Hey there. Thanks for being back with us on the podcast. So glad you’re here. Today’s guest, Gregg Majewski, is the founder and CEO of Craveworthy Brands, operating multiple concepts in 24 states and growing. We’re going to talk all about current trends, labor, inflation, opportunities, How to stay relevant in a very competitive restaurant marketplace.

The things that have made them most successful across their brands in different states. What’s made the biggest difference? We’re going to talk about company culture, and leadership, and onboarding, and getting the most from your people, which of course are the foundation of your operation, as well as marketing ideas.

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You’re tuned in to the Restaurant Rockstars Podcast. Powerful ideas to rock your restaurant. Here’s your host, Roger Beaudoin.

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Welcome back, everyone. This is the Restaurant Rockstars podcast. Glad you’re here. Gregg, how are you today? I’m great. How are you? Super [00:03:00] glad to have you on the show. You have a wealth of knowledge and experience and insights to offer to our audience, whether they be full service operators, quick serve operators, you’ve had quite a career and you’re just getting started.

So take us back. Tell us your backstory.

It’s funny, just getting started. I’ve been doing this for 26 years. Definitely not getting started. So I started like everybody. I went off to college and screwed up majorly and my parents decided that I was no longer on their gravy train. And I had to pay for school.

And so I instantly started working in the restaurant industry because of it. So my first job was actually with Mellow Mushroom as a pizza delivery driver. And from there I was a house boy and I was a house boy at sororities as stupid as that was because I got free meals. and I couldn’t afford to eat.

I then went on and was a barback, a waitner. I learned how the kitchen from an incredible operator outside of Lexington that saw that I was serving and had some interest in it and said, why don’t I [00:04:00] teach you the kitchen and how to be a manager? And I’m like, okay, whatever. Does it pay more? And he goes, absolutely.

And worked my way through that school doing those types of ads and ends and learning the restaurant business, never really wanting to be in the restaurant business afterwards. I swore off the restaurant business and on my way to do international forensic, or forensic accounting, and an international tax division for Arthur Anderson, and they told me to take a semester off, and out of the blue, a guy by the name of Jimmy John got a hold of my resume, and made me an offer that I couldn’t say no to, and That became, okay, great, now I’m in the restaurant industry, full time.

And have never looked back and have never wanted to look back.

Oh, that’s fascinating. So let’s talk about Jimmy John for a second, because that name is well known in our industry, obviously. Was that in relation to your accounting gig with Arthur Anderson, or did it go back to something? How did you make that?

Or how did that connection how was that connection made? So

to this [00:05:00] day, I still don’t know how he got my resume.

No kidding. He

doesn’t know how he got my resume.

So how did that connection with Jimmy John happen? Did it just fall out of the sky? What’s the story there?

It is to our, both of our knowledge today, we still don’t know how my resume got in his hands. And he was in a dire position that he needed accounting help and he offered me an internship.

An internship quickly fell into, hey, why don’t you stick around and be my controller? To, why don’t you be CFO? Six months later, I was COO. And then shortly after that, I was CEO of a growing brand that wasn’t growing at that point. It was, I, I joined them when there was 30 restaurants.

I left when we had 300 open and 700 sold. But in that time frame, we were just ma and pas. We weren’t growing at the rate that we were going to be growing. We were still just getting started. And when I actually looked at. Jimmy John’s, because when he called and said, I want to offer you a job, I laughed.

I had no idea what Jimmy John’s was. I never heard of Jimmy John’s subs. Because I was going to school in Kentucky and there were none and [00:06:00] I’m like, who the heck are you? And his comment, I’ll never forget it. I’m Jimmy John! And it’s I don’t care who you are. What is Jimmy John’s? And it was a moment that if I look back on it, I probably would never tell my kids to take the same gamble I did.

I probably would have gone for the sure thing. And for whatever reason, that moment, it was, Hey, why not? What do I have to lose? And it turned out for an incredible journey and an incredible moment of my life, because most people, when they see those two doors and you get a pick, the sure thing, going and being a one of two hires in a certain accounting division, or Going with something in the restaurant industry that you never heard of, most people are gonna go and take the for sure thing,

Now, mind

you Arthur Anderson bombed about three years later and was out of business, and it was a great decision when you look back on it. But I took the restaurant industry because I loved it when I was working in it. And this gave me an opportunity to look at it [00:07:00] from outside of the restaurants because I was going into above restaurants for the first time and I was a young kid.

So why not take a gamble?

That’s an excellent story. So you’re obviously very strong analytically and you’ve got a super deep accounting background. Are you a CPA also by trade? I

was. Yes. Okay.

All right. So no longer practicing of course, but obviously there’s so much that you can apply to the finances of this big picture company that’s now called Craveworthy.

What other key learnings would you say from past career opportunities that you still apply to the restaurant business today? There must be numerous things that stand out. But foundationally, there’s a lot of elements that I’m sure have made a difference in your career.

Everyone always talks about, follow the money.

And if you’re in the restaurant business, it’s black and white. If you’re making money that day or you don’t and you can tell instantaneously, but there’s so many more layers to it that mom, pop operators tend to get bogged down by what comes in the door every day and not what has to go out, the next [00:08:00] 21 days, based on receivables and everything else.

And so part of the things that I continually look at in the. The last thing I’m going to focus on is, the cashflow part of the business. What’s coming up two months, three months, four months down the line, and not just what’s there tomorrow that you got to pay or take care of. And the restaurant industry has always been, take care of today and worry about tomorrow, later.

You can. Hear about that all the time. And what we figured out was you’ve got to figure out a way to analyze every aspect. So you’re planning years down the line. And that was the biggest change for me, in the restaurant industry, because I instantly took that accounting background and started planning next year, the, next quarter, two quarters, three quarters, three, four, five years down.

