WEBVTT - Blaze Pizza’s Smaller Stores to Fuel Development 0:00:20.560 --> 0:00:23.400 Welcome to Chopping It Up. I'm your host, Mike Hallen. 0:00:23.440 --> 0:00:26.720 I'm the senior Restaurant and food Service analyst at Bloomberg Intelligence. 0:00:27.280 --> 0:00:30.680 Today we're joined by Bette Guahardo, CEO of Blaze Pizza. 0:00:30.720 --> 0:00:32.080 Thanks for doing this, Beto. 0:00:32.240 --> 0:00:34.360 Hey, Mike, thanks for having me. I really appreciate it. 0:00:34.720 --> 0:00:37.760 So can you start out by telling us a bit 0:00:37.800 --> 0:00:40.760 about your career background and then what attracted you to 0:00:40.760 --> 0:00:41.479 Blaze Pizza. 0:00:41.960 --> 0:00:45.880 Yeah, thanks for the question. You know, coming out of 0:00:45.920 --> 0:00:49.120 graduate school at Northwestern, I ended up spending about ten 0:00:49.200 --> 0:00:53.800 years in professional services with Deloitte and McKenzie, and that 0:00:53.920 --> 0:00:57.640 actually then kind of led me into this track of 0:00:57.640 --> 0:01:01.480 being a corporate strategist. I led corporate strategy for some 0:01:01.520 --> 0:01:06.480 of the world's most iconic brands, Levi Strauss, Avon Cosmetics, 0:01:07.200 --> 0:01:12.119 and Starbucks Coffee Company. While I was at Starbucks, one 0:01:12.160 --> 0:01:15.640 of my mentors, actually the CFO, said to me one day, 0:01:16.000 --> 0:01:18.679 you really need to go run a company, and that 0:01:18.800 --> 0:01:21.880 actually led me to an opportunity with Focused Brands to 0:01:21.880 --> 0:01:24.160 be the president of Schlatsky's and eventually the president of 0:01:24.240 --> 0:01:27.959 the International division. And while I was with the International Division, 0:01:28.680 --> 0:01:31.679 you know, I thought that well, maybe I won't be 0:01:31.680 --> 0:01:34.200 a CEO. Maybe I'm meant to be a president of 0:01:34.240 --> 0:01:36.640 a division. And of course, as soon as you think that, 0:01:36.880 --> 0:01:42.000 the phone rings. And I've always loved Blaze Pizza. I 0:01:42.040 --> 0:01:45.280 love the experience that you get inside a Blaze Pizza's store. 0:01:45.360 --> 0:01:47.360 I love the fact that you can make it your own. 0:01:48.240 --> 0:01:51.400 It was always one of my favorite pizzas. And so 0:01:51.480 --> 0:01:54.200 when I met the team, you know, it was a 0:01:54.240 --> 0:01:59.800 relationship made in the stomach. Very cool. 0:02:00.840 --> 0:02:02.760 Can you give the audience a little bit of history 0:02:02.800 --> 0:02:05.520 about Blaze, you know, talk a little bit about the 0:02:05.560 --> 0:02:07.400 service model and the menu. 0:02:08.040 --> 0:02:11.880 Yeah. So, Blaze was actually founded in twenty eleven by 0:02:12.040 --> 0:02:16.320 Rick and Lice Wetzel here in Pasadena, and their idea 0:02:17.280 --> 0:02:20.880 was basically, for lack of a better word, create the 0:02:20.960 --> 0:02:26.840 subway of pizzas, right, and that for one price, you 0:02:26.880 --> 0:02:29.880 can make your own pizza and have as many toppings 0:02:29.960 --> 0:02:34.160 as you would like. As you know traditional pizza experiences, 0:02:34.960 --> 0:02:37.160 you pick the size of your pizza and then every 0:02:37.240 --> 0:02:38.919 topic that you want is going to cost you another 0:02:38.960 --> 0:02:43.520 two to five dollars. Right, Well, Blaze introduced this idea 0:02:44.120 --> 0:02:46.840 that for a build your own pizza, you could pick 0:02:47.000 --> 0:02:51.000 the proteins you wanted, You could pick the vegetables that 0:02:51.040 --> 0:02:53.240 you wanted. You get to pick a crust, you get 0:02:53.280 --> 0:02:54.880 to pick a sauce, you get to pick your cheeses, 0:02:55.280 --> 0:02:59.919 and you're truly making your own pizza as a matter 0:02:59.919 --> 0:03:03.640 of fact, when it works really well. And I hope 0:03:03.639 --> 0:03:06.160 to make this happen someday. I want Mike to be 0:03:06.200 --> 0:03:08.200 able to come into a Blaze Pizza and say, hey, 0:03:08.240 --> 0:03:11.240 I want the Mike Special, and that's a pizza that 0:03:11.320 --> 