WEBVTT - Honeygrow Posts Net Income Despite Rapid Growth 0:00:20.120 --> 0:00:22.400 Welcome to Chopping It Up. I'm your host, Mike Hallon, 0:00:22.440 --> 0:00:25.440 the senior restaurant and food service analyst at Bloomberg Intelligence. 0:00:25.600 --> 0:00:28.479 Today we're joined by Justin Rosenberg, founder and CEO of 0:00:28.480 --> 0:00:29.000 Honey Grow. 0:00:29.200 --> 0:00:29.680 It's up. 0:00:30.080 --> 0:00:32.640 That's up, man, Thanks for doing this, Thanks for having me. 0:00:33.280 --> 0:00:35.120 Let's just hop right in. Man, you weren't always a 0:00:35.159 --> 0:00:37.879 restaurant tour I was not. Tell us a little bit 0:00:37.920 --> 0:00:38.360 about that. 0:00:38.640 --> 0:00:42.159 Yeah, I was, you know, from here. Always great to 0:00:42.159 --> 0:00:43.960 be back in my hometown, New York, even though my 0:00:43.960 --> 0:00:47.040 Phillies had on go. Phil's been in Philly for twenty years, 0:00:47.040 --> 0:00:50.040 which is a wild wild thought for me. But born 0:00:50.080 --> 0:00:52.959 and raised Long Islands, and I went to Penn State undergrad. 0:00:54.160 --> 0:00:56.400 Met a girl got me to Philly. Now she's my 0:00:56.440 --> 0:00:59.480 wife and mom of our three kids. And it was 0:00:59.480 --> 0:01:02.640 in finance in the beginning, and you know it just 0:01:02.760 --> 0:01:06.520 didn't love working in my cubicle. But it was great 0:01:06.560 --> 0:01:08.440 in many different ways, and did it for five years. 0:01:08.440 --> 0:01:10.720 But my passion's always been food and the idea of 0:01:10.720 --> 0:01:14.399 scaling something and building a business. Had some health challenges 0:01:14.480 --> 0:01:16.720 in my mid twenties. I waited a lot more in 0:01:16.760 --> 0:01:20.280 a bad way and went to the doctor, and you know, 0:01:20.280 --> 0:01:21.920 they're like, hey, you got really high blood sugar and 0:01:21.959 --> 0:01:25.960 high cholesterol and scared me. I just had a first kid. Verbatim, 0:01:26.000 --> 0:01:27.400 He's like, do you want to see her walk down 0:01:27.400 --> 0:01:29.520 the aisle one day? And scared me enough to say 0:01:29.600 --> 0:01:33.039 yes and get my life in order. Went vegan for 0:01:33.200 --> 0:01:35.360 about two years, but I was making salads for lunch, 0:01:35.520 --> 0:01:38.319 stir fry for dinner at the company I worked for, 0:01:38.520 --> 0:01:41.360 company called PRET It's a real estate investment trust. I 0:01:41.360 --> 0:01:43.600 would get the access for all the sales for all 0:01:43.600 --> 0:01:45.559 these different tenets. So like Chick fil A was doing 0:01:45.680 --> 0:01:48.639 insane numbers, right, I think there's like eight five today. 0:01:49.440 --> 0:01:51.440 But I would just people in a way, like why 0:01:51.480 --> 0:01:53.280 are these concepts doing so well? Why is the Apple 0:01:53.320 --> 0:01:56.000 store doing four thousand a square foot? What can I 0:01:56.040 --> 0:01:57.880 do to really create a great brand? You know, what 0:01:57.880 --> 0:02:00.960 are they doing that other brands are not doing? So 0:02:01.320 --> 0:02:02.960 I really wanted to create something that's not been done. 0:02:03.200 --> 0:02:05.120 I think there's so many bowl concepts out there, and 0:02:05.120 --> 0:02:06.760 this is like, you know, I'm part of that twenty 0:02:06.880 --> 0:02:10.840 tens boom. I didn't want to do you know, burgers, 0:02:10.919 --> 0:02:14.200 Mexican salad, it's all been done and you know, honey 0:02:14.200 --> 0:02:16.040 grop eighty five percent stir fries. So we're not a 0:02:16.040 --> 0:02:19.280 solid concept per se. And that was kind of it. 0:02:19.320 --> 0:02:21.079 Just got after it and rode a business plan and 0:02:21.480 --> 0:02:23.920 a lot in between. But that was the beginning, your 0:02:24.000 --> 0:02:24.560 brave soul. 0:02:25.080 --> 0:02:28.240 Did you know how difficult the restaurant business is going 0:02:28.320 --> 0:02:28.480 to be? 