Restaurant Rockstars Episode #312
How to Grow a Restaurant Chain With Culture
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There’s a huge difference between a restaurant’s Culture and their Mission.
Most restaurants have a Mission Statement, but once it’s put on the wall do the staff practice it? If they do, that’s called culture.
In this episode of the Restaurant Rockstars Podcast, I’m speaking all about the power of culture and growing a restaurant chain with Michael Mabry, President of Famous Toastery. Both their Mission and their Culture is “Be Famous”! This operating philosophy is embraced and practiced by all stakeholders, from corporate to suppliers, to individual franchisees to their staffs.
Ours is a business of relationships…between the people we choose to do business with, to the people we hire to the guests we serve. Our operations live and die by the authenticity and strength of these relationships.
Listen as Michael shares:
- What “Be Famous” is all about and how to create a powerful restaurant culture
- How to maintain the delicate balance of all our relationships for optimum success
- The Secret Sauce of successful restaurants and restaurant chains
- Current operating Pain Points (Labor, Supply, Inflation…)
- How to maintain the customer “Value Proposition”
- The key to maintaining consistency as your brand and restaurant chain grows quickly
And of course, how this chain plans to double its restaurant chain locations by 2024 by “Being Famous”!
Watch or listen on then Go Rock YOUR Restaurant!
Connect with Michael:
To be the best of the best, you gotta continue to to up your standards. You’ve got to continue to shorten the window that it takes to get folks to your standards, via empowerment and training, etc. And then you got it, you’ve got to be willing to make mistakes.
Hey there. Thanks for joining me again on the podcast. As operators and leaders. One of the biggest challenges in our business is maintaining consistency as we grow that business. Now many of our listeners have single locations, many have multiple locations. But ultimately, if you want to grow, maintaining consistency of service of food and beverage quality of training of profitability takes tremendous skills and a system. So in this episode, this particular franchise is particularly successful at treating all stakeholders, their suppliers, their leaders, the owners, the franchisees everyone involved in this concept follows a mantra be famous. So you’re gonna want to stay tuned to find out exactly how that works. But there’s so many key learnings in this episode, so don’t miss it.
You’re tuned in to the restaurant rockstars podcast, powerful ideas to rock your restaurant. Here’s your host Roger Beaudoin, when
people go to restaurants for lots of reasons. What the customer doesn’t know is the 1000s of details it takes to run a great restaurant. This is a high risk high failed business. It’s a treacherous road and SMART operators need a professional guide. I’m Roger. I’ve started many highly successful high profit restaurants. I’m passionate about helping other owners and managers not just succeed, but knock it out of the park. You don’t just want to run a restaurant, you want to dominate your competition and create a lasting legacy. Join the academy and I’ll show you how it’s done.
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Welcome back to the restaurant rockstars podcast with me today. Mr. Michael Mabry. He is the president of famous toast story. Welcome to the show, Michael, how are you today? Great, Roger, thanks. This is fantastic. We’re gonna dive in because I know you’ve got a fast growing concept here focused on breakfast and lunch and brunch. And that’s really exciting. I’m going to talk all about the ins and outs. But my guests know I always begin with the backstory of my guest. And everyone’s got a unique, interesting restaurant story, what first inspired them how they got into the business. So why don’t you take us there?
Yeah, sure. Thank you. Well, I’m a restaurant guy. And I’ve got three passions, people food in life. And the restaurant industry is really able to allow me to tap into each of those. I fell in love with cooking at a young age in I lived with my dad, andwhenever I’d go to my mom’s he would say Hey, could you learn how to make her meatloaf or could you learn how to make that spaghetti and meat sauce that she made? So I got a mom’s she would teach me then I’d come home to dad in I would cook it for us. So I just really fell in love with foodfrom that point on and was fortunate enough toget into some some early businesses at a very young age.But you really just fell in love like I said, with the the romance of cooking and went to El Centro Community College andDallas, Texas and get my chef certificate. And during that time, a buddy of mine was working at a restaurant in 1992 called Romanos Macaroni Grill. And yeah, he’s like, Hey, man, and we’re making $100 a day waiting tables, and I’m like, I gotta, I gotta, I gotta get in that. So I went, and I went applied for that position to be a server. Unfortunately, I didn’t get the job as a server. But they did offer me a job as a server support, which is a very fancy name for busboy.And, you know, the reason I didn’t get the job was, you had to know Italian and I didn’t study so I didn’t pass the test.And I really look back at now, and you know, everything happens for a reason. And the whole idea of starting as a busboy really gave me the opportunityto have received a paycheck for really every position in a restaurant, from busboy to server, to dishwasher to prep, cook, line cook, to management, and those experiences that would have been really invaluable for me. No, but as I, you know, there was there’s three or four key moments in my, in my earlier years that really defined my trajectory.One was, I’m working the floor as a server one day, and the manager comes over and says, Ron, I still remember his name. And he’s like, Hey, I heard you are a cook. Or United cook. I said, Yeah, I actually do. You say one of our guys called in, could you go, could you go help? I said, Sure. Well, that’s the last day I was ever on the floor.So that started my career in the kitchen, was a it was a prep cook, then I was a backup cook. Then I became a line cook, saute. Pretty good at it, I think.Then a sous chef, an Executive Sous Chef, than an executive chef, than an area chef. And, and that opportunity took me all throughthe kitchen,andhad been moving from Dallas to Houston to Las Vegas, all still with remodels, Macaroni Grill, the second key piece wasmarried, and my wife says, hey, you need to make more money. So I go to my boss’s head, he’s made more money. This is not your top out as the Executive Chef, the only way to make more money is to become a general manager. Like No way. I don’t want to be a general manager, I want to stay at the kitchen. He’s like, well, then that you can’t make any more money. Short version is I became a general manager. So once I got home and told my