So we had a plan that we were always working towards. Oh,

that’s unreal. This is a really fascinating story. Besides key learnings, let’s talk about the things that you applied immediately to the business. We’re talking about systems here. And there’s so many operators out [00:09:00] there that I think you just said a second ago.

It’s they’re not planning down the road. It’s we’re doing, we’re taking things day by day. We’re reactive, not proactive. It’s let’s talk about some of these systems that are necessary for any operator to move the needle down the road forward versus just put out today’s food and hope you did a good job.

So we, I was taught at an early age, would you get on a plane if the pilot doesn’t check his checklist? Would you want to be on there if he doesn’t go through and check everything that he’s supposed to check to make sure that you get off the ground and land safely? And all of us would say absolutely not.

We want that pilot to be as diligent as possible. My life is in his hands. And so we took that same philosophy and put it into Jimmy John’s and then put it into everything else that I did is that everything is built on a system. And if our customers don’t deserve to walk into our restaurants, if there’s not a system in place to make sure they have the best experience day in and day out.

And so we systemized. Everything. Not just how to bake bread or how to cut meat. We systemize how to [00:10:00] clean bathrooms. How to do your accounting. How many days after the close of a period should you have your financial statement? What is the checklist necessary to close a period? How do you know that it’s closed properly?

When do you do bank recs? How do you reconcile your credit card receipts to make sure you’re getting what it is? We systemized everything. Everything. So our franchisees could come in and run their business and have a checklist to follow to make sure every month, seven days after the close of a period, they got a financial statement that they could review and instantly know if they were profitable or not, or their areas of concerns that we had to help build them towards to get better.

And those are the things are so important. And yet how many of us actually have a system on how to do your financials? What do you have to close? What’s the steps of closing your books day in and day out, and making sure you get accounted every dollar that you’re supposed to. In the old days, it was only cash, so it was easy.

Cash came in, cash came out, a lot of mom, pas, or a lot of franchisees, everybody took a little bit and didn’t [00:11:00] record it. Now with credit cards, everything is recorded, but you don’t know if you’re getting every dollar that you’re supposed to because of the chargebacks and everything else, this. The analytical component of watching every dollar becomes so much more crucial in how you’re successful or not.

And even today, we found a 50, 000 mistake in one of my companies last month. I didn’t get 50 grand from DoorDash. It’s a huge number.

But if we weren’t auditing it every week and started noticing something was off so we could then start fighting for it, we would have been out 50 grand because most people don’t catch that.

Wow, that, there’s a definite key learning there, whether you’ve got one unit or a hundred units or more, it’s like all of these things make a huge impact on the bottom line, and if you’re not looking, and if you’re just putting out the daily fires, it’s costing you money, it could be, it could be at your peril where something goes sideways, and it can’t be fixed, or it’s too late to fix it, or it literally sets you upside down, so thanks so much for sharing that.

Let’s talk about current [00:12:00] industry trends. Post pandemic, we had, supply chain issues, we had labor shortages, we had inflation. How much of that is still hanging on and affecting business today versus new things that, that you’re seeing that are coming up? What should we be concerned, most concerned about today?

COVID is always going to have a lasting effect on our, the way we handle our business. It made us better operators. It made us look at things that we used to not have to worry about. And I hope those practices on fine tuning what you do and watching the bottom line, because we all got cut so bad, those things stay.

Now, some of the other practices I hope go bye bye. But, we got smarter and more sophisticated during COVID than the restaurant industry has ever been. With technology, with looking at different avenues to bring in sales, all of these things that came in during this time was a goldmine for us.

Those are the good things that came out of it. The bad things are obviously, we lost our hospitality component of our industry a little bit. [00:13:00] Because we didn’t want to talk to guests were angry, guests were upset, they didn’t want to be out, and everyone got mean. And that mean is part of where we have to forget, and we’ve got to get back to being hospital all the time first, to win back the guests that are now just ordering from third parties and everything else, because they don’t want to deal with the service aspect.

Much easier to just sit at home than it is to come in and get inexperienced. That’s the part that I want to bring back. The other things that are important that we learn from is that as you progressed, you got smarter with how you bought. And you got better with your negotiations and everything else.

And so today’s time with all the ups and downs on supply chain and everything else, and we became a much smarter group than we ever were. We were able to pivot when things weren’t working in our direction and stuff like that. Those are all valuable lessons. Now things that we have to be concerned about is like right now, our biggest obstacle is economy.

And as much as everyone wants to say the economy is booming, McDonald’s earnings [00:14:00] claim shows they’re trading out of McDonald’s. So if a consumer is trading out of McDonald’s and they’re going home. Then, for sure, they’re trading out about everything else in the industry. There’s obviously some exceptions.

Chipotle numbers are impressive and stuff like that. They, in Starbucks, they become irreplaceable in people’s lives. They’ve deemed those brands to be, I’m going to spend that money no matter what. What is everything else is now replaceable and trade out. So how do we get smarter about battling for those customers?

What do we have to do to get them back? And how do we become dependable in their lives? So they choose us over the other opportunities that are out there. And in blue collared America, again, with McDonald’s report proving it, They’re just not eating out. So you’re now in this new sort of COVID wave because you’re seeing sales in some areas of the country tank while other areas are booming.

And it’s again, based on [00:15:00] economical distribution, and so how do you survive those downturns? You got to use the principles from COVID. To get leaner, get meaner, and get smarter again.

I love what you said about bringing back the experience, because that creates a competitive advantage. If you can create a very unique and dynamic experience where your guests feel like they’re the most important guest, they’re recognized, they’re acknowledged, they’re served, they’re real, they have relationships with the people That are in the locations that they frequent.

