WEBVTT - Dairy Queen Pursues Strong International Growth

0:00:13.600 --> 0:00:16.240
<v Speaker 1>Welcome the Chopping It Up. I'm your host, Mike Hamon,

0:00:16.280 --> 0:00:19.320
<v Speaker 1>the senior Restaurant and Food Service analyst at Bloomberg Intelligence.

0:00:19.920 --> 0:00:23.439
<v Speaker 1>Our research and that of bi's five hundred analysts across

0:00:23.440 --> 0:00:26.360
<v Speaker 1>the globe can be found exclusively on the Bloomberg terminal.

0:00:26.720 --> 0:00:30.440
<v Speaker 1>Today we're joined by Nicholas Boudet, the Chief Operating Officer

0:00:30.600 --> 0:00:34.360
<v Speaker 1>of International for Dairy Queen. Thanks for doing us, Nicholas.

0:00:34.880 --> 0:00:37.480
<v Speaker 2>Thank you, Michael, it's great to be on your podcast.

0:00:38.120 --> 0:00:40.559
<v Speaker 1>Yeah, I've been looking forward to this. You've worked for

0:00:40.600 --> 0:00:42.800
<v Speaker 1>some great brands. Please tell me a little bit about

0:00:42.840 --> 0:00:45.200
<v Speaker 1>your career journey and what attracted you to Dairy Queen.

0:00:45.800 --> 0:00:49.360
<v Speaker 2>Oh. Yeah, Look, I started in the food space back

0:00:49.400 --> 0:00:52.840
<v Speaker 2>in two thousand and eight. I joined Young Brands as

0:00:52.960 --> 0:00:58.200
<v Speaker 2>the chief development officer for KFC Pizza, Taco Bell and

0:00:58.360 --> 0:01:02.240
<v Speaker 2>Long Good Silvers and ANW Filatin America and the Caribbean.

0:01:02.960 --> 0:01:07.000
<v Speaker 2>And then that took me to Taco Bell domestically as

0:01:07.040 --> 0:01:10.720
<v Speaker 2>the VP of Development and head a franchising, which later

0:01:10.880 --> 0:01:15.080
<v Speaker 2>turned into the Chief Development Officer for Taco Bell, And

0:01:15.160 --> 0:01:19.240
<v Speaker 2>after that joined a privately held company called Focus Brands

0:01:19.280 --> 0:01:22.800
<v Speaker 2>owned by war Capital as the president of International for

0:01:22.959 --> 0:01:28.200
<v Speaker 2>brands such as Cinnabon, Annie and Mos the licensee of

0:01:28.560 --> 0:01:33.160
<v Speaker 2>Seattle's Best Coffee company and see others. Then joined Wingstop

0:01:34.080 --> 0:01:37.280
<v Speaker 2>based in Dallas, and then from Wingstop, I have the

0:01:37.319 --> 0:01:41.160
<v Speaker 2>pleasure to have joined Dairy Queen back in September twenty

0:01:41.200 --> 0:01:45.280
<v Speaker 2>twenty two. So that's the background in a nutshell. And

0:01:45.319 --> 0:01:48.320
<v Speaker 2>prior to joining the food space, I was in the

0:01:48.360 --> 0:01:51.960
<v Speaker 2>hospitality world, working with brands such as A Club met

0:01:52.040 --> 0:01:55.920
<v Speaker 2>but also star with hotels and resorts. So that's my

0:01:56.000 --> 0:01:57.080
<v Speaker 2>background in a nutshell.

0:01:57.160 --> 0:01:59.960
<v Speaker 1>Michael, what was it about Dairy Queen that drew.

0:02:00.120 --> 0:02:02.720
<v Speaker 2>Yeah, Darry Queen is an iconic brand. It's been in

0:02:03.200 --> 0:02:06.160
<v Speaker 2>the business for you know this year, for eighty five years,

0:02:06.160 --> 0:02:08.800
<v Speaker 2>so there's a huge raw being part of such a

0:02:08.840 --> 0:02:12.040
<v Speaker 2>se brand. But also the fact that Dairy Queen is

0:02:12.240 --> 0:02:15.600
<v Speaker 2>very well and solid established biness around the world. So

0:02:15.720 --> 0:02:18.680
<v Speaker 2>those are the I would say, the prime primary driver

0:02:18.760 --> 0:02:20.080
<v Speaker 2>as to why I joined the company.

0:02:20.840 --> 0:02:23.600
<v Speaker 1>Yeah, I was surprised to find out how big Dairy

0:02:23.680 --> 0:02:27.920
<v Speaker 1>Queen is overseas, how big is the international footprint and

0:02:27.960 --> 0:02:29.520
<v Speaker 1>how many countries do you operate in.