wife what he said, she said, well, then you’re going to be a general manager. So made that transition to front of the house, and had some great leaders that coached me through that, to say was Rocky was an understatement, but we made it through it. The third important thing that happened was we had our child we were living in Southern California at the time, running the remodels, Macaroni Grill, 1000, Oaks, California, andmy wife wanted to come home to Dallas. So we came home to Dallas. As we did that. I went back to the original restaurant I started at as a busboy as the General Manager. And we had just brought on a president. His name’s John Miller, to run the brand and he was having all of his meetings at the restaurant, rather than at the corporate office, becausehe was new to the role. And, you know, being young and dumb, I started to interject myself into those meetings, unbeknownst to me that I wasn’t supposed to. But nonetheless I did, which got me very overpromoted into a role that was responsible for franchising for the brand. And it was all international. So I go from this busboy line cook guy to open up restaurants in alcohol, Saudi Arabia, to Dubai, all through the UK.All through Latin America up into Canada.
Was your wife traveling with you at the time like,
well, that some of my kids were two years old? bored when I started that, Yeah, no kidding. So typing away from home. That must have been a challenge. Yeah, a couple 100 days a year. Yeah. I like to say, though, that I do the restaurant. I knew how to run a restaurant. Prior to that. I learned the restaurantBusiness during that during that time, so, we’ve gone Great. Yeah. So so as we, as we continued to progress in do that I was very fortunate get to sit around tables that I had no business sitting around. Some of the guys that I consider to be the godfathers of casual dining. Norman Brinker was listening. Right, right. John Miller, Doug Brooks, Rob Dougal, Russell Owens, Rick Federico. All these gentlemen were sitting around the table there I was,really didn’t have much to say but soaked, soaked. I can only imagine. Yeah, what they had to say. And because of that, just gave me the opportunity to do many things in my career. Sothat was the first 10 to 12 years of my career that I spent the next 20 very fortunate. I’ve been part of a startup companyin we grew via franchising, I became a franchisee. So I’ve been a franchisee of a couple of different brands.Then did another startup.A burger restaurant based here out of Dallas Fort Worth called mu yob burgers, fries and shakes? I’m familiar with that. I think we covered them on the podcast a while back. So I’m familiar with Yeah, yeah. We grew that from zero restaurants to just over 100 sold to private equity,then was able to stay on board for 18 months.It’s continued to lead that brand, but work with private private equity to do that.That left, you know, as as as we went through that process,we get in front of many different groups. One of them, it didn’t end up buying us but I became friendly with them. And when I left muya, went to work with them at a concept called fuzzies. Taco Shop. It was leading development for them. Then COVID hid anddid some consulting for two or three years, doing some different things. But Robert Maynard is the founder and CEO of famous toast rate. And he and I met about six or seven years ago at a CEO retreat. And we hit it off to talk to one another about hey, how can we do something together? And about October November of last year, the timing was right for both of us. So I joined the team in December as president of famous toaster. Fantastic. That’s amazing. Awesome. All right. So let’s let’s talk about famous toast tree. There is a history of the brand you talked about Robert, you meeting him at the SEO conference. But when was famous toast refounded and how did it grow? And what are what would you say the secret to the success of that brand is and then we’re going to talk all about franchising. But let’s start with the history. Yeah, it was founded in the early 2000s by Robert Menard. As I mentioned in Brian virtual, Brian really is the the godfather of famous sosta. He’s the guy that it was his brainchild. And he and Robert were childhood friends. They grew up on a street in in New York called a Holiday Park. And the name of our holding company is holiday park partners. So Brian moved from New York to Charlotte and opened up the fate the first famous toast rate, the original name was toast.And he ran that that one restaurant then went to two then went to three. Then about 2013 He and Robert decided, hey, let’s start to franchise this. This concept. So 2013 They go out on the road they start to franchise in got up to roughly 30 Plus restaurants open via franchising over the next few years, had some some attrition in some of those units. Today we’re sitting sitting at 26 up and operating units. But the brand was born from a desire to give people a breakfast brunch and lunch offer that they haven’t had before.We haveone lens that we put everything through and it’s called be famous. So the whole idea. Yeah, the whole idea about being famous is not famous toast rebei and famous. We want our our team members to be famous. We want our guests to be famous. We want our franchisees to be famous, we want our vendors to be famous, and the way we we go about that or where they go about that is a day by day shift by shiftof making sure we’re executing at the at the level that needs to be executed on. One of those executions is a the food lens that we look at everything through is called famously fresh. So, for years, the brand took it for granted that we use the 100% real maple syrup.Fresh squeezed orange juice, when I say fresh squeezed, we don’t squeeze the orange until the guest orders the orange than it squeezed to order for for that guest.We make all of our batters in house, we make hollandaise sauce.For our Benedict’s every hour, we we make our own corned beefin house. So there are a lot of things that we have been doing for 15 or so years that we just really haven’t took took credit for. So this famously fresh lens that we’re now running everything through is making sure that not only our guests know, but we want our team members to know to feel proud about what they do. Absolutely right. So that’s the basis of why the famous grocery was was built was to give truly fresh food in an environment possibly that hadn’t had been there in the past. Then for the service model. Our service model is a team service model, we call it every server is your server. And the idea behind that is that if you’re ever sitting at a table, anyone that walks by can help you. Anyone that walks by can can can either refill your coffee, or take take, take your order ortake care of an issue that you may have, or bringing another glass of orange juice. So it’s a heightened level of service at the table through our beef Amis lens. And then it’s a famously fresh, heightened level of food quality coming out of the kitchen.