0:02:29.200 --> 0:02:30.960 No, I had no idea. I mean I worked for 0:02:30.960 --> 0:02:33.799 a buddy of mine on the weekends in DC in 0:02:33.800 --> 0:02:36.600 a kitchen and busted. My ass was just quiet, nobody 0:02:36.639 --> 0:02:38.680 knew who I was and just cooked and learned and 0:02:38.720 --> 0:02:42.040 got beat up in the kitchen. But I mean, any 0:02:42.200 --> 0:02:44.320 scaling a business career, you gotta be nuts man like, 0:02:44.320 --> 0:02:46.400 like you have to do. Something's wrong with us entrepreneurs, 0:02:46.440 --> 0:02:48.800 so like do what we do and withstand what we do. 0:02:48.840 --> 0:02:51.360 But like it's also just in our DNA and it's 0:02:51.600 --> 0:02:52.240 it's been fun. 0:02:52.560 --> 0:02:55.119 Yeah, and it's cool. It's interesting that you know health 0:02:55.160 --> 0:02:57.400 struggles and being overweight. Yeah, you know, because I just 0:02:57.440 --> 0:02:58.560 know you as being in shape. 0:02:58.560 --> 0:03:00.440 You want to see a picture. Yeah, I wish we 0:03:00.480 --> 0:03:01.560 had the cameras in here every phoner. 0:03:01.720 --> 0:03:04.840 Yeah for the listeners. Justin beat me up in jiujitsu 0:03:04.919 --> 0:03:06.120 class weeks ago. 0:03:05.960 --> 0:03:08.120 And we should we should talk about that, dude. This 0:03:08.200 --> 0:03:10.120 was me on jiu jitsu on awesome. 0:03:10.880 --> 0:03:12.920 Yeah, he chained with a bunch of savages in Philly, 0:03:12.960 --> 0:03:13.720 their monsters. 0:03:13.840 --> 0:03:15.679 All right, So this is a picture of me. Got 0:03:15.760 --> 0:03:18.000 married in the two thousands, So this is I think 0:03:18.000 --> 0:03:20.519 it was my twenty two or twenty three. Here that's 0:03:20.560 --> 0:03:22.000 my now wife. 0:03:22.160 --> 0:03:23.360 Dude, that doesn't even look like you. 0:03:23.680 --> 0:03:27.160 I don't even know what she said. Yes, I genuinely 0:03:27.200 --> 0:03:30.880 don't know. Why what are you thinking? This guy's gross? 0:03:31.040 --> 0:03:33.359 But uh, I got some funny pictures. I can share 0:03:33.360 --> 0:03:35.000 it with you too. I'll shaw after this. 0:03:35.040 --> 0:03:38.160 I have a funny license where I was like, it 0:03:38.240 --> 0:03:40.040 was like, you know, I was going through a tough 0:03:40.040 --> 0:03:42.160 time in my marriage and I was really overweight, and 0:03:43.560 --> 0:03:45.200 he was around Christmas when I got you know, I 0:03:45.240 --> 0:03:47.520 had put on some weight after Thanksgiving and Christmas. I 0:03:47.520 --> 0:03:49.760 was probably like two forty. Right now I'm like two fifteen, 0:03:50.280 --> 0:03:52.760 and uh, you know, I look like a totally different person. 0:03:52.800 --> 0:03:55.000 But it was so funny, Like get handing my ID 0:03:55.160 --> 0:03:57.200 to people, they would look at the IDA, look at me, 0:03:57.280 --> 0:03:58.760 look at the ID, look at me, and I'd be 0:03:58.800 --> 0:04:01.120 like it was just rough. Cri SMIs you know, family 0:04:01.200 --> 0:04:03.160 to be you know, stuff like that. 0:04:03.200 --> 0:04:06.360 Well, you know it's the holidays. Dude, you you're but 0:04:06.400 --> 0:04:09.119 you're two fifteen. Let's talk about jiu jitsu real quick, 0:04:09.160 --> 0:04:12.640 because you're very well distributed to fifteen. You know, for 0:04:12.960 --> 0:04:15.320 all Mike's listeners out there. He actually, to his credit, 0:04:16.120 --> 0:04:19.359 drove in from Jersey to Philadelphia, central Jersey, not like 0:04:19.360 --> 0:04:21.960 you know, over the bridge, but central Jersey and then 0:04:22.040 --> 0:04:24.080 like doesn't know anyone in this this school that I 0:04:24.080 --> 0:04:26.599 go to Balance Studio. Shout out to my crew there. 