What are some of the things you’re doing to get people reengaged with your brands versus just ordering, picking up the phone or getting on an app and ordering Uber or DoorDash or whatever it is? What can you do? What are you doing?

The biggest thing you got to do is you got to reinstall the hospitality of training and training for hospitality.

So during COVID and all that you were basically order takers and you took away the experience factor. You took away the time that you were in the restaurant. Your servers came up and basically said what would you like and stood away and it was an easy way for them to [00:16:00] just rattle off what they needed and walk away.

You have to go back and retrain The principles of what makes this industry so special, which is that customer interaction. And that goes for QSR to fast casual to fine dining. That experience, as stupid as it may sound, when you come up to a register and you’re happy to greet somebody, that happiness rubs off on the consumer on the other side.

They remember a happy cashier, and so think about how many times you go through Starbucks or anything else and the guy handing out the coffee to you or the McDonald’s bag or Chick fil A in particular, how happy they are to give you what you ordered. You remember that when you walk away and you get this warm feeling, it bottles up, man I had a great time.

Food’s not great, but because it’s so hospital and they know that they appreciate you, you walk away thinking it was the best thing in the world. We’ve got to get back to training our employees not to be afraid of the consumer, that the consumer is our guest and that they’ve chosen to come into our restaurant.

So it comes down to training that and having the right leaders in place to [00:17:00] remember that hospitality is the focal point of what we do every day. Food is secondary. Everybody can cook. And there’s a Disney movie that says it, everybody can learn to cook, so what we do is not that incredible.

What we do that is incredible is we provide a level of service and a hospitality and a even as stupid as it is coming in for a sandwich, an experience that they get that fast, that they’re gonna remember that they can’t get from doing it at home. And that’s what we have to remember and we have to go all in on, is that level of what makes us better than eating at home.

And that’s hospitality, the level of service, and the ease of not obviously having to do dishes and everything else, but there’s a big cost for that these days.

Touching every guest in a personal way, building that relationship and giving them lots of reasons to come back and share the message on social media because that’s free marketing.

So let’s, this is a perfect segue now to talk about onboarding and training and what you do in your different brands and how [00:18:00] do we develop that competitive advantage with our people that are giving these experiences to guests every day that are memorable and giving them reasons to come back.

The biggest one is that I can say is the bigger you are, it’s easier.

You can put in all the cool training tools and have it be the way kids learn today and on their devices and stuff like that. So being in the position I am today compared to the position that if I had one or two restaurants, it’s way easier to establish the culture that I need in a restaurant than it was five or 10 years ago, because everybody looks at their damn device and you can train them.

through that device. And you can have the videos and you can have that excitement and I can be present in each one of my brands where I can install or talk to each one of my employees about why I feel what they do is so important. Now it’s up to the GMs to lead that by. And then that GM or that management trainer at MIT or whoever you have, Training your employees has to be all in on what you do and [00:19:00] it’s got to be somebody who just completely believes in the brand and the process to make sure that every person that walks in and starts with you gets the same level of training day in and day out.

And it’s the owner in most cases, because it’s the mom, pa, and the individual restaurant. They’re the ones that have that, the passion. If not, it’s finding that key employee that believes everything you do and is going to put it out there. So they’re learning how great this job is and how important it is that, Hey, we do this with the pizza that’s so different.

Being excited about this one little trick. Why are we different? Getting that sort of built into that culture and then culture bubbles up as more and more people buy into it, then instantly everybody is watching each other to make sure they stay the same. But it takes getting to that bare bones first employee and then building up two and building up three and building up four.

All of a sudden then you have this team of just bursting at the seams ready to run through walls for you because you’ve showed them the way over and over again and each person does it [00:20:00] the same way, then that’s when culture foams. And you can win and you can be different in this industry. Chick fil A is the perfect example.

Again, I know how hard it is to build a culture like that, but they do it in every store and every store buys in because every person that comes into the building or every person that comes onto that team has to go through the process. And then if you’re not getting it, you’re not there. They don’t waste time.

They remove the people that aren’t going to believe or be part of that team. The industry in the old days. You can get rid of people instantly and have five more people lined up.

So we’ve gotten,

we’ve gotten very scared to fire in this industry, but the great ones that have the culture and have all that will fire the ones that are bad for culture and bring in new people.

They don’t wait to do those things.

We always called that weeding the garden and that was important. And you’re right. A lot of people are hesitant to do so because with short staffing, it’s hard to get great [00:21:00] people. It’s you need warm bodies. And unfortunately that mindset is not doing your business any favors.

It’s turning off your guests. They’re giving average experiences. You’re absolutely right with that. It’s like as harsh as it sounds, you got to get rid of those people that aren’t trainable or really don’t assimilate the culture. Let’s talk about retention because this is a business or our industry is famous for lots of young people and they’re different than they used to be.

And obviously they’re on their devices all the time. And we need to engage them. We need to figure out what, you is important to them in order to train them so that they deliver these experiences. But it’s so important to keep these great people once we develop them. When this industry has been a stepping stone to other careers, or I’ll do this for a while just to make some money, and then I’m going to go do something else.

What do you guys do to recognize talent in certain individuals when they’re at that level and encourage them that if you stay with us, you can move up. We’ll give you more responsibility. We’ll give you incentives for doing so. That seems to be the key [00:22:00] to building a brand as well, foundationally with your people, right?

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So people are everything and we all know that. And where I go all in is that I know that this is most people’s first jobs. And to us, we take that as great pride. Taking the responsibility of having that be someone’s first job or first employment and being able to teach them work ethic and responsibility.