Definitely value proposition there in a brand differentiator. I really liked that. Let’s talk about walking through the door of a typical famous toast free. Is it a standardized sort of vibe and ambiance? Or do franchisees have any leeway in how they design their stores other than the basic layout? Tell us about what it feels like when you walk through the door? What’s What’s the atmosphere like? And a typical question? Yeah, good question.
It’s, it’s a combination of all the above. The key thing though, is how you feel when you walk in. What is that guests going to feel like when they walk into famous toasts, which needs to be welcoming, they need to feel one of one. So whether the walls brown, white or gray, whether the floor is stained concrete for or hardwood, whether the bar has chandeliers on it, or we just got a little corner bar, it is important to what we’re trying to portray as a brand. But what’s more important is that our team members feel empowered to make the guests feel one of one because you I use in our industry use this term brand a lot. And yes, you you want someone to know they’re in a famous toast hurry. But we also want our franchisees and our local markets to feel that it’s their restaurant. So what they feel great in Davidson, North Carolina, not may not feel so great in Roanoke, Virginia. But at the end of the day, as long as we’re executing from the famously fresh food item, we’re executing on the be famous lens through our service, the franchisees do have some leeway in what that finish out may or may not look look like. Now, that being said, we just did a complete remodel of our of our flagship restaurant in Davidson said 100 plus year old building, if it wasn’t scheduled to be a remodel, but every time we build something back in 100 year old building, oops, we gotta get rid of this, we got to get rid of that. So ended up new walls, new flooring, we actually peeled back two or three layers off of a wall, there was a old brick from 1905 that was on it. So we kept the brick and treated it. So it’s got this really cool vibe to it. When you walk in.
Let’s go back quickly to be famous in every server is your server. Those are two really powerful concepts that I want to focus in on a little bit more. Now. Every company or most companies have a mission statement and it hangs on the wall and maybe you read it once and you never really practice it and the difference is culture. So would you say that that is part of the culture now of this, you know of this company and every new franchise that opens up for famous toastery obviously before AMS is a mantra that translates to we talked about it the staff and every stakeholder in that business, be a vendor, be a guest be an employee or staff, team member, that sort of thing. Is it part of the culture? Is it really ingrained? And is it something that a new franchisee is really pounding into new staff when they’re opening a store that is like that is our foundation that is unchallenged on negotiable?
That is how we deliver our service to our stakeholders, including our guests, would you say that’s true? I would it’s it’s a process. The the issue with with mission statements or vision statements, is they’re only as good as the words that they are in. What we’ve got to do with our franchisees is make sure that they feel famous so as we’re talking about be famous that they they’re buying in our franchisee mantra is be famous with us. So as we’re out looking for new franchisees, that’s what we’re leading with, in any of our PR, and indeed, our franchise development messaging. So, you know, as we as we, as we prove, from a headquarters standpoint, or a corporate standpoint, or a brand standpoint, that hey, be famous, and then we start to treat our franchisees that way, then they will adopt it. And then it will continue to be in be even be more ingrained than it is now.
Fantastic. Okay, let’s talk about franchising in the model. You know, there are plenty of franchises out there. And it seems to be it’s very rigid, it’s very structured, it’s like that’s the point of a franchise, you’ve got a built in system that you’re buying into. And then the consistency is absolutely critically important. But there’s a trust factor in a relationship between corporate and the individual franchisees and there’s been a lot of industry headlines lately about disputes between some of the biggest names in franchising and their operators in the field. And you have a whole different philosophy about that. So tell us about the relationships that you build, and what you stand on and the give and take communication and trust and relationships between the two to make a really successful franchise work. restaurant owners and managers.