0:02:30.240 --> 0:02:33.640
<v Speaker 2>Yeah, now your surprise was like mine as well before

0:02:33.680 --> 0:02:36.720
<v Speaker 2>I join. So look dairy Queen is exclosed to a

0:02:36.800 --> 0:02:40.680
<v Speaker 2>six point eight billion dollar brand measured by system sales.

0:02:40.760 --> 0:02:44.680
<v Speaker 2>We have close tour's not more than seven seven hundred

0:02:44.680 --> 0:02:48.880
<v Speaker 2>stores operating in twenty one market, twenty of which are international.

0:02:49.520 --> 0:02:53.760
<v Speaker 2>So we have performed exceptionally well globally, you know, during

0:02:53.800 --> 0:02:56.919
<v Speaker 2>the last years, during and since COVID. In fact, our

0:02:56.919 --> 0:03:01.280
<v Speaker 2>market chair outside of the US has consistently growth as

0:03:01.280 --> 0:03:04.240
<v Speaker 2>we have on an average grown our net international football

0:03:04.280 --> 0:03:06.480
<v Speaker 2>close to six percent year of a year over the

0:03:06.600 --> 0:03:09.800
<v Speaker 2>last five years. So you know what's remarking about about

0:03:09.800 --> 0:03:12.600
<v Speaker 2>Derrick Quein. It's his legacy as I was saying before,

0:03:12.919 --> 0:03:15.799
<v Speaker 2>but also the logevity of the brand. As I said,

0:03:15.840 --> 0:03:20.160
<v Speaker 2>we are about to turn a massive milestone in June

0:03:20.200 --> 0:03:23.360
<v Speaker 2>this year or eighty five year, which is pretty impressive.

0:03:23.520 --> 0:03:27.520
<v Speaker 2>But going back to international, so look, we have been

0:03:27.800 --> 0:03:33.280
<v Speaker 2>doing business internationally over the last seventy two years. In fact,

0:03:33.360 --> 0:03:35.840
<v Speaker 2>we first launched out out of the US in Canada

0:03:35.920 --> 0:03:38.960
<v Speaker 2>in nineteen fifty three. So there's a lot there's a

0:03:38.960 --> 0:03:43.320
<v Speaker 2>lot of market and institutional knowledge that the brand has

0:03:43.360 --> 0:03:46.480
<v Speaker 2>been leveraging and continue to leverage across the globe. Our

0:03:46.520 --> 0:03:50.520
<v Speaker 2>second international market, which is still operating today is Panama

0:03:50.880 --> 0:03:53.120
<v Speaker 2>and Panama we've been in operation there for the last

0:03:53.120 --> 0:03:56.320
<v Speaker 2>sixty six years, and then Mexico for fifty four years,

0:03:56.320 --> 0:04:00.760
<v Speaker 2>so a really strong presence in an actually and then

0:04:01.040 --> 0:04:04.480
<v Speaker 2>very early owned as a pioneer. The other thing, which

0:04:04.520 --> 0:04:06.080
<v Speaker 2>I know we're going to talk about a little bit more,

0:04:06.120 --> 0:04:09.920
<v Speaker 2>is our China business. It's been a you know, uh

0:04:10.120 --> 0:04:14.080
<v Speaker 2>impressive that we've been there close to thirty three years

0:04:14.120 --> 0:04:17.200
<v Speaker 2>and we Insact studied in nineteen ninety two, which is

0:04:17.600 --> 0:04:21.000
<v Speaker 2>slightly more than six years after Kiffy started there as well,

0:04:21.560 --> 0:04:27.040
<v Speaker 2>So pretty impressive footprint. Yeah, very very impressive.

0:04:27.760 --> 0:04:32.520
<v Speaker 1>That's a it's been a long time to be operating internationally.

0:04:33.200 --> 0:04:35.040
<v Speaker 1>Is Dry Queen one hundred percent franchise?

0:04:35.120 --> 0:04:39.200
<v Speaker 2>Overseas it is insict tiah. Our international business is hundred

0:04:39.200 --> 0:04:42.640
<v Speaker 2>percent franchise. The only caveat to that is that we

0:04:42.720 --> 0:04:46.680
<v Speaker 2>have two corporate stores there are based in Minneapolis next

0:04:46.720 --> 0:04:50.280
<v Speaker 2>to our quarters. But yeah, overall, the the Insact ninety

0:04:50.360 --> 0:04:52.200
<v Speaker 2>nine point nine percent is a franchise.

0:04:53.120 --> 0:04:59.040
<v Speaker 1>Gotcha. So internationally, does the brand have different store layouts

0:04:59.080 --> 0:05:02.360
<v Speaker 1>based on you know, the countries that they operate in

0:05:02.400 --> 0:05:04.279
<v Speaker 1>and the particular sites that they occupy.