0:03:18.320 you created. We like to say anybody who has an 0:03:18.400 --> 0:03:22.600 enjoyment for great flavor can be a pizza artist and 0:03:22.960 --> 0:03:28.160 at Blaze that specialty experience of making it your own 0:03:28.600 --> 0:03:32.760 and doing so Mike doing so in an experience that's 0:03:32.880 --> 0:03:36.800 under one hundred and eighty seconds. So when it's done right, 0:03:37.400 --> 0:03:40.280 it almost feels magical that you've just created a pizza, 0:03:40.520 --> 0:03:43.280 it's been fired up in that oven and it's being 0:03:43.320 --> 0:03:46.520 handed to you by the time you got your own drink. 0:03:47.560 --> 0:03:48.480 And that's Blaze. 0:03:49.080 --> 0:03:53.040 Yeah, that's that's very cool. How many restaurants does Blaze 0:03:54.520 --> 0:03:58.200 own operator franchise right now? And where you strong geographically? 0:03:58.600 --> 0:04:02.600 Yeah, we have about three hundred and thirty stores. Mike 0:04:02.960 --> 0:04:07.960 and our biggest markets are actually in Florida and California, 0:04:08.840 --> 0:04:11.800 but you know, don't tell that to Texas, if you 0:04:11.840 --> 0:04:16.320 know what I mean. And then we've got stores essentially, 0:04:16.360 --> 0:04:20.239 I believe in thirty five different states, and we also 0:04:20.360 --> 0:04:22.600 have several international markets as well. 0:04:23.160 --> 0:04:25.800 So what's the what's the mix of company owned versus 0:04:25.800 --> 0:04:28.359 franchise and where do you think the sweet spot is 0:04:28.400 --> 0:04:29.080 for Blaze? 0:04:29.600 --> 0:04:35.960 Yeah, great question, you know, it's it's an interesting financial 0:04:36.000 --> 0:04:42.320 analysis to do based on store profitability and cost to 0:04:42.360 --> 0:04:45.679 build a new restaurant and what your investors are seeking 0:04:46.440 --> 0:04:50.680 with regards to annual growth. You see in a lot 0:04:50.720 --> 0:04:53.560 of concepts. You know, McDonald's is a great one, right 0:04:53.600 --> 0:04:57.040 where they basically held on to about thirty percent of 0:04:57.080 --> 0:04:59.320 their company owned stores and eventually went down to twenty 0:04:59.320 --> 0:05:01.360 and eventually down to ten and now it's like almost 0:05:01.360 --> 0:05:04.920 all franchise. Right then you look at someone like Chipolte 0:05:05.480 --> 0:05:07.720 and it's all company owned stores because the stores are 0:05:07.720 --> 0:05:12.599 so profitable. What I learned in this industry mic is 0:05:12.640 --> 0:05:17.279 that if you can deliver four wall profitability of above 0:05:17.920 --> 0:05:22.080 sixteen to eighteen percent based on your cost of capital, 0:05:22.680 --> 0:05:25.760 you're probably better off actually owning that store. Versus being 0:05:25.800 --> 0:05:29.000 in a franchise model. But if the four wall profitability 0:05:29.000 --> 0:05:30.760 is going to be less than that, then you let 0:05:30.839 --> 0:05:34.800 someone else invest their capital who doesn't need as high 0:05:34.839 --> 0:05:40.320 of a return. Currently, we've got about ten company owned stores, 0:05:40.800 --> 0:05:42.839 and I believe the sweet spot's going to be somewhere 0:05:42.880 --> 0:05:46.000 in the neighborhood you know of around fifteen to twenty percent. 0:05:46.560 --> 0:05:48.359 Okay, okay, So how are you going to hit the 0:05:48.400 --> 0:05:50.479 fifteen to twenty percent. Are you looking to buy out 0:05:50.480 --> 0:05:52.880 some franchisees, are you gonna build your build them yourself? 