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So the you know the franchisee franchisor piece is it’s so interesting it because as as we license out our intellectual property, it license out the the opportunity to operate our brand. It’s really the it’s not really it is the franchisee that takes on the burden. So I preach to my team and teams, that at the end of the day, we work for the franchisee and the the royalty stream that comes in pays everyone’s car payments and house payments and put food on the table and since kids to school. So we have a responsibility to be servant leaders to those franchisees. And when we approach it from from that manner, I have found that we’re able to build trust a lot quicker and I’ve preached this what I just said to the franchisees to I let them know we work for you. It is it is it is our responsibility to be responsible for the brand, but it’s also our responsibility to serve you. And a quick story is I was part of a brand that there was a there was a little bit of tension between the franchisor and the franchisees and the teams and this brand was actually particularly had all it was all franchise but one corporate restaurant but it was really just to for training and research and development. And we had some new team members on in they were trying to they were struggling with the franchisee franchisor relationship, you know, wanted to Hey, do it our way kind of thing. So what I had them do every two weeks when they got their pay was the head to send a franchisee any one of them, thank you and say, Hey, thanks, I got paid today. And without your royalty stream that came in, I wouldn’t have got it and I’m here to serve you. And it just started to change the paradigm of how our my team looked at it, but then also how the franchisees view so you know, because of that, it is something that I’ve just carried through throughout the last years. And I lead with it with with any company that I’m a part of lead with it at famous dose reason lead with with a team and franchisees today,
let’s talk about onboarding, or no before we go to onboarding, let’s talk about what you look for in a great potential franchisee what type of experience is necessary business acumen, finance, success, all that sort of thing? Like what what is the there’s got to be a base criteria that you will have further discussions with someone if they’re a promising candidate to become a franchisee?
Yeah, people food in life, and you’ve got to have the same to be a franchisee the idea of running a restaurant is romantic. But as you all know, it’s extremely hard work. Okay, so obviously, we’re talking about the criteria that you look for, you know, in a potential franchisee, and there’s many things of course, there’s obviously business acumen, whether they have restaurant or hospitality experience, whether they’ve been a franchise e of a company before, you know, what does it take, and what makes you look at a candidate more than once and have, you know, ongoing discussion? Well, they, they really got to be in want to be a servant leader. In you’ve got to have this, this this innate desire for hospitality. Because to be a franchisee, or just to be in the restaurant business, the hours worked, when everyone else is out, partying, they’re at your place during the party. And whenever everyone else is out, celebrating, they’re at your place celebrating. So you, you really need to love to serve to serve people. And in it’s not just serve the guests yet to love to serve your team members. But because when you serve your team members, and then you’ve got to attract the right team member, to serve those serve those guests. So when we can and when we do identify those servant leaders that have a passion for people in hospitality, then the next piece of the puzzle is, can they identify the same type of people? And it’s can like minded people attract like minded people. So, you know, we preach that I preach that as we’re talking to potential franchisees, to be quite honest, I do my best to talk people out of it. Because particular, they haven’t been in the business before. I do everything I can to like, Hey, are you sure you want to do this? It’s really hard work. That it’s not just hard work. It’s different work. Have you ever managed, you know, 25 to 30 to 50? Folks before? Do you understand? Seven days a week type of operation close couple days a year? You try to get people to think absolutely through it. And the ones that you’ll keep fighting? Yes, yes. Yes. usually end up being the right choice. Yeah, there’s a burning passion inside. They understand hospitality. They love people. They love relationship building. They love it sounds to me like, well, this is a really interesting point that’s come up a couple of times, I’m a huge believer, as a former operator in obviously the word leader versus manager, the word empowerment versus delegation. And what I mean by that is any manager can tell somebody what to do that’s delegating. But it’s a rare organization that literally empowers its people through leadership by example, that gives them additional responsibility gives them a chance to fail, critiques them in a positive way, uplift their confidence in their skills, and then recognizes and rewards the achievement that they make. That’s how you build team members that last right. This is what we’re looking for in each individual location. It’s not just and right now their labor challenges. No one disputes that. And unfortunately, it’s that warm body thing where people are just hiring anyone off the street they can get just to deliver, you know the product, but the value proposition that guests expect, especially with inflation and rising food costs, and you have to adjust menu prices and people are paying seeing higher prices in a restaurant. And they’re getting less than standard, you know, less than what they would expect in terms of service. And that is the biggest challenge that most operators are facing today. But it really starts foundationally with the staff you hire, and you’re really looking to build careers and people that have that passion.
And wouldn’t you say that’s a huge challenge right now, but that’s where culture begins. Now.