0:04:27.080 --> 0:04:30.400 You know who you are and you and after it, man, 0:04:30.440 --> 0:04:33.479 like you like you really you trained stuff, but like 0:04:33.520 --> 0:04:37.360 not the ju jitsu side. Yeah, and you're formidable like 0:04:37.480 --> 0:04:40.040 you were like you had like like strong legs, like 0:04:40.080 --> 0:04:42.080 I couldn't get certain like moves on you, and you 0:04:42.080 --> 0:04:43.640 know you held your own. Dude. I was saying before, 0:04:43.680 --> 0:04:46.040 like I just kept checking on you. I'm like down 0:04:46.160 --> 0:04:48.760 the hall like the matt like getting my butt kicked 0:04:48.800 --> 0:04:50.720 and like keep an eye on you. And you were 0:04:50.760 --> 0:04:52.880 like you're getting after it. So you should be proud. 0:04:52.920 --> 0:04:53.360 That's cool. 0:04:53.400 --> 0:04:55.560 Thanks, man, It's fun. What I love about it. And 0:04:55.760 --> 0:04:58.479 MMA two is like it's such a humbling experience. Man, 0:04:58.880 --> 0:05:00.640 it is such a humbling exp experience and I think 0:05:00.680 --> 0:05:02.880 everybody needs that in life, you know what I mean. 0:05:03.040 --> 0:05:05.760 So I agree. Yeah, it's awesome, man. It's a great 0:05:06.040 --> 0:05:10.160 you know, stress reliever, and it's fun. It's like three 0:05:10.240 --> 0:05:13.320 D chests, right, like using your brain and thinking and 0:05:13.720 --> 0:05:15.480 trying to create traps. I'm not that good to be 0:05:15.560 --> 0:05:17.640 able to trap anybody, but you know what I mean. 0:05:17.760 --> 0:05:20.200 It's three D chests and you know, not to go 0:05:20.360 --> 0:05:23.600 too deep into current events, but for me, and you know, 0:05:23.680 --> 0:05:25.600 I've been going through a hard time, Jewish people going 0:05:25.640 --> 0:05:27.680 through hard time, a lot of people going through a 0:05:27.720 --> 0:05:30.960 hard time, and it's been a chance for me to 0:05:31.120 --> 0:05:34.479 turn my brain off and you know, Monday morning, Tuesday night, 0:05:34.560 --> 0:05:38.200 Wednesday morning, I'm not thinking, I'm rolling and I'm just 0:05:38.240 --> 0:05:41.279 with other humans. I don't care your religion, your race, gender. 0:05:41.880 --> 0:05:45.240 People there to train and it's beautiful and awesome and 0:05:45.839 --> 0:05:46.920 I'm very grateful for it. 0:05:46.920 --> 0:05:48.400 That's cool, man, That's a great gym. 0:05:48.920 --> 0:05:49.240 Thank you. 0:05:50.279 --> 0:05:52.240 All right, Cole, let's talk a little bit more about 0:05:52.279 --> 0:05:55.240 Honey Grow for the people that aren't familiar. Can you 0:05:55.240 --> 0:05:58.839 talk a little bit about the service model, the menu, 0:05:58.960 --> 0:05:59.760 customer base. 0:06:00.279 --> 0:06:03.839 Yeah, so we're based in Philadelphia. Fast Schedule concept. We 0:06:03.880 --> 0:06:06.720 do freshly made to order stir fry salads, honey bar, 0:06:06.800 --> 0:06:08.880 which is take some fruit, there's all some honey on 0:06:08.960 --> 0:06:11.039 top of it. It's actually five percent of our sales. 0:06:11.120 --> 0:06:14.200 It's like a little snack. That's pretty cool. Everything's made 0:06:14.240 --> 0:06:17.159 to order order on a Kiosk, which is basically an app. 0:06:18.480 --> 0:06:20.720 And we have thirty six locations. So we're you know, 0:06:20.839 --> 0:06:24.800 Boston here in New York and Brooklyn, Hoboken, Jersey, Delaware, 0:06:24.800 --> 0:06:29.360 Baltimore area, DC, Metro Pittsburgh. Forgetting something which isn't good, 0:06:30.160 --> 0:06:32.360 but we will be at forty restaurants. But in this year, 0:06:33.279 --> 0:06:35.479 and thank god, things have been pretty good. It wasn't 0:06:35.520 --> 0:06:38.080 always good though, Nope, it was good bad. 0:06:38.160 --> 0:06:42.680 Good about the the bad part a little bit because 0:06:42.680 --> 0:06:45.120 I think I think listeners could learn a lot about it. 0:06:45.160 --> 0:06:46.960 And you've always been super open a bad which I 0:06:47.000 --> 0:06:47.800 think is really cool. 0:06:48.120 --> 0:06:51.039 Yeah. Look, I I have nothing to hide. I don't 0:06:51.040 --> 0:06:52.880 really