0:05:52.920 --> 0:05:54.000 What's the plan right now? 0:05:54.279 --> 0:05:57.279 Yeah, it's a combination of things. I can't get into 0:05:57.360 --> 0:06:01.320 the specific details, but suffice to say we have been 0:06:01.360 --> 0:06:04.360 approached by a number of developers with opportunities to actually 0:06:04.400 --> 0:06:07.400 build our own stores that would be company owned, and 0:06:07.400 --> 0:06:10.560 that includes some non traditional locations as well, by the way, 0:06:11.360 --> 0:06:13.480 which is a lot of fun. And though we do 0:06:13.560 --> 0:06:17.000 show up in several airports, it's definitely a place that 0:06:17.040 --> 0:06:19.680 we want to be more as well as you know, 0:06:19.680 --> 0:06:21.960 what I like to think of as locations where we 0:06:22.040 --> 0:06:25.839 might not necessarily have access to the real estate. Right 0:06:25.920 --> 0:06:29.360 So if we can, you know, partner with the developers 0:06:29.400 --> 0:06:31.680 and get access into that real estate, then we can 0:06:31.720 --> 0:06:37.080 operate them ourselves. It's one example. Two, the system is about, 0:06:37.160 --> 0:06:43.480 you know, twelve years old, right, and industry best practices 0:06:43.560 --> 0:06:48.840 is that you are improving your location every three to 0:06:48.920 --> 0:06:54.600 five years with a modest remodel and then probably a 0:06:54.600 --> 0:06:56.920 massive remodel, you know, in the seven to ten year 0:06:57.440 --> 0:07:01.520 time period. Some of our franchisees find themselves now at 0:07:01.520 --> 0:07:04.680 that threshold of do I want to invest additional capital 0:07:04.680 --> 0:07:10.400 and remodel the store. It's interesting because those franchisees that 0:07:10.520 --> 0:07:15.160 really see themselves as operators with an investment want to 0:07:15.200 --> 0:07:19.720 be operators with an investment, and those franchisees who are 0:07:19.720 --> 0:07:24.600 investors who have other operators oftentimes are like, well, now 0:07:24.640 --> 0:07:27.960 I want to try something else, And so they're approaching 0:07:28.040 --> 0:07:29.680 us with an opportunity to say, hey, would you guys 0:07:29.680 --> 0:07:32.960 like to take over? And it's happening in two different ways. 0:07:33.640 --> 0:07:37.160 So we are actually in the process of acquiring some 0:07:37.200 --> 0:07:40.360 of our franchise stores, but we are also in the 0:07:40.400 --> 0:07:44.240 process of helping some of our franchisees sell to new investors. 0:07:45.800 --> 0:07:47.520 Cool and so can you talk a little bit about 0:07:47.560 --> 0:07:52.560 where where the locations are, you know, and a little 0:07:52.600 --> 0:07:55.200 bit about the box and if there's been any you know, 0:07:55.320 --> 0:07:58.400 discussions about maybe changing the box or the way you 0:07:58.440 --> 0:08:02.840 get customers their food based on you know, the proliferation 0:08:03.000 --> 0:08:06.320 of off premise and the popularity of drive throughs over 0:08:06.360 --> 0:08:08.480 the last couple of years. But you know, i'd imagine 0:08:08.560 --> 0:08:13.160 that you assemble and bake these pizzas, you know, fast 0:08:13.280 --> 0:08:15.320 enough that it gives you some options. 0:08:16.600 --> 0:08:23.040 Great question. Since the pandemic, the guest experience in a 0:08:23.120 --> 0:08:28.440 restaurant has dramatically changed, especially in QSR and fast casual, 0:08:29.640 --> 0:08:33.120 more and more orders and this is nothing new. Everyone 0:08:33.160 --> 0:08:36.120 knows this right coming in online, I want to place 0:08:36.160 --> 0:08:38.079 my order ahead of time, I want to come into 0:08:38.120 --> 0:08:39.480 the store and pick it up, or I want to 0:08:39.520 --> 0:08:42.800 deliver it to me. At one point in time, let's 0:08:42.840 --> 0:08:47.480 go back to twenty eighteen, we were closer to ninety 0:08:47.520 --> 0:08:50.480 percent of all of our orders were placed in the 0:08:50.559 --> 0:08:56.120 store for an in store dining experience. Fast forward through 0:08:56.160 --> 0:08:59.400 the pandemic. Now we're down to about sixty five or 0:08:59.480 --> 0:09:03.200 seventy percent, right with thirty to thirty five percent of 0:09:03.200 --> 0:09:08.480 our orders being placed through the app or web to 0:09:08.520 --> 0:09:13.240 be picked up or to be delivered. And so the 0:09:13.280 --> 0:09:16.240 size of our box doesn't need to be as big 0:09:16.280 --> 0:09:19.000 if it's not going to be utilized as much, not 0:09:19.120 --> 0:09:24.200 to mention with the cost of development, particularly interest rates, 0:09:25.240 --> 0:09:30.560 