0:05:05.000 --> 0:05:07.120
<v Speaker 2>Yeah, that's a good question. So look from a brand

0:05:07.160 --> 0:05:13.040
<v Speaker 2>recognition standpoint, you will unmistakably recognize our iconics world logo

0:05:13.080 --> 0:05:15.839
<v Speaker 2>wherever you go, and as well as our as our

0:05:16.040 --> 0:05:19.039
<v Speaker 2>you know, key product, which is our self serve. Either.

0:05:19.240 --> 0:05:21.640
<v Speaker 2>What we do is we adapt our restaurant design to

0:05:21.680 --> 0:05:24.720
<v Speaker 2>the marketplace. And we do this because we want to

0:05:24.800 --> 0:05:27.159
<v Speaker 2>keep the brand fresh and we want to keep the

0:05:27.200 --> 0:05:29.839
<v Speaker 2>brand relevant to the consumer and in the marketplace that

0:05:29.880 --> 0:05:32.080
<v Speaker 2>we find ourselves in. And I think China is a

0:05:32.080 --> 0:05:35.400
<v Speaker 2>great example of that where we flex more there in

0:05:35.480 --> 0:05:39.840
<v Speaker 2>terms of innovative and cuttage, cutting edge design to make

0:05:39.880 --> 0:05:42.760
<v Speaker 2>sure that our brand is top of mind with our consumers,

0:05:43.200 --> 0:05:45.159
<v Speaker 2>who uh we do. We give a lot of attention

0:05:45.240 --> 0:05:48.640
<v Speaker 2>and credit to brand that stay current with with the trends.

0:05:48.680 --> 0:05:52.479
<v Speaker 2>So we have a slightly different expression outside of the

0:05:52.520 --> 0:05:56.680
<v Speaker 2>country when it comes to design but also layout. So

0:05:56.920 --> 0:05:59.599
<v Speaker 2>another distation that we do as well is that we

0:05:59.640 --> 0:06:02.640
<v Speaker 2>also to be more urban in terms of the development

0:06:02.720 --> 0:06:06.560
<v Speaker 2>strategy versus the US, which which makes our asset base

0:06:06.640 --> 0:06:10.240
<v Speaker 2>a little bit more of a destination versus what you

0:06:10.240 --> 0:06:12.880
<v Speaker 2>would find to be more of a functional suburban type

0:06:12.880 --> 0:06:15.839
<v Speaker 2>of design. So and then a good example of that

0:06:15.960 --> 0:06:18.200
<v Speaker 2>is our adaptation of our newly launched the air Queen

0:06:18.200 --> 0:06:20.960
<v Speaker 2>Blizzard and Burgers in China, which is our version of

0:06:20.960 --> 0:06:24.040
<v Speaker 2>Derrek Derek Quin Grill and Shield in the US. A

0:06:24.160 --> 0:06:27.640
<v Speaker 2>local partner there, one big, exactly one big in choosing

0:06:27.680 --> 0:06:29.960
<v Speaker 2>a location in Shanghai that is the equivalent of or

0:06:30.040 --> 0:06:33.719
<v Speaker 2>Times Square in New York with a beautiful brand building assets.

0:06:33.960 --> 0:06:37.719
<v Speaker 2>And I also made a big statement about the brand itself,

0:06:37.839 --> 0:06:41.839
<v Speaker 2>its origin, the minor maniacal focus on our product quality,

0:06:41.880 --> 0:06:45.560
<v Speaker 2>and frankly the overall placeableness of the brand with fun

0:06:45.600 --> 0:06:49.719
<v Speaker 2>and color, colorful seating package and urals. So yeah, so

0:06:50.120 --> 0:06:53.160
<v Speaker 2>we do differ, but you will, as I said at

0:06:53.160 --> 0:06:57.640
<v Speaker 2>the beginning, uh not be confused to recognize there Queen

0:06:57.680 --> 0:06:58.240
<v Speaker 2>wherever you go?

0:06:58.560 --> 0:07:02.599
<v Speaker 1>Got it? What percentage of your international stores offer food?

0:07:03.720 --> 0:07:06.400
<v Speaker 2>So almost all of our state outside of the US

0:07:06.760 --> 0:07:10.880
<v Speaker 2>is uh is and Canada Street, what I call treat

0:07:10.920 --> 0:07:13.440
<v Speaker 2>is our you know, soft served venu and we have

0:07:13.480 --> 0:07:16.680
<v Speaker 2>a few exceptions with few markets. As I say, Canada

0:07:17.080 --> 0:07:19.760
<v Speaker 2>is clearly a grevalential market as well as Street, but

0:07:19.760 --> 0:07:26.240
<v Speaker 2>also Bahrain, Catar and Kuwait and now China, and I'll

0:07:26.280 --> 0:07:29.680
<v Speaker 2>expand more on China specifically which is a pretty recent

0:07:29.720 --> 0:07:33.600
<v Speaker 2>news as well as far as the restaurant launch is concerned.