care. It's like, you know, if we're going to 0:06:52.920 --> 0:06:56.000 be a publicly traded company one day, I don't know, 0:06:56.279 --> 0:06:58.440 like you're not. The numbers are the numbers at the 0:06:58.520 --> 0:07:00.000 end of the day. And I think the numbers will 0:07:00.000 --> 0:07:02.120 always speak for themselves, kind of like actions speak more 0:07:02.120 --> 0:07:04.440 than words, and that's my philosophy. And you know, the 0:07:04.520 --> 0:07:06.640 challenges we had was we raised a lot of money, 0:07:06.640 --> 0:07:09.680 We had the pressure to grow. We opened up a 0:07:09.720 --> 0:07:12.160 bunch of new markets. I had a second concept that 0:07:12.360 --> 0:07:15.400 really was more of a business solution than like a 0:07:15.400 --> 0:07:17.520 passion project. Honeygro is like from my heart and soul 0:07:17.520 --> 0:07:20.000 in DNA. Minigro was like, hey, like the cost to 0:07:20.040 --> 0:07:23.720 build a honey grow in twenty sixteen or fifteen was 0:07:23.760 --> 0:07:26.680 too much. Let's do this smaller version that we don't 0:07:26.680 --> 0:07:29.560 need to vent and have a simpler line, and we'll 0:07:29.600 --> 0:07:32.560 do that urban and the honey grow suburban, so instead 0:07:32.560 --> 0:07:35.880 of doing like one to six and I think, you know, 0:07:36.080 --> 0:07:37.680 we're all drinking the kool aid. I think this thing was 0:07:37.720 --> 0:07:39.400 going to be a successful as quickly as honey grow. 0:07:40.560 --> 0:07:42.680 And the food was great, and it did great until 0:07:42.680 --> 0:07:44.440 two thirty here in Manhattan, and then all of a sudden, 0:07:44.440 --> 0:07:46.720 you know, it's the city. But yeah, a lot of 0:07:46.760 --> 0:07:50.640 mistakes made, so you know, paid crazy rents, you know, 0:07:50.960 --> 0:07:54.000 just not really mastering that model. I think there was 0:07:54.000 --> 0:07:55.800 a lot of confusion. I think the best models are 0:07:55.800 --> 0:07:58.400 the simplest ones, and you can explain, like we sell 0:07:58.440 --> 0:08:00.720 seraphices and selves as we do. Minigro is like, well, 0:08:00.720 --> 0:08:03.520 it's noodles, it's bowls, it's salads. Food was great, but 0:08:03.560 --> 0:08:06.080 I think it was very difficult to really conceptualize and explain. 0:08:06.760 --> 0:08:09.080 So that was aside. And then with Honey Grow, you know, 0:08:09.120 --> 0:08:10.800 were really quick and we took on some rents that 0:08:10.800 --> 0:08:14.800 were pretty crazy and you know, seven new markets in 0:08:14.920 --> 0:08:16.880 one year, and plus we had a brand new corporate team. 0:08:17.520 --> 0:08:19.480 So it was just like the textbook of what to 0:08:19.720 --> 0:08:23.760 never do. And you know, look, it was a really hard, 0:08:23.840 --> 0:08:26.040 scary time five six years ago. And I think I've 0:08:26.040 --> 0:08:29.040 told the story, but I remember, you know, looking up 0:08:29.080 --> 0:08:31.800 my wife and I went to Miami to get away 0:08:31.880 --> 0:08:33.680 for a weekend, and my wife's on the phone with 0:08:33.679 --> 0:08:35.480 the kids, not really knowing everything going on in my 0:08:35.520 --> 0:08:37.400 life because I didn't want to like share all this, 0:08:38.520 --> 0:08:40.680 but we're running out of cash, and my our CFO 0:08:40.679 --> 0:08:43.160 at the time, my partner, David, was like, you know, 0:08:43.200 --> 0:08:45.640 we should really be considering bankruptcy together some of these leases, 0:08:45.720 --> 0:08:47.840 and you know, my wife's looking at the ocean like smiling, 0:08:47.880 --> 0:08:50.199 and I'm like I'm like, we're not doing that. We 0:08:50.480 --> 0:08:52.480 have we're going to create a plan, let's do it. 0:08:52.600 --> 0:08:55.240 And you know, I knew, and unfortunately, my investors have 0:08:55.280 --> 0:08:58.520 been very supportive and been very good and that way, 0:08:58.520 --> 0:08:59.880 a lot of people would