seeking smaller locations and a new store format where we 0:09:30.640 --> 0:09:36.040 can actually lean in faster, more cost effectively into the 0:09:36.160 --> 0:09:39.880 off premise experience. We just recently opened up a store 0:09:40.920 --> 0:09:44.600 in Florida that's down to seventeen hundred square feet and 0:09:44.720 --> 0:09:49.760 it is doing great, actually beating our expectations for its 0:09:49.760 --> 0:09:52.800 first three weeks of sales, and so we're going to 0:09:52.800 --> 0:09:55.200 be trying that more and more and more. I love 0:09:55.240 --> 0:09:57.800 your question on drive through, by the way, and I 0:09:57.880 --> 0:10:01.400 actually do believe that with the speed of our equipment 0:10:01.800 --> 0:10:05.120 and our service levels and our capabilities, that there is 0:10:05.120 --> 0:10:08.439 an opportunity for us to lean in to being your 0:10:08.520 --> 0:10:09.920 drive through piece experience. 0:10:12.000 --> 0:10:15.000 Yeah, that'd be cool. Seventeen hundred square feet. How does 0:10:15.040 --> 0:10:20.200 that compare to how big this the units were historically 0:10:20.559 --> 0:10:23.920 and how much cheaper is it to build these smaller units. 0:10:24.200 --> 0:10:28.120 It's about half the size, and half the size equates 0:10:28.120 --> 0:10:30.760 to anywhere from twenty five to thirty five percent less 0:10:30.800 --> 0:10:31.600 expense to build it. 0:10:33.440 --> 0:10:38.160 That's great. And are you like in typically located in 0:10:38.200 --> 0:10:41.839 shopping malls or you and things that the strip malls 0:10:41.840 --> 0:10:43.960 and things of that nature. 0:10:44.559 --> 0:10:48.880 So the vast majority of the Blaze locations are either 0:10:49.000 --> 0:10:54.560 in standalone buildings themselves or in line in strip malls, 0:10:55.440 --> 0:10:58.319 but we also have locations within traditional malls as well. 0:11:00.559 --> 0:11:07.199 You know, I do believe that we can win in 0:11:07.360 --> 0:11:12.920 any one of these type of real estate plays. Uh. 0:11:14.559 --> 0:11:19.199 The most important thing is that we are focusing our investments, 0:11:19.760 --> 0:11:23.680 you know, on a maybe be real estate, and we 0:11:23.800 --> 0:11:29.000 don't get greedy with c and oftentimes, you know, the 0:11:29.080 --> 0:11:33.120 development partners that we are in business with, they have 0:11:33.280 --> 0:11:35.680 ideas of where the traffic patterns are going to be 0:11:35.920 --> 0:11:39.240 in a year or two years from now. And so 0:11:39.640 --> 0:11:42.240 based on the you know, software that we have and 0:11:42.280 --> 0:11:44.240 the tools that we use and the insights that we 0:11:44.320 --> 0:11:47.240 have with some of our development partners, I think you're 0:11:47.240 --> 0:11:50.840 going to see us continue both in line and standalone 0:11:50.920 --> 0:11:51.960 locations going forward. 0:11:53.760 --> 0:11:55.720 Okay, cool, By. 0:11:55.559 --> 0:11:57.160 The way, if it's if it's in line, I want 0:11:57.160 --> 0:11:58.360 to be on the end so I can open that 0:11:58.440 --> 0:11:59.120 drive through window. 0:12:00.080 --> 0:12:04.280 Yeah, I like it. Is there any any other unit 0:12:04.320 --> 0:12:05.920 economic data that you'd like to share? 0:12:07.120 --> 0:12:10.440 You know, I think the important thing for someone who 0:12:10.720 --> 0:12:14.320 would want to consider having a Blaze Pizza if we 0:12:14.320 --> 0:12:16.959 can get the development cost you know, to seven hundred 0:12:16.960 --> 0:12:20.960 and fifty thousand dollars or less, and we can run 0:12:21.280 --> 0:12:24.559 you know, an average unit volume up to a million 0:12:24.640 --> 0:12:29.960 and a half on that investment, even in the first year, 0:12:30.480 --> 0:12:35.000 where you're still learning to be really efficient. Right, if 0:12:35.040 --> 0:12:39.640 you're capturing you know, fifteen percent, let's say, in profitability, 0:12:39.679 --> 0:12:43.199 you're doing a really really good job, right, and now 0:12:43.240 --> 0:12:45.760 you're looking at what