Yeah, I’ve got a couple of comments on that. The first is 100%, in agreement on empowering. And you said a key word mistake. I challenge my team and teams, if they’re not making a mistake a week, they’re not making enough decisions. So you’ve got to get out there. You got to make that. And we’ll we’ll talk about the mistake that was made in coach you through it. So that’s, that’s number one. And the second thing you said was warm bodies off the street to deliver the product. I think we have to define, quote, the product. Because it’s the products the plate of flapjacks. Okay, yeah, it’s a product. But or is the product, the service, the mentality, the culture. So it’s a fine line that we walk in, in to be the best of the best you got to, I believe you got to continue to, to up your standards, you’ve got to continue to to shorten the window that it takes to get folks to your standards, via empowerment and training, etc. And then you’ve got to you’ve got to be willing to make mistakes. Well, you know, we’ve touched on this before, but the right kind of people with the right kind of training are really being brand ambassadors for famous toe stree, and they’re building relationships with guests where guests are coming back as much for the food and the ambiance as for the person that they’ve built a relationship with. And that’s like, powerful marketing, right? To get someone that feels an affinity with not just the restaurant, but the people that serve them. And that’s a goal for any operation to achieve. And, you know, that’s what we’re all striving for right now. But you’re right, it’s not just the product of the food you serve. It’s really the whole experience, and to get positive reviews to get repeat business to get people to recommend the restaurant saying I had a great experience that famous toe story. It really is foundational with the person serving each each individual guests. So yeah, we’re totally on board. With that. Let’s, let’s talk about growth plans.
Now. I understand you’re looking to achieve, say 50 locations by 2024. How will that be achieved? And how many units? Will you need to say take on? And is it also regional based? Or will you expand literally anywhere?
Yeah, so that’s a that’s a pretty hefty goal. Number one, let me state that.
Yes, about doubling in size in two years, right? Yeah, yes, yes. But the easiest way to double in size of every franchisee to open another restaurant. So there’s that goes back. That goes back to all of the things that we just said building trust it right. And it’s etc. But we’re going to have to bring new folks on. So we’ve, over the last year, we start to build a robust team. We’ve got some new leader, new leaders in operations in development and training in marketing. And we continue to, to to evolve and bring on more more folks are getting getting us ready for this growth. And the idea is we’re based in the Carolinas, we’ve got a couple units up in Virginia. So yeah, we are going to look regionally, we feel that from the Carolinas and surrounding states, to Virginia, there’s absolutely plenty of space for us to to reach that 50 or so units. But by doing that doesn’t mean that we won’t look elsewhere. But that is 100% our focus. Okay, in an individual location, we talked about ideally for the company, you’d get seasoned operators that then open multiple units, is there sort of a, with a system like this, obviously, most of these things are dialed but there’s got to be a certain range where, you know, is it a 10 mile radius from a location? Is it 20 Miles is it can you have more than one in a large metropolitan area all run by the same franchisee? Yeah, I think that’s you’ve got to go market by market varies in every every particular location. Let me make sure this is clear. Okay.
One of the things we don’t want to do and are not going to do and have it done is cannibalize a franchise. nation with another franchise. Right?
Right. Exactly. Exclusive territory as part of a contract, I’m sure within a certain reason, right? Yeah, yes, yes. But But even on top of that, let’s just make the assumption that, yeah, exclusive territory or there’s not. And there’s an opportunity to, to open a location. Because sometimes in the restaurant business, you have to play chess. So you’ve got to, you’ve got to put a location just to outpace your competitor, or to help position them. So we would, you know, at least I’ve worked with in the past with franchisees to hey, I understand, but if, if we don’t go there, competition, x is gonna go there. So do you want to lose sales to yourself? Or do you want to lose sales to them? So we’ve got, but that comes with all the trust that we just talked about. But the idea is to have solid multi unit franchisees, that doesn’t mean that the franchisee that owns one, they’re just as valuable, I would argue maybe a little more valuable, because they’re the ones going in working hard every day. And they figure out efficiencies and operating standards that maybe we haven’t figured out, because they’re opening and closing the restaurants every day. So we open up the opportunity for that type of communication to strengthens our brand.
That’s great. Let’s talk about current pain points that your operators are dealing with. And as a reference, certain day part or restaurant segments have been challenged by, say fryer oil increases and french fries and beef and Mexican restaurants are struggling with avocado costs and all this kind of stuff that just raises obviously their food costs. Have you had to pare down your menus, are there certain things that have been limited due to supply chain issues? Like what are the biggest pain points that your your, you know, your franchise operators are dealing with now?