have said, this doesn't work. 0:09:00.000 --> 0:09:02.920 I got our good luck. They put more cash in 0:09:03.240 --> 0:09:05.680 and let us execute our plan, and we did and 0:09:05.720 --> 0:09:08.800 then something so by twenty nineteen we were really on 0:09:08.840 --> 0:09:11.520 our way, and there's COVID. But by the middle of COVID, 0:09:11.520 --> 0:09:14.640 we're actually doing okay, thank god. And then the last 0:09:15.120 --> 0:09:17.280 three and a half years, you've been really good. We 0:09:17.360 --> 0:09:21.559 opened thirteen restaurants producing low twenties and ebada and we've 0:09:21.600 --> 0:09:24.640 been profitable from a like everyone's talking about ebada, like 0:09:24.760 --> 0:09:27.040 ajustity whatever, like yeah, we have a lot of that, 0:09:27.120 --> 0:09:30.559 thank god, but now we actually make money, so we 0:09:30.640 --> 0:09:33.320 have a net income basis. We've been profitable too. So 0:09:33.840 --> 0:09:35.679 one of my goals has been, you know, there's been 0:09:35.679 --> 0:09:38.360 a lot of companies that have gone public and iPod 0:09:38.960 --> 0:09:42.640 it's super inspirational and it's great, but I you know, 0:09:42.880 --> 0:09:45.160 I like to keep my gena tight, a little different 0:09:45.160 --> 0:09:46.520 from some of these other guys that they do what 0:09:46.559 --> 0:09:48.920 they need to do. And that's fine. But I'm a 0:09:48.920 --> 0:09:50.960 firm believer after going through what I've been through with 0:09:51.040 --> 0:09:53.199 cash and everything else. Like, run the business type. We're 0:09:53.240 --> 0:09:55.760 not a tech company or a restaurant company. Our jobs 0:09:55.760 --> 0:09:57.439 to make people happy, s have really good food, do 0:09:57.480 --> 0:09:59.000 it over and over and over and over again. We're 0:09:59.040 --> 0:10:02.920 not perfect, but you know it's not I'm not creating 0:10:02.960 --> 0:10:05.080 time travel here. Yeah, I'm not like, you know, creating 0:10:05.160 --> 0:10:07.760 portals in space. It's like the restaurant business. 0:10:08.200 --> 0:10:11.640 Yeah, it's a simple business, but it's hard. Yeah right, 0:10:12.640 --> 0:10:14.199 but yeah, no, that that's great. I think there's a 0:10:14.240 --> 0:10:15.920 lot of great lessons in there because a lot of 0:10:16.000 --> 0:10:18.160 chains now are trying to shrink the size of the 0:10:18.200 --> 0:10:21.640 box because it's expensive to open a new store, construsting 0:10:21.960 --> 0:10:25.079 construction costs are up. You know, we haven't seen that 0:10:25.280 --> 0:10:28.280 kind of break in the cost of real estate that 0:10:28.440 --> 0:10:30.400 a lot of people have been expecting with interest rates 0:10:30.400 --> 0:10:32.040 being higher and stuff like that. So you're seeing a 0:10:32.040 --> 0:10:33.320 lot of chains making that move. 0:10:33.480 --> 0:10:39.000 Yep, yep. Absolutely, We've been flexible in the real estate. 0:10:39.200 --> 0:10:41.760 So two thousand square feet will take some reason twenty 0:10:41.800 --> 0:10:44.559 five hundred square feet, but we'll take two thousand if 0:10:44.559 --> 0:10:46.679 we can make it work, and then we'll take three thousand. 0:10:46.920 --> 0:10:49.160 We can make it work. But you know, we're all 0:10:49.200 --> 0:10:51.520 competing for the same twenty five hundred square foot pad site, 0:10:51.600 --> 0:10:55.040 redcap space, and the challenge is there's not enough of 0:10:55.040 --> 0:10:57.240 that coming out of COVID and there's there's a lot 0:10:57.240 --> 0:10:58.600 of big box but there's not a lot of that. 0:10:59.480 --> 0:11:04.240 And the issue then becomes everyone's growing and they have cash. 0:11:04.320 --> 0:11:06.280 And I hear this from everybody. It's like it's just 0:11:06.360 --> 0:11:08.480 everyone's competing for the same real estate, driving up rents 0:11:08.480 --> 0:11:12.520 and you're getting less from landlords. So for example, we 