeling by having two employees lead customers along, a move that, again, cost more labor, but rang high on the appreciation factor.

The company also kept its chef’s special quarterly program that introduced new items and brought back old favorites. There was no cut-back.

XRG didn’t close a single restaurant or take on new debt during COVID. And the company, mainly a California-based footprint, went from down 90 percent in sales early on to 65 percent or so before outdoor dining and other options allowed it to reach single-digit declines by early February 2021. And then, business boomed.

Now, instead of factors like 6-foot-spacing and understaffed restaurants, XRG is navigating the value perception as it pertains to discretionary spending. Sharpe says consumers are getting hit on multiple fronts as their everyday lives ratchet up.

Whether that slows or not as economists grapple with predictions, Sharpe doesn’t think the table stakes of winning over customers is going to change. Guests continued to dine out through inflationary pressures. As is often the case, although people might come less often, they see restaurants as an avenue for experience that’s more affordable than, say, a weekend vacation. A race toward “affordable luxuries” is a common turn in shaky economic times, sometimes referred to as the “lipstick index.”

Sharpe says he reads every article and consumes all the industry data he can find. And while he understands why brands focus on costcutting and control, XRG seeks balance. “It has to be a balance between keeping your profit margin at a certain level and making sure you have enough focus on the experience,” he says.

“Because experience is what matters to our guest right now. They’ll spend the money at your res-

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Krazy Coupon Lady—a digital platform informing readers on the best deals—surveyed more than 14,000 readers in late October to understand consumer dining trends. The report covers three age groups: Gen Z (18-26), millennials (27-45), and Gen X/baby boomers (46 and above).

The Importance of Digital: • The use of online resources to find food promotions proved paramount for all ages. About 70 percent of Gen Z respondents chose “in-app” deals as their goto while a little more than 60 percent of millennials said the same. For Gen X and baby boomers, it was just shy of 60 percent.

Unsurprisingly, almost 60 percent of each age group also selected “krazycouponlady.com” as a reliable source for food promotions.

• Although digital options are growing significantly, coupons through the mail are still somewhat relevant. Well over a quarter of Gen Z and millennial respondents rely on mailers to find food promotions.

For Gen X and baby boomers, it’s over 40 percent.

• Krazy Coupon Lady concludes that leveraging a mixture of digital and traditional methods may be the best way to reach consumers in today’s time.

How to Save: • When asked what types of savings you’re most hoping to find when dining out or ordering food delivery, all age groups chose BOGO deals as the top choice, each nearly reaching 80 percent.

For Gen Z, the second-most popular option was combo deals. For millennials, Gen X, and baby boomers, it was dollar-off discounts.

Dining out Preferences and Spending Habits: • 81 percent of Krazy Coupon Lady readers eat out at least once monthly. Forty percent eat out up to four times per month. Gen Z dines out more than any other generation.

• In terms of costs, more than 50 percent of Gen Z prefer to spend between $21 and $50 when eating at a restaurant. That range is also the most popular option for millennials, Gen X, and baby boomers.

The second-most popular option for Gen Z is $20 or less, while it’s $51-$100 for the other two groups. This makes sense given that more spending power and bigger families come with older generations.

• “Free items when you spend” and “calendar-based discounts or specials” were near the bottom for each age group.

• From these findings, Krazy Coupon Lady believes all generations desire immediate value in dining choices, meaning restaurants should focus on straightforward benefits like BOGO and fixed-dollar discounts.

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taurant or your concept or your company, if they come in and they have a level of consistency and excellence that they expect.”

“If you don’t, you’ll lose traction fast,” Sharpe adds. “And then all those cost-cutting measures didn’t matter too much, did they?”

Technology sits in the middle of XRG’s approach.

It serves to help with controls and guest experience where applicable. For instance, the company invested in a bar KDS instead of tickets. Today, the level of execution is dramatically higher and the timing of food and cocktails steadier.

It’s a good snapshot of XRG’s broader vision.

These past 18 months were a tornado of maneuvering. Whether it was figuring out what guests needed out of the pandemic or buying new brands, then finding models, approaches, and square footage that worked best, XRG reacted to and rolled with opportunities. In 2024, though, Sharpe says, the goal will be to focus on optimizing locations that have opened and to ensure the company positions itself for lasting success. If another potential acquisition appears that would improve the platform, XRG will engage. “But for us,” Sharpe says, “I think it’s time to take a deep breath and focus on what we have in front of us.”

That could become a common theme in 2024 as restaurants work to decipher all the innovation that flowed via solutions during crisis times. This includes evolving technologies like AI and robotics, and the ever-enduring challenge to turn data into leverageable currency.

Not to mention, Sharpe says, it’s an election year. So who can really say what that entails, other than more chaos.

It won’t be as simple as raising prices, Sharpe adds. XRG knows that story all too well living in the Golden State. The longer-term plan is to train and bolster restaurant teams so managers can deliver on the things guests are willing to pay more for, he says. The fact the FAST Act is bringing minimum wage to $20 for large quick-service chains is a rearview point, too, since XRG was already there. Kitchen staff have made that “for a while now.” It actually might open opportunity since it levels the wage field a bit.

“There’s transactional growth out there and we see some of that in more of our off-premises piece of our business,” Sharpe adds. “But we’ve grown through the experiential from day one. Make it more of a memorable experience for our guest and that’s something that we pride ourselves at being great at.” 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ON THE GO

• The Krazy Coupon Lady hypothesizes that the $21 to $50 range is the “sweet spot” for pricing strategies and that offering meals and promotions under this umbrella is likely to be universally appealing.

M A R C H 2 0 24

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Understanding global flavors and emerging customer preferences. BY OL I V I A S CHUST ER

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or more than a hundred years, Monin Gourmet Flavorings has played a pivotal role in transforming menus worldwide with its diverse selection of syrups, purées, concentrates, and mixers. This year, Monin takes innovation a step further with its 2024 Flavor Trends Report, meticulously crafted to meet the evolving tastes of a global audience. With a keen focus on consumers’ adventurous palates, Monin introduces a palette of flavors that are as diverse as they are innovative, including the highly anticipated Flavor of the Year, Ube. Monin’s journey to pinpoint the 2024 Flavor Trends involved a dedicated internal team of beverage innovation experts, chefs, flavor scientists, consumer insight specialists, and leading data partners.

“Through our proprietary Flavor Forward Process, we engage in global market excursions, rigorous industry research, data analysis, and consumer testing to discover how these trends will impact

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menus in 2024 and beyond,” says Hussain Shamseddine, Senior Product Marketing Manager at Monin. “We learn what people crave, what they find comforting, and what new flavors they’re excited to try.”

This year’s report unveils five key trends set to revolutionize bar and restaurant menus: Flavor Journey, Kitchen Meets Bar, Timeless Temptations, Under the Influenc[er], and Next Gen Now. Each trend reflects a deep understanding of consumer desires for bold, authentic flavors, a nod to nostalgia, the power of social media influence, and a growing demand for wellness-focused beverages.

Flavor Journey showcases Southeast Asia and Central America’s bold, vibrant tastes. According to Mintel, 60 percent of consumers say they associate Asian cuisine with offering a good variety of flavors. Ingredients like black sugar, yuzu,

Discover more about Monin’s 2024 Flavor Trends and explore recipes that will inspire your menu at www.moninflavortrends.com.

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Monin Unveils Its 2024 Flavor Trends

and guava highlight global flavors that invite customers to explore the world through their food.

Kitchen Meets Bar is an intersection of culinary and beverage innovation, with savory elements like basil and ginger transforming the cocktail menu. Timeless Temptations transforms nostalgic flavors into unique and modern renditions (think orange creamsicle lemonades or cereal milk ice cream), catering to a sophisticated audience that still finds comfort in nostalgia. Mintel found that 72 percent of consumers enjoy things that remind them of their childhood.

Social media’s impact is evident in Under the Influenc[er], with expressive, share-worthy creations featuring trendy flavors like lavender and pistachio designed to craft memorable moments.

Nearly 80 percent of Gen Z are willing to try menu items because they saw them on social media (Datassential).

Lastly, Next Gen Now addresses the health-conscious consumer, incorporating sugar alternatives and functional additives for a balanced yet indulgent experience. “We’re proud to offer the largest variety of high-quality, clean-label products that are free from artificial flavors, colors, preservatives, and sweeteners,” says Shamseddine. “We currently offer more than 40 zero-sugar options for health-conscious consumers.”

Ube, the 2024 Flavor of the Year, showcases a versatile and unique taste profile of ube blended with fig, vanilla, and cinnamon. According to Monin Proprietary Research, 67 percent of consumers are likely to purchase an ubeflavored beverage or dessert. “Ube aligns perfectly with two of our 2024 Flavor Trends. One is Under the Influenc[er] because of its Instagram-worthy vibrant purple color,” says Shamseddine. “The other is Flavor Journey, reiterating how Asian flavors are migrating stateside and becoming more popular.” ⦁

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Why Serving Every Generation

Craveworthy Flavors is Vital to Success

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T. MARZETTI

IT’S NO SHOCK that generations’ preferences vary greatly when it comes to flavor. Millennials and Gen Z are driving more market sales in the quick-service industry than ever before. In fact, 20–39-year-olds make up 44.9 percent of fast-food consumers, beating out any other age segment by nearly 10 percent, according to a report by Enterprise Apps Today. This variation in flavor preferences complicates the way that restaurants appeal to the tastes of all their customers, which can drag down back-of-house operations. Restaurants must create wow-worthy flavors to keep every generation coming back for more.

Introducing innovative sauces and dips is an easy way to elevate menu items and differentiate a restaurant from the competition.

Serve Up Classics with a Twist “Consumers are craving flavor more than ever,” says Chrissy Shea, Brand Marketing Manager for T. Marzetti Company—a manufacturer and marketer of specialty food products for the retail and foodservice markets. “Even a simple twist to traditional favorites can elevate the experience for consumers and make menus a little more special,” Shea says. “Having a range of base flavors is a great way for operators to manage complexity. Depending on the desired flavor profile, adding a plus-one ingredient can upgrade menu items and keep it easy for kitchen staff without compromising flavor.” T. Marzetti offers a full portfolio of dressings, dips, and sauces that operators can customize with on-hand ingredients to create craveworthy dishes. This approach to innovation can help restaurants stand out and strengthen their brand while also reducing the strain on back-of-house operations.

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LTO can be a daunting task for an operator when consistency and execution are critical across multiple units. More and more, operators are seeking outside help for innovation and ingredient procurement. “Operators want simplicity,” says Chris Domanik, Senior Corporate R&D Chef at T. Marzetti and 30-year industry veteran. “Classic sauces hold a great amount of demand. However, consumers are still looking for destination flavors and experiences.” “It’s not just time; it’s not just money; it’s consistency,” Shea says. “T. Marzetti can help operators deliver a consistent, delicious eating experience every time.”

Capitalize on Changing Flavor Preferences Consistency, price, and labor aside, catering to different consumers’

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tastes is vital to the success of a restaurant. The need for greater flavor diversity on menus is something that restaurants can be challenged to fulfill on their own. It is not enough to offer one great sauce that caters to one generation.

“Younger generations are creating consumer demand for spicy,

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premium, and globally inspired menu options. While certain flavors may not appeal to everyone, having a special, on-trend sauce can drive loyalty and repeat visits with key consumer groups,” Shea says.

“T. Marzetti has the skill, experience, and passion to create unforgettable sauces, dips, and dressings.”

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“We create innovative sauces like Roasted Garlic Parmesan and Sriracha Bourbon, which help our foodservice customers offer those craveable flavors that consumers are seeking,” Domanik says. “We know consumer preferences are evolving, and T. Marzetti is exploring the forefront of flavor to be ready for those shifts. For example, product labels denoting spicy flavors that older generations avoided have become a major selling point for younger consumers. They are looking for unique flavors combined with heat, which we deliver through branded sauces like Korean BBQ and Sweet Chili.”

Partner with T. Marzetti for Flavor that’s Just Better In today’s competitive restaurant industry, adapting to the varying tastes of different generations is crucial for success. Millennials and Gen Z are dominating the

“ Operators want simplicity. Classic sauces hold a great amount of consumer demand; however, they are still looking for destination flavors and trends.”

fast-food scene with Gen Alpha fast on their heels, making it essential to offer a wide array of bold and unique flavors to attract and retain customers.

Innovative sauces and dips play a pivotal role in setting restaurants apart from their competitors. The challenges posed by the post-COVID era have amplified the demand for diverse and trendsetting flavors. While maintaining consistency is essential, classic sauces may no longer suffice to meet the ever-changing preferences of younger consumers who crave spicy, global, and premium tastes. In this complex landscape, partnerships with experienced flavor creators like T. Marzetti are invaluable. With over a century of expertise, the company understands how to craft sauces, dressings, and dips that resonate with modern consumers. From savory Roasted Garlic Parmesan to fiery Sriracha Bourbon, their commitment to innovation enables restaurants to stay ahead of flavor trends. Shea notes, “T. Marzetti has a wealth of experience in foodservice, and an outstanding team of chefs and food scientists that are passionate and dedicated to providing creative flavor solutions.” ⦁

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Chefs & Ingredients THIRD-PARTY DELIVERY

DELIVERY FEES REMAIN HIGH FOR RESTAURANTS.

RE

Aggregators are adding new tools to support restaurants, but for many operators, the pricing struggle persists.

BY SAM DANLEY QSR

IND U S T RY- W ID E I S SU E

FSR

The rise of third-party delivery has brought more than just convenience. It’s brought a financial puzzle for restaurants. Fees for delivery and marketing are stacking up alongside commissions of up to 30 percent and making profitability an uphill battle, especially amid elevated food and labor costs.

“Economic theory would have it that as a company increases their market share, they’re able to reduce the fees they charge, but that hasn’t happened,” says Andrew Rigie, executive director of the New York City Hospitality Alliance. “There’s a lot of frustra-

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tion with the way the market evolved. Restaurants feel like they can’t afford to be on the platforms.

They also can’t afford to not be on these apps. So, they end up increasing their delivery menu prices to offset all of those fees.”

A 2023 study from Gordon Haskett Research Advisors found the average menu pricing premium across the industry was approximately 20 percent higher than the cost of dine-in, with quick-service brands running a 26 percent premium and casual-dining brands running an 11 percent premium.

Consumers have shown an enduring willingness to pay more for convenience. And while aggregators have struggled to prove they can earn a consistent profit, their sales have continued growing at an impressive clip, even in the face of high inflation and a challenging economic climate. Still, companies like DoorDash, Grubhub, and Uber Eats say some restaurants are deterring customers by charging significantly higher prices for the food they deliver, and all stakeholders could reap the rewards of reduced food markups.

Delivery companies have been trying to incentivize operators to rethink higher delivery prices without changing their approach to fees. Uber Eats alerts customers in some cities when there’s a significant premium. DoorDash has experimented with making restaurants that mark up prices less visible to customers and giving priority to those with price parity.

An internal study of more than 4,500 restaurants on DoorDash found those that mark up their menu prices can see up to 37 percent fewer sales and up to 78 percent lower reorder rates. For restaurants that mark up items by more than 20

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 DOORDASH RECOMMENDS RESTAURANTS PRICE DELIVERY MENUS AS CLOSE TO THE IN-STORE MENU AS POSSIBLE.

percent, decreasing those prices by 10 percent can result in volume increases of up to 15 percent in one month and up to 21 percent in 12 months, according to the company.

VP of enterprise partnerships Vishwa Chandra says DoorDash doesn’t require restaurants to match in-store prices on its app, but it recommends they price delivery menus as close to their in-store menu as possible.

“Every restaurant can choose how they want to think about pricing, what works for them, and what’s right for them,” he says.

The company has updated its messaging to restaurants to clarify that they aren’t downgraded based on prices alone, he adds. It’s just one of many metrics the company uses when determining how prominently restaurants appear on its app.

“There are a lot of different factors that go into that, but at the end of the day, it is always around customer preferences,” Vishwa says. “So, things like popularity, speed, accuracy—all of that goes into making sure the guest is finding what fits their needs at that moment.”

Aggregators say bringing what restaurants charge for delivery items closer to what they charge in-house will keep consumers hitting the order button and amp up sales. Many restaurants say passing on fees to consumers is the only way to make delivery profitable.

“What restaurants are saying is accurate,” says Liz Bosone, VP of restaurant success at Grubhub.

“This is a very slim margin industry, so we understand there’s some work they may need to do on the pricing that’s offered to consumers. That being said, it can’t be too aggressive, because we also know there’s an inflection point when a burger gets too expensive or the fees become too much for a diner.”

Some operators mistakenly assume customers will just close the app and drive to the restaurant themselves when they reach that inflection point, she adds.

“I don’t think that’s always the case. They may just move to the next restaurant when the pricing seems too far out of whack from what they’re expecting or what they usually see, so it’s something we really want to partner with the restaurant on figuring out,” Bosone says.

Rigie says there are a couple of things delivery providers could do to improve their relationships with operators, like sharing data and providing more transparency around fees and commissions.

Introducing different fees for new and repeat orders is at the top of that list.

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C H E FS & I N G R E D I E N T S / T H I R D - PA R T Y D E L I V E R Y

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 GRUBHUB SAID IT HAS OPENED UP MORE CUSTOMER DATA TO RESTAURANTS.

SAM DANLEY IS THE ASSOCIATE EDITOR OF QSR. HE CAN BE REACHED AT SDANLEY@WTHWMEDIA.COM.

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GRUBHUB (4)

“There’s no issue if they want to charge a higher fee when they secure a new customer for the restaurant. That’s an incremental sale. It’s worth paying a higher fee for,” he says. “But if it’s a repeat customer, why are we paying them a higher marketing fee, if they didn’t generate that customer by paying more?”

Grubhub has heard similar feedback, and while it isn’t committing to making that change, Bosone says it’s a topic of conversation both internally and with operators.

“That’s the type of thing that we bring up when we do roundtables with restaurants,” she

says. “We’re very active in listening to pain points and using feedback to continue improving that relationship.”

To that end, Grubhub has enhanced its analytics tools and opened up more customer data to restaurants in response to demands for deeper insights. It also has bolstered its web ordering tool with commission-free options and integrations for targeted marketing. Similarly, DoorDash has rolled out a host of new tools recently, like personalized AI-driven growth suggestions, rewards features for customer loyalty, and updates to its online ordering software that help restaurants grow their first-party channels.

Both companies say they’re continually innovating to further support merchants. Yet, for many operators, the pricing struggle persists.

“Third-party delivery platforms shouldn’t be the enemy,” Rigie says. “There’s still an opportunity for these companies to really help restaurants by creating better relationships that are profitable for all parties, where everyone pays a little bit, everyone gets a little bit, and the consumer gets a great meal delivered to their door.” 

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Chefs & Ingredients LIQUID INTELLIGENCE

Gen Z and the Push for Alcoholic Innovation Gen Z’s newer preferences are driving change in the beer industry, leading to an increased focus on diverse flavors and experiences.

BY SAM DANLEY

Gen Z is continuing the decades-long trend of young adults becoming progressively less likely to use alcohol. Just under a third of adults aged 21-24 claim they never drink, according to a 2023 survey from CivicScience, a consumer

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QSR

FSR

insights and trends data company.

“We’ve seen our youngest demographic trending away from alcohol,” says Matthew Stock, The Brass Tap manager of training and beer specialist. “That’s similar to what we saw with

millennials. Thinking back to when I first got into the craft beer industry 15 years ago, it was all about these big, punch-you-in-the-teeth types of beers with lots of alcohol and ABVs of up to 8, 9, or 10 percent.”

Millennials played a big role in swinging the pendulum back in the other direction, and most of The Brass Tap’s best-selling items hover around the 5 to 6 percent ABV range today, he adds.

Gen Z is further compounding that trend and sparking a wave of innovation in the zero-proof beer category.

The Brass Tap is capitalizing on the demand through partnerships with companies like Athletic Brewing that offer non-alcoholic versions of everything from IPAs and stouts to sours and radlers.

“We’ve really embraced non-alcoholic beers thanks to the introduction of better and more flavorful offerings

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ADOBE STOCK / BY MIRKO VITALI, GAUGE ICON: ADOBE STOCK / EMIL’

GEN Z IS INFLUENCING INNOVATION IN THE BEVERAGE SPACE.

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“ Gen Z is more focused on their mental health and wellbeing than any generation that’s come before them, so their attitude toward alcohol is more about quality over quantity.”

Voodoo Brewing

from breweries over the past five or six years,” Stock says. “All of the new locations that we open carry at least four non-alcoholic packages. That represents about 9 percent of our total package list.”

CivicScience asked consumers about the future outlook for alcohol and found roughly a quarter of Gen Z respondents said they expect drinking will become less common in the next few years, the highest percentage among all generations. Twothirds predicted non-alcoholic beer will continue growing in popularity, versus 46 percent of millennials and just 19 percent of Gen Xers.

Despite the heightened interest in abstaining from alcohol altogether, younger consumers that do imbibe are exhibiting a range of dynamic behaviors. They’re drinking differently and with newer preferences compared to their older counterparts.

“Not everyone who chooses zero-proof beer is sober,” says Tony Lang, CMO of Voodoo Brewing, a craft beer maker with over a dozen corporate and franchised brewpubs that double as casualdining restaurants. “Gen Z is more focused on their mental health and wellbeing than any generation that’s come before them, so their attitude

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 GEN Z HAS DIFFERENT DRINKING PREFERENCES THAN THEIR OLDER COUNTERPARTS.

toward alcohol is more about quality over quantity. I think that’s why we’re still seeing growth on both ends of the spectrum. A lot of younger folks come in and order a higher ABV beer, like a barrel aged stout or triple IPA, and then switch to a low-alcohol or no-alcohol beer after that to moderate themselves.”

Younger consumers tend to prefer light, easier-drinking beer styles when they like beer at all,

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“ If you’ve got 10 taplines, I’d say six of them should be local breweries.

It doesn’t have to be some crazy kettle soured lactose-infused blueberry marshmallow beer or anything like that, but it should be something that represents your community.”