twenty four month eighteen month payback 0:12:46.440 --> 0:12:50.640 you know on your investment. But even on a lower 0:12:50.720 --> 0:12:54.280 AUV call it a million two and you know, a 0:12:54.360 --> 0:12:59.560 twelve percent four wall profitability, you're still looking at, you know, 0:13:00.640 --> 0:13:03.680 twenty four to thirty six months if you're running and 0:13:03.720 --> 0:13:10.080 operating correctly. That being said, my team and what we're 0:13:10.120 --> 0:13:15.800 seeking is to continue to develop operating models and find 0:13:15.840 --> 0:13:20.680 locations where we can actually drive above that sixteen percent. 0:13:21.440 --> 0:13:23.400 Now I told you what my percentage of company and 0:13:23.520 --> 0:13:26.360 stores I want to have. But the more we can 0:13:26.400 --> 0:13:29.640 find opportunities to drive fifteen to twenty percent four wall 0:13:29.679 --> 0:13:32.800 profitability with that level of investment, that's just going to 0:13:32.880 --> 0:13:40.320 drive continued individual seeking to invest with Blaze. And by 0:13:40.320 --> 0:13:44.360 the way, I should share with you. Part of our 0:13:44.400 --> 0:13:50.200 plan is international expansion. And as I mentioned, I ran 0:13:51.080 --> 0:13:56.040 eight brands internationally before I came to Blaze Pizza. And 0:13:56.080 --> 0:14:00.280 so we are in the process, Mike, of talk to 0:14:00.559 --> 0:14:05.319 potential investors in the Middle East, in North and South Asia, 0:14:06.000 --> 0:14:09.160 and even in Western Europe. And I'm hoping that we'll 0:14:09.160 --> 0:14:12.760 have some good news next year around some opportunities that 0:14:12.800 --> 0:14:17.400 we're seeking as we discuss investments with these individuals. 0:14:19.120 --> 0:14:21.160 Very cool. So you're looking at that kind of like 0:14:21.200 --> 0:14:23.000 a master franchise model overseas. 0:14:23.320 --> 0:14:27.760 That's exactly right, That's exactly right. Sell the entire territory, 0:14:28.240 --> 0:14:31.480 give them an opportunity, you know, with their knowledge and 0:14:31.520 --> 0:14:35.200 their capability to find the real estate. And you know, 0:14:35.320 --> 0:14:37.240 as I know, you know when you're talking Middle East, 0:14:37.320 --> 0:14:44.720 when you're talking you know in Asia, it's in the mall. 0:14:45.720 --> 0:14:49.080 I mean, it's in the mall. And oftentimes your investors 0:14:49.280 --> 0:14:54.160 are actually the mall owners themselves who are going to 0:14:54.200 --> 0:14:57.840 build with you. So yeah, a lot of excitement on 0:14:57.880 --> 0:15:00.640 the Blaze Pizza team right now for what is happening internationally. 0:15:02.520 --> 0:15:02.920 Very cool. 0:15:02.960 --> 0:15:06.880 And how are how are you identifying the countries that 0:15:06.920 --> 0:15:09.040 you're kind of targeting and the partners that you're targeting. 0:15:09.320 --> 0:15:15.280 Yeah, great question. We actually conducted a rather sophisticated analysis 0:15:15.800 --> 0:15:21.560 on market opportunity uh and penetration capability. So it really 0:15:21.600 --> 0:15:26.720 starts with, you know, looking at what is the population's 0:15:27.400 --> 0:15:31.920 acceptance of Western brands, and then it is you know, 0:15:31.960 --> 0:15:35.040 what is their disposable income right for a consumer level. 0:15:35.680 --> 0:15:38.640 And then it's looking at the pizza market you know itself, 0:15:39.520 --> 0:15:44.120 and then it's assessing also risk associated with operating in 0:15:44.160 --> 0:15:52.080 that market, you know, political, economic, financial, et cetera. And 0:15:52.120 --> 0:15:56.760 then based on all that, we identify the markets that 0:15:56.840 --> 0:16:03.040 would have put it simply ease of getting into with 0:16:03.080 --> 0:16:06.120 the most opportunity, right, ease of getting into with the 0:16:06.160 --> 0:16:11.960 most opportunity, And that actually came to roughly fifteen international 0:16:11.960 --> 0:16:15.280 markets for us that we're seeking as our first Now 0:16:15.480 --> 0:16:21.000 that being said, if an opportunity presents itself with the 0:16:21.160 --> 0:16:25.200 really powerful developer, we're not going to walk away. We're 0:16:25.200 --> 0:16:27.520 not going to walk away. It's just that we're going 0:16:27.600 --> 0:16:32.040 to focus our sales efforts into those top fifteen markets. 