0:07:33.880 --> 0:07:36.320
<v Speaker 2>So you know, depending on the provinces of the market

0:07:37.280 --> 0:07:39.800
<v Speaker 2>that we're in, the mix between treat and food very

0:07:39.920 --> 0:07:43.320
<v Speaker 2>but directionally is well bounced between between the two. In China,

0:07:43.360 --> 0:07:46.240
<v Speaker 2>for example, of Blizzard and Burger, which is only based

0:07:46.280 --> 0:07:49.200
<v Speaker 2>on three units so far, and we have, you know,

0:07:49.840 --> 0:07:52.000
<v Speaker 2>fifty five percent food forty five percent treat.

0:07:53.800 --> 0:07:57.200
<v Speaker 1>Got it. What are your largest international markets and which

0:07:57.240 --> 0:07:58.680
<v Speaker 1>markets are growing the fastest for you?

0:07:59.000 --> 0:08:03.600
<v Speaker 2>Yeah? Yeah, So largest by far is China is close

0:08:03.680 --> 0:08:08.480
<v Speaker 2>to seventeen NDRED stores as of January, and it's also

0:08:08.560 --> 0:08:10.800
<v Speaker 2>one of the I would say the fact that growing

0:08:10.840 --> 0:08:14.320
<v Speaker 2>market in some ways, we do derive a lot of

0:08:14.320 --> 0:08:17.120
<v Speaker 2>growth from that market specifically, and not only that, but

0:08:17.200 --> 0:08:19.920
<v Speaker 2>also consistently over the last few years that I've been

0:08:19.920 --> 0:08:23.880
<v Speaker 2>with the company. Is still a pretty impressive growth specifically

0:08:23.960 --> 0:08:25.800
<v Speaker 2>based on the side, but when you look at the macros,

0:08:25.800 --> 0:08:29.160
<v Speaker 2>obviously you could expect significant growth from that market. It

0:08:29.240 --> 0:08:32.360
<v Speaker 2>tel great.

0:08:32.360 --> 0:08:34.360
<v Speaker 1>Are you opening any new markets this year?

0:08:35.960 --> 0:08:41.400
<v Speaker 2>So yes, potentially yes, And I say potentially because a

0:08:40.920 --> 0:08:43.520
<v Speaker 2>lot of a lot of injuries on supply chain and

0:08:43.559 --> 0:08:45.800
<v Speaker 2>as you know, there are a lot of movements these

0:08:45.880 --> 0:08:48.800
<v Speaker 2>days around trade, and we're carefully monitoring the you know,

0:08:48.840 --> 0:08:52.280
<v Speaker 2>the US China relationship, which which obviously influenced us and

0:08:52.679 --> 0:08:57.480
<v Speaker 2>frankly see for our ability extend beyond mainline China, such

0:08:57.520 --> 0:09:00.120
<v Speaker 2>as you know, places like Hong Kong and Macau's so

0:09:01.280 --> 0:09:03.880
<v Speaker 2>those type of destination and market would be possible for

0:09:03.960 --> 0:09:06.440
<v Speaker 2>us to enter in the very near future. But I

0:09:06.480 --> 0:09:09.280
<v Speaker 2>can tell you that we've made significant progress also an

0:09:09.320 --> 0:09:11.960
<v Speaker 2>our new market entry pipeline, and we have set sits

0:09:12.000 --> 0:09:15.760
<v Speaker 2>on different markets such as you know India as an

0:09:15.760 --> 0:09:18.680
<v Speaker 2>example of Saudi on which I'm going to go there

0:09:18.840 --> 0:09:21.400
<v Speaker 2>and this weekend, but also UK, Frances, Spain and a

0:09:21.440 --> 0:09:25.200
<v Speaker 2>few others in between. So a pretty robust pipeline in

0:09:25.240 --> 0:09:26.680
<v Speaker 2>an act for the next eight years.

0:09:27.000 --> 0:09:29.760
<v Speaker 1>Great, can you walk me through the process of deciding

0:09:29.800 --> 0:09:31.640
<v Speaker 1>which new market you're going to open next?

0:09:32.760 --> 0:09:36.040
<v Speaker 2>Yes, our process. Look, it really helps us turn our

0:09:36.040 --> 0:09:38.640
<v Speaker 2>attention to markets where a few things where we believe

0:09:38.640 --> 0:09:42.520
<v Speaker 2>we can grow the market share relatively rapidly, which implies

0:09:42.679 --> 0:09:45.920
<v Speaker 2>a sizeable urban concentration, So we do pay attention to

0:09:46.000 --> 0:09:49.000
<v Speaker 2>the organization of the market were getting get into. The

0:09:49.040 --> 0:09:52.920
<v Speaker 2>second one is where there's a decent purchasing power parity

0:09:52.920 --> 0:09:55.719
<v Speaker 2>from a consumer based in other words, can the consumerl