— Matthew Stock The Brass Tap

BRASS TAP HAS SEEN ITS YOUNGEST DEMOGRAPHIC MOVE AWAY FROM ALCOHOL. 

says. “We thrive on things like grapefruits and oranges in Florida, so that’s what local producers are putting into their beers, and that’s what the people here are gravitating toward. If you’ve got 10 taplines, I’d say six of them should be local breweries. It doesn’t have to be some crazy kettle soured lactose-infused blueberry marshmallow beer or anything like that, but it should be something that represents your community.”

While non-alcoholic options, sessionable brews, and local blends are a good starting point, appealing to younger drinkers ultimately is less about the products that are being poured and more about the experiences that are being provided, says Lori Bolin, president and chief marketing officer at BrewLogix, a technology platform for breweries, taprooms, and restaurants. “Consumption itself isn’t the experience for them,” she says. “They’re looking for experiences that create consumption.”

“The big question folks are asking right now is if interest in craft beer is going to wane with younger consumers drinking less alcohol,” Bolin continues. “My encouragement is to say that we’ll answer that by what we do as operators and as people who are designing beverage experiences.

Think about things like tap takeovers, where a restaurant partners with a local brewery to connect with the community. Take a look at the menu to design food pairings that complement your beverages. We all need to be coming at this with the mindset that we’re welcoming a new group into the craft beer category.”

Lang offers a similar piece of advice for restaurants looking to evaluate their beer program through the lens of Gen Z. “The most important thing to keep in mind is the fact that this demographic’s prevailing trait is valuing experiences over material product,” he says. “That’s something we think about all the time. There’s something of a loneliness epidemic among young people where they’re really craving in-person experiences and social connection. Restaurants and taprooms have a unique opportunity to help address that not only with the products they’re putting on the tapline, but also with the service and the programming they’re doing, whether it’s trivia, cornhole leagues, live music, or whatever else. That’s crucial when you’re thinking about winning with this next generation.”  SAM DANLEY IS AN ASSOCIATE EDITOR. HE CAN BE REACHED AT SDANLEY@WTHWMEDIA.COM.

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BRASS TAP (2)

according to data from Knit, an on-demand Gen Z insights platform. The majority of beer drinkers polled by the company ranked approachable, session-ready beers as their favorite type. More than half said they favor lagers, ales, and pilsners.

Wheat beers weren’t too far behind at 48 percent.

Porters and stouts were less popular at 24.5 percent.

Lang says Voodoo’s 4.7 percent ABV American Lager style beer, called “Empty Calories,” is a favorite among Gen Z customers.

“You’ve got to have some sessionable stuff that’s below 5 percent ABV, and you’ve got to have some high-end stuff for the people that still want a bang for their buck,” he says. “So, while everyone is going to have at least one dedicated tap for non-alcoholic beer at some point in the very near future, you’re also going to see more variety as restaurants focus on making sure they’re hitting all of the different beer styles on their tapline.”

One thing Gen Z has in common with the generations ahead of it is interest in variety, not just ABV levels and styles of beer, but also flavor profiles. Restaurants can leverage this inclination by offering a wider assortment from local craft beer makers, many of which prioritize sustainable sourcing and production methods. That carries the added benefit of aligning with Gen Z’s growing interest in conscientious consumption.

“Continued gravitation towards local and hyper local production is another big trend,” Stock

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inevitable. In fact, it’s necessary for restaurant brands to stay innovative in a world where how a dish photographs is as important as how it tastes. The plethora of viral social media content featuring massive or unique confections proves that there is always something new and exciting in dessert trends.

Savory flavors have influenced the dessert space for more than a decade— what started with incorporating ingredients such as pretzels and bacon into sweet treats has turned into adding heat, balsamic, herbs, and flavor profiles typically reserved for main courses.

Many of these savory food trends won’t reach the mainstream, but spicy and sweet has staying power that is showing up across food, beverage, and desserts.

“Today’s consumers are more willing than ever to try new trends and unique flavors in their desserts and there is no ‘hotter’ foodie trend than sweet and spicy,” says Jana Schneider, vice president of national programs at Kahala Brands, the parent company of Cold Stone Creamery. “When reviewing flavors for our 2024 calendar we tasted hundreds of possibilities and we all agreed that we had to include hot honey ice cream this year—

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MIKE’S HOT HONEY

Ice cream has been a treasured American treat for nearly two centuries, but like everything, change is

and that we had to work with America’s #1 hot honey brand, Mike’s Hot Honey.”

Cold Stone and Mike’s worked together to create an ice cream flavor that would live up to the quality fans of both brands expect. The partnership— which was available nationwide from January 10 to February 20—paired Cold Stone’s smooth, creamy super-premium ice cream with brownie, pecans, and Mike’s 100% pure honey infused with real chili peppers. The result? A complex flavor dubbed ‘For the Love of Hot Honey’ that took consumers’ taste buds on an adventure.

The more creative chefs are, the more consumers expect—especially when it comes to LTOs. Unfortunately, some brands advertise an exciting LTO experience but fall short on taste. Ultimately, a dish must be successful on several fronts: buzzworthy, unique in a “camera-ready” way, and satisfying in terms of quality and taste.

“We want our LTO flavors to create a mouth-watering buzz and intrigue our guests, but they must be absolutely delicious to earn a place in our promotional calendar,” Schneider says. “Our Mike’s Hot Honey Ice Cream could not have been a better example of that; hot honey is an exciting flavor that may not be mainstream yet, but is up-and-coming in the dessert space.”

Like their main course counterparts, quick-serve dessert brands must be creative in their LTO offerings. Innovative flavors not only pique diners’ curiosities, they can encourage visit frequency.

“In 2024 we expect to see trends emerging in the buckets of nostalgic flavors, unique fruit flavors, international flavors, and typically savory combinations like our Mike’s Hot Honey flavor,” Schneider says. “Our strategy is to delight our customers with unique new flavors while continuing to offer the classic flavors they love.” By Davina van Buren

Mike’s Hot Honey is available through foodservice distributors nationwide and DOT Foods. Visit mikeshothoney.com for more info.

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SPONSORED BY AMERICAN EXPRESS

SPONSORED BY AMERICAN EXPRESS

M

able’s Smokehouse is a Southern comfort restaurant and catering service that wanted to bring down-to-earth, family flavors to Brooklyn. Meghan Love and her husband, Jeff Love, have successfully done just that for 13 years. The restaurant features Jeff Love’s grandmother Mable’s recipes. The Loves—who have worked in the restaurant and hospitality industry for most of their lives—draw on their experiences to make their family restaurant and catering business a success.

“When we opened our restaurant, we were young and green, and we didn’t have a lot of money. Although I had worked in the restaurant industry for 20 years,” says Meghan Love. “I’ve been waiting tables since I was fifteen, so I knew how to run the front of house, but it’s a whole different story when you do it yourself. My husband grew up in restaurants. His mom had a catering business and also had a couple of restaurants, so he knew how to set up the back of the house.”

Remaining open and financially healthy as a small business and restaurant can be challenging. Stability is

How A Family-Owned Restaurant

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Find out how Mable’s Smokehouse beats the odds and remains strong in the restaurant industry.

BY YA’EL McLOUD ALL PHOTOS: MABEL’S SMOKEHOUSE

especially hard as consumer trends seem to be changing faster than ever and inflation is on the rise. How small businesses handle the turbulent market may differ.

However, Mable’s Smokehouse has found success as it relies on the Loves’ depth of experience, rigorous training protocols, and diversifying both the payments it can receive and the avenues through which it offers food.

Meghan Love recalled how she came to New York as an aspiring actress and her husband was an artist before they opened their first restaurant. “We decided to open this down-to-earth, restaurant in the middle of Brooklyn,” Love recalls.

“There were a few barbecue restaurants but there wasn’t anything that felt like home. So we said there’s a hole in the market here, let’s just do what we truly know and understand—here we are, 13 years later. It’s been a wild ride.”

The Loves’ extensive experience in the restaurant industry informed their decision to accept American Express. Boosting Mable’s bottom line is its catering arm.

The restaurant hosts scores of corporate events every year, and American Express plays a critical role in working with corporate clients. According to Meghan Love, around 10 percent of their overall revenue comes from catering.

“We’ve taken American Express since day one because we always knew we would alienate a certain portion of our cli-

SPONSORED BY AMERICAN EXPRESS

entele if we didn’t take it,” Meghan Love says. “The majority of our business clients are using American Express.”

Between the rise of social media, evolving consumer tastes, and the COVID-19 pandemic, Mable’s Smokehouse and Banquet Hall has thrived due to the Loves’ ability to adapt and their extensive training protocols.

This is furthered by the support they received from the Williamsburg community as a small business.

While many consumers agree supporting small businesses is important, it can be challenging to discover a smaller family-owned business because they have less marketing and advertising support. According to Meghan Love, removing obstacles for consumers is one of the most important parts of her business, whether that be diversifying payment methods or partnering with multiple delivery services.

“We wouldn’t have survived the pandemic without delivery services, and I think of them as a marketing tool more than anything because lots of customers discover us that way,” Love says.

“Delivery services were a very consistent way to get business during the pandemic.”

Consumers rely on delivery services almost as much as Google to discover new restaurants. Thirty-eight percent of consumers discover new restaurants through delivery services according to a survey conducted by Censuwide. Furthermore, according to the same survey, 71 percent of consumers rely on delivery services to investigate those new restaurants.

Being discoverable is only part of the equation for small businesses; they must also ensure they are up to date with payment types and technology. Love explains the importance of removing barriers to payment for catering order contracts and everyday consumers.

“Operators have to make everything

MEGHAN LOVE

“Operators have to make everything as convenient and easy as possible.” as convenient and easy as possible,” Love says. “For instance, we used to have this process where we would send clients a credit card authorization form and they would have to fill it out and then email it back to us. It was inconvenient. So we made sure anybody could get their invoice and pay it within the request form.”

Accepting American Express not only provides convenience to customers, but also supports small buisnesses, like Mable’s Smokehouse. Love acknowledges the value her restaurant receives from American Express. “American Express fosters and nurtures the small business community, and I have felt that since the beginning,” Love says.

“Once, we ran into some construction issues so I made business purchases on my American Express Business Gold® card. When I think about this now, American Express was definitely instrumental in that final push of getting us open.”

American Express has been a pioneer in backing independent shops and restaurants. In 2010 it launched Small Business Saturday® to help businesses like Mable’s attract new customers.

Love considers this one of the major

distinguishers and cites this as one of the many benefits she receives from accepting American Express. “We promote Small Business Saturday, and there is a lot of support for small businesses that sets American Express apart.”

In addition to the support Mable’s receives during Small Business Saturday, American Express provides Love with free signage and supplies for her restaurant. “Over the years we’ve had our check presenters through American Express, and I feel there’s a lot of support we get from American Express,” Love says.

The financial strain of opening, owning, and operating a restaurant can be massive and is a sentiment reflected by many small business owners. According to Investopedia, only 25 percent of small businesses survive 15 years or more, and 65 percent fail within the first 10 years.

“American Express has been there in a pinch over the years,” Love says.

“There isn’t really a nurturing community for small businesses with any of the other processors and I don’t associate any other processor with small business in the same way.”

Mable’s Smokehouse is not just a restaurant; it’s a testament to the Love family’s culinary legacy. Meghan and her team continue to evolve and adapt, staying on the cutting edge of their industry. Participation in Small Buisness Saturday, coupled with the practical assistance, free supplies, and innovative solutions provided by American Express, has made an impact to the Loves’ success.

American Express has been a steadfast partner in their journey, helping them navigate the ever-changing landscape of Brooklyn’s restaurant scene.

Meghan aptly puts it, “Everything is evolving and changing all the time, and we have to be on the cutting edge all the time in how we do business. American Express evolves with us.” ⦁

For more information on American Express, visit americanexpress.com/business-solutions

SERVING UP RESOURCES TO HELP YOUR BUSINESS THRIVE When you welcome American Express® Cards, you have access to benefits, services and programs to help your business, including: • • •

Curated offers & discounts to help you get more out of your business.

Solutions & tips to help attract new customers.

Order free signs for your business that highlight inclusivity and community: AmericanExpress.com/signage/artistseries

99%

3X

CARD ACCEPTANCE

HIGHER SPEND

American Express can be accepted at 99% of places in the US that accept credit cards.1

In 2022, annual spend of American Express® Card Members was, on average, 3X that of non-Card Members. 2

65%

HIGHER TRANSACTION SIZE

In 2022, the average transaction size of American Express Card Members was 65% higher than that of non-Card Members.3

Scan the QR code for more information on resources for your business.

1. Based on the Feb 2023 Nilson Report.

2. Nilson Report #1,235, February 2023. Spend per card derived from U.S. year-end purchase volume divided by year-end cards in force (CIF), not from individual consumer-level data. CIF represents the number of cards issued and outstanding with cardholders. Average Non-American Express spend per card includes Visa, MasterCard and Discover credit and charge card card volume and CIF and excludes debit and prepaid volume and CIF. 3. Nilson Report #1,235, February 2023. Transaction Size derived from U.S. year-end purchase volume divided by year-end purchase transactions, not from individual consumer-level data. Average Non-American Express transaction size includes Visa, MasterCard and Discover credit and charge cards and excludes debit and prepaid volume and transactions.

CHEFS & INGREDIENTS / CHEF PROFILE

Culinary Maestro Drives Cross-Concept Collaboration From crafting iconic dishes at Logan’s Roadhouse to building across diverse dining concepts, chef Luis Haro is helping to shape the next era at SPB Hospitality.

BY CALLIE EVERGREEN FSR

Directing the culinary operations for a restaurant group with wide-ranging concepts is no easy task—just ask chef Luis Haro of SPB Hospitality. He joined Logan’s Roadhouse 27 years ago, attracted to the steakhouse concept’s fun atmosphere and “the way that we treat people at Logan’s,” he says. SPB is an operator and franchisor of several casual-dining restaurant chains, from steakhouses, pizza, and craft breweries to fast-food chain Krystal. SPB took control of the latter, known for its burger sliders with steamed-in onions, in April 2023.

“It’s always been a great company to work for,” Haro adds, even though he’s seen about 12 different people cycle through the title of CEO throughout his time at the company. “It felt like the new CEO always brought a vision and we were changing directions. There were times years ago that a CEO would only last a year.”

Thankfully, Josh Kern—who was promoted to CEO officially in June 2023 after serving as interim—seems to be sticking around for the long haul and is setting Houston-based SPB on a steady course for growth. The company’s umbrella also encompasses Old Chicago Pizza & Taproom, fine-dining concepts J. Alexander’s and Stoney

IND U S T RY- W ID E I S SU E

LUIS HARO HAS BEEN WITH LOGAN’S ROADHOUSE FOR 27 YEARS.

River Steakhouse and Grill, and a collection of craft brewery restaurants including Rock Bottom Restaurant & Brewery, Gordon Biersch Brewery Restaurant, ChopHouse & Brewery, Big River Grille & Brewing Works, AIA Ale Works Restaurant & Taproom, Ragtime Tavern Seafood & Grill, and Seven Bridges Grille & Brewery.

“I’ve always looked at what the guest wants, and sometimes, there are things the guests really want that’s not my preference and not what I really like, but I know the guest likes it, and that’s what I try to do,” he says. At Logan’s

Steakhouse, he focuses on dishes that complement the core menu of steaks, ribs, burgers, and a plethora of sides, from classic Caesar salads, mashed potatoes, and corn to premium options like cheesy parmesan rice, cinnamon apples, and loaded baked potatoes.

“At Logan’s we give you big portions, starting with a salad, a big steak, and of course a starch,” Haro says.

“That’s kind of where my mind is always at: How can I fill a plate that a guest can come in and say, ‘This is what I deserve after a hard week of work. I come in here, let loose, I can have my

M A R C H 2 0 24

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rolls, beer, and a full plate, and go home satisfied.’”

“That’s always going to be driving my development—how can I put a hefty portion on a plate that tastes good and makes people want to come back,” he adds.

Throughout Haro’s 27 years, he’s worked in the training department, opened restaurants, organized food for special events, and even been in charge of the Logan’s Roadhouse stand at Nashville, Tennessee’s Nissan Stadium, where the NFL’s Tennessee Titans play. However, 18 years ago, Haro narrowed in his focus on the food and beverage side of the business. Specifically, he served as director of culinary operations at Logan’s Roadhouse until July 2023, when he was elevated to senior director of culinary of SPB. Haro works in tandem with other SPB culinary leaders such as Ian Dodson, who started his career as a kitchen coach with J. Alexander’s 31 years ago before rising to senior vice president of culinary and beverage, and Nicholas Tzompanakis, vice president of culinary operations.

“If I see something via a supplier or an idea that I have, we bring it together and say hey, ‘This is not going to work for Logan’s, but I can see this working in Old Chicago or Rock Bottom,’” Haro says. “It’s very open communication and seeing what we all have and what works for our guests.

That’s one of the things that I think we all know, that our guests are very different—from the J. Alexander’s guest to the Stoney River guest to the Old Chicago and brewery group.”

That collaboration is key to the success of SPB’s culinary offerings, and one of Haro’s favorite parts of working at the restaurant group. And while some multi-brand organizations keep culinary and other departments siloed, Haro enjoys knowing what’s coming down the line for each concept in the next six months to a year.

“That’s the best thing about this as the corporations get larger,” he says. “I’m friends with people that work at other concepts, and they don’t speak to the chefs at the other brands; they’re like, ‘I’m working on my stuff, and I don’t want anybody seeing it,’ versus us. If I’m working on something, I’m like, ‘Hey, what else? What am I missing? Is there something else I can do?’ It’s always open communication.”

“We all take criticism very openly, because at the end of the day, we are looking for the same thing: more guests in more stores,” Haro adds.

Haro helps create limited-time offerings for Logan’s three times per year, including a seafood

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IND U S T RY- W ID E I S SU E

 LUIS HARO WORKS WITH OTHER SPB HOSPITALITY CHEFS TO CREATE INNOVATION.

Secret comfort food:

Pho

Go-to ingredient for ‘wow’ factor:

Bacon—it’s good in any format Dream chef collab:

Aaron Sanchez Favorite spice at the moment:

Chile Guajillo

Go-to meal at home:

Beef stew with yellow rice and fried sweet plantains

Post-shift drink:

Tequila Cristalino on the rocks with an orange wedge

option from February to March for the spring season. “Because the majority of our restaurants are in the South and Southeast, Lent is a big thing, so it’s primarily seafood driven,” he explains.

The summer season means anything on the grill is fair game. “But it’s, how do we get our guests to stop grilling at their house and come into a restaurant? We do some more elaborate things,” Haro says. “If you don’t want to smoke pulled pork in your house for 10 hours, we will do that for you and take care of that.”

Meanwhile, the fall/winter season focuses on hearty foods like in-season vegetables and comfort eats. The LTOs help round out the core menu, which goes through about two changes throughout the year.

Haro looks to popular foodie culture on Instagram and TikTok for inspiration before giving it an SPB twist. For example, Haro took a half pound of extra thick-cut pork belly, smoked it for 12 hours, and finished it on the grill in a brown sugar glaze to pick up mesquite flavors before seasoning it with a kick of spice. “We saw online that pork belly was trending, so I did a pork belly on a stick, but we called it Bacon on a Steak,” he says. “People ate it up. It was very popular and did very well for us. We kept it on the menu for two to three years.”

One of Haro’s claims to fame was creating the iconic Made-From-Scratch Loaded Potato Skins appetizer at Logan’s Roadhouse, which is not only award-winning and a fan favorite, but also helped reduce waste in the restaurant and increase the bottom line. Melted cheddar cheese, bacon bits, and green onions served with sour cream make the appetizer a signature item.

“We do quite a bit of baked potatoes at Logan’s, and we used to have all this leftover extra potatoes that would just go in the trash, and you couldn’t reuse them. So I started working on it, and I was like, we can make potato skins out of this,” he explains. “We cool them properly, cut them, peel them, and then refry them and season them. We tried to do a test, and people went nuts over it. That recipe is still our number one appetizer to this day.”

“It’s one of those things that as simple as it sounds, sometimes it’s not the complexity that makes it great; it’s simplicity and really good flavors that make a good recipe,” he adds.  CALLIE EVERGREEN IS THE EDITOR OF FSR. SHE CAN BE REACHED AT CEVERGREEN@WTWHMEDIA.COM.

M A R C H 2 0 24

SPB HOSPITALITY (6), PHO BO NOODLE SOUP: ADOBE STOCK / VANKAD

CHEFS & INGREDIENTS / CHEF PROFILE

Trending on the Menu MARCH 2024 // Appetizers

ADOBE STOCK

FRESHLY STEAMED DUMPLINGS

Asian Inspired Flavors M A R C H 2 0 24 / S P O N S O R E D C O N T E N T

Popular Asian Cuisine Offers a New Way to Look at Appetizers

BY ABBY WINTERBURN

S TO RY // 3 6

New Preferences DATA // 4 0

By the Numbers

IND U S T RY- W ID E I S SU E

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TRENDING ON THE MENU

// Appetizers

SCHWAN’S FOOD SERVICE

ASIAN-STYLE APPETIZER TRAY

SERVING SUGGESTION

Popular Asian Cuisine Offers a New Way to Look at Appetizers Versatile global flavors can attract customers—and increase profit.

C

hoosing the right appetizers can provide new, versatile, on-trend dishes be challenging for restaurants. restaurants can use to attract customers Some operators leave them off and increase profits. the menu entirely, while others priori“Appetizers set the standard for the tize high-price ingredients rather than rest of the meal,” says Chef Craig Claude, profitability, resulting in their appetiz- corporate chef of Schwan’s Food Service. ers doing more harm than good. How- “If a consumer has a great experience ever, the solution may come in an unex- with an appetizer, the rest of their meal pected place: Asian-Style Appetizers that will go very well.”