0:16:32.520 --> 0:16:35.080 Yeah, I can tell you've worked in international before. 0:16:35.760 --> 0:16:36.720 Yeah. 0:16:37.000 --> 0:16:39.160 Now, it's a great answer, and you'd be surprised how many, 0:16:39.200 --> 0:16:41.840 you know, public companies. I asked that question and I 0:16:41.840 --> 0:16:43.920 don't get nearly as detailed an answer. 0:16:44.400 --> 0:16:47.040 No, thank you, So that that's very very cool to hear. 0:16:48.360 --> 0:16:51.400 So how fast are you looking overall to build the 0:16:51.440 --> 0:16:56.280 store base from here and out? You know, excluding international? 0:16:56.400 --> 0:16:58.080 You know, where are you looking to build new stores 0:16:58.080 --> 0:16:59.920 in the United States? Are you going to continue to 0:17:00.000 --> 0:17:02.760 build out Florida and California? Are there other markets that 0:17:02.800 --> 0:17:04.400 you're you're really targeting right now? 0:17:05.119 --> 0:17:07.400 So, you know, one of the challenges that a lot 0:17:07.400 --> 0:17:10.919 of brands have when they're in their early days of 0:17:10.960 --> 0:17:20.680 growth is that they do accept smaller developers and consequently 0:17:20.800 --> 0:17:24.040 you end up with a store to stores and it's 0:17:24.080 --> 0:17:27.520 not enough to actually gain the leverage, and so you 0:17:27.560 --> 0:17:30.000 have no economies of scale with your marketing dollars spend, 0:17:30.080 --> 0:17:33.159 and you're spending a lot more for distribution. You know 0:17:33.200 --> 0:17:37.880 how it goes. And so you know, the philosophy that 0:17:37.920 --> 0:17:41.800 we've adopted as a team is when where you're winning, 0:17:42.600 --> 0:17:45.680 When where you're winning, right and we're winning in Florida, 0:17:45.760 --> 0:17:48.960 and we're winning in California, and we're winning in Texas, 0:17:49.760 --> 0:17:53.320 and we also have significant opportunities in the northeast and 0:17:53.359 --> 0:17:56.800 the Midwest, but it's not going to be you know, 0:17:57.000 --> 0:18:00.480 winning in you know, small towns and trying to be 0:18:00.520 --> 0:18:04.720 the only player in town. Blaze Pizza is a concept 0:18:04.960 --> 0:18:09.240 and a model that actually works best in higher density 0:18:09.400 --> 0:18:15.199 urban areas when people are looking for something different for 0:18:15.359 --> 0:18:18.560 either lunch or dinner that's convenient to get to, that's 0:18:18.600 --> 0:18:21.880 going to be fast in service and a good experience. Right. 0:18:23.200 --> 0:18:26.080 That's not to say that you can't come to Blaze Pizza, 0:18:26.280 --> 0:18:28.119 you know, with your family and sit down and have 0:18:28.160 --> 0:18:31.200 a nice casual you know, dinner, even have a couple 0:18:31.200 --> 0:18:33.520 of drinks. But the truth of the matter is we 0:18:33.560 --> 0:18:36.280 know who our customer is, right, and we do almost 0:18:36.320 --> 0:18:39.399 as much lunch business as we do dinner business. And 0:18:39.480 --> 0:18:44.480 so it's people looking for a great, healthy pizza. I mean, 0:18:45.000 --> 0:18:48.080 we have you know, fresh ingredients in everything that we do, 0:18:49.080 --> 0:18:52.879 and people appreciate the fact that they have gluten free crust. 0:18:52.920 --> 0:18:55.919 You have a coliflower crust, we have a vegan crust, 0:18:56.119 --> 0:18:59.280 we have vegan cheese, I mean, and so on and 0:18:59.280 --> 0:19:02.679 so forth. So, yes, we're gonna win where we're winning. 