0:09:55.840 --> 0:09:58.120
<v Speaker 2>for us? And then the third one is there a

0:09:58.160 --> 0:10:02.080
<v Speaker 2>sizeable intermited service rest market, So do we have in

0:10:02.120 --> 0:10:04.640
<v Speaker 2>some ways in other words, do we have to educate

0:10:04.640 --> 0:10:08.160
<v Speaker 2>the market or the consumers or not? And ultimately the

0:10:08.320 --> 0:10:14.199
<v Speaker 2>ability to find like minded franchises what we we see

0:10:14.360 --> 0:10:18.160
<v Speaker 2>as potentially good brand builders, good operators, good developers, but

0:10:18.200 --> 0:10:22.440
<v Speaker 2>also well capitalized. So when you run through these filters

0:10:22.559 --> 0:10:26.480
<v Speaker 2>and from seventy countries that we're currently not in, the

0:10:26.559 --> 0:10:30.000
<v Speaker 2>fuel eventually gives us, you know, a sixteen to twenty

0:10:30.040 --> 0:10:34.160
<v Speaker 2>market which will racket stack depending on the attractiveness, the size,

0:10:34.480 --> 0:10:38.080
<v Speaker 2>and whether they are concentric to an existing market or not,

0:10:38.600 --> 0:10:40.640
<v Speaker 2>which is a big consideration for us on the supply

0:10:40.760 --> 0:10:43.760
<v Speaker 2>chain standpoint, but also finding whether or not there are

0:10:43.800 --> 0:10:47.959
<v Speaker 2>consumer similarities perspective which will be probably easier to get into.

0:10:48.040 --> 0:10:51.040
<v Speaker 2>So without disclosing too much, I think you know I

0:10:51.120 --> 0:10:55.200
<v Speaker 2>aliated earlier, but western Southern Europe our priority for US,

0:10:55.240 --> 0:10:59.080
<v Speaker 2>North Asia as well, Central Asia, the GCC yet larger,

0:10:59.160 --> 0:11:02.400
<v Speaker 2>the greater GO countries and our few markets to South

0:11:02.440 --> 0:11:05.080
<v Speaker 2>America are also coloring our attention, but I would say

0:11:05.160 --> 0:11:06.520
<v Speaker 2>much further down the pipeline.

0:11:06.760 --> 0:11:10.600
<v Speaker 1>Yeah, very well thought out a strategy which I love

0:11:10.640 --> 0:11:13.240
<v Speaker 1>to hear. Yeah, I love to hear. It's not just

0:11:13.280 --> 0:11:15.080
<v Speaker 1>accepting whoever whoever wants.

0:11:18.880 --> 0:11:20.880
<v Speaker 2>No, no, no, no, no no. We try to stay

0:11:20.920 --> 0:11:24.520
<v Speaker 2>away from that and another look. I mean I personally,

0:11:24.600 --> 0:11:26.440
<v Speaker 2>you know, have been exposed to that type of a

0:11:26.520 --> 0:11:29.720
<v Speaker 2>development strategy, which you know, it's great when you sign

0:11:29.720 --> 0:11:33.280
<v Speaker 2>a deal, but probably painful to support and grow in scale.

0:11:33.280 --> 0:11:35.720
<v Speaker 2>So no, we're very disciplined when it comes to deciding

0:11:36.160 --> 0:11:39.280
<v Speaker 2>where and when and with w we are deciding to

0:11:39.280 --> 0:11:41.079
<v Speaker 2>put Dere a queen on any given.

0:11:40.840 --> 0:11:44.400
<v Speaker 1>Market, it's fantastic. I'd imagine some markets like the GCC,

0:11:44.559 --> 0:11:48.960
<v Speaker 1>where it's hot pretty much year round, would help ice

0:11:49.000 --> 0:11:49.680
<v Speaker 1>cream sales.

0:11:49.679 --> 0:11:53.280
<v Speaker 2>Now, yeah, I mean you the common wisdom is you

0:11:53.320 --> 0:11:57.720
<v Speaker 2>would think that weather influences ice cream consumption as all,

0:11:58.280 --> 0:12:00.680
<v Speaker 2>and it does to something type, but not as much

0:12:00.720 --> 0:12:04.200
<v Speaker 2>as one would think. So weather does play a role,

0:12:04.480 --> 0:12:07.040
<v Speaker 2>but I think it's really about, you know, the the

0:12:07.080 --> 0:12:11.640
<v Speaker 2>affordability of the product, the brand, uh you know, uh,

0:12:11.840 --> 0:12:16.959
<v Speaker 2>you know, relative strength and anticipation from the consumer standpoint.

0:12:16.960 --> 0:12:20.120
<v Speaker 2>So yeah, there's a plenty of other factors which I

0:12:20.160 --> 0:12:24.679
<v Speaker 2>think are probably quite significant. Over the weather, it's help,

0:12:24.720 --> 0:12:26.000
<v Speaker 2>but yeah, it does play a role.