Install Drive is part of what we thrive in. We know that most of them are going to leave us and go on and get their degrees or, go on and do other things. That’s wonderful because as they look back on it, they’re going to remember that we installed in them, the golden rule or how to work and all that.

And they’re going to look back on those things. We’re all in on that. The other difference [00:25:00] is that we want them to also know. That if, hey, school isn’t for you or you fall in love with this industry like so many do, what’s the avenue for you to grow and to become more? We do a program that if one of my GMs has been a GM or a manager with me for three years, we waive their royalty for three years.

If they ever buy a franchise from me, so I can invest in them to let them be on their avenue towards being a millionaire. And that’s how I differentiate ourselves so much is that if you’re really believe you want to be an owner and all that, and you work with us and follow us and are on our page, we’re going to give you the avenue and the opportunity so you can become your own millionaire.

Those types of things are the way we make it seem that this is an industry. They also have another option is that they can look at my story and the story of everyone else that is on there. That not going and being the accountant or being a salesperson or being a, typical bookkeeper as my CFO was [00:26:00] and stuff like that.

We have so many people that have decided to make this industry and have done so well on it. And we tell those stories to those employees all the time, and I can use the Jimmy John’s metaphor. I’ve got Jimmy John’s managers now that own 20, 30, 40 stores, that worked for me as an assistant manager.

And now they’re multi millionaires because they went in and believed in the system and the brand and that this is something that you could really be passionate about.

One, that’s a fantastic operating philosophy and giving these people those opportunities is incredible. That’s fantastic. But what a great approach for any business.

And there’s an element of that word intrapreneurship here, because you’re developing people to be entrepreneurs within your business so that they recognize the opportunity, they dig deep and they lead your business forward. And how powerful is that? That’s just incredible.

It’s huge. And we also make each and every manager an operating partner.

So we share up to, depending on where they are on the avenue, you can earn up to 30 percent of the profit in restaurants, and the [00:27:00] better you run your store every year you can go up 5 percent of profit share up until 30 points, and 30 points, it’s life changing if you just stay with one store.

I have a Jimmy John’s manager that up until this, up until COVID, made over 250, 000 a year running one store. Just running a Jimmy John’s because she had been there, she profit shared and all that, and obviously COVID took a hit on her and this and that, but she’s now slowly ramping back up to be that 200, 000.

1, 000 or 250 employee again. That’s the magic. If you go all in and you treat people as they’re your partners, cause you can’t do it without them, so make them your partner so they win. And then you don’t ever have to have the turnover or retraining or anything else because they stick with you.

And that’s the biggest key in this industry is getting people who stick with you longer than the typical lifespan. Cause you can’t create enough great people all the time.

Absolutely

 That’s a great learning also for independent operators to develop their [00:28:00] people and give them a piece of the action. If they deliver amazing things for you, if you recognize that talent, one, you’re going to retain them, and two, you’re going to far exceed, the return on investment.

than if you just treated them as employees. So thanks so much for sharing that. Can you give us an overview, Gregg, of Craveworthy Brands? Because it’s a diverse portfolio and it’s growing all the time and you do so many different things with different concepts. Just give us a, a taste of everything you do and the different concepts.

So Craveworthy was an idea that I had that I wanted to help the emerging franchisee or the emerging restaurant group. As my time in Jimmy John’s showed me, that the big boys are set up to win. And so the PE groups that come in and the PE groups that are buying up these restaurant chains all the time, I have all the tools and all the money to be able to do things that the mom & paws or the startups can’t do.

So I created Craveworthy as a way that we could find the emerging brands and provide them that level of [00:29:00] service where they now have access to a platform of individuals that have all done it before. CFO from McDon VP of Finance for McDonald’s. Chief Development Officer from Fat Brands, Operational Team, Marketing Support, having access to Gregg Creed, who is one of my advisors and the former CEO of Yum.

Having these things is unheard of for most 4, 5, 6, 20 unit chains. This is what Craveworthy does. And then Craveworthy went out and we started acquiring Brands to make this happen. So Genghis Grill, which is an Asian quick serve concept that we completely retrofitted and changed to be fast casual from the steak and shake model that it was.

BD’s Mongolian flat top grill, wing it on, Budlong hot chicken. We just announced a JV deal with Tsum Mediterranean. And then my latest acquisition, which was Dirty Dough. I got decided for whatever reason I wanted to be in the cookie war business.

No kidding. Awesome.

But the uniqueness on Dirty Dough, for example, was because [00:30:00] that’s truly what motivated me to do it, was these are people that were taking everything they had to go in and invest in a low start restaurant concept, to start their platform, to start becoming the American dream.

So that’s what motivated me in that, is because you can build a brand. for a low cost. You can get people in early if your food’s good, and obviously cookies are going to be like ice cream. They’re going to go up and down, but the American population loves sweets. It’s not going to go away. So if you’re the best and add other increments of revenue for them so they can survive the ups and downs, add the ice cream and become more than just cookies, which 30 dough now.

These individuals are going to be able to get in for sub 200, 000. And start their American dream. And you can build three, four, five of them and having great lifestyle.

Is that a simple concept? Meaning it doesn’t, there’s not a lot of moving parts, right? You’ve got one product. It’s not an extensive menu.

Perhaps you keep coming up with new [00:31:00] creations, but it’s all based around the dough and the ingredients that go into the dough and all that sort of thing. There’s, there’s a brand that’s becoming really popular. It’s been popular for a while, these gourmet cookies and the public’s just, Eating it alive.

Is that really what your mission is? And is that why it’s easy for a new franchisee to, to enter if they don’t have a ton of restaurant experience? It’s like it’s a simple formula to follow to be successful with a dirty dough franchise.