Yeah, commodities for sure. And we’ve done we’ve done a couple of things to to get out in front of it. The first is, we just did a complete renegotiation of our broadline supplier. So we took, we went out to bid and stayed with our incumbent, which is Cisco, they came back to the table with some really strong economics for franchisees, which saves a substantial amount of money for franchisee just from a from a raw cost standpoint. So that’s one thing that we’ve done. The second is one of the first initiatives that we took on it the beginning of this year, was brought on a purchasing consultant that I’ve used for the last 25 years. His name is Lea Plotkin he’s done a just a great job in looking at our current contracts, and it has enabled us to play bigger than we actually are. So we’re, we’re looking at taking positions on certain items. And then really getting some buying power from from what he’s doing. So we’ve strengthened our our cost of goods from a from initial purchase standpoint, we strengthened our cost of goods from a taking positions in getting better buying power. And even with all those things. I mean, there was a report last week their eggs are up 267% Yeah, yeah. And then just a couple of days ago, there’s a new Asian flu pandemic that’s hitting poultry. I believe it was 60,000 chickens were just put to death because I mean, so it’s it is a lot is coming our way. Yeah, so we ran a, a model on our menu. And we rolled out our first famously freshmen you back two months ago, and we took some price increase on some things, kept some things the same, added some new items, took off some items. And so far, the the sentiment has been excellent. There’s been minimal to no pushback from our consumer. On our on our pricing. There’s been some great accolades and some of the things that we added. We added a section called famous toasts. So we have a avocado toast. We have a Nutella toast, and then we partnered with a great brand called Abby’s better butter. So we have a Abby’s better butter toast that we put on sorts of nut butter and we trick those toasts up with either bacon or or strawberries, bananas, etc and really have seen so Um, our guests grab a hold of it. So those are the three things that we’ve done. But, you know, with, with a potential recession, you know, knock on wood come in. But the inflation is where it is, do we, you know, we’ve got to be able to hedge our bets unlike the grocery store. So if you and I go to the grocery store, today, we pay $4 for a gallon of milk, we go tomorrow, it could be 480. And that is what it is. But if they’re in the restaurant business, you can’t do that. You can’t raise your price every day with commodities. But you can’t Oh, you can’t out price yourself either.So you’ve we feel we’ve done a really good job on understanding where our menu is and what our consumers are demanding and pricing accordingly.
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Yeah, you’re absolutely right. I mean, there comes a ceiling, too, you can’t raise your prices any higher for the guests till the field value for what they’re ordering. Okay. So that’s, that’s super important. But obviously, maintaining margins with rising costs is harder and harder. And, you know, a chain or franchise like famous toaster has economies of scale, you just mentioned working with Sysco, you negotiated really good pricing and all that sort of thing. But still, there are things beyond our control, whether we have 100 restaurants or 10, restaurants. And you know, costing things out on a regular basis, knowing how much profit or how much each plate cost is on a regular basis is super important, whether you’ve got one location or 100 today, and you’re a chef, so you understand all this in addition to a business partner, or a business person, would you say that your menus are optimizing profit right now? And that that’s something that’s routinely looked at every so many months?
Yeah, we’re beginning to optimize? And yes, we are looking at it. I would say right now on a weekly basis. Okay, that’s great. Yeah, we’re just we’re becoming, I feel the brand is becoming a lot smarter. It’s all due to the credit of the new team that we brought on this year. Yeah, I mean, we do have quite a bit of independent single location operators that listen to this podcast, and we have a range of guests. But I think it’s so important to bring that point clear, because obviously, menu optimization is something that not every operator thinks about. And in my experience, I see lots of restaurants that just have profits all over the place on the menu, and that the spread in each category is dollars in that sense. And lower profit items are bigger sellers, and they’re stealing sales from what they could be selling, and they’re paying the highest wages in the kitchen. So I think it’s really important for our audience to know that it’s really important to cost out your menu know what every dish cost to serve the guests what your margins are, and obviously see with a product mix, you know, from your point of sale on a regular basis, what’s selling and what isn’t selling our lower profit items, your biggest sellers, because if so, there’s some adjustments you need to make. So I’m glad to hear that. Because obviously that you know, the larger companies such as yourself, are working on these things have these systems dialed but not every independent operator has that benefit? Yeah, yeah, you’ve got to make sure we tried to make sure that those those movers whether it be eggs or bad or section where flapjacks or our waffles, French toast, have a the appropriate margin in them. But that the guest feels that they’ve got a great value for what they did. And then some of our whether it’s a a bar drinks, we didn’t have full bars, although we’re breakfast, lunch and brunch. And some of our, you know, our splurge items, and they have a little bit larger margin in them. The product mix isn’t isn’t as high, but the guests that wants that wants that. And yeah, that that price point isn’t something that is going to dissuade them from from getting it. It’s just that we happen to have it and they’re going to order it so it’s to your point. It’s just a healthy balance of what it looks like. Let’s let’s go back to the onboarding piece. We talked about the criteria you’re looking for with operators that come into the fold, but what type of training are you supporting them with? How long does the Training take, is there also locational assistance for them to find the ideal location, you got real estate people? I mean, franchising is a really complicated piece and the extent of the support you can offer really adds to the success of that individual operator. So tell us about their training and their onboarding. Yeah. So in franchising, you can be, again, very interesting in that I’ve never had in my 25 plus years involved in franchising. Someone slide a check across the table for the franchise fee that was mad at me. But it would have saved me the brand. Yes, yes, whatever brand that may be. But somewhere along the way, they sometimes they I call it lost that loving feeling. And where did it happen? So we’ve got to go back and identify those gaps. And there’s, there’s there’s major milestones during that process. Milestone number one is real estate. So we signed on our franchisee, and we’ll say, let’s go find real estate. Well, maybe they don’t know what I’m talking about, then that’s okay. That’s why they sign on to the franchisor. We’re supposed to know what we’re talking about. So we’ve got to make sure that we’ve got the appropriate people in place the appropriate tools in place the appropriate partnerships in place to help them find that location, then we then we have to negotiate the lease, we have to help them through that process. Then what’s the next milestone construction? Okay, now go building. Maybe they’ve never built anything before. So we have to have the appropriate team and processes in place that then allows them to get their plans drawn up taken to the city. It get that piece of the process that Okay, great. Next big milestone, now you need to come to training. Maybe they’ve never worked in a restaurant before or, or been in a kitchen before. So we’ve got to make sure that we are have that lined out appropriately. So they feel comfortable and confident. And they have competence as they go through as they go through that process. Next big milestone is now we’re gonna go open. And we sent the team in. And the franchisee has got to have put a grand opening plan together. It’s got to market their restaurant, you got to hire. And what I have found in this is a brand specific there’s just overall there was this there was this overall in when we got to the day before opening the franchise egos. We made it and how am I made it now? Yes, we had even started, right?