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IND U S T RY- W ID E I S SU E

Since the end of the pandemic, dining out has boomed. “The popularity of sitdown dining has grown, and it’s become a time to socialize with those close to you,” says Claude. Having appetizers on the menu is more important than ever as consumers expect a meal where they can relax, sit for a while, and have a good time among friends.

S P O N S O R E D C O N T E N T / M A R C H 2 0 24

70%* of operators say demand for globally inspired food is increasing.

Meet that demand with Asian-Style Appetizers from Schwan’s Food Service.

EGG ROLLS & DUMPLINGS & MORE? OH MY. Familiar, on-trend, easy to prep and easy to sell.

What’s not to love?

Scan and see how to menu Egg Roll Skewers and more

SERVING SUGGESTION

©2024 SCHWAN'S FOOD SERVICE, INC. ALL RIGHTS RESERVED.

*Datassential, Global Flavors Keynote Report, November 2021.

TRENDING ON THE MENU

// Appetizers

SCHWAN’S FOOD SERVICE

BLOODY MARY WITH DUMPLING GARNISH

“When appetizers are served, they act as a conversation starter, promoting light-hearted conversations accompanied by a laid-back, causal time,” says Claude.

Appetizers don’t just drive foot traffic—they also drive profits. “If you don’t have appetizers, you’re missing out on some of that incremental income,” says Claude. “When people don’t know what they want as their main course they usually will start with appetizers. This extends their decision time and allows them to explore new foods.”

Serving high-quality appetizers is a great way to increase the likability of the rest of the meal. It’s a quick way to make the appetizer section of the menu a destination consumers look forward to. “Offering unique appetizer options is a great way to get appetizers to the front of the menu where they belong versus being an afterthought,” says Claude.

In the past year, Asian-Style Appetizers—from egg rolls to dumplings—have seen a surge in popularity. “Asian cuisine is one of the fastest-growing trends we’re seeing right now,” says Claude. Consum-

38

IND U S T RY- W ID E I S SU E

I look at Asian food and how I want to introduce it into my restaurant, I decided to do it in a way that’s not intimidating to kids and adults,” says Chef Uno. Chef Uno pairs traditional AsianStyle Appetizers, such as dumplings and egg rolls, with flavors that are familiar to consumers. She tosses her dumplings in a Buffalo-style wing sauce. “This allows my customers to feel comfortable trying something new while allowing me to offer a unique twist on traditional Asian flavors,” says Uno. To make things even easier, industry leaders like Schwan’s Food Service offer a variety of pre-prepared dumplings and egg rolls, allowing restaurant operators to incorporate Asian flavors “Asian cuisine into their menus seamlessly. “You can is one of take them out of the freezer, bake them, the fastestfry them, and prepare them any way you growing like,” says Claude. trends we’re Pre-prepared Asian-Style Appetizseeing right ers significantly reduce prep time. “To deep fry the dumplings or egg rolls takes now.” about 3-4 minutes,” says Claude.

Chef Uno swears by products like ers are increasingly expecting new and MINH ® Egg Rolls and CHEF ONE ® novel styles of food. “I think we’re only Dumplings. “I had to make money and seeing the beginning of the proliferation figure out how to offer the Asian flavors of Asian cuisine,” he continues. And the that I wanted in an efficient, time and more exposure customers get to Asian labor-sensitive way,” says Uno. “With cuisine, the more they’ll want to see it on Schwan’s Food Service, I found an easy menus—even at restaurants that aren’t solution. The eggrolls and dumplings known for Asian food. have a long shelf life and can easily be An unexpected way to showcase prepared in multiple different ways.”

Asian cuisine and meet the consumer Dumplings and egg rolls are very verdemand for global flavor is adding sitile, making them perfect for any type Asian-Style Appetizers to the menu at of restaurant. “Every sports bar and restraditional American bars and restau- taurant in the country should offer an rants. “It’s a great way to take something Asian-Style Appetizer,” says Claude. that’s traditionally Asian and make it As the popularity of appetizers and more mainstream American food,” says Asian cuisine continues to grow, AsianClaude. “We’ve done it with Mexican Style Appetizers from Schwan’s Food food for years, and I think we’re starting Service provide the perfect opportunity to see the same trends with Asian foods. to save time, give customers what they It’s not going to stop anytime soon.” want, and make money doing so. “They’re Operators may be hesitant to add within our food costs, yet it’s something an unfamiliar cuisine like Asian to the that is high on our product mix,” says menu, but Chef Uno Immanivong, CEO Uno. “I think there is something to pushof Chef Uno Brands and chef and owner ing the easy button. Life can be hard, and of RedStix Street Food, has found that there’s comfort in putting something it doesn’t have to be difficult to menu quick, easy, and profitable on the menu Asian-Style Appetizers that sell. “When that everyone can enjoy.”

S P O N S O R E D C O N T E N T / M A R C H 2 0 24

Asian-Style Appetizers like Egg Rolls and Dumplings jump-start your menu with dozens of exciting flavor combinations and innovative, culinary dishes.

THE FOUNDATION OF FUSION Discover an easy starting

point for developing new and intriguing applications.

Scan and see how to menu Buffalo-style Dumplings and more

SERVING SUGGESTION

©2024 SCHWAN'S FOOD SERVICE, INC. ALL RIGHTS RESERVED.

TRENDING ON THE MENU

// Appetizers

Appetizer Trends A FEW KEY INSIGHTS FROM DATASSENTIAL ON APPETIZERS • Buffalo Cauliflower as an appetizer has grown by +100%, indicating a significant trend toward vegetarian and health-conscious dining options.

• Consumers are increasingly seeking out spicy and sweet flavor profiles.

• There is a growing consumer demand for diverse and authentic culinary experiences.

• Soup has seen a significant decrease of -11 % in menu penetration.

• Sweet Chili Chicken Wings have seen a remarkable +380% growth over four years.

TOP APPETIZER VARIETIES GROWING ON U.S. MENUS Appetizer

Menu Penetration 4-Year Growth

Sweet Chili Chicken Wing

1.2%

+380%

Teriyaki Chicken

2.0%

+55%

Tom Yum

1.3%

+35%

Dumpling

12.8%

+4%

Egg Roll

11.1%

+4%

Pretzel Bite

1.7%

+38%

Buffalo Cauliflower

1.2%

+100%

APPETIZER TRENDS TO WATCH & UNDERSTAND // COURTESY OF DATASSENTIAL TOM YUM SOUP Tom Yum is a Thai coconut soup traditionally made with coconut milk, stock, lemongrass, garlic, fresh galangal or ginger, kaffir lime leaves, lime juice, fish sauce, Thai chiles, Thai basil, cilantro, mushrooms, bok choy, and shrimp; also can be made with chicken, beef, pork, or shrimp.

CONSUMERS Know It

Have Tried It

29%

14%

DUMPLING A broad name for a category of foods with dough wraping or stuffed with a variety of fillings.

CONSUMERS Know It

Have Tried It

91%

74%

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IND U S T RY- W ID E I S SU E

M A R C H 2 0 24

ADOBE STOCK (3)

MENU EXAMPLE:

Pork Korean Mandu Dumplings: pork, organic tofu, bean sprouts, napa cabbage, leek, garlic, and onion. served with spicy citrus soy. served with spicy citrus soy sauce.

Kimchi Grill // BROOKLYN, NY

Stronger business starts from the top line. Asian-Style Appetizers from Schwan’s Food Service help you increase check rings by giving consumers the exciting global flavors they demand.

TOP OFF YOUR TOP LINE More apps mean more ways to encourage customers to open their wallets so you can raise revenue.

Scan here to take your menu to the next level

SERVING SUGGESTION

©2024 SCHWAN'S FOOD SERVICE, INC. ALL RIGHTS RESERVED.

TRENDING ON THE MENU

// Appetizers

EGGROLL A fried roll of thin dough wrapping a number of fillings.

CALAMARI Squid that is most often fried and served with dipping sauces.

CONSUMERS

CONSUMERS

Know It

Have Tried It

Know It

Have Tried It

96%

84%

82%

51%

MENU EXAMPLE:

Carne Asada Eggroll: House carne asada, a and r teriyaki sauce, a and r spicy chili and bbq jam, baby corn, water chestnuts, cilantro, green onion, carrots, red bell pepper, lo mein noodles.

Agave & Rye // CHATTANOOGA, TN

MENU EXAMPLE:

Asian Calamari: Golden fried rings, tentacles, and banana peppers served with a side of sweet chili sauce.

110 Grill // CANTON, CT

MENU ADOPTION CYCLE: APPETIZERS INCEPTION Trends start here. Found in mostly finedining and ethnic independents, inception-stage trends exemplify originality in flavor, preparation, and presentation.

1. Takoyaki 2. Shumai

VEGETABLE TEMPURA

3. Chicken 65 4. Pakora

ADOPTION Found at fast-casual and casual indepen-

dents, adoption-stage trends grow their base via lower price points and simpler prep methods. Still differentiated, these trends often feature premium and/or generally authentic ingredients.

1. Seaweed Salad 2. Shishito Pepper

3. Bao 4. Poke

PROLIFERATION Proliferation-stage trends show up at casual and quick-service restaurants. They are adjusted for mainstream appeal. Often combined with popular applications (burgers, pastas, etc.), these trends have become familiar to many.

1. Tempura 2. Edamame

3. Crab Rangoon 4. Lettuce Wrap

5. Potsticker

where—these trends have reached maturity and can be found across all sectors of the food industry. Though often diluted by this point, their inception-stage roots are still recognizable.

SALMON POKE BOWL

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1. Egg Roll 2. Fried Seafood

3. Calamari 4. Slider M A R C H 2 0 24

ADOBE STOCK (2)

4. UBIQUITY Ubiquity-stage trends are found every-

®

®

ONES TO WATCH

Wild Thyme Looks to Go Big Time Meet the full-service restaurant group that doubles as a quickservice franchisor.

BY SAM DANLEY

QSR

WILD THYME HAS GROWN FAST ACROSS SEDONA, ARIZONA, AND THE WESTERN U.S.

FSR

FOUNDER: Heinrich Stasiuk HEADQUARTERS: Orange, California YEAR STARTED: 2009 ANNUAL SALES: ~$47 million TOTAL UNITS: 15 Shorebird: 3 Molé Comida: 2 Stagecoach: 3 Kai/Kaiseki: 2

Jay Bird’s: 5

WILD THYME RESTAURANT GROUP (3), GAUGE ICON: ADOBE STOCK / EMIL’

FRANCHISED UNITS: 1

Surrounded by steep canyon walls and pine forests, Stagecoach Roadhouse in Sedona, Arizona, offers smoked meats and creative appetizers in a playful atmosphere with live country music and mechanical bull riding. Nestled at the Arabella Hotel just five minutes down the road, Molé Comida showcases upscale Mexican cuisine that blends traditional recipes with a contemporary twist. A few blocks away, Jay Bird’s serves up Nashville hot chicken with six different levels of heat in a quick-service environment. Those are a few of the concepts Wild Thyme Restaurant Group has brought to its hometown.

Having such a diverse portfolio of cuisines and service models comes with advantages and challenges, says CEO Niko Viramo. The former hotel and cruise line executive took the helm last year to help steer the company into its next chapter.

“All of these concepts are already successful and are already in the process of growing,” he says. “Now, it’s just

M A R C H 2 0 24

about taking them to the next level and thinking about which concepts we’re really going to scale. We’re still quite small in terms of the number of hands on the corporate team, so we can’t focus on expanding all of the concepts at the same time. That means we have to pick and choose where we want to go next.”

Founded in 2009 by hospitality vet-

eran Heinrich Stasiuk, Wild Thyme has rapidly grown its footprint across Sedona and the Western U.S. with a series of new ventures in recent years.

Jay Bird’s has spread its wings with five locations in Arizona, California, and Utah since taking flight five years ago.

Stagecoach Roadhouse got its start in 2022 and has two other stores in Cal-

IND U S T RY- W ID E I S SU E

43

 NIKO VIRAMO

from their days at Modul University in Vienna, Austria, to help accelerate growth and shape the company’s future trajectory. He brought over 25 years of experience in the hospitality industry to the fast-growing restaurant group.

“With my background from the hotel business and cruise lines, I know what it means to standardize products and services,” Viramo says.

“Consistency is always the key, so I think one of the most important factors when you have so many brands is creating cohesive and detailed standard operating procedures across the board, and then elevating things even further by creating brand standards on top of that.”

He’s also been working to digitize the entire company, from HR and inventory to kitchen

ifornia. Molé Comida launched that same year and has one additional unit in the Sunshine State.

There’s also Shorebird, which launched in 2020 and has a store in Sedona along with two haunts in California. It offers an expansive menu of upscale, globally inspired dishes in a casualdining atmosphere. Think Kurobuta Sticky Ribs, Carne Adovada Tacos, and Chilean Sea Bass, plus bespoke cocktails, distinctive wines, and a roster of rotating beers on tap. Other restaurants in Wild Thyme’s sprawling portfolio include the single-unit concepts Kaiseki Sushi, which debuted last year in Utah, and Kai Japanese Bistro, which opened its doors in 2022 in California. The company also has a handful of F&B operations in hotels and resorts that specialize in everything from barbecue and burgers to craft cocktails.

After launching six new brands and more than a dozen locations in just a few short years, Stasiuk reached out to Viramo, a longtime friend

management and POS systems. Those tools are streamlining operations, giving leaders a more granular view of the business, and enabling data-driven decision-making throughout the organization.

One particularly useful investment is Birdeye, an AI-based tool that helps Wild Thyme manage its reputation, quickly respond to complaints, and track consumer feedback. It centralizes reviews of all of its locations that are posted across the internet in a single location.

“I think it’s very important for companies to be totally on top of what the guests are saying,” Viramo says. “People are leaving reviews all over the place, and that’s even more complicated when you need to collect feedback for multiple different restaurants.”

Wild Thyme has zeroed in on Shorebird and Molé Comida as key growth drivers. Viramo’s goal is to add around 10 units for both brands in

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IND U S T RY- W ID E I S SU E

 FOR WILD THYME CEO NIKO VIRAMO, CONSISTENCY IS THE KEY.

M A R C H 2 0 24

WILD THYME RESTAURANT GROUP (6)

O N E S T O W AT C H

The Human Bean Franchising Done

.

®

285 Locations

0% Royalty

Open Or In Development

2

$1,251,709 TOP QUARTILE AUV $884,304 AUV 3 (2022 FDD ITEM 19)

159 currently open, 56 signed franchise agreements but not yet opened, and another 70 obligated by Area Developers.

Franchisor derives revenue from required purchases of coffee and other supplies from the franchisor or its designated suppliers.

AUV is average unit volume for calendar year 2022. 53 stores surpassed and 56 stores made less than the listed AUV. Median was $859,940. Some outlets have sold or earned this amount. Your individual results may differ. There is no assurance you'll sell or earn this much. For more information, see Item 19 of the Franchise Disclosure Document (FDD). $1,251,709 is the top quartile average unit volume of the best-performing franchisees in 2022. 11 surpassed and 16 made less. Median was $1,207,887.

Contact us at franchising@thehumanbean.com for franchise sales.

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 JAY BOGSINSKE

the next three to five years. There’s plenty of runway for Stagecoach Roadhouse, too. And he isn’t necessarily writing off the possibility of opening more sushi bars and Japanese restaurants, if the right product-market fit presents itself. That’s the benefit of managing multiple brands concurrently.

“One of the advantages of having many different concepts is that we could get a location

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 JAY BIRD’S IS HOPING TO TAKE ADVANTAGE OF NASHVILLE HOT CHICKEN’S GROWING POPULARITY.

opportunity that wouldn’t work for Shorebird, but perhaps we can still go in with Stagecoach or a different brand that’s a better fit,” Viramo says.

The company won’t be adding any more quickservice brands into the mix. It won’t be opening any more corporate-owned Jay Bird’s locations, either. It notched its first franchised location in California last year and plans to grow the brand through that model from here on out.

Viramo is more concerned with finding the right locations and the right operators than meeting a predetermined growth target, but he expects franchising activity will ramp up in the year ahead, thanks to strong customer demand at existing stores and the recent addition of a dedicated franchise development leader.

A laser-like focus on the flagship spicy chicken product–something that stems from the group’s expertise in delivering high-end full-service experiences–already is helping Jay Bird’s stand out in the saturated quick-service chicken segment, adds Jay Boginske, Wild Thyme’s director of culinary development.

“Obviously in the last five years, there’s been a lot of people trying to cash in on Nashville hot chicken, but I’d say nine out of 10 people that are serving it right now don’t understand the layers of seasoning and the layers of technique. We worked on it for an entire year, trying different brining techniques and getting the seasoning just right with ingredients I guarantee no one else is using, in order to build something really special,” Boginske says. “We knew we could do it better and outperform what was already out there because of our experience cooking and toying with recipes for different types of restaurants.”  SAM DANLEY IS THE ASSOCIATE EDITOR OF QSR. HE CAN BE REACHED AT SDANLEY@WTHWMEDIA.COM.

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WILD THYME RESTAURANT GROUP (5)

O N E S T O W AT C H

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Family owned since 1945 • Proudly made in the USA ©2023 Johnsonville, LLC • *IRI 7/9/23

SPONSORED BY ANGRY CHICKZ

The Secret Behind Angry Chickz’s Rapid Expansion Setting the standard for Nashville-style hot chicken with a unique taste experience.

ANGRY CHICKZ

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hicken is hot right now, both literally and figuratively. And Californiabased Angry Chickz is the hottest ticket in town.

Angry Chickz launched its 900-square-foot first location in East Hollywood in 2018 and received rave reviews. Angry Chickz has gone on to open 24 restaurants across California, Arizona, and Nevada. Their goal is to serve the best hot chicken with the best customer service. The simplified yet mighty menu of chicken, fries, coleslaw, mac, and cheese focuses on a less-is-more strategy, earning them their slogan of “life-changing chicken.”

“My deep-seated passion for all things spice and my commitment to delivering high-quality food fueled the brand’s development. It was evident that we were not just offering a product. We were creating an experience that resonated with people’s taste buds and preferences,” says David Mkhitiaryan, founder and chief executive officer at Angry Chickz. “This alignment of my personal passion, industry knowledge, and the positive customer response solidified my belief that Angry Chickz has the potential to become a leader in the Nashville-style hot chicken market.”

Its signature spices, distinct flavors, proprietary recipes, and the innovative menu clearly show that Angry Chickz is not just another Nashville-style hot chicken franchise. Customers can

choose from a spectrum of spices— from Country No Heat, Mild Light Heat, Medium Perfect Heat, to Hot Feel the Burn, X-hot call 911, and lastly, Angry, for which patrons must sign an Angry Heat Level Waiver to partake. With that kind of excitement at the start of its restaurant journey, Angry Chickz is slated for rapid growth.

Franchising thus emerged as a strategic avenue to achieve expansion while involving local entrepreneurs and communities in the success story.

While Angry Chickz may be a relatively new player, its impressive AUV and positive customer response underscore the potential for success.

Bringing in top-tier executives for marketing and operations has also propelled our success. These key individuals bring a wealth of experi-

ence, industry insights, and a proven track record that aligns with our vision for expansion and excellence. Angry Chickz’s operations align with industry insights, such as investing in specific technological advancements like digital ordering platforms and supply chain optimization that set it apart from competitors and enhance operations and customer experience.

“Technology is a cornerstone of our strategy, and our investments have been pivotal in differentiating us within the fast-paced food industry. Staying ahead of the curve and improving overall customer satisfaction while leveraging technology is a testament to our dedication to providing a modern and innovative dining experience for our customers,” says Mkhitiaryan.

» BY J O C E LY N W I N N

To take advantage of this franchise opportunity, visit www.angrychickz.com 48

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S P O N S O R E D C O N T E N T / M A R C H 2 0 24

PARTNER WITH A TOP-GROWING BRAND WITH SALES TO BACK IT UP!

SIMPLE OPERATIONS We’re chicken, fries, coleslaw, and mac’n cheese... That’s it.

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WOMEN IN LEADERSHIP

Leaders weigh in on how operators can apply corporate social responsibility in small ways to make an enormous impact.

BY SATYNE DONER

QSR

FSR

The late Alexandra “Alex” Scott was diagnosed with childhood cancer at the cusp of her first birthday, and by 4 years old, she was running a lemonade stand to raise money for research, one cup at a time.

Alex passed away in 2004 at the age of 8, but her dedication to finding a cure lives on through Alex’s Lemonade Stand Foundation (alsf), a charity in her honor that has raised over $250 million through fundraising and restaurant partnerships.

The biggest thing Alex taught others, says executive director Liz Scott, is even small acts of kindness can accumulate to have an immense impact on

 ALEX’S LEMONADE STAND HAS RAISED MORE THAN $250 MILLION.

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the lives of others. This principle acts as her north star when she considers corporate social responsibility (csr), and it’s a philosophy she preaches to restaurant managers pursuing making a difference.

“For operators, approaching CSR can feel overwhelming and be a lot of heavy lifting,” Scott says. “The idea of something grand and comprehensive can get in the way of just starting out, [but the biggest thing] is finding what their values are and what’s important to them first.”

In Scott’s experience, when approaching CSR, most companies have the same goal: connecting their employees to something larger than themselves, where customers can see the social work they’ve been doing.

She explains that the key to CSR, for many operators, lies in implementing a modest program with honest intentions and evolving, either organically or with a partnership like ALSF. Applebee’s started with one franchisee collaborating with the foundation, and after 16 years, it spread across the system to multiple locations. Firebirds Wood Fired Grill followed the same trajectory. What started as donating a few cents of every lemonade sold turned into fundraising events, rotating promotional menu items, and getting vendors involved.

“Most companies underestimate their ability to have an impact, and it’s a big barrier,” Scott says. “But it’s about taking those first steps to get involved and see what works in your restaurant. I think there’s an opportunity there to just try it out, and that’s what we learned from Alex.”