It’s, it allows them access to get in. And if we were going to bank our laurels just on cookies, then I would, I’d be very concerned.

Cause again, you can’t bake on just one thing. And the industry has proven that time and time again. Look at Annie Ann’s had to add, hot dogs and pretzels and other pretzel inspired items to maintain. Dirty dough is no different.

Yeah,

we’re adding those brand extensions so we can survive and be more than just cookies, but we’ll always be cookie inspired.

But again, it allows you to come in and have a simple [00:32:00] operation, a simple build out, no hoods. You can go in and train how to do it very easily with a lesser employee than you as the operator and grow at a faster rate. It’s an, it’s a great story. If the operators put in the time, money, and advertising like every other restaurant that’s necessary.

Okay. What are some of those brand extensions? What goes with cookies that’s just a natural fit that isn’t a radical departure, yet it’s, you’re gonna get a cookie, but then you also want something else, which increases the check average or the spend in a store?

So we’re exploring right now dirty drinks we’re exploring edible cookie dough we’re exploring ice cream sandwiches made with our cookies milkshakes, obviously.

So anything that can have a cookie in it or a cookie avenue or flavor that you can have in any suede sort of form, including coffees and stuff like that. So we’re playing right now with dirty drinks that will have a cookie flavor for the drinks So if you don’t want to eat your cookie, you can drink your [00:33:00] cookie and just different things to try to push the people in more than just that one time every couple months that you want to have a cookie for dessert.

Can you sell rolls of dirty dough? You mentioned edible dough. Like, when I was a kid growing up you could either make Nestle’s Toll House cookies from scratch or you could buy a roll that was already formulated and you just cut it into little cookies and put it on a pan and they bake into cookies.

Like, how simple is that? But there was a novelty to it. And it’s the kids all wanted the moms to buy this stuff and the kids could do it themselves because it was so simple. Is that still a thing or not really?

It definitely is a thing and coming to grocery stores soon.

All right. That’s fantastic.

Very cool. All right. You have legacy brands that have been around for a while. Have you reformulated them or given them a makeover besides the emerging brands we’re talking about? Like, how do you, it’s all about staying relevant in this business, you must stay relevant. You can’t just sit back and say, we’ve had a brand for 50 years and it’s doing [00:34:00] just fine.

It’s okay, that’s when someone else is going to eat your lunch. What’s your philosophy there?

You constantly got to evolve. So let’s look at what we did with Genghis. Genghis was a 5, 000 square foot building and the whole mentality behind it was you came up, built your bowl as big as you possibly could, and went to the grill and we cooked it.

It was a money loser. Food cost was impossible back in the day when food cost was controllable. Having a customer come in and put five pounds of steak wasn’t going to kill you. Five pounds of steak now will cost you 18 bucks, if not more. So we had to look at the model on how we could change that.

So we instantly put in chef bowls and chef inspired bowls and pre done bowls to try to drive traffic just away from the chef bowl or the create your own model. We did that, we rolled that out to the tune of over 20 percent of our sales now are these chef bowls and on third party 80 percent are chef bowls.

So we’re no longer having these issues of the huge giant bowls, we’re moving away from it. We then took that 5, 000 square foot box and shrunk it [00:35:00] to 2, 200 square feet. We eliminated the servers and went to the fast casual model. And we now portion the product in the new prototype instead of the customer taking it.

So we dropped our food costs from 32 to 26, and all these things. So we constantly are evolving. All of our brands. So if you’re a legacy brand, what that means to us is you will come in, we’ll then take it as a consultant sort of basis, put everything in that you guys have been afraid to do, no sacred cows, and put the brand up and ready for the next 20 years, and that’s just having the money and the capital to get through that because you’re always afraid to change.

In Genghis’s case, they had a hundred restaurants at one point. They were growing, but they built on the arms of the 2008 recession where they got these great real estate deals, they thought, but they were 5, 000 square foot boxes. Rents went up very fast that they didn’t survive. The idea was fabulous.

And so now we’ve taken this great idea and we’ve made it into the fast [00:36:00] casual for today’s customer base.

Wow. Constant evolution, no sacred cows, but still, don’t fix what isn’t broken, right? And the things that work, obviously you keep monitoring those things, make sure they’re still working, but if the guest loves something, you never take it away, provided it’s still providing the return that you expect.

So that’s also a great philosophy. Let’s talk about your virtual brands, because we talked earlier about how COVID shifted the model and how we were really going for convenience and now it’s all about convenience and bringing the service back, but virtual brands is. Is that an emerging trend? Will that continue to go?

Because I understood that you could have whether it’s a ghost kitchen or restaurant that just needed new business and with the internet, you could have 30 different names for the same food you’re putting out. Is that how your model works or? Walk us through that.

So COVID allowed you to operate other brands in your restaurants and [00:37:00] pay 30, 40 percent to these other companies to survive and for the rights to use the brands.

That model to me makes no sense, because as an operator, your margins are so slim. It doesn’t matter how much additional revenue you are. You can’t give away 40 percent to third party fees and other avenues and only expect to cover.

Yep.

Yep. To expect that 40 percent you’re left with and you have to pay food cost out of that is going to get you anything.

So that model to me is horrible. Now there’s other models like WowBow that I think is a fabulous model for people to put into their kitchens because there’s no waste, you, they prepackage it, you’re able to use their service, not have that sort of avenue. They only make the money on the food they serve, sell you.

They don’t charge you anything else. That peaked my interest. I like that model. What we then looked at was, how can I make Craveworthy or virtual brands different than everybody else? So we decided that we were going to create Craveworthy Kitchen. [00:38:00] And Craveworthy Kitchen is our virtual brands that operate inside our franchisee’s restaurants, that our consumers can come in and order, if they come into Genghis, you can order our three virtual brands while you’re sitting there as well.