Yeah, yeah. Because of that. That franchisee is tired, because they’ve just went through all of these things that I just mentioned. Yeah, it’s rigorous. So we had to sweat the flip to switch.
The day before opening, we shut down, we’re getting ready to open that next day, my team should be exhausted, my team should like we made it the franchisees to be in an athletic stance on their toes ready to go, let’s go. But that’s our responsibility to help them get there. So the onboarding aspect of what we do, has to be one that keeps them energized, keeps them rested, keeps them focused, and keeps them eye on the prize, which is the first day we open in the first guest walks in and pays money for a product. Wow, that’s such a that’s quite a process. And every person handles stress differently and their emotions differently, and they’re all amped up and ready to go. But like you said, they’ve gone through an exhaustive process, and it’s the support and the motivation and the inspiration that you provide, that really gets them over the hump so that they can really deliver, obviously, on that value proposition to guests that that was an awesome description how that works. Let’s talk about consistency.
Now, obviously, you walk into a famous toastery here versus the next town over the next state over it’s like it’s got to be a consistent experience and you must spend a significant amount of time ensuring that consistency how from a corporate standpoint, can you maintain consistency when you’ve got independent operators that are part of your system that need to deliver the very same experience?
Stay out of their way the the majority of franchisees if not all want to succeed I mean, it’s their money. They’re on tenure leases, they’ve got bank notes, they’re in it. They are 100% in it, for sure. So as long as we can provide them with the appropriate tools, whether that’s training tools, recipe specs, menu, uniform standards, opening, mid closing checklists, closed, open checklists, line checks, all of the thing, bathroom checklists, all the things that are needed, we got to stay out of their way. And allow them to organically operate their business.
How it needs to be operated. Yep, yeah, does there has to be brand standards, of course. But that’s our sign. That’s our menu. That’s our logo, that’s our uniforms. That’s our every servers, your server. That’s the raw product of the food that we’ve designated, that they bake the items on. So, you know, how we do, how they deliver at the table, and how they deliver out of the kitchen.
At least that famous toastery, what I have found is the those franchisees that, if a completely bought in, I went into
our previous Jersey up in up in Virginia, and I’m talking to her name, her name’s Angela Goodman. It was just a great experience. Same thing down in Wilmington, Joe Colbert’s a franchisee?
What are you doing here? Man, this place feels great. It looks great. Your people are great. Both ones in Wilmington, North Carolina ones up in Virginia. They both answered the same thing. What are you doing what they taught us that opening? And they’re like seven years ago. I mean, they’re just doing what they were shown. So that’s why we’ve I stay out of the way the ones that are the first franchisees that are performing this get out of their way we need to support them, the ones that are struggling, we got to figure out why they’re struggling? Is it? Is it market driven? Is it Team member driven? Is it you know, things happen in life? Is it personal driven? We have to figure that out, and then help them get there. But I’m not a believer that one one size fits all.
We’ve got to be able to listen and react and act accordingly. Do you participate with any either corporate or outside secret shopper services, perhaps to give you sort of a pulse on what’s happening in a new location and existing location? Because obviously, people yourself may included might do some travel and visit locations from time to time. But obviously when you walk in the door, people get all nervous and squirrel like oh my god, we’re gonna snap to attention kind of thing. But anonymous people that do this for, you know, a vocation or whatever can give you real honest feedback, real objective feedback on what they see. Do you do that at all?
We do. We have a secret shopper program. It’s not as robust. It’s not as robust as I would like. But the ops team is actually currently working on making it more robust, paring down some of the scoring. Because there’s some things on there, it felt like it was just put together just to come up with a score. And I’d rather just grade three things and for all three great things and good overstating but you know, so yes, we do. And what I personally use it for famous toasts over the last six to eight months, is really just get a barometer. Is this thing working doesn’t move the needle or not. Right. And it works. I don’t think it’s moving the needle. So we’re looking at reform reformatting that how it goes. But I do want to I do want to say it’s interesting you say, you know, if you said me, if I go into a restaurant, quote, snap to attention, I do everything in my power. For that is not the case. I told my team when we walk in, we should be met with open arms and and businesses normal. It because I am less important. And when I walk in any restaurant, I’m the least important person in that restaurant. I would argue the most important person in the restaurant is either the the new team, the newest team member, or the last guest that just walked in the door. So yeah, so we’ve got to, we got to get we got to break that down with the team that you know we’re not there to be the center of attention. We’re there to help make other people be the center of attention. Okay. Every franchise company is different in flexibility that the
Other operators, very rigid, somewhat loose somewhere in the middle, different regions of the country as the company continues to grow has different sort of cultural differences, maybe menu differences, preferences that really work in an area but don’t work in another one.