0:11:14.440 --> 0:11:19.760 I turned out of space recently because of recently iPod 0:11:19.840 --> 0:11:23.920 company was willing to pay a crazy rent and I'm like, 0:11:24.280 --> 0:11:26.640 this is in Pennsylvania, in a suburb of PA and 0:11:26.679 --> 0:11:29.920 I'm like affiliate. I'm like, go for it. I mean, 0:11:29.960 --> 0:11:32.840 that's a mistake I made six seven years ago, and 0:11:32.880 --> 0:11:34.960 that's fine. Like, if they can do it and afford it, 0:11:35.160 --> 0:11:37.120 go for it. You know, I know the AUVs and 0:11:37.720 --> 0:11:40.040 they can make it work. Cool, We're going to be 0:11:40.080 --> 0:11:43.559 disciplined and it's it's good, but it's not great. We 0:11:43.640 --> 0:11:45.520 move on and that's just how it has to pay well. 0:11:45.559 --> 0:11:47.079 It's good they're private and you can do that right 0:11:47.160 --> 0:11:50.840 because you know, once you get that equity money, you know, 0:11:51.440 --> 0:11:54.079 the Wall Street's pressuring you to open more stores and 0:11:54.120 --> 0:11:57.040 you've got to hit those bogies or where the evaluation 0:11:57.360 --> 0:12:01.640 multiple gets dinged and you're on you're on that hamster wheel, 0:12:01.720 --> 0:12:02.640 you know you are. 0:12:02.679 --> 0:12:06.240 And I think internally we're really disciplined group, but we're 0:12:06.240 --> 0:12:09.000 also aggressive. You know, we grew this year. We'll have 0:12:09.080 --> 0:12:12.040 nine new restaurants into base of thirty one, so you know, 0:12:12.080 --> 0:12:14.160 next year we're looking to do twelve to thirteen more. 0:12:14.920 --> 0:12:17.480 So we're not you know, we're certainly aggressive in the market, 0:12:17.520 --> 0:12:19.880 but you know we're not going to be twenty next year. 0:12:19.920 --> 0:12:24.040 It's just not possible. Yeah, it's no way. Yeah. And 0:12:24.920 --> 0:12:26.640 I guess what's the biggest hurdle is it? Is it 0:12:26.679 --> 0:12:27.720 finding good managers? 0:12:27.960 --> 0:12:32.120 Always? Always like finding a good GM is always the 0:12:32.360 --> 0:12:35.679 most key thing you need to successfully run a business. 0:12:35.840 --> 0:12:39.839 And I you know, recently said on a separate podcast, 0:12:40.920 --> 0:12:43.200 and it's true, and it's like, you know, this is quoting, 0:12:43.520 --> 0:12:47.760 it's like Jocko from you know, Extreame Ownership. But it's 0:12:47.760 --> 0:12:49.600 a great line. It's very true. There's no bad teams. 0:12:49.600 --> 0:12:53.280 There's only about leaders. And if you have a really 0:12:53.320 --> 0:12:55.680 good leader, they can remove the low performers on the team, 0:12:55.760 --> 0:12:59.240 build up your top performers and really like push where 0:12:59.280 --> 0:13:01.280 you need to go. Whereas if you have a bad leader, 0:13:01.400 --> 0:13:03.280 like things are going to happen that you don't want. So, 0:13:04.320 --> 0:13:06.040 you know, one of the key things we've been doing 0:13:06.240 --> 0:13:08.520 is pushing an elite GM program, which is very similar 0:13:08.520 --> 0:13:12.040 to the restaurant tour program from Chipotle, but it's very effective. 0:13:12.240 --> 0:13:14.199 And when you create these cultures of folks that are 0:13:14.240 --> 0:13:17.920 like all star teams led by really great gms, the 0:13:17.960 --> 0:13:20.400 food taste better, you know, the experience is better, the 0:13:20.480 --> 0:13:22.360 vibe is better, the music is the right volume, like 0:13:22.360 --> 0:13:25.400 everything kind of clicks. The hospitalities there and it becomes 0:13:25.440 --> 0:13:27.440 a really great experience. And then the P and L 0:13:27.800 --> 0:13:30.640 is also really strong, not just the sales, but things 0:13:30.679 --> 0:13:33.280 are managed tight. So it's that balance of like culture 0:13:33.320 --> 0:13:35.360 and vibe and business results is really key. But it 0:13:35.400 --> 0:13:36.120 starts with the GM. 0:13:36.640 --> 0:13:39.360 Cool. Yeah. Black Box Intelligence has done some work on 0:13:39.360 --> 0:13:41.600 that and they talk about how that's like the biggest 0:13:41.640 --> 0:13:46.160 correlation with a successful restaurants having a great no question, Yeah, cool, 0:13:47.480 --> 0:13:49.439 it's financing, tighten up, tightening up. 0:13:50.520 --> 0:13:53.800 We're not looking for financing, so we've been pretty lucky. 