0:12:26.040 --> 0:12:30.160
<v Speaker 1>Nonetheless, Uh do you have any well known franchised partners

0:12:30.200 --> 0:12:34.520
<v Speaker 1>that are operating maybe other brands, other US brand we do.

0:12:34.600 --> 0:12:36.360
<v Speaker 2>I don't know if they're well known, but they're pretty

0:12:36.400 --> 0:12:40.559
<v Speaker 2>large and sophisticated and extremely well capitalized. And above all,

0:12:40.960 --> 0:12:42.960
<v Speaker 2>and this is an important poet for US, is that

0:12:43.000 --> 0:12:45.560
<v Speaker 2>they are extremely dedicated to the brand and and what

0:12:45.640 --> 0:12:48.720
<v Speaker 2>I call them brand builder is not just necessarily by

0:12:48.800 --> 0:12:51.840
<v Speaker 2>building restaurant, but but contributing to make the brand what

0:12:51.880 --> 0:12:55.040
<v Speaker 2>it is today. So a couple of a couple of

0:12:55.440 --> 0:12:59.520
<v Speaker 2>franchise group comes into mind. One is CFB CHINAUS with

0:12:59.640 --> 0:13:05.480
<v Speaker 2>business in In in China, is all master franchise in

0:13:05.760 --> 0:13:09.080
<v Speaker 2>uh In, a part of China and backed by a

0:13:09.240 --> 0:13:13.480
<v Speaker 2>large private withion called Fountain Investors. Very good people, super

0:13:13.520 --> 0:13:19.640
<v Speaker 2>long term, perspective minded individuals and very very a real

0:13:19.679 --> 0:13:22.960
<v Speaker 2>pleasure to work with. The second one, which is probably

0:13:23.040 --> 0:13:28.120
<v Speaker 2>known uh in In in Southeast Asia and and pretty

0:13:28.160 --> 0:13:30.960
<v Speaker 2>much across the world because they're well diversified from a

0:13:31.000 --> 0:13:34.480
<v Speaker 2>from a franchise group standpoint. It's the minor group based

0:13:34.480 --> 0:13:38.439
<v Speaker 2>out of Talent also a very large publicly traded company,

0:13:38.920 --> 0:13:41.679
<v Speaker 2>well diversified in a way where they they do have

0:13:41.840 --> 0:13:45.319
<v Speaker 2>multiple other brands. They do own some brands, but also

0:13:45.440 --> 0:13:47.319
<v Speaker 2>not just in the food space, and as well in

0:13:47.360 --> 0:13:51.600
<v Speaker 2>the hospitality. They've just recently acquired actually at the very

0:13:51.600 --> 0:13:54.959
<v Speaker 2>onset of Covid, a huge hotel chain called n H

0:13:55.640 --> 0:14:00.520
<v Speaker 2>and so, yeah, very very sophisticated, super super dedicated to

0:14:00.559 --> 0:14:02.760
<v Speaker 2>the brand and insactly being with us for a very

0:14:02.800 --> 0:14:06.120
<v Speaker 2>long time. So we have very privileged and a good

0:14:06.160 --> 0:14:07.840
<v Speaker 2>relationship with with those two.

0:14:08.679 --> 0:14:11.040
<v Speaker 1>Yeah, it's so important to have good franchise partners.

0:14:11.040 --> 0:14:11.599
<v Speaker 2>Absolutely.

0:14:12.679 --> 0:14:15.719
<v Speaker 1>How do your sales shake out based on time? In

0:14:15.800 --> 0:14:16.720
<v Speaker 1>the time of day?

0:14:17.720 --> 0:14:20.280
<v Speaker 2>Yeah, so look from a treat perspective, we do most

0:14:20.320 --> 0:14:23.000
<v Speaker 2>of our trade in the afternoon, uh, in the evening

0:14:23.000 --> 0:14:27.360
<v Speaker 2>and late evening our restaurants, you know, except those who

0:14:27.400 --> 0:14:29.560
<v Speaker 2>are doing breakfast. I mean, we have a quarter of

0:14:29.600 --> 0:14:33.680
<v Speaker 2>ourselves or at lunch, you know, in the afternoon and

0:14:33.680 --> 0:14:36.720
<v Speaker 2>and and and then in the evening. The any of

0:14:36.760 --> 0:14:38.920
<v Speaker 2>the balance between the two uh, the to the to,

0:14:39.160 --> 0:14:42.080
<v Speaker 2>these two day parts are split evenly. So yeah, so

0:14:42.320 --> 0:14:45.320
<v Speaker 2>those are those are you know, day parts. The way

0:14:45.320 --> 0:14:47.040
<v Speaker 2>they are being distributed.