For Jen Hidinger-Kendrick, founder of The Giving Kitchen, CSR includes an added layer of remaining socially

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TOP CENTER: ALEX’S LEMONADE STAND FOUNDATION, FIREBIRDS WOOD FIRED GRILL (2), GAUGE ICON: ADOBE STOCK / EMIL’

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accountable and transparent—not just raising the money but being what she calls “excellent stewards of donor dollars.”

“Being responsible for the truth and learning how to lead together through transparency is how operators bring people into their belief system, and it’s something we must think about constantly. [ You must] be transparent with the stories you’re telling and who you’re helping.”

The Giving Kitchen, founded in 2012, provides emergency assistance to foodservice workers through financial support and community resources. The nonprofit has raised over $8.5 million in financial assistance to employees in the industry nationwide.

Like Scott, Hidinger-Kendrick understands how CSR can feel unattainable at times, but she stresses how having a central mission can override any growth pains and act as a guiding force for restaurants.

“It won’t come without immense community effort, but you have to have belief in the people of this industry,” Hidinger-Kendrick says. “There are challenges within all of it ... But this doesn’t mean it can’t happen. It just has to be done and lead with authenticity and a common goal.”

Hidinger-Kendrick believes the industry’s stance on mental health can act as a bottleneck when she thinks about CSR, but there is room to grow. In a space where workers and management alike are asked to leave their feelings at the door, it takes an immense amount of courage to ask for help and even more to be able to provide it.

“The Giving Kitchen has helped over 16,300 foodservice workers by sharing a story. It’s this ripple effect and continuous opportunity to share a little bit of yourself with somebody that empowers others,” Hidinger-Kendrick adds. “[For operators] just knowing the resources available to you and sharing them is one of the most responsible things anybody can do within their local community.”

CoreGives, otherwise known as Children of Restaurant Employees (core), has been offering grant assistance for hospitality workers experiencing financial hardship since 2004. Sheila Bennett, CORE’s executive director, agrees with Scott and Hidinger-Kendrick in that the first step for operators wanting to deploy a successful CSR program is to align themselves with a cause important to the organization.

“What we’ve learned is when a restaurant chooses to conduct a promotion for CORE [or similar programs], it builds a sense of pride and

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demonstrates the organization’s ability to make a positive impact in the community in which they serve,” Bennett says. “We know it builds a halo effect and customers value doing business with these types of brands.”

She builds of f Hidinger-Kendrick’s belief in transparency and urges operators to become comfortable with Better Business Bu reau g u idel i nes regarding how promotions and charity are communicated with the public—she says it’s an easy thing for operators to overlook and have issues with.  Also, she warns of JEN HIDINGER-KENDRICK the epidemic of stretch ing too wide and too THE GIVING KITCHEN, fast when implementing a new CSR program.

FOUNDED BY JEN HIDINGERHaving a keen understanding of operational KENDRICK IN 2012, GIVES EMERGENCY systems and choosing a nonprofit accordingly is FUNDS TO imperative, Bennett says.

FOODSERVICE WORKERS. “You need to know the bandwidth of your operation, and it’s helpful to choose a nonprofit with turnkey assets and tools to make your job a little bit easier,” Bennett advises. “In some cases, they’ve already created customized training tools for your employees and content for your newsletCORE HAS ters, menus, and social media.”

BEEN OFFERING GRANT ASSISTANCE Weaving CSR into a brand’s ethos can seem TO HOSPITALITY WORKERS staggering, especially when looking at how it SINCE 2004. affects daily practices and margins, but all three  nonprofit industry veterans see a path forward for operators through even the smallest acts of service.

“Start where you are and understand there’s probably a million ways you can be socially responsible, but there is a way that fits every company,” Scott says. “If you try to be everything and tick off every CSR pillar right away, it won’t be sustainable ... Do what fits within your business, and you can still have an impact.”  SATYNE DONER IS A STAFF WRITER. SHE CAN BE REACHED AT SDONER@WTHWMEDIA.COM.

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TOP: THE GIVING KITCHEN, COREGIVES

WOMEN IN LEADERSHIP

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PRODUCT CONSISTENCY Sunny Sky Products is revolutionizing the beverage solutions industry.

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onsumers are increasingly concerned with finding the next trendy and affordable beverage.

In the quick-service industry, timesaving benefits are just as important.

According to a survey conducted by GlobalData Plc, 79 percent of global consumers look for products that offer them time-saving benefits, and 32 percent of consumers believe that time-saving benefits are essential to making a purchasing decision.

Addressing these needs within the beverage industry can be complicated, leaving restaurants seeking to do more with less. Sunny Sky Products is a leading manufacturer of innova-

tive beverage solutions tackling these challenges.

“We have become a one-stop shop for all beverage-related needs,” says Rich Shuey, executive director of dining, hospitality, and leisure, Rich Shuey. “By offering a wide range of solutions from a single source, Sunny Sky Products is a versatile partner offering ingredients usable in various aspects of our customers' businesses.”

Beverages play a crucial role in helping restaurants stay trendy. “People are not going to places because of the food,” says Isabel Atherton, vice president of marketing. “They're going to locations because of the beverage offerings.” This shift makes operational efficiencies in preparation, service, and the need to stay on top of emerging trends more critical than ever.

Sunny Sky Products offers opera-

tional expertise for beverage solutions, one solution that has proven to be effective in improving back-of-house operations and meeting consumer needs is its cold brew concentrate.

“The cold brew trend has been ongoing,” Atherton says. “There are two types of customers we come across: those who have embraced cold brew and those who have yet to do so.

We find ourselves in a unique position to assist both categories.” Some customers who have adopted cold brew have faced limitations, due to high costs or the labor-intensive brewing process. Sunny Sky Products cold brew solutions make it easy for an operator to deliver quality products, customized to the changing consumer need states while maintaining operational speed and eliminating errors consistently and quickly.“ Our approach not only improves operational efficiencies but also standardizes the product. We ensure that customers receive 100 percent authentic premium cold brew, whether ready-to-drink or in concentrated form,” Atherton says.

The speed of in-house preparation can vary, but Sunny Sky Products offers options like bag-in-box solutions compatible with dispensing equipment or direct water hookups. “Simply connect the bag-in-box to a dispenser, and it's ready to serve,” Atherton says.

“Alternatively, we can provide a finished, ready-to-drink solution that can be dispensed directly. Additionally, we offer concentrated products, which can be diluted to the desired strength and served instantly.”

With one product for multiple applications, Sunny Sky offers solutions to reduce SKU complexity while expanding menu offerings. By providing beverages and developing programs that address the specific needs of each customer, Sunny Sky has become a one-stop shop for all beverage needs. » BY DREW FILIPSKI

For more information on Sunny Sky Products beverage solutions visit sunnyskyproducts.com 54

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S P O N S O R E D C O N T E N T / M A R C H 2 0 24

SUNNY SKY PRODUCTS (3)

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FSR

The Peak of Restaurant Franchising Already the world’s largest franchisee entity, Flynn Group is looking for so much more, whether that’s domestic, international, or breaking into new categories. ➺ /

BY BEN COLEY

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FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023, GAUGE ICON: ADOBE STOCK / EMIL’

QSR

®

FRANCHISEE DEVELOPMENT

FLYNN GROUP IS ONE OF THE BIGGEST FRANCHISEES IN EACH OF ITS CONCEPTS.

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Greg Flynn, CEO of Flynn Group, prefers to break up his company’s journey into chapters.

FLYNN GROUP CUT ITS TEETH

BY OPERATING HUNDREDS OF APPLEBEE’S STORES. 

THE BIRTH OF A DYNAMIC FRANCHISEE Chapter one involved growing Applebee’s from 1999 to 2012.

During that time, Flynn Group’s sole focus was the casual-dining chain. The strategy served them well as the company jumped from 10 stores to 72 to over 400, becoming the world’s biggest Applebee’s operator in the process.

Flynn Group entered the system at a time when sit-down concepts had significant momentum.

Leading up to COVID, Applebee’s was more of a challenged brand, causing the chain to close about 300 U.S. stores over roughly five years.

However, thanks to an emphasis on value, digital, off-premises, and marketing toward younger consumers, the brand experienced historic sales figures during the pandemic—numbers it hadn’t seen since it combined with IHOP in 2007.

FLYNN GROUP (4)

It’s an in-depth novel any aspiring restaurateur would pay to read.

Over two-plus decades, the entity transformed into the largest franchisee group in the world. As of January, Flynn Group had more than 2,600 units, over $4.5 billion in annual sales, 30 percent annualized growth, and more than 75,000 employees.

COO Brad Pettinger was among the first to see the start of the vision. The executive vividly remembers being connected through a headhunter, back when Flynn was running World Wrapps restaurants on the West Coast. Pettinger recently tore his Achilles tendon and had a bright pink cast, but he hobbled to San Francisco to visit a store that was reportedly doing an “unbelievable volume” out of an 800-square-foot building. When he arrived, the shop had to shut down because it was so busy. Everything had to be restocked.

Consider that the prologue.

“Greg’s never met a deal he didn’t want to do,”

Pettinger says. “So I don’t think there was ever a cap on where we thought we would go. We’re constantly amazed at where we’ve gone. And I think we’re really proud of the culture we’ve built that enabled us to add on every other couple of years. I don’t think there’s a limit to what we want to do. It’s just what’s available.”

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Dan Krebsbach, who serves as Applebee’s president under Flynn Group, says growth began when the chain formed a stronger connection with guests.

“We even had an ad that just marketed toward recognizing our regulars because it’s not uncommon to walk into one of our restaurants and see the same faces there, maybe around the bar or at a table consistently,” Krebsbach says. “Those are all key ingredients. Right after the pandemic, we reduced the menu and that has also helped with greater execution and speed of service. And we have stayed that course. We haven’t gone back to inflating the number of items on the menu and I think that has really helped.”

The second chapter began in 2013 when Flynn Group recognized it was time to do more. The company decided to diversify domestically in a way that mirrored the composition of the restaurant industry. Listening to the market and the marching of consumers’ feet, the franchisee group knew quick service was the next logical jump. Not only that, but Flynn Group made it a priority to only involve itself with the best brands in the segment.

With that mindset, entering Taco Bell 11 years ago was a no-brainer. Flynn Group acquired 76 restaurants and has since expanded the footprint to 280-plus stores, nine states, and more than 7,800 workers. The operator is now the thirdlargest Taco Bell franchisee in the world. By 2015, Flynn Group had its target on a swiftly growing fast-casual segment. Chipotle wasn’t an option— one, because it’s completely corporately owned, and two, because even if it were franchisable, it would likely be a direct competitor to Taco Bell.

This made Panera the easy choice. Flynn Group splashed into the bakery-cafe concept by purchasing 47 locations and building it to 125-plus restaurants in eight states. After that growth, the company became the second-biggest franchisee in Panera’s footprint. In 2018, Flynn Group took an even bigger leap by buying 368 Arby’s stores to become the brand’s biggest operator.

But no acquisition quite matches the latest one on record. In 2021, Flynn Group bought 937 Pizza Hut and 194 Wendy’s locations for $552.6 million from bankrupt franchisee NPC International. The company nearly doubled its restaurant count as a result of the purchase.

“It gave us an opportunity through one transaction, albeit very complicated, to get it to scale in both systems,” CFO Lorin Cortina says. “We

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 FAST FOOD AND FAST CASUAL ARE KEY VERTICALS FOR FLYNN GROUP.

had a distinct advantage over virtually anybody else in the process because we’re probably the only, if not only a couple, qualified bidders who could complete the entire acquisition in a single transaction as opposed to multiple bidders. So we had the credibility across the franchisors, and more importantly, we had the credibility across the financial markets to raise capital during a difficult time.”

So after years of being casual dining only, Flynn Group is now majority quick service, giving the company a unique perspective across multiple categories. According to Flynn, one thing is clear—there’s lots of blurred lines, and there has been for a while. For instance, KDS systems began in quick-service stores where a customer

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FLYNN GROUP (7)

FR ANCHISEE DE VELOPMENT

FR ANCHISEE DE VELOPMENT

FLYNN GROUP (4)

FLYNN GROUP ADDED TACO BELL TO ITS PORTFOLIO 11 YEARS AGO. 

would order at the counter and the ticket would go up on a screen for back-of-house workers to view and complete. Initially in full service, there were handwritten tickets that would get handed back to the cooks. Eventually, KDS systems entered sit-down occasions, with many servers inputting orders onto a tablet, which then automatically transfers to the kitchen.

Off-premises has become more ubiquitous as well, even before the pandemic. Flynn remembers in the early 2000s when Applebee’s developed carside to-go. Not exactly a drive-thru experience, but pretty similar. And in many cases, it takes less time than a drive-thru lane because all orders are made in advance. He also points out Applebee’s has tested a mobile order pickup window that mimics a quick-service drive-thru lane.

“That’s one of the reasons when COVID hit Applebee’s was so well-positioned to grow,” Flynn says. “It’s all business because we had already been doing it. A high level of efficient carside to-go business for 20 years at that point. And we had all the systems in place and we had the parking spaces and we had the notification, we had the app and we had the KDS set up. So there are lots of mobile opportunities.”

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Flynn Group’s quick-service sector hasn’t been a slouch, either. Rasheeda Clark, Wendy’s brand president, says, “It’s an exciting time to be in the Wendy’s business.” Backing up her point, the fast-food chain’s 2023 was filled with innovative news, like testing drive-thru automated voice ordering with Google Cloud, experimenting with an underground delivery system, and unveiling a Global Next Gen prototype designed to cut costs and embrace digital sales.

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FLYNN GROUP BOUGHT NEARLY 200 WENDY’S STORES OUT OF BANKRUPTCY. 

“Ultimately a consistent guest experience, time, time, and time again is the only way to survive in this business,” Clark says. “I think it is ensuring that you don’t fall behind industry trends to stay relevant. Technology is one of those things you can delay if you want, but if you delay, you don’t stay up to trends, and you will fall behind.”

Development, either by organic expansion or additional acquisitions, is still in play for all of Flynn Group’s restaurant chains. The pace of that, Flynn says, is driven primarily by unit economics—the cost to build a restaurant, the sales and profits, and either an attractive or unattractive return. In general, he believes quick-service brands are experiencing better unit economics these days because building full-service locations is a lot more expensive. They also tend to have lower margins than fast-food outlets. Sales have grown in casual dining, but not enough to mitigate rising costs in labor, equipment, and other categories.

COVID forced numerous full-service restaurants to close, making second-generation opportunities a more viable option for growth in the post-pandemic period. Applebee’s is one of several bigger chains capitalizing on this availability. Meanwhile, Flynn Group announced in 2023 that it acquired six Applebee’s stores in Albuquerque, New Mexico, and plans to invest roughly $4 million in renovations for five of the locations.

On the quick-service side, Flynn predicted in September the company would open about 75 restaurants in 2023. There’s whitespace, but it’s competitive since everyone is gunning for pads with drive-thru space. That includes Pizza Hut, which now has a digital pickup window it calls “the Hut Lane.”

Flynn Group doesn’t have any explicit goal to be the biggest in any of its restaurant brands, or even in aggregate, even though it already is by a significant margin. Implicitly, the objective is to realize scale economics in the business. The other advantage of having a meaningful footprint is it provides a relationship with the franchisor. For all of its chains, Flynn Group has a seat at the table to discuss all challenges and opportunities.

“And for us being in six different brands, we have a wide view of the whole industry,” Flynn says. “In some cases, we have a wider view than our franchisors. And we try to be very constructive around that—helping consider each of our brand’s problems with the benefit of the experience we have from our other brands. Now we need

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FLYNN GROUP (3)

FR ANCHISEE DE VELOPMENT

SPONSORED BY XENIAL

Four Advantages Multi-Unit Restaurants Gain from Cloud POS

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oint-of-sale systems have been around for a long time, but today’s cloud-based systems have catapulted the standard POS into a robust engine filled with capabilities. The past POS was the center of your operation, but today’s cloud platforms have capabilities that are far beyond legacy POS solutions.

Cloud POS restaurant management platforms help manage virtually every aspect of your enterprise: front-of-house to kitchen, inventory, recipes, schedules, staff timekeeping, waitlists, reservations, employee communications, manager coordination, customer interaction, digital everything, customer loyalty, marketing, and more.

Why Switch to Cloud POS?

Traditional client-server POS setups involve bulky terminals connected to a central server through a network of wires and hardware. Cloud POS offers tangible advantages in cost, simplicity, flexibility, and functionality, shifting away from the need for physical servers and reducing data center costs.

Avoid or Reduce Data Center Costs

1 | Leaders who budget for and manage IT resources know

the high cost of acquiring and maintaining infrastructure for corporate and store operations. In-store, client-server POS and other systems require hands-on updating and troubleshooting. Some of these systems are mission-critical, so you may have redundant data centers if one goes down.

Cloud restaurant systems avoid these expenses because the cloud technology provider handles them.

Avoid Up-front Capex and Per Terminal Fees

2 | Cloud POS eliminates the need for a server and moves

XENIAL

traffic flow to someone else’s data center. The end result is much simpler: devices running apps connected to cloud computing.

Cloud solutions offer simplicity while lowering costs without sacrificing performance, scalability, or security.

Gain Visibility Beyond

3 | the Four Walls

Data is the currency of success. By design, cloud technology makes it easy to access important metrics even when you’re not onsite. This also seamlessly gives a multi-unit restaurant operator visibility into important metrics across multiple locations from a centralized reporting portal.

Benefit from More (and Better) Integrations

4 | Cloud POS in restaurants uses modern programming

languages, so systems can easily integrate with other systems used to serve guests—such as third-party ordering—and manage restaurant tasks—such as staff scheduling.

Simplified, native connections and integrations make it easier to serve today’s guests in the way they want to be served. It also tends to lower overhead IT costs and reduce finger-pointing.

Ready to Consider Cloud POS?

A modern Cloud POS restaurant management platform launches a restaurant to new heights of success, saving you money and turning trends and customer insights into sales and competitive advantages. When searching for a POS provider, look no further than Xenial.

There’s noise in the POS space, so parsing out the best system for your restaurant also requires choosing the best partner for your business. With over 35 years of experience in the quick-service restaurant space and a digital technology ecosystem, Xenial, a Global Payments company, is the onehand-to-shake solution. ◗

To find out more about Xenial Cloud POS or the full stack ecosystem visit www.xenial.com or email: sales@xenial.com

M A R C H 2 0 24

IND U S T RY- W ID E I S SU E

63

to be careful because we need to honor confidentiality between brands, and we are very careful about that, but that doesn’t mean there aren’t lots of general lessons that we can and have learned that we can bring to bear on any of our brands.”

NEXT GEAR OF GROWTH When Flynn talks about chapter three, he references two major growth channels—one of those being international expansion.

“The good news is that international is unlimited opportunity,” Flynn says. “It’s a big world out there and there are literally millions of restaurants, and I don’t see why we can’t effectively operate internationally. But I wanted to be conservative about it and take baby steps out of the country.”

The move is already underway in Australia.

In June, Flynn Group announced that it agreed to take over Pizza Hut’s roughly 260-unit master franchising business in the country. The chain is the second-largest pizza player in Australia, behind Domino’s, which has close to 800 units.

With the backing of Flynn Group’s capital and franchising experience, Flynn says there’s no reason why Pizza Hut couldn’t reach at least 1,000 restaurants in the country.

The company looked at international avenues for a while, COO Ron Bellamy says. Flynn Group wanted to put capital to work, but with a brand it knows well, a geography that isn’t too different from the U.S., and a team it really believes in.

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IND U S T RY- W ID E I S SU E

FLYNN GROUP IS NOW IN CHARGE OF BUILDING PIZZA HUT IN AUSTRALIA. 

“We’ve seen a lot of success in adding brands and building scale in the U.S.,” Bellamy says.

“And the question becomes, how can we do that in other regions? So Australia is the first step, which I think is a really good one in that it was a light first step. I mean, a heavy first step would have been to go buy 2,000 restaurants in Asia.

Had that not gone well, that could really hurt us.

And I think this is a really good first step to learn on. We feel really confident in it. But if, for some reason, it doesn’t break our way, life’s going to be OK. I don’t think that’s going to be the case.”

Establishing roots in Australia felt right in a lot of ways for the company. It’s the same language, there are good, nonstop flights to and from headquarters in San Francisco, and the residents have demonstrated an affection for American brands.

Plus, Pizza Hut was already a high-functioning business in Australia with a 100-person team in place. Phil Reed, CEO of Pizza Hut Australia, has been in the position since 2018 and in the quickservice segment overall since 1984.

Flynn Group doubled down on its Aussie aspirations by agreeing to debut Wendy’s in the country—to the tune of 200 stores over 10 years.

“The combination of the two opportunities was serendipitous but excellent,” Flynn says. “It was a way to, in a low-risk way, get into an overseas market, but do it with a business that had growth potential. But then later on another business that we knew well with a partner we knew well on top of that, and now it can make it a much more substantial opportunity.”

Bellamy says restaurant culture is broadly similar between the U.S. and Australia. If a store has a high-performing manager and general manager, the restaurant is going to do well. The mechanics, however, are different. Flynn Group controls all the locations for Wendy’s and Pizza Hut in a country of 25 million people. Master franchising means it will work with smaller, local franchise partners who will own and operate the restaurants.

Pizza Hut sales in Australia are similar to the U.S. in that the cuisine was one of the least impacted food groups during the pandemic because of its close association with delivery and takeout. Previously, the brand was big on buildings with red roofs and sit-down occasions, but that’s significantly shifted to much smaller offpremises-only outlets. Flynn Group plans to do the same in Australia. As for Wendy’s, there is no asset base, so the company has the rare opportunity to configure the chain’s personality in the country.

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“And for that, I think we really do have to take into account recent customer trends, how big the dining rooms have to be for us,” Bellamy says.

“It’s going to be interesting too because we’ve got to balance what might be the most efficient with how to have the biggest brand impact coming out of the gate. So you might actually conclude as an example, hey, we actually don’t want a dining room. We think the right way to do this is it’s drive-thru and it’s carryout and it’s third-party delivery and that’s what we’re focused on and that asset might look like something. But we might say that’s not the way that we want to begin because we want to put a stake in the ground of what we’re going to be about and you might want those first couple of restaurants to look a little bit different.