0:13:53.840 --> 0:13:57.280 We recently extended or got more in a line and 0:13:57.360 --> 0:14:01.240 the terms are pretty favorable. But I hear other things, 0:14:01.559 --> 0:14:02.280 so yeah, I. 0:14:02.200 --> 0:14:05.199 Know franchisees you know who don't have the scale, Yeah, 0:14:05.559 --> 0:14:10.800 or especially getting squeezed a little bit right now. Yeah, yeah. 0:14:11.080 --> 0:14:12.760 Can you talk a little bit about your mix of 0:14:12.800 --> 0:14:16.520 in restaurants sales versus to go and kind of what 0:14:16.679 --> 0:14:18.800 the pandemic did and how it changed your business. 0:14:18.840 --> 0:14:23.040 For sure, we were eight percent delivery pre pandemic. We 0:14:23.080 --> 0:14:25.920 are today sticky it around thirty three, thirty four percent 0:14:26.600 --> 0:14:29.320 like high a pandemic almost fifty percent kind of stable. 0:14:29.600 --> 0:14:31.400 Your food travels well, thank god. 0:14:31.480 --> 0:14:35.120 Yeah, Like it's it's literally like you know you've had 0:14:35.200 --> 0:14:38.000 like it's freshly made noodles. It's great, by the way, 0:14:38.120 --> 0:14:40.280 thank you, the noodles of the same duel as David 0:14:40.320 --> 0:14:41.560 Chang is gonna get more food. But it's like a 0:14:41.680 --> 0:14:45.920 high quality good product. We're very proud of that. And uh, 0:14:47.080 --> 0:14:49.520 it travels well. And during the pandemic, a lot of 0:14:49.520 --> 0:14:52.800 folks discovered us and it helped us stay alive and 0:14:53.200 --> 0:14:55.360 ultimately thrive, so it was good. 0:14:55.600 --> 0:14:59.720 Cool. Do you have any plans to franchise in the future. 0:15:00.320 --> 0:15:01.880 No, I mean, look, we talk about it at the 0:15:01.880 --> 0:15:04.320 board level, but right now the focus is the growth 0:15:04.360 --> 0:15:06.000 plan and just executing that. 0:15:06.320 --> 0:15:10.000 Yeah. Well, I mean you have impressive unit economic uni economics, 0:15:10.040 --> 0:15:12.120 so it doesn't seems like there's any real reason too 0:15:12.200 --> 0:15:14.920 at this point until you go international, right, you got 0:15:14.920 --> 0:15:17.080 to grab that international partner and let them run with it. 0:15:17.160 --> 0:15:17.600 One day. 0:15:17.960 --> 0:15:22.520 Yeah, how our staffing levels better? 0:15:22.760 --> 0:15:26.080 Yeah, twenty end of twenty one, beginning of twenty two 0:15:26.240 --> 0:15:29.240 was horrible. I remember just like walking in too the 0:15:29.280 --> 0:15:32.280 restaurants and just seeing like there were days we couldn't 0:15:32.280 --> 0:15:34.240 even open because we couldn't staff. People just were not 0:15:34.280 --> 0:15:38.360 showing up. So many no shows on interviews are happening. 0:15:38.440 --> 0:15:40.320 I mean, it was a really, really, really stressful time. 0:15:40.320 --> 0:15:42.480 And kudos to the team at Honey Growth for getting 0:15:42.480 --> 0:15:46.680 through it, in particularly the ops team, who are badasses 0:15:46.720 --> 0:15:48.600 and shout outs to all you guys and girls. You 0:15:48.640 --> 0:15:52.160 know who you are. But it was hard, you know, 0:15:52.200 --> 0:15:53.080 they did a great job. 0:15:53.480 --> 0:15:57.800 Yeah, all right, good, Yeah, that's what we've been hearing. 