0:14:48.600 --> 0:14:51.080
<v Speaker 1>And you mentioned late evening. You're open pretty late in

0:14:51.120 --> 0:14:52.280
<v Speaker 1>some in some markets.

0:14:52.480 --> 0:14:56.200
<v Speaker 2>In some instances, yeah, sometimes we're actually nearing midnight or

0:14:56.360 --> 0:14:58.680
<v Speaker 2>in some instances, depending on the location, you know, you

0:14:58.720 --> 0:14:59.640
<v Speaker 2>could actually push.

0:14:59.520 --> 0:15:04.120
<v Speaker 1>Up to to am Okay, col, I'm not sure you know.

0:15:04.160 --> 0:15:06.480
<v Speaker 1>The Dairy Queen I frequent is at the Jersey Shore.

0:15:06.480 --> 0:15:08.760
<v Speaker 1>I'm not sure what time they're I don't know sure

0:15:08.760 --> 0:15:11.240
<v Speaker 1>what time they're open, so I'm trying not to eat

0:15:11.680 --> 0:15:13.200
<v Speaker 1>ice cream too late.

0:15:13.440 --> 0:15:15.120
<v Speaker 2>So I'm good to you.

0:15:15.720 --> 0:15:18.200
<v Speaker 1>But yeah, we visit every summer. Man, It's great. My

0:15:18.240 --> 0:15:22.000
<v Speaker 1>mom loves Dairy Queen. So does your menu vary by country?

0:15:22.720 --> 0:15:27.000
<v Speaker 2>Yes and no. It is consistently built around our iconic

0:15:27.040 --> 0:15:29.440
<v Speaker 2>suff serve and our cold and a blizzard and our

0:15:29.520 --> 0:15:32.520
<v Speaker 2>cakes on the street side, but it does take on

0:15:32.560 --> 0:15:36.040
<v Speaker 2>a localized approach when it comes to flavors and combination

0:15:36.160 --> 0:15:40.400
<v Speaker 2>of flavors or even Brent tie in with regional conflictionary brands.

0:15:40.400 --> 0:15:43.480
<v Speaker 2>So from a food standpoint, our categories are very similar,

0:15:43.880 --> 0:15:46.560
<v Speaker 2>but some of the bills, as an example of our burgers,

0:15:47.280 --> 0:15:51.680
<v Speaker 2>are slightly different. So yeah, but I would say it

0:15:52.520 --> 0:15:55.160
<v Speaker 2>does vary from a flavor standpoint.

0:15:54.600 --> 0:15:56.640
<v Speaker 1>And you know, in the fourth quarter, you know, we

0:15:56.720 --> 0:16:00.920
<v Speaker 1>had expected better results in the Middle East as we

0:16:00.960 --> 0:16:04.160
<v Speaker 1>were lapping the start of the Israel Maas war. But

0:16:04.240 --> 0:16:08.000
<v Speaker 1>I think, you know, we were kind of like pleasantly surprised,

0:16:08.040 --> 0:16:10.320
<v Speaker 1>I guess at the rate of improvement for some of

0:16:10.360 --> 0:16:15.320
<v Speaker 1>the companies we cover, McDonald's being one. Can you talk

0:16:15.320 --> 0:16:17.280
<v Speaker 1>a little bit about how sales.

0:16:17.080 --> 0:16:20.120
<v Speaker 2>Are doing in the Middle East, Well, you know, ourselves

0:16:20.160 --> 0:16:22.600
<v Speaker 2>have been pretty consistent up until you know the vess

0:16:22.680 --> 0:16:24.920
<v Speaker 2>that you mentioned the October seventh last year, and then,

0:16:25.000 --> 0:16:28.760
<v Speaker 2>like many other brands, were affected by the overall region turnmoil.

0:16:29.240 --> 0:16:31.640
<v Speaker 2>But we still the course and frankly ourselves have been

0:16:31.840 --> 0:16:34.520
<v Speaker 2>growing as well as our footprint. In fact, as I

0:16:34.680 --> 0:16:36.640
<v Speaker 2>was saying earlier, I think I'm flying to Saudi to

0:16:36.840 --> 0:16:40.360
<v Speaker 2>this week to to meet potential interesting parties, which is

0:16:40.440 --> 0:16:42.560
<v Speaker 2>pretty exciting. So we do have a lot of hope

0:16:43.080 --> 0:16:45.960
<v Speaker 2>and a lot of expectation in that region, and I

0:16:45.960 --> 0:16:48.200
<v Speaker 2>hope to see more dairy Queen good stuff.

0:16:48.240 --> 0:16:50.920
<v Speaker 1>And are you seeing any improvement in China?