So we’ll have to play through that.”

The second half of chapter three was about entering consumer-facing brands outside of the restaurant industry. The company did just that in late 2023 by acquiring 37 Planet Fitness locations from Alder Partners, LLC. This prompted a change from “Flynn Restaurant Group” to simply “Flynn Group.” When the company was evaluating potential complementary segments, fitness became a primary target. Flynn Group said Planet Fitness fit its “investment thesis built on concepts that offer consumers a substantial value proposition and expertise in operating multi-unit and multistate consumer facing franchised businesses.” At the time of the announcement in November, the company said it would continue growth under the current area development agreement and open three stores within the next four months.

There were reports in early February Flynn Group was looking to sell a majority stake in its business, which could be valued at more than $5 billion, including debt. The company declined to comment on the news as of press time.

A PROFITABLE FUTURE Flynn Group’s sales have been favorable since its recovery from the COVID pandemic. For the quick-service brands, it was a matter of weeks. For full-service, it took about a year. Flynn describes the comeback as “epic” in 2021 and “very strong” in 2022. The company was hit with inflation in the middle of its P&L in 2023, but strength in sales leads him to believe consumer demand—down to the lowest-income levels—remains robust.

Flynn has predicted a soft landing in the economy for a couple of years after a rise in real wages

66

IND U S T RY- W ID E I S SU E

“ I think the key to success in the restaurant industry for a franchise or any other kind of operator is running your restaurants well, each and every day consistently everywhere.”

put more money in people’s pockets. The company is seeing consumers use that cash on restaurant experiences. Flynn Group took between 8-12 percent price in the past year and a half, but it hasn’t seen a material decline in traffic.

The company has built hundreds of restaurants—still actively doing so—but that’s limited by finding the right opportunities. Over the years, Flynn Group has acquired more restaurants than it’s developed, but done so at a cost that’s cheaper than constructing its own. The franchisee is almost everywhere in the U.S., with flags in 44 states.

There are a couple of surprising markets that Flynn Group hasn’t cracked yet, like Arizona, Nebraska, and Connecticut. However, Flynn feels confident in reaching these places soon.

He’s also optimistic about the company adding another restaurant chain in the future. Taking competitive conflicts into consideration, there’s still space in segments like Asian, Mediterranean, steak, fine dining, coffee, and tea. Flynn Group will be careful with any choice it makes because there isn’t necessarily a need to tack on any more brands. Also, the company will keep its filter of only joining premier chains.

Flynn can’t say he had a vision of Flynn Group becoming exactly what it’s evolved into. But he can say he was always attracted to the prospect of growing something. He’s an entrepreneur at heart, so he set out to build an enterprise. It’s done well thanks to a “combination of good luck and a lot of teamwork,” Flynn says, although he’s more interested in discovering where Flynn Group goes from here.

“I think the key to success in the restaurant industry for a franchise or any other kind of operator is running your restaurants well, each and every day consistently everywhere,” Flynn says.

“And that’s the main hurdle you have to overcome to succeed. It’s not about buying restaurants cheaply or it’s not about building restaurants quickly or it’s not even about your franchisor coming up with the latest great promotion or advertising. All those things matter and have contributed to success. But the thing that we need to get right and focus almost all of our energies on, especially as the franchise operator, is running our restaurants well each and every day and creating consistent, great guest experiences because that’s the heart of the business.”  BEN COLEY IS THE EDITOR OF QSR. HE CAN BE REACHED AT BCOLEY@WTWHMEDIA.COM

M A R C H 2 0 24

FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

FR ANCHISEE DE VELOPMENT

Clarity in Every

Transaction The AI-Driven Revolution of Drive-Thru Efficiency

®

®

Here Comes NextGen Casual /

68

IND U S T RY- W ID E I S SU E

BY DANNY KLEIN

M A R C H 2 0 24

I N D U S T R Y DATA

NEXTGEN BRANDS ARE THE LONG-AWAITED ANSWER TO FAST CASUAL.

A new breed of full-service restaurants are finding plenty of whitespace in the post-pandemic world of dining out.

In the fall of 2021, FSR unveiled “NextGen Casual” as a category definer. But it was hardly a novel idea. For years, full-service chains had taken to labeling themselves in hopes of placing some type of proverbial line in the sand. Terms like “upscale casual,” “polished casual,” “elevated casual,” “fine-fast,” “craft casual,” and on it went. The idea was a plain one: “casual dining” had become a blanket descriptor for larger players in the space, from how they operated to what they looked like, but didn’t capture what was taking shape in the middle—a restaurant movement closer to independent restaurants, in terms of food, sourcing, and nuance, yet with the scale, model capabilities, and ambitions of multi-unit chains.

In many respects, it was a long-awaited answer to fast casual. The quick-service disruptor didn’t simply crash fast food and force change from the top down; it also grayed the proposition for full-serves.

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QSR

FSR

IND U S T RY- W ID E I S SU E

69

Was the food quality in sit-down establishments materially better than fast casual? And if the answer wasn’t so clear all of a sudden, then how could operators justify the added cost of table service? Even before COVID-19, brands had started to solve the riddle through a combination of experience, accessibility, agility, hyper-focused menus, technology, and differentiated designs. The pandemic sped the cycle, and it’s only solidified in the aftermath. Picture higher prices across the foodservice industry and a growing divide between transactional brands and those that are hospitality-driven. As challenging as the dynamic is, it’s uncovered opportunity for brands that lead with the latter to reframe value as “what it’s worth” versus “what it costs.”

All said, though, what “NextGen Casual” means going forward remains fluid. Just like fast casual when it landed, or “better burger,” etc., how a brand gets credit for stepping into a fresh space comes down to what guests care most about. And so, FSR and QSR this year commissioned a consumer study with consulting firm King-Casey to develop an understanding of diner wants/needs for the next generation of full-service restaurants.

The answers won’t just matter to sit-down chains, however—everybody will be paying attention.

To begin, we set out to assess the relative appeal of five alternative benefit themes for differentiating NextGen Casual restaurants from existing concepts: menu differentiation; technology; health and the environment; non-chain experience; and convenience and comfort.

Nearly 630 people were polled who eat at/from restaurants at least once per month (64 percent visited weekly) and had annual household incomes of $35,000-plus (30 percent reported $100,000 and above). Each survey covered restaurant usage behaviors, reasons for visits and priorities, overall response to one of five NextGen Casual concepts, diagnostic questions to assess attitudes, and relative degree of influenced sponsored by varied attribute/benefit nomenclature.

Here were the results.

The Takeaways/ RESTAURANT USAGE BEHAVIORS AND PRIORITIES

Age affects frequency of restaurant use, chain preferences, and types of food consumed in past year. Based on frequency of use, 55- to 69-yearolds are the least desirable segment.

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IND U S T RY- W ID E I S SU E

brands had started to solve the riddle through a combination of experience, accessibility, agility, hyperfocused menus, technology, and differentiated designs.

NEARLY

630 PEOPLE WERE POLLED WHO EAT AT/FROM

RESTAURANTS AT LEAST ONCE PER MONTH

\

64 VISITED WEEKLY

%

Reasons for restaurant visits, though, are largely independent of age. Consumers have mainly visited establishments for a relaxing meal, to celebrate special occasions, to socialize, avoid cooking and/ or to have a particular type of food.

Consumers do not exhibit much, if any, exclusive loyalty to either types of restaurants, specific chains or to specific types of foods. On average, they have, in the past year, visited more than six of the chains studied, consumed more than eight types of foods and have visited fast casuals and quick-service restaurants as well as full-service venues.

Although quick-serves foster the most frequent visits, fullservice restaurants earned the highest levels of satisfaction.

Interestingly, fast casuals are no more satisfying than quick-service brands.

Providing a relaxed, comfortable atmosphere with physical menus, meals prepared to order, and popular pricing for everyday dining are, by far, the most important considerations for choosing a restaurant to visit. Those benefits are far more broadly desirable than many of the current “hot buttons” for the NextGen themes like technology, health, and the environment and/or limited menus. Nonetheless, there are significant minorities of consumers who find those NextGen themes to be desirable.

A quick editor’s note on the above: Much of the NextGen movement isn’t necessarily tied to recreating what guests expect of full-service dining—it’s to take the hallmarks and do them better/more consistently. That’s where fast casual first threw the quick-service game into chaos. Chipotle reset the bar by taking the pillars of the category (speed and convenience) and bringing them forward with reimagined food quality and more customization than ever. You don’t always have to reinvent the wheel to spin it.

RESPONSE TO NEXTGEN CONCEPTS

Consistent with the earlier findings that consumers like to visit different chains and different restaurant formats, all five of the NextGen concepts studied enjoyed high levels of positive response.

On average, more than four of five consumers liked the ideas and would visit them if conveniently located. Largely, broad interest in the concepts can be traced to their common prom-

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I N D U S T R Y D ATA

RESPONDENTS HAD ANNUAL

ise of highly desirable benefits—new, full-service restaurant that offers a varied menu with great tasting food, comfortable seating, table service, and a relaxing atmosphere.

Consumers were most attracted to the idea that emphasizes convenience and comfort—satisfied—well-fed and comfortable, better food, and convenient service at affordable prices; in a hurry, want to relax, order ahead, have your order delivered. Almost two-thirds of consumers liked that concept a lot (61 versus 39–51 percent) and more than half claimed they would definitely visit (53 versus 36–47 percent). This concept was particularly associated with dinner meals and was disproportionately appealing to 55- to 69-year-olds.

A slightly narrower appeal was expressed for the concepts that promised menu differentiation (the most innovative, chef-inspired creations) or a nonchain experience (we don’t look, feel, or operate like a chain restaurant). Menu differentiation was also associated with dinners and, particularly, special occasions. Interest in a non-chain experience was particularly expressed by women and consumers with higher incomes.

Least appealing were the concepts that focused on technology or health and environment. It is important to note, however, those concepts still had strong levels of appeal, but to a smaller audience. Notably,

HOUSEHOLD INCOMES $

OF

35,000 +

\

30

% REPORTED $

100,000 AND ABOVE

The Charts

•Reasons for visiting

6065+ 6755+595056+ 575056+ 5546+534441+ 28 restaurants in the past year/ ■■ 18–34

YEAR OLDS

60

■■ 35-54

■■ 55-69

YEAR OLDS

% 67 % 65

YEAR OLDS

%

% 59 55 55 %

%

50

% % 57 56 %

50

% 56 55% %

46% 46

% 53 %

44% 41%

Having a Celebrate relaxing meal special occasion

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IND U S T RY- W ID E I S SU E

Socialize

Didn’t want to cook

Have particular type of food

Save time

M A R C H 2 0 24

ADOBE STOCK / PRINS PRODUCTIONS

28%

I N D U S T R Y D ATA

both of these concepts were disproportionately associated with dining alone and particularly attractive to men. Interest in the technology theme was skewed to 18–34 year-old single Black men. The health and environment theme was particularly appreciated by 35- to 54-year-old married men with kids living at home.

ON AVERAGE, MORE THAN

4 OF 5

CONSUMERS LIKED THE IDEAS AND

WOULD VISIT THEM IF CONVENIENTLY LOCATED. CONSUMERS WERE

Another note: One of the secret weapons of NextGen concepts is their ability to flex technology by fit. Customers generally aren’t going to say they want tech in their sit-down experience unless it’s supplementing what they expect of the brand.

That’s generally on the restaurant to figure out. So a brand like bartaco and its QR code ordering complements the approach with a team of customer-experience providers in the dining room, running food and answering questions. Other chains

MOST ATTRACTED

might have pay-at-the-table tech and tablets to enable servers to cover more ground and have information at the ready, or KDS systems in the back to boost consistency and open them to a wider labor pool that can train faster. Tech can be invisible, or not, but NextGen concepts find ways to deploy innovation to improve the experience rather than take something away.

For several of the concepts, specific words/phrases evoked positive consumer attention and disproportionately led to interest: “Convenience” and “comfort”—reasonable prices; freshly

prepared foods; foods I crave; good wait staff and/ or the promise of saving time.

3735+ 26 66+47 4644+ 30 3634+ 232944+ 193134+ 223029+ 172723+ 192617+ 7 TO THE IDEA THAT EMPHASIZES

CONVENIENCE AND

COMFORT

•Visit Frequency/

Menu differentiation—customized food order; foods

made-to-order; freshly prepared foods; choices you can’t get elsewhere; limited, but great choices.

■■ 18–34 YEAR OLDS ■■ 35-54 YEAR OLDS

66% 66%

Once per week, or more

■■ 55-69 YEAR OLDS

47 %

37 % 35%

26

FULL SERVICE

30%

%

QUICK SERVICE

FAST CASUAL

44%

36% 34%

31% 34

29

%

23

RESTAURANT ICONS: ADOBE STOCK / ICONS-STUDIO

46% 44%

%

19%

%

22

%

30% 29%

17%

27% 23%

19%

26%

17%

7%

Try place that had been recommended

M A R C H 2 0 24

Family meal with kids

Try new type/style of food

Pickup food en route to school/work

Try place that had been advertised

Watch sporting event

IND U S T RY- W ID E I S SU E

73

I N D U S T R Y D ATA

tally conscious/sustainability; organic ingredients.

Although most people (84 percent) were suspicious of the concepts in one or more ways, only a fear of prices being too high (45 percent) was articulated by more than a third of consumers. At lower levels, to varying degrees by concept, consumers, on average, were concerned with portions being too small, the restaurant being too noisy/ busy, bland food that doesn’t look appetizing, etc.

Independent of the concepts studied and totally consistent with the foregoing findings, consumers would be far more influenced by words and phrases related to fresh preparation of

84

their meals and/or unique recipes than to the use of healthy, good-for-you ingredients. Here again, however, these data points do not mean that there is not a market for restaurants that cater to the health conscious. But rather, that there would be far broader appeal in flavorful descriptions than to those related to healthful ingredients.

% WERE SUSPICIOUS OF THE CONCEPTS IN ONE OR MORE WAYS

\ WITH MORE THAN A THIRD OF CONSUMERS SAYING

RECOMMENDATIONS AND CONSIDERATIONS

FEAR OF

PRICES BEING

TOO HIGH

There is definitely an opportunity for a NextGen class of full-service restaurants built around a common theme of great tasting food with comfort in a relaxed atmosphere. Consumers are ready and willing to try almost any type of new restaurant concept because they like varied

44 36 + 39 27 20 + 21 2+ 7 3 + 7156+ 60 2436+ 34 1+21+ •Satisfaction/ ■■ FULL SERVICE

■■ QUICK SERVICE

44

27%

■■ FAST CASUAL

%

% 39 36 %

20 21% %

•Most important considerations for restaurant selection/

■■ DESIRABLE ■■ EXTREMELY DESIRABLE

Relaxing atmosphere

85%

% 60 56

Extremely Satisfied

36% 34%

24

Satisfied Net

74

IND U S T RY- W ID E I S SU E

%

Somewhat Satisfied

Very Satisfied

2

%

7 % 3%

%

Knowledgeable, attentive wait staff

84%

71%

%

85=39= 39

84=43= 43

%

Comfortable seating

84%

84=41= 41

%

Not feeling rushed

81%

Not Very Satisfied

81=40= 40

%

Popularly priced for everyday dining

79=32= 32

1% 2% 1%

79%

Not at All Satisfied

Meals prepared to order

78%

%

78=38= 38

%

ADOBE STOCK / GIRAFCHIK

Health and environment—healthy items; environmen-

I N D U S T R Y D ATA

CONSUMERS ARE

experiences as well as varied menus.

Under that overall umbrella there are numerous opportunities that appeal to varying numbers of consumers based on their differential priorities.

The broadest opportunity is for full-service restaurants that combine the promise of a relaxed on-premises experience with the convenient efficiency for those in a hurry or with takeout needs—and all at affordable prices. Whether or not this triple-benefit restaurant can be successful from an operations and financial perspective must be carefully evaluated.

Lower, but not insignificant opportunities, exist for new full-service restaurants that focus on menu differentiation or a non-chain experience

Can customize ingredients in order

72%

72=33= 33

%

Physical menus to hold and read

72%

72=32= 32

%

Entrees under $12

71%

71=32= 36

%

70=29=

Easy to get meal in short amount of time

70

%

70=29= 29

%

Menus with detailed descriptions

61

%

61=24= 24

%

Able to get in/out quickly

61%

61=23= 23

60%

%

CONCEPT BECAUSE THEY LIKE

Taken together, it is likely that the Next Gen era of full-service restaurants will not be a singleminded, homogeneous group, but rather niche oriented clusters of restaurants targeted to specific/ unique consumer need/benefit segments rather than trying to broadly appeal to the masses. 

VARIED EXPERIENCES AS WELL AS

VARIED MENUS

DANNY KLEIN IS THE EDITORIAL DIRECTOR OF QSR AND FSR. HE CAN BE REACHED AT DKLEIN@WTWHMEDIA.COM.

Environmentally sensitive plates, etc.

39=16= 16

Some locally inspired menu items

Lots of low-calorie/ low-fat items

59%

59=23= 23

Décor consistent with type of food %

Electronic paying at table

56=23=

23%

Offering alcoholic beverages

55

%

55=26=

26

%

Menus with pictures of every item

52%

52=26= 22

%

Not having look/feel of a chain

%

60=22= 22

NEW

RESTAURANT

39%

52%

Many unique items/recipes

WILLING

TO TRY ALMOST ANY TYPE OF

■■ DESIRABLE ■■ EXTREMELY DESIRABLE

56%

29%

AND

•The lesser considerations/

Entrees from $12–$24

70%

or technology and/or a healthy, environmentally conscious theme.

There is some evidence that the alternative themes can be disproportionately used to attract specific demographic groups.

READY

52=17= 17

47=17= 17

%

47%

47=23= 13

39% %

Soft background music

44%

44=17= 17

43=13= 13

%

50=19= 19

42%

%

42%

%

%

%

42=16= 19

%

37=17= 17

%

37=14= 14

%

Live music/ entertainment

35%

42=19= 19

39=16= 16

Modern, high-tech décor

37%

Sustainable to-go packaging %

40=14= 14

All/mostly organic ingredients

37%

Traditional, classic décor

43%

40%

Electronic ordering at table

Simple menu (not too many choices)

Kid friendly

Modern, contemporary atmosphere

50%

47%

%

37=14= 13

%

TV monitors

35%

37=14= 13

%

Lots of gluten-free items %

25%

25=11= 11

%

I N D U S T R Y D ATA

•Likelihood of visiting

•Overall opinion of concept/ 86%

restaurant due to concept/ 86%

51+35+86+1+0+13 46+40+86+13+2+0 42+33+75+11+2+12 36+40+76+16+6+2 39+34+73+5+2+20 40+41+81+14+3+2 51+37+88+1+0+12 47+38+85+13+2+0 61+26+87+2+0+12 53+35+88+10+2+1 51%

Menu Differentiation

46%

35%

1

%

• LIKE IT A LOT

• LIKE IT A LITTLE

• LIKE IT NET

• DISLIKE A LITTLE

0

• DISLIKE A LOT

75%

42%

• LIKE IT NET

• DISLIKE A LITTLE

NEITHER LIKE NOR DISLIKE

2

%

• DISLIKE A LOT

• LIKE IT NET

• PROBABLY WOULD

• DISLIKE A LITTLE

• DEFINITELY WOULD

• PROBABLY WOULD

81%

2

• DEFINITELY WOULD

• PROBABLY WOULD

• LIKE IT A LOT

• LIKE IT A LITTLE

• LIKE IT NET

1

• DISLIKE A LITTLE

0

%

• DISLIKE A LOT

• DEFINITELY WOULD

• PROBABLY WOULD

• WOULD NET

• MIGHT/ MIGHT NOT

3%

• PROBABLY NOT

2%

• DEFINITELY NOT

Non-chain Experience

• MIGHT/ MIGHT NOT

2%

• PROBABLY NOT

0%

• DEFINITELY NOT

Convenience and Comfort

53

%

34%

26%

2 •

%

• LIKE IT A LITTLE

2%

• DEFINITELY NOT

88%

Convenience and Comfort

61%

• PROBABLY NOT

Health and Environment

13%

12%

• NEITHER LIKE NOR DISLIKE

6%

38%

87%

• LIKE IT A LOT

• WOULD NET

85%

47%

37%

• MIGHT/ MIGHT NOT

14%

%

• NEITHER LIKE NOR DISLIKE

0%

• DEFINITELY NOT

41%

Non-chain Experience

%

• WOULD NET

20%

• DISLIKE A LOT

2%

• PROBABLY NOT

Technology

16%

12%

• NEITHER LIKE NOR DISLIKE

• MIGHT/ MIGHT NOT

40%

88%

51%

• WOULD NET

76%

40%

34%

• LIKE IT A LITTLE

• DEFINITELY WOULD

Health and Environment

5%

• LIKE IT A LOT

•

13%

36%

73%

39%

13%

33%

• LIKE IT A LITTLE

40%

Technology

11%

• LIKE IT A LOT

%

Menu Differentiation

• LIKE IT NET

DISLIKE A LITTLE

0 •

%

DISLIKE A LOT

12%

• NEITHER LIKE NOR DISLIKE

10%

• DEFINITELY WOULD

• PROBABLY WOULD

• WOULD NET

• MIGHT/ MIGHT NOT

2%

• PROBABLY NOT

1%

• DEFINITELY NOT

I N D U S T R Y D ATA

•Occasions/

82 +33+20 62+46 46+38+24 3436+ +65 77+66+35+17 54+43 42+30+32 2332+ 71+76+40+26 67+52 42+33+34 2438+ 72+64+38+20 54+38 43+38+24 28+26 82+69+37+21 56+43 46+40+24 2636+ 82%