0:15:57.880 --> 0:16:01.720 Things are definitely getting better. Still, some a little bit 0:16:01.720 --> 0:16:04.160 of issues at late night. But even that's that's getting 0:16:04.160 --> 0:16:07.200 a little bit easier to staff right now. Yeah, you 0:16:07.200 --> 0:16:09.000 guys have always seemed to be ahead of the game 0:16:09.280 --> 0:16:13.480 on technology. I uh, the Kiosks, you were early on those, 0:16:14.000 --> 0:16:16.600 the virtual reality training. Yeah, I love that kind I 0:16:16.640 --> 0:16:19.440 love that. So it was fun, Yeah, really really cool. 0:16:19.880 --> 0:16:22.080 You can find it on YouTube. Uh, you know for 0:16:22.160 --> 0:16:26.840 the listeners. Is there anything else that you're you know, 0:16:27.040 --> 0:16:28.840 focused on right now technology wise? 0:16:29.120 --> 0:16:32.480 Yeah, I mean, look, the the Kiosks, it's essentially an 0:16:32.480 --> 0:16:35.640 app where one hundred percent digital. As an organization, it's 0:16:35.680 --> 0:16:38.440 either you know, you're ordering on the app, you're ordering 0:16:38.440 --> 0:16:41.120 the mobile website. I'm sorry, on the Hunter website, you're 0:16:41.200 --> 0:16:43.400 ordering on a Kiosk. We're ordering third parties. So we're 0:16:43.760 --> 0:16:47.680 you know, that's just the way it is. Not intentionally 0:16:47.720 --> 0:16:49.600 wanting that. Actually, I'm not going to sit here in 0:16:49.600 --> 0:16:50.680 SA a tech genius. 0:16:50.680 --> 0:16:50.960 I'm not. 0:16:51.600 --> 0:16:53.200 I just knew that if you wanted a salad and 0:16:53.240 --> 0:16:56.520 I wanted to stir fry, the best way to do it. 0:16:56.760 --> 0:16:58.400 It's also assume that most people don't want to create 0:16:58.400 --> 0:17:00.080 their own food, which is the number one thing was 0:17:00.120 --> 0:17:04.480 create on Stuver a chicken excuse me. I knew that 0:17:04.480 --> 0:17:06.320 that would be the cleanest, best way to do it 0:17:06.400 --> 0:17:09.960 and also make it beautiful in the process. So yeah, 0:17:10.000 --> 0:17:14.520 I launched that in twenty twelve. And now yeah, we 0:17:14.560 --> 0:17:16.480 have the app with it, which is great, and everything 0:17:16.480 --> 0:17:19.280 gets funneled into the same loyalty system, so you can 0:17:19.280 --> 0:17:21.720 actually get loyalty rewards on the Kiosk and on the app, 0:17:21.720 --> 0:17:24.000 which really helps strive frequency in a really cool way, 0:17:24.040 --> 0:17:27.520 which I know our competitors can't do. Yeah. And then 0:17:27.560 --> 0:17:30.080 for the future, like you know, everyone's talking about automation, 0:17:31.080 --> 0:17:34.320 We've we've been looking at some stuff and maybe test 0:17:34.359 --> 0:17:38.119 some stuff on it. But honestly, like we run like 0:17:38.200 --> 0:17:41.640 good numbers and not to sound cliche, but like it 0:17:41.680 --> 0:17:43.959 like annoys me a lot when everyone tries to get 0:17:44.040 --> 0:17:45.760 very techy and like, you know, we're gonna get rid 0:17:45.760 --> 0:17:48.359 of people. Like there have been concepts I've seen that 0:17:48.400 --> 0:17:50.480 have really tried this in the past, say four or 0:17:50.520 --> 0:17:53.800 five years, and it doesn't feel good. Yeah, and the 0:17:53.800 --> 0:17:56.520 food's not as good and there's something missing from that. 0:17:56.720 --> 0:17:58.800 It's almost like it's sterile, I guess is the word. 0:17:58.880 --> 0:18:01.239 It's like, yeah, it's it doesn't feels like you're in 0:18:01.280 --> 0:18:03.399 like a hospital or something that in at a restaurant, it. 0:18:03.359 --> 0:18:04.600 Feels like you're in the hospital. I mean, look, the 0:18:04.640 --> 0:18:07.760 kiosks don't save us labor at all, Like people think, 0:18:07.800 --> 0:18:09.720 oh well, yeah, I mean you can make the argument 0:18:09.800 --> 0:18:12.000 during peak lunch that there's four chios, but I also 0:18:12.040 --> 0:18:13.560 make the argument that you could go on your app too, 0:18:13.600 --> 0:18:16.359 So it really isn't saving on labor. And if anything, 0:18:16.400 --> 0:18:18.320 we have a person on the floor as an ambassador, 0:18:18.359 --> 0:18:21.920