Or order them as you’re at home. We wanted to give our franchisees and our operators another way to build top line revenues without having any huge skews coming in or anything else. We built these menus with the products that they have. So as of right now, we’ve actually come up with 16 virtual brands that can operate in our restaurants.

Most restaurants can only operate three or four. That’s the most we allow. But each brand has their unique brands. That we built to fit. We have tested it that with adding very few SKUs on typical 5 to 10 different items, and they’re usually sauce base or packaging or something like that by adding those things, we can build top line sales through our restaurants of 250, 000 a store per year.

And the [00:39:00] difference, you’re not paying 60 percent or 70 percent to virtual, you’re only paying your royalty and your standard marketing fee that you pay anyways. So it’s incremental revenue now that helps you cover all your G& A. So my franchisees rents can be paid for. My franchisees overhead, everything on the G and A line can be covered by these virtual kitchens. How much easier is it for a profit center now for your restaurant to be successful? So we went all in and making sure our franchisees and our stores can win by adding this other component into our restaurants. That’s going to be the, that’s what sets us apart in the virtual world, but it also then will set, I’m sure other people will copy me very fast once it goes out.

That

was my next question. It’s you just released this incredible opportunity. Provided you can execute, but think about how that improves the margin in the store, gives further incentive for the operators to do this, and how it just makes their whole life. Oh, it’s amazing. That was a really powerful piece right there.

Thanks for sharing. [00:40:00] And

what we’re doing different on top of that is that because Craveworthy Kitchen is part of my brands and I have emerging brands, My loyalty programs and everything else all tie together so you can now have one loyalty program across all of my restaurants where you couldn’t do that with a Dunkin.

Dunkin franchisees would never agree to allow their loyalty points to go to Buffalo Wild Wings. My franchisees, because we’re starting now, have no choice. We’re building this as something that’s a benefit for everybody. So if you work at a, eat at a Genghis, but you go to a Craveworthy Kitchen in Georgia and they have a wing it on and you see the Craveworthy Kitchen name, you may order, you still earn loyalty points there, just like you would everywhere else.

So my customers now become across the nation based on my brands. So we’re tying all this together. So this becomes this new evolution of what a, a platform can really be and how we can attract and market to our customers across so many different avenues.

That sounds like a foundational element of your marketing strategy and your plan, and it’s also trackable, and you’re [00:41:00] keeping things within the family as well, and It’s up leveling all the individual concepts.

Is there anything else from a marketing standpoint that’s proven to work for you? We talked about loyalty. We talked about what you just said. What else do you do that’s trackable? Because so many operators, they experiment with their marketing. They might try something new. This didn’t work.

So I’m going to try something else. And it’s literally dumping money out the window, unless you can track where it’s coming from and what the ROI is. What’s your proven marketing strategy besides what we just talked

about?

Marketing is one of those where for years it was, let’s throw something at a board and hope that you get something out of it.

And that’s still the way most of us do it. You can do mailers and get coupons back. You can advertise on Facebook, but why would you these days? You can go TikTok and social media. That all drives a little bit, but it’s hard to measure. So where most people tend to go is they stop marketing. That’s the first instinct by most restaurant operators or most franchises.

Oh, I’m just not going to [00:42:00] market. I don’t need to spend a nutshell one or 2%. I don’t make enough. But if you don’t continually spend. You don’t attract new customers. And if you don’t attract new customers, you don’t replace the ones that die. And that doesn’t mean they physically die, but die from being a customer of yours.

They either move, they go on, they are no longer able to come to your restaurant for whatever reason. So if you’re not spending that 3, 4, 5 percent of your sales on attracting new customers each and every year, you’re not going to be able to maintain yourself. Your sales instantaneously are going to go down over time.

So that’s lesson like 101 we tell everybody, you’ve got to spend to make money and you’ve got to spend to grow your business and replace the people that have been there forever because eventually they die off on you. Where you spend that money is the next issue and so it’s most individual or small groups don’t, are afraid to get into bed with big companies because they think they’re going to be taken advantage of.

[00:43:00] All I can stress, and we have a service that we use, and we’ve gotten this sort of dialed in, find one that you can trust that will do the digital campaigns that you need with plussing of mailings and TV. And we have a program that if you spend about 5, 000 per quarter, you get 30 days of, TV, you get digital ads for three months, you can get replaced the TV with mailers one quarter.

You’ve got to find something that you can attract and drive. And there’s great companies out there. And Veracast is one of them, where you can go and partner with them, that they can then give you other tools and other analytics on how those results benefit you or don’t benefit you based on what they’re running.

And you’ve got to go all in on that. Don’t go and put ads in Facebook and yourself, you’re going to fail. Don’t go and put a bunch of things on social media, even though you have to build social media, but don’t go and promote something on social media. Cause if you don’t know how to tie everything together, you’re not going to get what you want out of it.

And it’s going to cost you thousands of dollars instantaneously [00:44:00] and really find and partner with people that are way smarter than you in that aspect. And those companies like Veritas and spend that money to make money.

Excellent advice. Let’s talk about your leadership style. You strike me as someone who continues to work on your company.

You don’t work in it. You empower other people. You raise people up in the organization. You got the big picture of 30, 000 feet. You’re staying relevant. You’re innovating the company constantly. Is there a typical day for you in this company or what do you do week to week? You are, you get in there and is it always constantly evolving or is there any common thread between your days?

My days are spent in building my team and being their person that can answer their question or get rid of their roadblock. So my job is not about obviously fundraising and the big picture stuff is my job, but my real job is removing roadblocks from the people that are report to me or work with me. [00:45:00] And so in a leader of any great company.