Menu Differentiation

65%

62%

33

• DINNER

77%

• LUNCH

46%

%

20

• BREAKFAST

46%

%

• LIGHT MEALS/ SNACKS

• WEEKENDS

66%

54%

35%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

71%

• LUNCH

• BREAKFAST

72%

• WEEKENDS

76%

67%

40

• DINNER

• LIGHT MEALS/ SNACKS

• LUNCH

%

• BREAKFAST

26

43

42%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WEEKENDS

30%

• WITH FAMILY, INCLUDING KIDS

52%

42%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

33%

• WITH FAMILY, INCLUDING KIDS

54%

40%

43%

38%

20%

RESTAURANT ICONS: ADOBE STOCK / BRO VECTOR

82%

• LUNCH

• BREAKFAST

• LIGHT MEALS/ SNACKS

69%

• LUNCH

• WEEKENDS

56%

37%

• DINNER

• EVERYDAY MEALS

• ALONE

34%

• SPECIAL OCCASIONS

32%

32%

• EVERYDAY MEALS

• ALONE

23%

• SPECIAL OCCASIONS

34%

38%

• EVERYDAY MEALS

• ALONE

24%

• SPECIAL OCCASIONS

Non-chain Experience

64%

38%

• DINNER

36%

Health and Environment

%

• LIGHT MEALS/ SNACKS

• WITH FAMILY, INCLUDING KIDS

24

%

Technology

%

17%

• DINNER

38%

• BREAKFAST

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WITH FAMILY, INCLUDING KIDS

• WEEKENDS

28%

• EVERYDAY MEALS

• ALONE

26%

• SPECIAL OCCASIONS

Convenience and Comfort

43%

46%

40%

21%

• LIGHT MEALS/ SNACKS

24%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WITH FAMILY, INCLUDING KIDS

24

• ALONE

%

36%

• EVERYDAY MEALS

26%

• SPECIAL OCCASIONS

I N D U S T R Y D ATA

•Reasons for interest in restaurant/

4532+ 2926+ 2322+ 20+ 17+ 16+ 13+138+ 50+4241+ 4038+ 3734+ 33+ 29+ 26+ 2523+ 2118+ 1714+ 9 TOTAL

78

They have good food Reasonable prices

Freshly prepared foods Relaxing atmosphere

Food is made to order

Customize food order Foods I crave

Friendly, helpful, courteous personnel Located near home/work

Wide variety of entrees

Consistently good/well prepared

Saves me time

Unique foods/recipes

Choices you cant get elsewhere

Menu has healthy items

Menu has limited, but great choices Foods that are better for you Environmentally conscious/sustainability

Uses organic ingredients

Closest source when time limited

Lots of off-premises options

IND U S T RY- W ID E I S SU E

•Reasons to not dine/

TOTAL

45% 32% 29% 26% 23% 22% 22% 20% 20% 17 % 17% 16% 13% 13% 13% 8%

Prices too high

Small portions

Too noisy/busy

Food is too bland

Food doesn’t look appetizing

Entrees not freshly prepared Tables too close together

Food not hot enough when served Not enough variety of entrees

Menu is too complicated

Not enough variety of sides Menus are not easy to read

Not enough variety of healthy choices

Pre-orders not ready upon arrival Takeout packaging doesn’t keep temperature right

Too many food/beverage choices

M A R C H 2 0 24

ADOBE STOCK / RAWPIXEL.COM

50% 50% 42 % 41% 40% 38% 37 % 34% 34% 33% 33% 29% 29% 26% 25% 23% 21% 18% 17 % 14% 9%

•

I N D U S T R Y D ATA

Most influential characteristics and terms/ ■■ INFLUENTIAL

■■ GREATLY INFLUENTIAL

Made fresh daily

96%

96=39= 39 95=69=

%

69%

Fresh-baked breads

93%

93=60=

60%

Customizable

93%

88%

88=44= 44

93=54= 54 91=55= 55

87%

87=44=

87%

%

%

86%

86=47= 47

Local favorite

Fast service

90

%

90=47= 47

Authentic

90%

90=52=

Craveable

89%

89=50=

50%

89=46= 46

Down-home cooking

88%

88=51= 51

M A R C H 2 0 24

73% %

%

%

78=38= 38

%

74=31= 31

%

73=28= 28

%

Free-range

72=31= 31

72%

85%

Hormone-free meats

85=39= 39 85=39= 39

%

70% %

84 %

84=39= 39

%

83%

%

82%

82=38=

38%

82

%

82=33= 33

81%

81=42= 42

%

80=35= 35

%

69=31= 31

%

69=25= 25

%

Curated

69%

69=20= 20

%

Non-fat and low-fat options

67%

67=24= 24

%

Non-GMO options %

61%

61=26= 26

%

Vegetarian options

47%

47=20= 20

%

Gluten-free options

Hand breaded

80%

70=34= 34

Superfoods

69%

83=40= 40

%

Organic ingredients

69%

All-natural %

79=34= 34

Whole grain breads/rolls

Slow cooked

Bold flavors

89%

%

Secret family recipe

52%

78% 74%

Healthy choices %

79%

Grain-fed meats

Quick preparation %

■■ GREATLY INFLUENTIAL

Wholesome goodness

85%

91=49= 49

%

86=44= 44

91%

%

■■ INFLUENTIAL

Succulent

87=44= 44

Marinated

91=55= 55

44%

Clean ingredients

86%

terms/

Hand-cut/diced

Chef-inspired recipes

Seasoned to perfection

91%

%

Signature recipes

Premium meats

91%

Special sauces and seasonings

Original recipe

Hot, fresh, and delicious

95%

•Less influential

%

47%

47=16= 16

%

IND U S T RY- W ID E I S SU E

79

®

®

The

Now NextGen

QSR

FSR

of

Restaurants Backed by recent data and insight from restaurant leaders, the emerging category is defining itself with chefinspired menus and fresh ingredients, top-notch hospitality, and more as it evolves and grows into the future.

And it’s all happening today. /

BY CALLIE EVERGREEN

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IND U S T RY- W ID E I S SU E

M A R C H 2 0 24

I N D U S T R Y D ATA

A STUDY BY KING-CASEY SHOWS MOST GUESTS ARE DRAWN TO FULL-SERVICE CONCEPTS THAT COMBINE DIVERSE MENUS AND COMFORTABLE ATMOSPHERES.

GINGER BRANDS HOSPITALITY GROUP, GAUGE ICON: ADOBE STOCK / EMIL’

It’s no surprise consumers are flocking to restaurant concepts where the guest experience is the primary focus, which is

M A R C H 2 0 24

why the emerging NextGen Casual segment continues to be a winning formula for success. Combining the best of the fullservice sector’s focus on hospitality with the technological advantages, comfort, and convenience seen in quick-service and fast-casual concepts, the category has become synonymous with constant evolution, improvement, and sustainable growth.

A recent consumer report by King-Casey (page 68), a leader in restaurant and foodservice business data analytics and consumer insights, reveals the evolving preferences of diners have significantly shifted toward full-service restaurants that blend the allure of diverse menus with the comfort of a relaxed dining atmosphere.

One revealing outcome: Though quick-serves foster the most frequent visits, full-service restaurants earned the highest levels of customer satisfaction, surpassing fast casuals as well. The net satisfaction score of quick service was 56 percent, fast casual 60 percent, full-service was 71 percent.

“To see that full-service restaurants create the highest levels of satisfaction suggests that full-service brands have reinvested appropriately in the guest experience following the deep staffing challenges of the pandemic in 2020,” says James O’Reilly, CEO of Ascent Hospitality Management— whose portfolio includes more than 600 Huddle House and Perkins restaurants.

IND U S T RY- W ID E I S SU E

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I N D U S T R Y D ATA

“It’s also reassuring to see that guests continue to value great tasting food, a comfortable relaxing environment, and affordable prices,” he continues. “While this is a difficult balance to strike sometimes in a highly inflationary environment, it reinforces my belief that a renaissance for family dining is on the horizon, which we intend to lead at Ascent.”

When consumers are deciding where to dine, the most important considerations are a relaxing atmosphere, knowledgeable and attentive wait staff, comfortable seating, and not feeling rushed, which were all rated desirable by more than 80 percent of study respondents.

“These usage behaviors and priorities ring true at Firebirds,” says Christine Lorusso, senior director of digital marketing at NextGen Casual concept, Firebirds Wood Fired Grill. “We cater to guests looking for a relaxing meal at a decent price point, as well as those who are celebrating everything from birthdays to engagements. Our goal is to create extraordinary experiences, no matter the reason for dining, so that guests continue to make us their restaurant of choice.”

Firebirds kept innovation at the forefront following the pandemic, where many brands fizzled on initiatives after COVID. The classic chain found a way to blend technology that speeds up

operations while balancing hospitality and the guest experience. Examples include fully integrating third-party delivery and training delivery service providers to use Flybuy, a dashboard platform where workers can see incoming orders all in one place. Wait times dipped as low as 30 seconds while increasing repeat visits, and it also cut down carbon emissions by 11,857g each month by keeping cars from idling in the parking lot, FSR previously reported.

Another illuminating statistic is Firebirds’ customer visit frequency. Before the pandemic, patrons frequented the brand about six times

FIREBIRDS GUESTS VISIT THE RESTAURANT 10 TIMES PER YEAR ON AVERAGE, UP FROM SIX TIMES PER YEAR PRE-COVID.

“ We cater to guests looking for a relaxing meal at a decent price point, as well as those who are celebrating everything from birthdays to engagements.”

 CHRISTINE LORUSSO

 FIREBIRDS KEPT INNOVATION AT THE FOREFRONT DURING COVID.

FIREBIRDS WOOD FIRED GRILL (5)

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IND U S T RY- W ID E I S SU E

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FIREBIRDS WOOD FIRED GRILL

I N D U S T R Y D ATA

per year. Currently, this figure has risen to more than 10 visits annually, which can be attributed to offering more diverse dining options, such as family meals, feasts, and takeout services.

While a relaxed and comfortable dining environment and attentive staff were the keys for consumers per the study, “hot button” NextGen themes like a limited menu, health, the environment, and technology fell further down on the list. But, it’s worth noting there are significant minorities of consumers who find those NextGen themes to be desirable.

“It doesn’t surprise me that ‘hot buttons’ fall a little bit lower on the priority list,” Lorusso says.

“Themes like technology, sustainability, and chefinspired menus should enhance the experience, not overshadow the importance of food quality or service.”

Liz Moskow, a food futurist and principal at Bread&Circus Ltd. says, “when asked, most consumers will tell you they want to make more sustainable choices for the planet and be early adopters of technology to enhance convenience, but when it comes to dining, and food consumption in general, this data only confirms what hospitality experts with restaurant experience already know to be true; emotions rule the day when choosing what to eat and where to eat it. This is the core of hospitality; precisely catering to human needs and paying attention to what drives people to motivate, act, choose, purchase, eat, return.”

Ginger Flesher-Sonnier, owner and CEO of the Ginger Brands Hospitality Group, agrees. “People say they flock to Throw Social because we provide

M A R C H 2 0 24

IND U S T RY- W ID E I S SU E

83

I N D U S T R Y D ATA

 GINGER FLESHER-SONNIER

a casual, comfortable, relaxed vibe with plenty going on if they choose to participate,” she says. A math teacher turned entrepreneur, Flesher-Sonnier founded the experiential hospitality group that includes brands THRōW Social, Escape Room Live (sold in 2021), Kick Axe Throwing, and coming in 2024, Yacht Club Social.

“They love that they can spend two to four hours—or more—with us and never feel rushed to leave, but know that they can pop in and out if they just want a quick bite. In particular, having music and games combined with fresh and tasty food seems to be a winning ticket,” she says.

“The NextGen customer wants fresh-made food in a comfortable setting. They also want it to be quick and convenient. Staff engagement matters a lot as well. It is important to strike the right balance of convenience and hospitality,” adds Scott Lawton, CEO and cofounder of bartaco.

Meanwhile, the largest potential concern for customers when trying a new restaurant was a fear of prices being too high, which was articulated by more than a third of consumers. At lower levels and to varying degrees, consumers were concerned with portions being too small, the res-

“ They love that they can spend two to four hours—or more— with us and never feel rushed to leave, but know that they can pop in and out if they just want a quick bite.”

GINGER BRANDS HOSPITALITY GROUP (3)

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IND U S T RY- W ID E I S SU E

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I N D U S T R Y D ATA

taurant being too noisy/busy, and bland food that doesn’t look appetizing.

CONSUMERS ARE CLAMORING FOR MORE SOCIAL ENTERTAINMENT. 

THE NEW DEFINITION OF “VALUE” One of the largest recent shifts the restaurant industry has seen is the redefining of what “value” means to guests. “Value is not always perceived as being cost-based. Value can come at a higher price, so long as the quality and experience is worth it,” Lorusso says.

Brandy Blackwell, vice president of marketing for Another Broken Egg Café, says the study “further validates that value is not always created through discounts and promotions. Value is also realized through the delivery of a consistently great dining experience and an environment where connections can be celebrated and fostered.” Another Broken Egg Café is one of the fastest-growing, franchised breakfast and brunch concepts in the nation, with 95 locations—nearly 20 of which opened in 2023—and more in development, part of its “Road to 100” plan for 2024.

GINGER BRANDS HOSPITALITY GROUP (6)

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Black Bear Diner, which has more than 140 locations in 14 states and counting, is known for its home-cooked comfort foods and focus on providing guests with exceptional service. Its growth plan for 2024 includes welcoming at least nine new franchise-owned diners and five corporate restaurants. The new diners will be a combination of conversions and ground-up new builds and will incorporate recent design enhancements to better accommodate off-premises dining, including an exterior delivery and pickup window. “Our investments at Black Bear focus on providing efficiencies and enhancing the guest experience without removing the connection our teams have with our guests,” Adams says.

“Our belief is guests continue to seek experiences that provide genuine hospitality, and our intent is to continue to emphasize this at Black Bear Diner,” she adds. “This has always been a pillar for us coupled with serving up an abundance of classic all-American fare in our beautiful cabin-themed diners. This heritage truly stands

86

IND U S T RY- W ID E I S SU E

the test of time and wrapped together provides the value guests are looking for.”

 CAROLINE SKINNER

 TUPELO HONEY IS KNOWN FOR ITS SCRATCH-MADE SOUTHERN FOOD.

A FOCUS ON SCRATCH-MADE FOOD NextGen Casual restaurants have innovative, chef-inspired creations, typically with a streamlined menu and customization options. The study defined NextGen Concepts in the following way: “We are not trying to be everything to all people—just delivering better product consistency of clean, fresh, and craveable food.”

Last February, Asheville, North Carolina-based Tupelo Honey launched a program for its “raving regulars.” The brand empowered stores with budgetary money, tools, and marketing programs to recognize and reward loyal customers, including secret menu items, participation in focus groups, and tasting new products. A large part of what’s driving customers to return is the brand’s fresh and made-from-scratch food, from its blueberry compote that accompanies the blueberry buttermilk waffles for brunch to chef-inspired entrees like its Grilled Salmon and Creamy Quinoa with sustainably farmed Atlantic salmon, roasted carrots and cauliflower, smoked harissa sauce, and chives.

“The study affirms what we see/hear from our customers about their affinity for our brand. It comes down to our commitment to scratch-made food and our unique niche in the Southern food space,” says Caroline Skinner, chief operating officer of Tupelo Honey Hospitality. “When these two things are paired with best-in-class hospitality and a comfortable dining experience, we excel at delivering a great guest experience.”

As far as food categories go, 81 percent of respondents say they ordered a burger in the past year. Mexican food and tacos (71 percent) were a close second, followed by chicken (69 percent), sandwiches (66 percent), breakfast (64 percent), Chinese food (62 percent), coffee/tea (58 percent), Italian/pasta (57 percent), barbeque (48 percent), steakhouse/prime rib (46 percent), seafood excluding sushi (38 percent), Japanese/sushi (30 percent), Thai/Korean/other Asian (26 percent), then Greek, Mediterranean, and Indian ordered by less than 20 percent of study participants.

Andrew Jaffe, chief marketing officer of Snooze, an AM Eatery, notes the brand’s focus on menu variety and creativity delivers on guests’ evolving needs and wants. “We pride ourselves in enhancing our Snooze experience with creative twists on our menu, unique multiethnic dishes,

M A R C H 2 0 24

TUPELO HONEY (4)

Moskow notes “it seems to be increasingly more important for all kinds of restaurants to provide value, both real and perceived to their consumers, in new and engaging ways; portion sizing to price value, and sourcing of ingredients, the usage of healthy and/or trending ingredients, and menu call outs that evoke emotions and feelings.

These feelings are what ultimately enhance both in-house and off-premises dining experiences.”

“Guests will continue to seek out brands that can deliver the full-value equation, which is much more than just the check,” adds Anita Adams, CEO of Black Bear Diner. “Enhanced technology is important to address a number of challenges restaurants face, however, will never be a substitute for hospitality.”

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balanced with morning breakfast staples and healthy lifestyle items. All of this begins with sourcing responsibly ingredients that are always thoughtfully prepared and fresh,” he says.

Cai Palmiter, vice president of marketing for upscale ramen concept JINYA Holdings, notes the room for the growing ramen category to differentiate itself in the future, highlighting “an interesting challenge. It speaks to the broader issue of how specific cuisines are perceived and categorized by consumers,” she says. “It is our struggle with consumers to recognize ‘ramen’ and not ‘Japanese’ cravings in general because it is either broad or just focused on ‘sushi.’”

“It’s about shifting perceptions and educating the market,” she adds. “This is a classic example of how businesses need to not only excel in their product offering but also in how they communicate their unique selling points to the market. By focusing on creating a strong association with ramen, JINYA is aiming to break through the barriers of generalization and carve out a distinct niche in the culinary mindscape of its customers.”

Tomo Takahashi initially started the concept in Japan before bringing JINYA stateside to Hollywood, California, in 2010, and growing it to more than 60 locations. “At JINYA, the commitment to preparing food fresh and made-to-order truly makes a significant impact on customer perception and satisfaction. This approach, while more labor intensive, sets JINYA apart in a market often flooded with pre-prepared or quick-serve options,” Palmiter adds.

TECH AND OFF-PREMISES Geo Concepcion, CEO of The Greene Turtle, recalls how important digital ordering and delivery became in the full-service world, which was crystallized in focus by the pandemic. “With that wave behind us, we’re now seeing that guests want a dine-in experience that offers great service and value. The study confirms what we’re seeing day to day as our sales growth is coming from our late-night and happy-hour periods rather than off premises, as it had in the past few years,” he says.

In the end, NextGen Casual restaurants that find ways to enhance their offerings with human touches that are designed to amplify customer service, hospitality, convenience, and customization are poised to succeed.

“We’re always looking for ways to utilize technology to help us more effectively deliver these

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IND U S T RY- W ID E I S SU E

“ We’re always looking for ways to utilize technology to help us more effectively deliver these core expectations.”

 GEO CONCEPCION

 GREENE TURTLE EMPHASIZES THE IMPORTANCE OF SERVICE AND VALUE.

core expectations. While other revenue channels [delivery, catering, pickup, etc.] are certainly beneficial, they aren’t our primary focus,” says Greg Graber, founder and CEO of Heritage Restaurant Brands, the franchisor of nearly 50 restaurants with concepts including Cool Hand Luke’s, a steakhouse/saloon; Perko’s Cafe Grill, which serves American family comfort food; and Huckleberry’s, a breakfast and lunch concept that serves up “Southern cookin’ with a California twist.”

“These revenue channels are primarily used by our loyal guests who enjoy the in-restaurant experience and then take advantage of our other options as needed,” he says. “If we take our eye off guests’ core expectations, we will eventually erode our loyal guest base and all revenue channels will decline. Consumers must be able to rely on your primary deliverables and, when they do, they’ll be much more apt to try new ways of experiencing the brand.”

Moskow believes tech is meant to encourage customer loyalty, provide deeper perceived or real value, and bolster a sense of human importance, and/or provide consumers with enhanced convenience and speed. “I see sustainability practices and the use of technology tools as layers to effective restaurant management; these layers should be added on top of consistent hospitality practices to make that restaurant selection more appealing, more satisfying, and more frequent,” she says.

“What good NextGen Casual concepts can take away from this is that by providing the value already inherent to the fast-casual segment— quality, price value, consistency—they are best positioned to layer on personal touches that will enhance hospitality and foster comfort and belonging,” she adds.

“While this can be enhanced off-premises via pickup and delivery to some extent, most of the focus needs to be on enhancing the in-store experience (dine-in or pickup) to make people feel a sense of connection to the brand, the location, and to the people who make each unit run effectively. This focuses on the restaurant customer, but begins with educating and incentivizing internal teams with new training protocols, employee incentives, and real organizational indoctrination from the CEO down to the dishwasher on the power of what true hospitality and personal human connection and interaction can do.”  CALLIE EVERGREEN IS THE EDITOR OF FSR. SHE CAN BE REACHED AT CEVERGREEN@WTWHMEDIA.COM.

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THE GREENE TURTLE (3)

I N D U S T R Y D ATA

MARCH 2024

SmartChain V E N D O R

R E S O U R C E S

/

T R E N D S

/

N E W

P R O D U C T S

®

The rise of digital signage at quickservice restaurants.

THE EVOLUTION OF

DIGITAL SIGNAGE SONY ELECTRONICS

/ BY ABBY WINTERBURN

Personalization P90

Content Optimization P98

MARCH 2024 | SPONSORED SECTION

Hardware Innovation

Key Players P106

P102

I N D U S T RY- W I D E I S S U E

89

SmartChain Digital Signage

How Personalization Leads to Customer Satisfaction Enhance customer’s dining experience with digital signage.

90

I N D U S T RY- W I D E I S S U E

PEERLESS-AV

I

n the dynamic world of quick-service restaurants, digital signage has emerged as a pivotal tool for enhancing customer experience and operational efficiency. The advancement of digital signage has played a transformative role in the restaurant industry, specifically impacting customer engagement, personalization, and the integration of advanced technologies.