0:16:51.080 --> 0:16:53.920
<v Speaker 2>So the market, you know, has had its challenges from

0:16:53.920 --> 0:16:57.320
<v Speaker 2>a domestic demand standpoint. We fell the consumer at large

0:16:57.360 --> 0:17:00.000
<v Speaker 2>less optimistic over the last few months of the last

0:17:00.040 --> 0:17:03.480
<v Speaker 2>twelve months I would say in general, which was you know,

0:17:03.600 --> 0:17:06.760
<v Speaker 2>somehow reflected in their in their spending. So we didn't

0:17:06.800 --> 0:17:10.720
<v Speaker 2>ever react by by leaning heavily on our value offering

0:17:10.720 --> 0:17:15.240
<v Speaker 2>to keep our transactions flowing and then growing. But so yeah,

0:17:15.280 --> 0:17:18.119
<v Speaker 2>so it's it's okay. I think the consumer overall is

0:17:18.160 --> 0:17:21.400
<v Speaker 2>expected to be resilient and I'm hopeful that they will

0:17:21.400 --> 0:17:24.640
<v Speaker 2>feel better about their country economic prospect. I know, franchise

0:17:24.760 --> 0:17:26.960
<v Speaker 2>in the and bankers are so so we are too

0:17:27.040 --> 0:17:27.480
<v Speaker 2>as well.

0:17:29.040 --> 0:17:31.040
<v Speaker 1>All right, good stuff, So what's your go to water?

0:17:32.480 --> 0:17:35.600
<v Speaker 2>Well, I really like the mango sticky rice, which is

0:17:35.720 --> 0:17:40.000
<v Speaker 2>usually coming from Thailand, but it's been adopted in China. Uh,

0:17:40.119 --> 0:17:43.560
<v Speaker 2>the mango STICKI rise is a pretty interesting uh you

0:17:43.560 --> 0:17:47.080
<v Speaker 2>know flavor which I really I really like color wise

0:17:47.119 --> 0:17:50.440
<v Speaker 2>as well. There's one fault not for the faint arts,

0:17:50.480 --> 0:17:54.800
<v Speaker 2>called the Durian, which is Southeast Asian fruit, which has

0:17:54.840 --> 0:17:59.040
<v Speaker 2>a very uh I would say, special taste and smell,

0:17:59.240 --> 0:18:01.320
<v Speaker 2>but it's more than a quiet taste. But I think

0:18:01.800 --> 0:18:02.960
<v Speaker 2>it's worth trying.

0:18:04.080 --> 0:18:07.080
<v Speaker 1>I have very cool you know, in the States. I'm

0:18:07.119 --> 0:18:09.159
<v Speaker 1>more of a blizzard kind of guy that you know.

0:18:09.200 --> 0:18:12.159
<v Speaker 1>I'll change the flavors based on my mood. But I

0:18:12.280 --> 0:18:14.600
<v Speaker 1>love mango and sticky rice. Man, there's a very good

0:18:14.960 --> 0:18:19.000
<v Speaker 1>mom and pop Thai restaurant. Oh yeah, and they have

0:18:19.200 --> 0:18:23.600
<v Speaker 1>fantastic mango and sticky rice. I'm there when mango's in season.

0:18:23.680 --> 0:18:26.280
<v Speaker 1>I'm there more frequently for sure.

0:18:26.880 --> 0:18:29.199
<v Speaker 2>Yeah. It's a big, big fruit in the in that

0:18:29.280 --> 0:18:32.960
<v Speaker 2>part of the world, and it's usually seasonal fruits. So

0:18:33.359 --> 0:18:35.560
<v Speaker 2>when when the season is up, I mean, you know,

0:18:35.640 --> 0:18:38.000
<v Speaker 2>we go, we go again bus stars.

0:18:37.720 --> 0:18:42.120
<v Speaker 1>Before very good. All right, thanks again, Nick, this is awesome.

0:18:42.440 --> 0:18:45.280
<v Speaker 1>Where can our listeners go find their closest to us,

0:18:45.480 --> 0:18:47.960
<v Speaker 1>Dairy Queen and what social media channel should we be

0:18:48.000 --> 0:18:48.879
<v Speaker 1>following the chain on?

0:18:49.280 --> 0:18:52.320
<v Speaker 2>Well, derekqueen dot com to begin with, but also or

0:18:52.359 --> 0:18:57.120
<v Speaker 2>any any social media such as Instagram, Facebook, and and

0:18:56.840 --> 0:18:59.760
<v Speaker 2>the and the likes. But yeah, I would say check

0:18:59.840 --> 0:19:02.720
<v Speaker 2>us out. We'd love to have you o our restaurants.

0:19:02.960 --> 0:19:04.720
<v Speaker 1>Good stuff. And I want to thank the audience for

0:19:04.760 --> 0:19:07.080
<v Speaker 1>tuning in. If you like the discussion, please leave us

0:19:07.080 --> 0:19:10.400
<v Speaker 1>a review. It'll help us expand the podcast reach. Check

0:19:10.440 --> 0:19:13.080
<v Speaker 1>back soon for another episode of Chopping It Up.