Their biggest thing is your people underneath you have to be successful for you to be successful. So I learned early on in my life that it was my job to make sure that there was no obstacles that could prevent you from doing the things that I needed you to do and to make sure you were always successful because if you win, I win.

And that’s been my mentality since day one, is surround myself by people that want to win, surround myself by people that are smarter than me, and that I can then help and raise to the level that they need to get to, to be their best self. And most people don’t know how to get to their best self, and a true leader’s job is to get them to that point.

And so this is back to the conversation of recruiting and how you keep people. My goal is always to have my team go on to be their next best self. And most of the time that can’t be with me. It’s hard for someone else to replace me as CEO until I leave. So [00:46:00] my job is to get them ready for their next job.

And to have that next stepping stone. And that may not always be with me, but it’s a win if they go on and do it for somebody else, because they learned the way to do it from us. And then when I need somebody, who do you think is going to be my biggest recruiter? It’s my team that’s gone off to go and do great things elsewhere because they learned the principles with us.

And that’s why I don’t, you don’t see recruitment ads for me very often. Because I just throw out to my network, I’m looking for somebody and all these people that left me to go and do something else or take a stepping stone, tell people to come work for me, I’ll make you great. And that’s the greatest, sort of passion that I have is seeing them go on and become better elsewhere.

Thrive and succeed. Yeah that’s wonderful. So you’re a mentor in so many ways, and I’m such a huge believer in mentoring. And even within the individual location, mentoring and shadowing the best practices of your best people. And even if you assign, a new [00:47:00] hire to several people, because they all have their own personal style, their own personalities, their own way of being successful, and you could pick up something from multiple people before you actually turn somebody loose.

On the floor. And that was always hugely beneficial to me. So thanks for sharing. That’s tremendous. Now let’s talk about your menus. Now, do they change regularly? Do you have LTOs from time to time? Because quick serve generally does. How do you come up with new menu items?

So the new menu items, it’s always my greatest, the area that I love the most, because you see stuff that’s working and you get to play and you get to try and you get to experiment and you get to push the envelope to see what a consumer will respond to or not respond to.

I believe that you have to have all, your menu can never be consistently the same. And in the old days you could have, you could sell a cheeseburger, a hamburger, a cheeseburger, a double burger, a double cheeseburger, you could get away with that. In today’s world, you have to evolve a little bit from that and have something to attract people to come into [00:48:00] multiple times.

You’ve gotta, you’ve gotta reinvent yourself just a little bit. So people come in for that special something that may only be there on a short term. So LTOs are extremely important. I also think the LTOs are your testing point to see where you can take a customer. And so we rolled out Jambalaya almost two and a half years ago.

It is absolutely nothing to do with an Asian restaurant. Nothing. We put it on the menu because I could get away with it being a rice based dish, and a dirty rice, which jambalaya is, and so it’s a fried rice. Everybody looked at me like I was nuts. You can’t put this on this. This is never gonna move.

It was our number two item. While we ran it and it’s now a permanent feature because our guests was close enough to what we were that our guests responded to it and they knew it and loved it and we’re able now to have a whole lineup of different fried rices. All Asian inspired, but not 100 percent Asian.

It allowed us to add [00:49:00] menu items. We have a chicken bacon ranch, and stuff like that. It just, it allows you and opens up other revenue streams. So LTOs are so important.

Yeah, and as long as you’re cross utilizing ingredients, and you’re not bringing in individual items that may move or may not move, that makes sense.

And as long as it’s profitable and it complements the menu, that makes perfect sense. Very cool.

And the core, though, has to stay. So that’s the biggest thing that when people go and redo their menu, there’s a core of 70 percent of your menu that you can never touch. You can make little tweaks and stuff like that, but 30 percent of your menu If you look at the data, don’t move.

Those are the 30 percent that you should constantly be changing out and evolving with to make sure that you have something that may catch on a move. But no menu mix in all of these restaurants. Go and look at the data. There’s 30 percent of them that should be just cut because you’re not selling enough to make it worthwhile.

That’s another key lesson right there, because if you’re just so focused on being reactive, you’re not looking at the data, you’re not [00:50:00] checking out sales reports and seeing what’s really moving versus what isn’t. If you’re not costing out your menu on a regular basis, and you don’t know what it costs you to serve this to the guest when the price of that just spiked, it’s these are some of the common pitfalls that you probably have people that are just solely responsible across the chain to monitor these KPIs or whatever you want to call them.

But the average operator. Unless you’ve got key people that you’ve empowered to take this on, it’s this is why the margins are slow, so low in this business. It’s we can’t stay the same every day. We’ve got to keep ahead of what’s happening. So thanks for joining us. And you also can’t

walk away from chicken or steak.

The last two years, chicken prices went through the roof and we all, there was nothing we could do. You could only raise your price. But yeah, you couldn’t raise it enough to what you’re recovering, so how do you survive and all that? That’s part of this business that there’s some things you can never replace, and proteins tend to be the biggest one.

But like steak now is, or beef prices right now are going through the roof, and we’re about to have the same sort of issue. How do [00:51:00] you survive? And if you’re not watching it every day and looking at ways to better yourself, or looking for a purchase deal, or a sub, or these type of things, you’re gonna, your margin is gonna be gone.

Overnight, because you’re not watching it. And most people don’t check their invoices on a weekly basis to see that beef went up 1. 50 a pound. And it didn’t go up 1. 50 a pound. I’m exaggerating, but they don’t notice it.

Yeah, that’s something I always did. I always monitored the invoices, had to keep people honest, all those things, shop people, shop my supplier, shop credit card processing.