0:19:03.640 --> 0:19:10.880 As mentioned, we will evaluate and maybe even decline areas 0:19:10.920 --> 0:19:13.280 that we know are going to be too challenging for 0:19:13.359 --> 0:19:16.119 the investors to make more money. Mike, I know what 0:19:16.160 --> 0:19:19.119 my job is. It's super simple. It's to help my 0:19:19.200 --> 0:19:24.200 franchisees make more money, right, And if I do that, 0:19:24.920 --> 0:19:27.399 they're gonna want to grow with us. And if we 0:19:27.440 --> 0:19:30.400 do that together, more people are gonna hear about it 0:19:30.680 --> 0:19:32.520 and want to be a part of the Blaze Pizza family. 0:19:34.760 --> 0:19:37.560 My mentor always taught men money flows to where it's 0:19:37.600 --> 0:19:38.359 treated best. 0:19:38.960 --> 0:19:41.000 So absolutely it's a good phrase. 0:19:41.800 --> 0:19:45.480 Yeah, yeah, great. Are you or your franchisees have any 0:19:45.560 --> 0:19:47.720 any issues finding quality real estate right now? 0:19:49.720 --> 0:19:53.480 Who is not having issues finding quality really now? Right? 0:19:54.760 --> 0:19:58.879 One of the big challenges, as everyone knows, because of 0:19:58.960 --> 0:20:03.440 current interest rates and bank's willingness you know, to lend 0:20:03.440 --> 0:20:08.280 money under their current conditions, is creating an atmosphere that 0:20:08.320 --> 0:20:13.440 we haven't seen, you know, in ten years, right, And 0:20:13.520 --> 0:20:19.280 so you know, for the individuals, for lack of a 0:20:19.320 --> 0:20:22.160 better word, the rich get richer in environments like this, 0:20:22.800 --> 0:20:25.040 you know, as they've got the dollars back to create 0:20:25.080 --> 0:20:29.480 these investments. We're actually looking right now at exploring some 0:20:31.160 --> 0:20:36.280 non traditional financial support for potential investors who want to 0:20:36.280 --> 0:20:38.400 be a part of Blaze. It's still early days, Mike, 0:20:38.440 --> 0:20:40.199 and I can't share it with you all the details, 0:20:40.600 --> 0:20:44.000 but you can begin to imagine how an individual who 0:20:44.520 --> 0:20:48.480 might have been very successful in becoming a Blaze franchisee 0:20:49.200 --> 0:20:51.879 when we had real estate interest rates less than three percent, 0:20:52.480 --> 0:20:54.720 now finds himself at seven percent going. I don't know 0:20:54.760 --> 0:20:57.240 if I can afford this now, there might be a 0:20:57.240 --> 0:20:59.040 way for us as a corporation to help. 0:20:58.920 --> 0:21:05.080 Them, right, good stuff. Yeah, And you have companies, competitors, 0:21:05.119 --> 0:21:09.040 other fast casual chains that have gotten equity money, you know, 0:21:09.200 --> 0:21:12.760 so they're getting the pressure from Wall Street to expand, 0:21:12.880 --> 0:21:16.560 and they're paying rents that I'm sure you know most 0:21:16.600 --> 0:21:18.280 franchises wouldn't want to match. 0:21:18.640 --> 0:21:19.640 That's right, That's right. 0:21:22.119 --> 0:21:24.360 Have you seen financing tighten up at all? 0:21:24.600 --> 0:21:27.800 We have as a matter of fact, you know, when 0:21:27.800 --> 0:21:30.639 I look at the pipeline that I walked into, you know, 0:21:30.720 --> 0:21:35.439 back in January of this year. We have a model 0:21:35.480 --> 0:21:39.240 that we use that based on where we are in 0:21:39.320 --> 0:21:45.160 the stage of negotiations and contracting, we have a percentage 0:21:45.200 --> 0:21:49.880 of viability that we believe will close in the deal. Right, 0:21:50.760 --> 0:21:54.199 And I've used this for like ten years and it 0:21:54.280 --> 0:21:57.919 really helps you, you know, plan for what you believe 0:21:57.960 --> 0:22:02.320 your development schedule is going to look like over the 0:22:02.359 --> 0:22:06.560 past year, Needless to say, some of those percentages that 0:22:06.640 --> 0:22:10.760 we had in the middle negotiation aspect where we're identifying 0:22:10.960 --> 0:22:16.720 real estate and investment have declined significantly as we can't 0:22:16.800 --> 0:22:20.119 count on them making it through the end of the pipeline, 0:22:20.320 --> 0:22:24.439 so you know it's not going to last forever. I 0:22:24.520 --> 0:22:28.440 believe the Fed is announcing that they are not raising 0:22:28.480 --> 0:22:31.080 interest rates, though they maintain the opportunity to do so 0:22:31.119 --> 0:22:34.200 in the future. We're seeing inflation coming down. The UK 0:22:34.440 --> 0:22:38.199 just reported that its inflation is down for three consecutive months. 