“Audience engagement remains a constant concern, requiring operators to produce captivating and interactive content to retain viewer interest consistently,” says Megan Zeller, senior director of business development at Peerless-AV. In the ever-competitive quick-service sector, capturing and maintaining customer attention is crucial. Digital signage offers an interactive platform to engage customers with visually appealing and dynamic content. This engagement is not just about displaying information; it’s about creating an immersive experience that resonates with the audience.

The evolution of digital signage is largely driven by technological advancements. A key development in digital signage is the incorporation of AI and machine learning, which enhances the personalization of content. “The rise of AI and machine learning contributes to personalized content delivery by analyzing audience demographics and behavior, ensuring a more targeted and engaging viewer experience,” Zeller says. By leveraging these technologies, restaurants can deliver content that is not only relevant but also tailored to individual customer preferences, thereby enhancing the overall dining experience. This personalization technology is also critical in capturing and maintaining the attention of increasingly discerning audiences.

Peerless-AV

“Customers now expect digital signage not only to convey information clearly and quickly but also to provide a seamless, personalized experience.”

Over the past few years, there have been several global chances, including the COVID-19 pandemic, that has driven a change in consumer behaviors and expectations. Due to this, digital signage has had to undergo an extensive shift.

“The global pandemic acted as a catalyst, accelerating the implementation of digital solutions as businesses looked for innovative ways to engage with customers

in a contactless environment,” Zeller says.

“As a result, customers now expect digital signage not only to convey information clearly and quickly but also to provide a seamless, personalized experience.” The pandemic has undoubtedly accelerated the adoption of digital technologies, pushing quick-service restaurants to innovate rapidly to meet changing customer needs.

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overcome. “With audience attention spans shrinking, it’s vital to deliver captivating, valuable, content consistently,” says Shokouh Shafiei, CEO of DSA Signage.

Other difficult challenges discussed

by Theresa Hannen, marketing manager for LSI Industries, include whether or not a franchise has the bandwidth to create unique, timely content and the ability to post if at the appropriate departed times.

“Or would hiring an experienced custom software solutions provider to create your quick-service restaurant content, in turn keep your team focused on other critical areas of customer service,” Hannen says.

To address this, “Operators are turning to dynamic content management systems and data-driven content solutions,” Shafiei says. ”By harnessing real-time data, they can deliver personalized, relevant content that resonates with their audiences.”

The pandemic has also led to behavioral changes among customers. “Another change, which was a result of COVID-19, is diners have become accustomed to relying on their mobile device to browse a menu, to order, and to pay,” says Rich Ventura, vice president of professional display solutions at Sony Electronics.

Thankfully retailers have been able to make strides in their software developments.

“Our new software allows consumers, shoppers, and guests to control or ‘take over’ content on a screen using their own personal device,” Glass says. “This solved for a pain point during Sony Electronics COVID, but still lives on as a use the use of technology and communicacase that seems to add value and personaltion tools to understand customer preferization to the journey.” ences better. “Retailers have started using “The pandemic also drove the resurtechnology and communication tools to gence of QR codes, kiosks, and mobile understand what their customers’ needs/ ordering,” Ventura says. “Customers are preferences are, and implementing digilooking for all of these technologies to be tal signage solutions to communicate they integrated to best suit their needs and proknow and understand their customers’ vide a cohesive experience.” Integration needs in a more direct and timely manis key to offering a seamless and efficient ner,” Glass says. This approach not only service, meeting the high expectations of modern consumers. enhances customer satisfaction but also Furthermore, years of experience have builds a sense of trust and loyalty. taught consumers new display technolHowever, keeping content fresh and ogies can help minimize order mistakes engaging is another difficult challenge to

CREATIVE REALITIES, SONY ELECTRONICS

“Trends that are watch-worthy are those that deliver a sense of intelligence – personalized experiences where the digital signage element reacts to an individual, or, that is driven by new business rules.”

usage also increased exposure to personalized online content, and advancements in interactive technologies have raised the bar for engagement and relevance in digital signage experiences,” Zeller says.

“Customers now anticipate virtually stunning displays and context-aware content that aligns with their preferences.”

Restaurant operators are adapting to these changes by focusing on trends that enhance customer personalization. This includes trends like reducing indoor dining space while expanding ordering options, introducing dual drive-thrus to manage increased traffic, synchronizing digital experiences across various platforms, and offering curbside pickup for convenience.

“Trends that are watch-worthy are those that deliver a sense of intelligence – personalized experiences where the digital signage element reacts to an individual, or, that is driven by new business rules,” says Rodrick Glass, executive vice president of business development at Creative Realities.

These trends are complemented by 92

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SmartChain Digital Signage

LG BUSINESS SOLUTIONS USA, PEERLESS-AV

and modifications, which in the end, saves time and boosts efficiency. “As a result, consumers expect to spend less time at the drive-thru or waiting at the register, forcing quick-service restaurants to invest more heavily in digital displays or risk leaving money on the table,” says Dave Borelin, digital signage key account manager at LG Business Solutions USA.

Customers now anticipate accurate and real-time information on menus, pricing, and promotions. “Personalization has become a key expectation, with customers desiring tailored recommendations and content based on their preferences and order history,” says Thibaud Denolle, CEO of ACRELEC America. Companies have responded by deploying speech-to-order

LG Business Solutions USA

Digital signage plays a crucial role in enhancing order accuracy and reducing wait times, directly impacting customer satisfaction and operational efficiency.

“Order confirmation boards make it easier for customers to see their order and ensure it’s correct in real-time, improving order accuracy and reducing the total time of their visit, while also encouraging add-on purchases,” Borelin says.

“Consumers now expect more than just information from signage,” Shafiei says.

“They seek engagement and personalization. Operators need to communicate this by showcasing how their digital signage solutions enhance the customer journey and cater to individual needs.” This type of personalization has become extremely important, and shows itself in several different ways.

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Peerless-AV

solutions that enhance the ability to process orders efficiently.

The role of partnerships within the quick-service restaurant industry are also evolving. “A partner can help introduce products and software that helps to provide a more personalized customer experience through digital signage, like displays showing tailored menu suggestions,”

says Robert Heise, executive vice president and general manager at Global Display Solutions. These collaborations are essential in delivering a more refined and personalized dining experience.

Digital signage is not just a tool for customer engagement; it’s also crucial for operational flexibility. “Digital signage is critical to help restaurant managers adjust quickly to these ever-changing factors,” Hannen says.

“Restaurants now have a way to provide daily messaging to their customers,” Hannen says. “As store hours are adjusted, dayparting becomes easier to manage.

Digital signage provides the flexibility to update pricing, promotions and LTOs in real time.” This adaptability is vital in a fast-paced industry where change is the only constant.

The impact of digital signage on customer experience is profound yet often unnoticed. “Customers may not realize it, but what they expect most of their quickservice restaurant experience is 100 percent impacted by digital signage,” Hannen says. “Reduced wait times and increased order accuracy are direct results of the successful use of digital signage.” This technology has become an integral part of the dining experience, subtly shaping customer expectations and satisfaction.

Customer happiness is at the forefront of retainer’s minds and continues to be something strongly impacted by digital signage. “Self-ordering kiosks and outdoor digital menu boards are very different but both use digital signage to improve customer satisfaction and increase store profits,” Hannen says.

A customer-centric approach is essential in the quick-service restaurant industry because it is imperative to prioritize customers’ needs. To do this, restaurants need to, “identify key issues and resolve them efficiently, quickly, and effectively all the while taking customer’s feedback and incorporating it into the next upgrade,” says Harry Horn, vice president global marketing at Scala.

“Highlight personalized features and showcasing how digital signage enhances the overall customer experience should be integral to marketing efforts,” Denolle SPONSORED SECTION | MARCH 2024

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PANASONIC CONNECT NORTH AMERICA (2)

Panasonic Connect North America (2)

says. Actively seeking and responding to customer feedback also plays a crucial role in understanding expectations and making necessary improvements,” Denolle says. This approach ensures customers’ needs and feedback are at the heart of every decision and innovation.

Additionally, operators should also emphasize the use of cutting-edge technologies like AI, highlighting how the customer experience can be made more efficient. “Transparent communication through social media and newsletters can inform consumers about the efforts taken to enhance their digital signage experi96

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ence, building confidence and fostering a sense of connection between operators and their audience,” says Zeller.

“Technology integration is a foundation to success in the quick-service restaurant space,” says James Burdette, senior director at Panasonic Connect North America.

New technology enables digital transformation and allows overburdened staff to focus their time on serving customers, while creating memorable experiences.

“Brands and operators are continuing to see the advantages of digital signage and the importance digital plays in the overall customer experience,” says Henry

Mowat, president at Coates Group. Due to this, brands are deciding to invest in the advancement of the digital customer experience. “This includes personalization, integration of loyalty programs and bridging the gap between the digital and physical environments to align the mobile experience with the in-restaurant retail experience,” Mowat says.

“Customers want personalization, efficiency, and overall heightened dining experiences even in a casual setting,” Burdette says. “Solutions like digital signage are a great way to communicate with consumers and give them as much information as possible to make informed purchasing decisions.” This integration of technology is key to enhancing both customer experience and operational efficiency, providing a competitive edge in the fast-paced quick-service restaurant industry.

The future of digital signage screens relies heavily on quick-service restaurants’ abilities to engage their customers and provide them an exceptional, personal experience. “The more you understand the trends of each customer, the better the messaging can be,” Hannen says.

“Content software will need to interact with loyalty apps, provide data analytics, and capture the trends of each customer,” Hannen says. “As that happens, the content display and the screen can be more personalized and engaging than ever before, making customers feel valued and want to return.”

Digital signage has become an indispensable tool in the quick-service restaurant industry, revolutionizing the way businesses interact with and serve their customers. From personalizing the customer experience to streamlining operations, the impact of digital signage is far reaching. As technology continues to evolve, so too will the capabilities and applications of digital signage in enhancing the dining experience, making it an exciting time for both quick-service restaurant operators and customers alike. The future of quick-service restaurants will undoubtedly be heavily influenced by how effectively they leverage digital signage to meet evolving consumer demands and SC stay ahead in the competitive market.

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Optimize Digital Signage Content Content strategies that boost menu promotions.

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SONY ELECTRONICS

I

n an era where technology and customer preferences constantly evolve, digital content management has become a cornerstone for businesses, particularly in the quick-service restaurant industry. Digital content management is a multifaceted world that comes with various advantages, challenges, strategies, and emerging trends.

With digital signage comes a lot of advantages. “Some of the major advancements in digital signage technology include order confirmation, suggested upsales, menu item updates, pricing accuracy, personalized messaging, promotional videos, and reduced wait time,” says Theresa Hannen, marketing manager for LSI Industries. “With today’s technology, a camera will read a drive-thru customer license plate and match it up with past orders.”

“Content management can pose its own set of challenges, encompassing the creation of engaging material, timely scheduling, and ensuring it is optimized for the intended purpose and audience,” says Megan Zeller, senior director of business development at Peerless-AV. The quick-service restaurant industry faces unique challenges in digital signage and content management. One of the primary issues is optimizing content.

“Original digital signage menu boards did little more than the traditional menu boards because they were static,” says Rich Ventura, vice president at Sony Electronics.

“As digital signage has evolved, it’s added more dynamic, interactive, eye-catching content—–including audio and video that not only engages and entertains but showcases promotions and limited-time offerings,” Ventura says.

A second significant challenge is sys-

“Being able to control a display remotely through a device management platform is a faster, easier, and costeffective solution.” tem management, especially for brands with multiple locations. “Restaurants and brands with multiple locations want to be able to quickly and easily resolve issues,” Ventura says. “Being able to control a dis-

play remotely through a device management platform is a faster, easier, and costeffective solution.”

“Another challenge for quick-service restaurants is determining their unique digital signage needs because the ideal display solution often depends on menu size and daypart segments, along with the frequency of limited-time menu offers,” says Dave Borelin, digital signage key account manager at LG Business Solutions USA. A single digital display screen may be enough for some quick-service restaurant drive-thrus, while others may need multiple menu display boards to fit all of their menu information and promotional graphics. “The on-screen content is imporSPONSORED SECTION | MARCH 2024

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tant, too, with some chains using simple text and images, others using moving graphics, and some even using live video feeds from employee-facing cameras,” Borelin says.

To address these challenges, quickservice restaurants are adopting various strategies. “Establishing a robust content creation process and scheduling workflow streamlines the management process,”

best tailored to customer preference and behaviors.”

New digital display technology and content management solutions have also positively impacted the abilities of large digital content areas. “Operators can add order confirmation to drive-thrus without requiring a dedicated screen,” Borelin says. “Another clear benefit is the ability to advertise high-margin options, spe-

COATES GROUP NORTH AMERICA, SONY ELECTRONICS

Coates Group

Sony Electronics

Zeller says. Additionally, avoiding direct lifts from static menus to digital signage is critical. “Avoiding a direct ‘lift’ from static menu boards to digital signage is important as dynamic content works differently and requires a more data-driven approach,” says Rodrick Glass, executive vice president at Creative Realities.

Advancements in technology have significantly impacted digital content management. “AI and analytics are changing digital signage every day,” says Robert Heise, executive vice president and general manager at Global Display Solutions.

“This includes developing content that is 100

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cials, and upsell items with moving highdefinition graphics that capture customers’ attention with enhanced appetite appeal.”

Partnering with trusted brands can provide necessary support for navigating these challenges. “As the digital landscape becomes more complex, partnering with a trusted brand can provide operators with the stability and support they need to navigate challenges and maximize their digital signage investment,” says Shokouh Shafiei, CEO at DSA Signage.

It is vital that partner brands keep restaurant’s best interest in mind. “It’s always best to partner with a company that understands your needs and brand, that way they can fully create the perfect signage platform for your business and bypass all the possible issues,” says Harry Horn, vice president marketing global at Scala.

Digital signage is not just about displaying content, it’s also about integrating with overall business operations.

“Operators are looking to cloud-based content management solutions for more efficient and flexible updates, but are also relying on support and training,” Heise says. The integration of digital signage with data analytics offers unprecedented insights into business operations, aiding in planning and forecasting.

Digital signage has evolved from static displays to digital displays that communicate a wide range of information. “Now digital signage is a multimedia blend of useful, informational, beneficial, and sensational visual information,” Hannen says.

This evolution has led to the development of more sophisticated systems like those suggesting upsells based on customer data.

“The digital order screen can suggest an upsell that has a likely chance of increasing the ticket size due to its personalized and relevant content,” Hannen says.

Engaging customers through digital signage is crucial. “Properly placed screens that display relevant information help decrease perceived wait times because they keep customers engaged,” Hannen says. Additionally, the trend of highlighting a curated selection of menu items appeals to modern customer preferences.

“Customers today want to see a curated, targeted, more digestible view of the menu rather than the full menu,” says Henry Mowat, president of Coates Group.

Content management in the quick-service restaurant industry is a dynamic field that requires a careful balance of technology, strategy, and customer understanding. “Keeping digital content up to date, relevant, and consistent across all signage platforms is a logistical challenge, especially for large restaurant chains,” says Thibaud Denolle, CEO of ACRELEC America.

However, with the right approach and tools, it can transform the customer experience and drive success.

“With fully integrated, end-to-end digital signage solutions, consumers will embrace dining experiences and display higher satisfaction throughout the process,” says James Burdette, senior director at Panasonic Connect North America.

Embracing these advancements and challenges will ensure quick-service restaurants remain competitive and relevant. SC SPONSORED SECTION | MARCH 2024

C

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For more information: CoatesGroup.com info@coatesgroup.com

Leading the Industry Immersive Customer Experiences Powered

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Innovations in Signage

A comprehensive look at digital signage software and hardware innovation.

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n the rapidly evolving landscape of digital signage, understanding the intricate balance between software and hardware is key to deploying effective, engaging, and sustainable solutions. As technology continues to advance, restaurants are recognizing that. “Investing in reliable hardware and regularly updating software can greatly assist in mitigating technical issues,” says Megan Zeller, senior director of business development at Peerless-AV. The software powering digital signage systems have become increasingly sophisticated, offering seamless content management and integration with the latest technological advancements. “High-resolution displays and interactive technologies offer operators the opportunity to create immersive and engaging experiences,” says Shokouh Shaffei, the CEO of DSA Signage. Furthermore, AI and machine learning are revolutionizing content personalization, with features like facial recognition, which help in understanding customer behaviors.

“Finding the right content management system, selecting technology that can be serviced and supported, and choosing the right screen, the right sizes, and the optimal computing power is mission critical,” says Rich Ventura, vice president at Sony Electronics. This approach ensures that digital signage not only delivers compelling content but also aligns with the evolving expectations and demands of consumers.

On the hardware front, the choice of displays and underlying technology plays a pivotal role. Operators are moving towards system-on-a-chip based solutions and 24/7 displays, which offer resilience and reduce failure points. The latest models, offering brightness levels of up to 4,000 nits, are crucial for visibility in vari-

LG Business Solutions USA

“When doing research on a signage partner, operators should find monitors that are commercial grade and can run 24/7 rather than residential TVs.” ous lighting conditions, especially for outdoor applications like drive-thrus.

“Knowing every restaurant is different, the largest display manufacturers have developed a wide variety of high-brightness solutions,” which cater to diverse needs, says Dave Borelin, digital signage

key account manager at LG Business Solutions USA. The longevity and reliability of hardware are equally vital, as well as avoiding quick burnout. “When doing research on a signage partner, operators should find monitors that are commercial grade and can run 24/7 rather than residential TVs,” Shafiei says. “Partnering with a trusted digital signage brand has become increasingly crucial in today’s business environment,” as it guarantees quality, performance, and ongoing support, Zeller says.

As we delve deeper into the future of digital signage, emerging technologies are setting new benchmarks. Innovations such as touchscreens, outdoor digital menus, and customer-facing displays like touchscreen kiosks are reshaping customer interactions. These technologies SPONSORED SECTION | MARCH 2024

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enhance customer experience and open new avenues for businesses to upsell and improve their service efficiency.

The integration of AI and machine learning is not just a fad but a substantial shift towards more personalized and predictive content. “Digital signage in the quick-service restaurant environment is now about leveraging the power of tech-

Furthermore, in today’s era, sustainability is more than just a buzzword. It’s a critical component of any technology, including digital signage. “Finding a digital signage partner that emphasizes ecofriendly manufacturing of hardware, such as energy-efficient displays and sustainable manufacturing practices, is becoming increasingly important,” says Robert

LG BUSINESS SOLUTIONS USA, CREATIVE REALITIES

LG Business Solutions USA

Heise, executive vice president and general manager of Global Display Solutions.

This not only aligns with global environmental goals but also resonates with the growing consumer demand for responsible business practices.

One of the core challenges in digital signage is balancing cost with quality.

“A challenge operators Creative Realities face is finding the system nology advancements like AI to not only that incorporates the best of both hardimprove the customer experience but to ware and software according to budget,” learn more about the customer and leversays James Burdette, senior director at Panasonic Connect North America. age data to drive greater ROI.” says Henry However, smart investments in comMowat, president at Coates Group. This evolution signifies a shift from traditional digmercial displays designed for prolonged ital signage to smart, data-driven systems use and high reliability offer better longthat can adapt and respond to customer term value. This is particularly true for behaviors and preferences in real time. environments that require constant oper104

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ation, such as quick service restaurants and retail outlets.

Another crucial factor for success in digital signage is the strength of the ecosystem surrounding the technology. “A manufacturer who has strong relationships with content management system companies, mounting providers, content companies, and accessory providers, can help customers find the best solution for their needs,” Ventura says.

This robust ecosystem ensures that customers can address and solve their unique challenges effectively. It also positions manufacturers to scale and grow with their customers, adapting to changing needs and technologies.

The future of digital signage hinges on the ability to offer customization and personalization. “The introduction of interactive features and touchscreen capabilities is increasing customer engagement, enabling them to customize orders or explore additional menu options,” says Thibaud Denolle, CEO of ACRELEC America. This level of interaction enhances the customer experience but also provides valuable data that can be used to further refine marketing strategies and product offerings.

“Restaurant digital menu displays throughout the interior—including customer-facing displays such as touch screens kiosks—offer new opportunities for customer interaction including meal upgrades and upsell, ultimately increasing the average check,” says Harry Horn vice president marketing global at Scala.

The successful implementation of digital signage hinges on a delicate balance between cutting-edge software and robust hardware. As operators are implementing digital signage that takes advantage of technological advancements, the importance of choosing the right partners, staying abreast of industry standards, and ensuring regular maintenance cannot be overstated.

By focusing on these key aspects, businesses can harness the full potential of digital signage to enhance customer experiences, drive engagement, and ultimately, achieve a higher return on investment. SC SPONSORED SECTION | MARCH 2024

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Acrelec America

Coates Group

Creative Realities, Inc

5490 Campbells Run Rd. Pittsburgh, PA 15205 877-334-9737 acrelec.com/odmb

112 N. May St. Chicago, IL 60611 312-374-1365 coatesgroup.com

13100 Magisterial Drive, Suite 100 Louisville, KY 40223 404-528-918 cri.com

Acrelec is a global technology company focused on reinventing the customer experience for restaurant and retail brands.

Leveraging decades of software, hardware and service expertise, we develop and integrate new platforms that increase customer engagement, optimize efficiency and improve operations for the world’s leading smart stores.

For 60 years, Coates has partnered with the world’s leading QSR brands to drive impactful customer experiences through our digital and physical solutions. Today, connecting our customers’ digital and physical channels enables us to deliver actionable insights, driving increasingly dynamic, tailored, and personalized customer experiences.

Creative Realities, Inc. (cri) is a full-service, end-to-end digital signage solutions company with a suite of proprietary content management systems (cms). We apply data-driven design methods to create digital menu boards optimized to drive transaction size, volume, through-put and ultimately return on investment (roi) – at scale.

DSA Signage

Global Display Solutions

LG Electronics

2321 E. Gladwick St. Rancho Dominguez, CA 90220 866-691-1682 dsasignage.com

5217 28 Ave. Rockford, IL 61109 815-282-2328 displays.gds.com

2000 Millbrook Dr. Lincolnshire, IL 60069 888-865-3026 lg.com/us/business

DSA Signage is a US Manufacturer of UL-Listed Signage solutions, including indoor and outdoor, digital, and illuminated menu boards. Our in-house team of engineers can work with an existing design or create a new solution, using only the best components for extended durability and offering competitive lead times.