Tell us about what degree of leeway Do you offer an operator to add menu items to r&d new things and say, Hey, this really works best practices that get shared across different operators. I mean, tell us about all that.
Yeah, I think we’re in the middle. And for and some of our restaurants are still doing this. But, you know, when I first got to famous toasters, beginning of this year, we had a specials card that was on the table every day. And the first thing I said was specials, is that really the right word? So we changes the famous features, because we wanted to feature something. But they even as we looked at that, we do that for a few months, at least in some of the our restaurants that we operate, I took them off the table. And why? Because it’s it, let’s just execute our current menu items Perfect. Well, once we get our current menu items, perfect, then we can go at a feature. And we can feature something in which we are about to feature a product this, this this fall. So, but some of our franchisees have some great features that they have now just staples in the restaurant. So we’re starting to pull some of those out and take a look at them and see how they will act or react within the whole environment. But the key is, you know, as you as you grow, as you well know, is can we get that particular item to all of our restaurants that it doesn’t do us any good? If it’s some specialty item that I can’t get to 26 restaurants. So we’ve got to be able to play within those boundaries.
Now what part of a menu that is standardized changes from time to time seasonally or new menu items get rolled out or limited time offers I mean, do you participate in those types of programs? Or is it pretty much a standard lunch brunch? Obviously breakfast menu that pretty much stays constant? How would you how would you go well we’re we absolutely participate with sub LTS we did a a full program in the spring called spring into alcohol. And it was really just focusing in on our on our bar, because we do a full bars like like I mentioned. So Mimosa flights, Bloody Marys, and really focusing in on those components. And then from from a from a food menu standpoint, really I’ve got this, this desire to have our back off the bat or section that’s our flat jacks or waffles. Or in we already have some great stuff. For instance, we stuffed with cream cheese or Nutella or bananas flipping great. But how do we how do we expand on that? And what are some of those things that we can do? So you know, everyone, it’s it’s fall, everyone says already right? So there’s pumpkin spice this and pumpkin spice that so we’re rolling out a nut butter product that we are going to stuff it’s either in our french toast, or one of our waffles that is a pecan spiced pumpkin that we’re that we’re going to do. So that’s that’s in the works as we speak should roll out in the next couple of weeks. Fantastic. Very good.
Last question, Michael. We have some sophisticated seasoned operators, as you know, listen to the podcast and whatnot and they’re always looking for a new opportunity. What message would you give them and we’ve covered a lot of ground today but is there any words of encouragement or Hey, take a look at famous toast tree what would you say to them and how can they reach out to get more information on this particular opportunity?
Sure. Well first, if you’re looking for opportunity, the most important thing to be as fit and I mentioned before when you talk about hey what are you looking for the franchisee? The franchisee is what are they looking for in a partner in in a franchisor also, so if it’s not a good fit whether you love the brand or don’t love the brand then I would suggest going to find something else. Because the franchisor franchisee relationship is it’s a long term relationships 10 years, at least most franchise agreements are and they’re hard to get out of on both sides. know, you got to make sure that the leadership team, and not only the brand you get to I love the food, I love the ambiance, I love the business model, okay, all that’s great. But you really got to connect with the people. So if any of those folks out there that are looking for opportunity, I just I suggest, as you go through your discovery process, not just look at the brand itself, but do some research on the people that are running the brand, do some research, and get to know those people see if they’ll meet you for coffee. Just talk talk, let’s talk about our kids. Let’s talk about our hobbies. Let’s talk about what drives us. Let’s talk about life. Because the the relationship really is intertwined. And at least I’ve found that there’s got to be a trudge a trust bridge built between the two, because there’s going to be issues, there’s going to be problems, that things are going to come up. But if that trust is always there, then you’re able to get through it much quicker. And you know, if you’re interested in a famous toaster, you go to famoustoastery.com or and take a look and Eric will get get a hold of you and we’ll start the conversation.
Fantastic, Michael! Well, again, we covered a lot of ground, lots of ins and outs of operating and best practices and challenges and just franchise operations in general. So I really appreciate your being on the podcast. Thanks for being with us.
Thank you so much to our audience for tuning in. Once again, we hope you stay well. And stay tuned. Thank you Michael for being a great guest on the podcast and for sharing your famous culture and philosophy with our audience. Again, so many key learnings that we can all apply to our own business. I’d like to also thank the sponsors of this week’s episode Popmenu, Smithfield Culinary, Davo and SRV the restaurant training app at SRVnow.com. Thanks for the audience. Can’t wait to see you next time. Don’t miss it.
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Thanks for listening to the restaurant rockstars podcast for lots of great resources, head over to restaurantrockstars.com See you next time.
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