I was always trying to, and this is a business of loyalty and relationships, I get that, but you’re vendors, and we have lots and lots of vendors in our businesses. It’s like they exist to serve us, even if they’re in the business of making money. It’s like nothing is sacred there. It’s like you should shop everything always and stay ahead of that curve.

Let’s shift gears and talk about necessary technology in your business, because that’s something that changes every minute. There’s always a new software that does this or that. [00:52:00] And unfortunately, a lot of it has replaced that magic word hospitality in search of convenience. There is a balance there.

What is absolutely essential for your business that gives you the guest convenience, makes things smooth and efficient, but also doesn’t detract from that hospitable experience that you talked so much about?

So I, we have a rule in my company, it will look at every piece of tech, but if it affects hospitality, we don’t want it.

So if it doesn’t make hospitality better and make it a more hospitable environment for our guests, it’s a no. So that’s the first thing that we do. Then we can look at it at stages. Because you have so many different people that listen. Like a one off restaurant, two, three, their level of tech is completely different than what a chain or my company has to have because of where we are.

There’s things you should and should not do, but you want all the rosy new features, but you can’t afford to do them. You can’t continue to add on these service fees on a monthly [00:53:00] basis because you keep adding on, all of a sudden you’re profited out because you don’t have the buying power. So if I had to pick one thing that every restaurant should always be investing in, it’s your POS system.

That’s first and foremost. Find one, use one, have it updated. Cabot current because of the reporting and everything else. That’s the most important thing. Second most important is an inventory and scheduling system. Have something where you can actually find out what your inventory and your cogs are and your labor is every week and that it’s accountable and manageable because those are the things that a restaurant can control.

So for me, I use restaurant 365. That’s the system of my choice. That’s the one that we have. We use it for everything, but we went all in on that so I could have food costs and labor. Perfect in all my restaurants. Then you start looking at, okay, now you start adding other things. Loyalty. Oh, loyalty is the greatest thing in the world.

I gotta be, have a loyalty program. If you have under 10 units, loyalty systems are so expensive. It’s not the right use of your. time or money yet. Have a [00:54:00] text message, have an email system, have that first component, but don’t pay for the full loyalty system. Then loyalty becomes important, because yes, it is the greatest way to market.

It is the greatest way to get people in and keep customers coming back and all that. And it’s the easiest low hanging fruit to maintain relationships. But if you only got a handful of restaurants, it’s so expensive, you can’t do that. So then loyalty comes in. Having your online ordering platform and a webpage and having a partnership with either DoorDash, and all those can design your webpage for you, where you can order from, is so much more important than a loyalty program today.

Partnering with an Instant TVO, if you’re at that stage, or a Olo and Punch or whatever your tech stack’s going to be, you got to do them in the proper stages so you can still make money and actually see a return on it. And again, we’re a much bigger company than most out there today, that our tech stack has now evolved to such a point where I question continually, did [00:55:00] we spend too much or do we have too many things that we’re not fully using the abilities on before we add something else?

Thanks for answering. Let’s talk about secret shopping. Do you travel across the different regions where your brands are located, and do you follow up on franchisees yourself, or do you have a team that does that? And how does that process work? Is it announced in advance that someone’s coming to your store, or is it really a secret shopper thing to maintain consistency, which is all important?

We do all the above. So I’m in restaurants, the, my, I have a team that goes out to restaurants, and then we do the secret shopping. The one that I’m least passionate about is secret shopping because you don’t have the same knowledge base. I think there’s other systems out there that can give you that like ovation or these customer feedback programs.

That can give you that same sort of mystery shop experience by just filling out a survey that you get done without having to pay those other avenues. Plus it helps [00:56:00] build your scores and your online database and all that. So that’s where, instead of secret shopping, that’s where I’d invest in. But you gotta be present.

And every owner and every operator, every partner, every franchise system that you’re a part of, if they’re not present with you and fighting with you and coming in to actually show you and help you and build your business with you and showing you things you can improve on so you can be better, then they’re not the right partners to have.

And so we’re continually in our restaurants and I’m in the restaurants way more than I probably should be, because I want to be hands in and making sure that we do things the way it should be and the systems are in place and they’re getting the feedback that they need.

Fantastic. Now you’ve got some pretty ambitious growth plans over the next five years.

Do you care to share? You’re going in lots of different directions, mergers and acquisitions and more virtual restaurants and more brands and all that sort of thing. So much going on. Tell us about that.

And we set a goal when I created Careerworthy that in five years, I want to be a billion dollars in revenue.

And it was a goal [00:57:00] that I said out of tongue in cheek when I said it, because who the hell is going to get to a billion dollars in system wide sales in five years? And, but it was something that we’ve rallied behind and that now is a focal point of ours that we actually think we can accomplish this goal.

But it’s because we can do acquisitions and we can grow at such a point that I have the war chest to be able to go after other brands to get there faster. If I were ever to look at someone in the eyes and say, I’m going to take one brand a billion dollars in five years, I’d laugh at them. It’s not doable.

But the way we’ve set this up, we can go after so many different avenues that we were going to have three, four, and five brands that are all growing at the same pace and exponentially that we’re going to be able to hit that number and make that come true. In the meantime, we’ll continue to look at acquisitions.

We’ll continue. We may sell off a couple brands. It just, it really depends on where we are at that moment to get to the end result that we want to achieve.

Such a dynamic business that you’re building here. And wow. Everything that you’ve talked about has been applicable to all stages of our [00:58:00] audience, so I can’t thank you enough for being on the podcast.

Thank you, Gregg.

Thank you. Thanks for having me.

That was the Restaurant Rockstars podcast. Thanks so much to our audience for tuning in. Thank you to our sponsors of this week’s episode. We wish everyone to stay well and stay tuned. See you in the next episode.

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