Global Display Solutions (gds), with over 40 years of experience, excels in developing and manufacturing cutting-edge technologies for indoor and outdoor digital signage displays.

Headquartered in Italy, the company boasts a global presence in over 20 countries, with a dedicated focus on customer-centric innovation and green business practices. GDS is renowned for its excellence in indoor and outdoor LCD and e-paper displays, ensuring quality and innovation at its core.

LG Electronics USA Business Solutions division serves commercial display customers in the U.S. lodging and hospitality, digital signage, systems integration, healthcare, education, government and industrial markets. With its dedicated engineering and customer support team, LG Business Solutions USA delivers business-to-business technology solutions tailored to the particular needs of business environments.

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From concept through installation LSI creates QSR solutions. We design and manufacture customized ways to grow your business using digital signage, menu boards, store décor and graphics, displays, and lighting. We are project management experts for complex, multi-site construction, engineering, and branding projects, as well as ongoing content management.

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Scala is globally known as the leader in stable, secure network deployment at scale when it comes to digital signage. With wide-ranging inhouse software, hardware, services, and support with an unmatched global delivery capability, we are continuously creating strategic partnerships with companies looking for a “marketing first” point of view to transform their physical space.

Sony Electronics’ Professional Display Solutions group develops and manufactures purpose-built audio and video technologies including presentation and display solutions. With flexible sizes, accommodating price points and various form factors, Sony provides versatile options and the consultative expertise to design and outfit corporate, education, entertainment, government, transportation, retail, and healthcare facilities.

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®

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FRANCHISE FORWARD

Are Multi-Concept Deals the Future of Franchising?

Whether its co-branded locations or freestanding sites on the same piece of land, franchisors are looking to sell multiple brands at once.

JACK IN THE BOX / DEL TAC0, GAUGE ICON: ADOBE STOCK / EMIL’

BY SAM DANLEY

QSR

FSR

Multi-concept restaurant franchising has taken off in recent years, riding the wave of companies adding multiple chains under one corporate umbrella.

The trend appeals to growth-minded operators who hit the saturation point with one brand in their market. For franchisors, it can mean dealing with fewer franchisees to sell more units.

That’s an advantage Jack in the Box unlocked after acquiring Del Taco two years ago. It inked around 130 new commitments for the Mexican chain in 2023. A sizable share of those were sold to existing franchisees looking to expand and take on a second brand.

“We also had a Del Taco franchisee enter the Jack in the Box system, so it’s been going both ways,” says VP of development Van Ingram. “The biggest benefit so far has been for Jack in the Box operators that don’t have additional development opportunities available to them in their core markets.

There’s a huge benefit when you have territory constraints on one brand and the ability to develop additional units of a second brand.”

Opportunities also exist to sell more

M A R C H 2 0 24

JACK IN THE BOX AND DEL TACO OPERATORS HAVE SHOWN INTEREST IN EACH OTHER’S BRAND.

than one brand at once to prospective operators. That comes with a couple of caveats. Franchisors typically find those deals are best suited for operators that already have a diverse portfolio and the infrastructure in place to manage additional concepts. The trade area in question also needs to make sense for both brands.

Signing operators for more than one brand at the same time may not make sense for everyone. Take Next Brands as an example. The platform brand manager has invested its capital in growing the legacy sandwich chain Beef-ARoo as well as the emerging smoothie chain Blenderz. Chief development officer Megan Rosen says there isn’t

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much overlap when it comes to franchise development because the concepts appeal to different demographics and target different types of markets. BeefA-Roo resonates with an older cohort and does well in tertiary markets that have traditionally been overlooked by quick-service chains. Blenderz appeals to a younger audience and is looking to grow in larger metro areas.

“Beef-A-Roo also has over 50 years of brand recognition to build on, while we’re still doing a lot of work on Blenderz to get its name and its product out there,” Rosen says. “It’d be detrimental to start putting them together right now. A lot of people are looking for that multi-brand investment, so there’s been some challenges around navigating the messaging and communicating that they’re separate brands and we’re not doing that yet.”

Ingram says there are plenty of cases where the dual-brand opportunity doesn’t work for Jack in the Box. Consumers don’t go to Mexican concepts as consistently as they go to burger concepts, so the company typically lists more opportunities for Jack in the Box than it does for Del Taco to ensure it’s maximizing each brand’s potential in a particular market.

“It can be tempting to break your strategy to try and chase that two-brand opportunity, especially when franchisees are asking about it, but you have to stick to the strategic market plan for each brand independently,” he says.

“Use your mapping and use your territory development to determine the areas where you want to grow with your brands individually. If there are opportunities where they crossover, capitalize on those, but don’t just try and cram one brand into another one’s market plan.”

More operators are embracing the idea of taking down a larger property for co-development when the stars align on multi-concept deals. Instead of half an acre to three-quarters of an acre, they can take down an acre and a quarter and do both brands as freestanding concepts on the same piece of land.

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FOCUS BRANDS HAS A SUITE OF SEVEN QUICK-SERVICE CONCEPTS.

“It’s about enabling our franchisees to really capitalize on a larger, better piece of property, and perhaps afford a piece of property that they couldn’t afford with just a single brand opportunity,” Ingram says.

Locating two or more brands in a single location is becoming an increasingly popular strategy amid the uptick in the number of franchisors offering multiple concepts. Focus Brands has long pioneered the concept of co-branding, predominantly in malls and other nontraditional locations with specialty concepts like Auntie Anne’s and Cinnabon. Now, it’s putting a bigger focus on pitching co-branded streetside opportunities to prospective operators to accelerate franchise growth.

Chief development officer Brian Krause points to the Jamba and Auntie Anne’s combination as an example.

The smoothie chain is heavily distributed on the West Coast, so its brand awareness isn’t as high out East, and

the pretzel chain isn’t accustomed to being in more traditional spaces with drive-thrus. Putting them together allows both brands to benefit from each other as Jamba pushes eastward and Auntie Anne’s pushes beyond captive audience venues.

The company has seen strong demand from existing and prospective operators for that dual-branded concept and has several dozen locations in the pipeline for 2024.

“We’ve seen some really great developers of other concepts come forward that love the idea of getting the efficiencies that go along with operating two businesses as one under the same roof,” Krause says. “The pipeline has grown exponentially for Jamba and Auntie Anne’s and for our other co-branded pairings, probably better than we’d admit to ourselves that we expected.”

Similar to Jack in the Box’s co-development strategy, Focus Brands is using its ability to sell multiple brands at the same time to mitigate heightened development costs through what Krause calls “cohabitation.”

“It’s basically just a building with a demising wall,” he says. “I’m putting a Moe’s Southwest Grill and a McAlister’s Deli in there, but I’m not sharing space other than those big four outside walls. It’s really more of a real estate play than an efficiency and operations play.”

Krause expects more companies will start experimenting with similar strategies, especially as the market for mergers and acquisitions gains momentum in 2024.

“With the market continuing to be as dynamic as it is, development costs being what they are, real estate being what it is, and financing being as expensive as it is, we’re all trying to find creative and flexible ways to continue to develop where it’s still a good investment for franchisees,” he says. “I think we’re going to see continued innovation throughout the industry on this.”  SAM DANLEY IS THE ASSOCIATE EDITOR. HE CAN BE REACHED AT SDANLEY@WTHWMEDIA.COM.

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OPERATIONS

Marketing at the Highest Level

 BETSY HAMM

The coveted role of CEO, traditionally reserved for former operational experts, has trended toward marketers in recent years.

BY SATYNE DONER

QSR

112 IND U S T RY- W ID E I S SU E

FSR

CMOs turned CEOs are trending across the restaurant industry, with brands including True Food Kitchen, Duck Donuts, First Watch, Papa Johns, Primanti Bros, and more elevating their head marketers to the top position. Usually, the story of a CEO’s rise follows the same trajectory—a COO or simi-

lar operational background—but this is starting to change.

What is it that makes CMOs attracted to the highest level of a company, and what makes them so successful once they get there? For Duck Donuts CEO Betsy Hamm, it’s the cross-departmental exposure marketers receive within their roles.

“Being able to work with other departments and have a very integrated understanding of different groups [within the organization] is key for us as marketers, but the other piece is having the ability to get customer insight and use it,” Hamm says. “This is why we’re starting to see more marketing people in the biggest seat.”

Her journey began as a marketing coordinator for Hershey Entertainment & Resorts, where she climbed to director over the course of her 15-year tenure.

What made her excel, she says, is her ability to adapt and change, a trait that good marketers are comfortable with.

“Marketing has changed so much and it’s so different ... It’s more datadriven than ever and continuing to evolve, so I think we [marketers] have gotten so much smarter and strategic compared to 15 years ago,” Hamm explains.

Hamm never imagined herself as a

M A R C H 2 0 24

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MARKETER’S CROSS-FUNCTIONAL TRAINING IS PREPARING THEM WELL FOR THE CEO POSITION.

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CEO; when she joined the Duck Donuts team in 2016, she started off overseeing and growing the marketing team.

“I met with the founder, who was the CEO at the time, and he told me about his vision to serve doughnuts across the country,” Hamm recounts.

“As a marketing person, it was like a dream come true, trying to figure out how to take this brand from scratch and make it a household name.”

It didn’t take long for Hamm to accept a job working with both the marketing and operations teams, acting as an intermediary for the two. When founder and former CEO Russ DiGilio stepped down in 2021, Hamm says he pinpointed her to be his successor because of her leadership philosophies.

“Asking questions and really trying to understand what’s best is why marketing people make good CEOs, and that’s always been my approach,” Hamm shares. “[ Marketers] generally do what’s right for the customer and different teams, like operation and finance.”

Under Hamm’s direction, Duck Donuts broke growth records in 2023 with the opening of 23 domestic shops and 10 international locations and securing 34 franchise agreements. In 2024, the brand plans to roll out over 45 new units while sticking to Hamm’s original ideology, rooted in marketing basics: going back to the customer and knowing what they’re looking for in a brand.

Duck Donuts isn’t the only concept to hand-pick a CEO from its marketing team. In January 2023, Pittsburghbased sandwich chain Primanti Bros.

Restaurant and Bar promoted Adam Golomb, previously president and CMO, to the level of chief executive.

Golomb has always aspired to lead a company and broaden his experience in what he calls “the world of marketing.”

He’s loved the Primanti Bros brand since childhood, and always admired it from a distance.

It wasn’t until a recruiter approached him for the role of CMO in 2018 that

114 IND U S T RY- W ID E I S SU E

 ADAM GOLOMB

PRIMANTI BROS CEO RELIES ON HIS CREATIVE AND ANALYTICAL ENERGY.

he realized how big the brand had become and the opportunities it presented to him. The only thing better, he says, would be a job with the Pittsburgh Steelers, but he was much more suited to marketing. “[ Primanti Bros] is a storied Pittsburgh brand, and we used to call it the coolest job in the city,” Golomb recalls. “When I was interviewing, my mentor told me I had to be the biggest cheerleader for the brand ... so my understanding and appreciation of the culture made it easier for me to take the job versus someone coming from outside the market.”

Hamm and Golomb both point to a marketer’s ability to be flexible and ask questions as the reason they make well-suited CEOs. “Today’s marketers are so different than they were 25 years ago,” Golomb says. “Especially current restaurant marketers, who look through thousands of options and can figure out which one is going to drive business right.”

Golomb explains that a great mar-

keter exhibits a blend of creative and analytical energy, constantly digging for a better understanding of what customers are looking for. Because of the speed of marketing and the instant judging capability of data, today’s marketers are more dynamic than ever.

“Marketers were never thought of for CEO until now,” Golomb adds.

“But they’re showing that they can drive topline sales, look at data, interpret results, and start putting points together across the board. You’re seeing marketers given broader responsibilities on their way to the top ... as part of strategic planning.”

In the past year of being CEO, Golomb has used his familiarity with the world of marketing to approach operations from a customer lens and position the company for profitability. Shaking hands with so many different departments as a marketer gave him widereaching experience in driving and implementing strategies within hours of their inception.

“Lately, it’s been a lot of learning for me, and transitioning into an overall leader on a broader scope,” Golomb says. “I still find myself going back in at times and doing marketing campaigns.

But now it’s really about pushing the strategies forward and surrounding myself with a talented team.”

With Golomb at the helm, the 90-year-old company continues to grow its fan base outside of Pittsburgh and potentially into Baltimore, with four openings in 2023 and four more coming this year. He continues to use his marketing background to monitor guest receptiveness as the chain expands, and he continues to root for marketers within the restaurant segment.

“I think it’s great to see so many different marketers out there getting a president or CEO role,” Golomb says.

“It’s happened to some of my friends in the industry, and it’s nice to see happening.”  SATYNE DONER IS A STAFF WRITER. SHE CAN BE REACHED AT SDONER@WTHWMEDIA.COM.

M A R C H 2 0 24

PRIMANTI BROS. RESTAURANT AND BAR (2)

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INNOVATE

In the post-pandemic world, the term ‘ghost kitchen’ will likely be left in the past.

BY BEN COLEY

 CAMILLA OPPERMAN MORSE

QSR

FSR

Nimbus, an innovator of commercial kitchen spaces, has been profitable since it was founded in 2019 by Camilla Opperman Morse. That’s quite the claim to fame, considering the struggles of other shared space operators like Kitchen United, CloudKitchens, and REEF Kitchens, which have reportedly closed locations and slowed their once-rising growth trajectory.

First and foremost, Opperman Morse attributes the company’s consistent balance sheet to prioritizing strong unit economics. It’s important to note that Nimbus is not venture-backed. It has never had millions of dollars in its coffers. As a result, every decision is “really colored,” explains Opperman Morse.

Beyond that, two factors set Nimbus apart and have pushed it toward profitability—flexibility and a focus on NIMBUS RECOGNIZES THE IMPORTANCE OF TRANSPARENCY FOR CUSTOMERS.

116 IND U S T RY- W ID E I S SU E

community. Regarding flexibility, members can cook in Nimbus kitchens for a few hours or a few years while competitors typically only offer longer-term rentals. From an economic standpoint, these shorter-term rentals have a substantially higher contribution margin.

Combining that higher margin and variable revenue stream with a more stable longer-term operation has proven to be “incredibly profitable” at the unit level, says Opperman Morse. On the community side, all locations—New York City’s Lower East Side, Downtown Brooklyn, SoHo, and Midtown—have front-ofhouse spaces where members can host pop-ups, dinner parties, and tastings.

“Consumers appreciate that transparency,” Opperman Morse says. “They want to know where their food is coming from.”

The flexibility allows Nimbus to target a variety of food businesses across size and maturity—catering, bakers, CPG brands, and pop-up delivery concepts. Clients include DoorDash, Jersey Mike’s, and Fuku. In another example, chef Cristina Martinez brought her South Philly Barbacoa concept into Nimbus’ downtown Brooklyn kitchen as a three-month pop-up restaurant to test the market. Additionally, Noma—a three-Michelin-starred restaurant based in Denmark—used kitchen space to prepare food for a two-week pop-up in New York City. Nonprofit Chefs for Impact uses Nimbus to serve multicourse fundraising dinners as well.

“We’re really focused on bridging that gap between these hyper-efficient off-premise kitchens and a traditional restaurant and that focus on community. That in-person interaction makes our product a lot stickier than some of

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117

I N N O V AT E

the soulless ‘ghost kitchens’ that have popped up around the country,” Opperman Morse says. “And it really helps streamline our sales process as well. So, it makes the product feel a lot better for our members, but then also from an economic standpoint, it ends up being really beneficial.”

The Brooklyn spot features a digitally-enabled food hall in which multiple concepts are prepared in the same kitchen and can be ordered online on one bill.

However, this location is different in that customers can also walk in, order from one place (not several booths like a traditional food hall), and eat on-site.

The operation is cheaper for food brands. They don’t need a cashier or individual food stall to hand off meals.

They’re getting all the benefits of people entering the door but without the added labor costs. A lot of times, chefs come out from the back of house and interact with guests too. Opperman Morse calls it a “food hall 2.0.”

“We’ve never wanted to be a ghost kitchen,” Opperman Morse says. “We don’t want to bill ourselves as a ghost kitchen because we don’t want there to be that lack of interaction between the brands and the end-consumer. And just having a place for customers to come in, they can order the food, they can eat it on-site, which is different than a lot of other operators in the space. We actually have seating in place for up to 74 people in that downtown Brooklyn location. It’s quite large. It brings some of that humanity and hospitality back to the operation.

I think it ultimately bolsters our members’ success. It increases transparency and candidly makes it a lot more fun for operators to use our spaces as well.”

In early December, Nimbus announced that it acquired the SoHo and Midtown locations. The latter is near Times Square and features a 9,000-squarefoot facility with 10 rentable kitchens. The SoHo spot has 6,800 square feet and nine rentable kitchens. Both of these sites were formerly operated by Kitchen United.

Opperman Morse says Nimbus doubled the supply of its rentable kitchen

118 IND U S T RY- W ID E I S SU E

A D IND E X : units overnight when these locations were launched last year. Both are adjacent to high foot traffic and are easily accessible to public transportation and drivers.

The company felt good about expansion given the success of existing operations.

Nimbus had such great occupancy in Brooklyn and the Lower East Side that it had to turn away potential members because there wasn’t enough space.

“With all of that, we knew that we could go in, we could launch these locations profitably,” Opperman Morse says.

“It’s obviously still early innings at the new locations, but our thesis has proven correct. We’re very excited about being able to accommodate more food businesses with this increased footprint, and we’re very much looking forward to continuing to ramp up those new sites and just to overall grow our presence in New York City.”

Opperman Morse believes there’s an opportunity for Nimbus to have a national operating footprint, and it’s currently exploring areas to expand outside of New York City. There aren’t any announcements to make at the moment, but additional markets will come on the radar in the coming years.

She’s conf ident in the off-premises kitchen having viability, but she emphasizes that the model has to evolve.

Opperman Morse predicts that as the industry matures, more operators will shift toward the flexible and communitycentric strategy that Nimbus pioneered.

“Obviously ghost kitchens have quite a bad rap and I think candidly a lot of the times that negative press is welldeserved in some ways, but Nimbus is very squarely not a ghost kitchen,” Opperman Morse says. “We’re a cocooking community. We provide food businesses, and people who are interested in engaging with those food businesses, the platform in which to produce and promote those products. It’s categorically in a different realm than what most people think of when they hear the term ghost kitchen.”  BEN COLEY IS THE EDITOR OF QSR. HE CAN BE REACHED AT BCOLEY@WTWHMEDIA.COM

American Express . . . . . . . . . . . . . . . Insert AmericanExpress.com/signage/artistseries

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McCormick Culinary . . . . . . . . . . . . . . . . 25 mccormickforchefs.com

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START TO FINISH

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EQUAL PARTS FLAVOR and functionality.

It’s our rallying cry and a mantra. It’s a central theme folded into our brand DNA and connects us with our guests. It’s a business objective and a mission statement, and it is a top priority as Juice It Up! remains committed to an industrybest lineup of superfruit, protein and plant-based smoothies, raw and blended juices, and açai and other superfruit bowls that deliver this balance.

When I stepped into my role as president and CEO of Juice It Up! in 2020, I knew the importance of balancing flavor and functionality. Before joining Juice It Up!, I spent 30-plus years in the restaurant/franchise industry—15 at another smoothie and juice concept. My experiences have proven how critical menu innovation is in keeping our brand relevant and our guests engaged, year over year. Innovation is at the top of the list

120 IND U S T RY- W ID E I S SU E

Juice It Up! CEO Susan Taylor describes how the better-for-you chain is repeatedly differentiating itself in the market. for our strategic priorities for 2024. Menu innovation has propelled Juice It Up! to the top of the segment since its inception and will continue to do so long into the future.

For nearly 30 years, Juice It Up! has stayed ahead of menu trends by exploring up-andcoming superfruit ingredients.

Our Team aims to further the brand’s rich history, its legacy, and its reputation as an innovator of functional food science and lesser-known superfruits. In 2001, Juice It Up! was one of the first, if not the first, smoothie and juice chain to introduce açaí to its menu. Today, we offer a wide variety of açaí, but also have added new superfruits like acerola and pitaya to our menu. We are experimenting with other ingredients  SUSAN TAYLOR known for nourishing qualities, including turmeric, aloe vera, and spirulina. Brand loyalists and new guests appreciate our dedication to menu innovation, and we’ve seen significant annual growth across all Juice It Up! menu categories.

The top of my checklist also includes helping Juice It Up! franchisees position their businesses for long-term growth and a return on investment. Juice It Up! franchisees provide me with a critical lens to view the Brand, and their success informs me. It also motivates me. Beyond our best-in-class menu and commitment to product innovation, Juice It Up! is known for delivering a simple and successful franchise business model. Especially now, following the post-pandemic rise of a more health-conscious population, we’re a destination for entrepreneurs looking to expand their portfolio with a healthy concept. 

What was your first job? Restaurants

have always been my passion. I worked as a dishwasher in a familyowned Italian restaurant for my first job.

What’s your favorite menu item at Juice It Up!?

My go-to Juice It Up! order is the Acai Berry Bowl with strawberries, bananas, and granola.

It’s a great, nutritious way to start my day.

What’s your favorite cuisine outside of Juice It Up!? Mexican food

has always been my jam.

Who inspires you as a leader?

My support center team and our franchise owners have always inspired me. Through all that has happened in the past three years, I am amazed at how everyone has persevered and continually looks to find solutions when unexpected challenges arise.

What’s the best piece of advice that other restaurant executives should hear? Always have a

plan B, C, D.

What are some of your interests outside of work?

A foodie and true Angeleno at heart, I enjoy cooking and seeking out new, diverse flavors and dishes try.

JUICE IT UP

A Healthy Balance

M A R C H 2 0 24

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