0:22:40.400 --> 0:22:42.800 People are talking about a soft landing as opposed to 0:22:42.800 --> 0:22:47.159 going into recession, and I'm not the economist, but I 0:22:47.240 --> 0:22:48.080 remain optimistic. 0:22:49.760 --> 0:22:54.960 Good. How's your staffing in turnover levels right now compared 0:22:55.000 --> 0:22:55.960 to pre pandemic? 0:22:59.200 --> 0:23:03.680 I guess the way I would describe it again back 0:23:03.720 --> 0:23:09.600 to what we've seen. Let's first talk about pre pandemic 0:23:09.640 --> 0:23:14.920 and pandemic right because that's when everything fell apart and 0:23:15.880 --> 0:23:19.399 our turnover rate probably was up, you know, forty fifty 0:23:19.400 --> 0:23:24.840 pandemic versus pre pandemic. Okay, now let's take a look 0:23:24.840 --> 0:23:30.720 at where we are post pandemic and things have improved significantly, 0:23:31.480 --> 0:23:36.040 but there remains an open market. I like to say, Mike, 0:23:37.200 --> 0:23:41.240 your guest will never have a better experience than the 0:23:41.280 --> 0:23:46.280 employees are having in the store right for sure. And 0:23:46.840 --> 0:23:50.600 I believe that we have a lot of opportunity to 0:23:50.720 --> 0:23:55.520 continue to improve our employee experience so that it's joyful 0:23:55.560 --> 0:23:57.679 for them to want to be a part of the 0:23:57.680 --> 0:24:02.159 Blaze team. We're not where I want us to be yet, 0:24:03.000 --> 0:24:08.880 but we are working on programs to improve benefits for 0:24:09.080 --> 0:24:13.280 our franchise and their employees, our own store owned employees 0:24:14.320 --> 0:24:18.359 and helping them, you know, seek the types of workers. 0:24:19.240 --> 0:24:22.440 I know this sounds crazy, Mike. I've used all kinds 0:24:22.440 --> 0:24:28.359 of tools to identify great hospitality resources, but one of 0:24:28.359 --> 0:24:32.720 my mentors once told me, better hire for a smile. 0:24:34.160 --> 0:24:38.520 Nothing beats it hire for a smile. And so I've 0:24:38.560 --> 0:24:43.320 been sharing and teaching my franchisees about this philosophy of 0:24:43.359 --> 0:24:47.240 seeking the hire for a smile. And then, also, Mike, 0:24:47.320 --> 0:24:50.360 and this is this is this is where not only 0:24:50.359 --> 0:24:52.959 Blazed Pizza, but the entire industry I believe is missing 0:24:53.760 --> 0:24:59.560 an opportunity, and that is when you hire employees, don't 0:24:59.600 --> 0:25:02.200 think of it it as a job and a paycheck, 0:25:03.000 --> 0:25:05.639 but spend the time with the people that you hire, 0:25:06.000 --> 0:25:09.280 asking them what is it that you really want out 0:25:09.320 --> 0:25:12.359 of this job? And if they say a paycheck, say no, 0:25:12.400 --> 0:25:15.000 But why do you want that paycheck to pay the rent, 0:25:15.240 --> 0:25:17.600 to have some extra spending money to buy a car, 0:25:17.920 --> 0:25:20.760 to save it for college. And then we have the 0:25:20.840 --> 0:25:26.960 opportunity to help those employees learn how to build their 0:25:27.080 --> 0:25:31.119 savings solutions to make their dreams come true, not just 0:25:31.119 --> 0:25:31.920 collect a paycheck. 0:25:33.720 --> 0:25:37.359 Yeah, it's important and and you know it's seen and 0:25:37.680 --> 0:25:40.760 it bears itself out in the results. Right companies treat 0:25:40.800 --> 0:25:45.040 their employees well, treat their franchise as well, tend to outperform, 0:25:45.200 --> 0:25:48.960 So you know, that's really good stuff. And Danny Meyers 0:25:49.040 --> 0:25:52.160 talked about a bit about you know what you're talking about, right, 0:25:52.240 --> 0:25:55.439 Like the emotional intelligence is what you hire for. The 0:25:55.480 --> 0:25:57.960 skills can be taught basically to anyone, right. 0:25:58.800 --> 0:26:04.119 You know, I mean, Danny's my hero, to be honest 0:26:04.119 --> 0:26:06.600