A Deeper Dive

What goes into an investment into one of the country’s fastest growing restaurant brands?This week’s episode of the Restaurant Business podcast A Deeper Dive features Scott Romanoff, the cofounder and co managing partner of Franchise Equity Partners.Franchise Equity Partners is a long-term investor in multi-unit operators of all types and recently made a big investment in 7 Crew, a 50-unit franchisee of the rapidly growing beverage brand 7 Brew. The beverage chain has been one of the fastest-growing restaurant chains in the country. It is also helping to lead a beverage revolution in the restaurant space. We wanted to ask Scott about that investment and about 7 Brew. We discuss the brand and why it was worth the investment. Scott talked about the operator and why its ability to grow locations was so attractive. We also discussed the environment of the past couple of years and why that’s made Franchise Equity Partners more choosy about its investments. We’re talking 7 Brew on A Deeper Dive so please check it out.

Are restaurants missing a key opportunity on delivery?This week’s episode of the Restaurant Business podcast A Deeper Dive features Cameron Watt, the CEO of secret shopper firm Intouch Insight.Intouch recently completed an exclusive study on delivery for Restaurant Business and we’re chatting about some of the conclusions. We caught up with Cameron at the recently concluded FSTEC conference.The study featured some fascinating results. For one thing, first-party delivery on average isn’t much better, performance-wise, than it is ordering from third-party delivery companies themselves. That may be a missed opportunity for restaurants. Cameron and I talk about that.We also talk about the growing influence of third-party delivery companies and the overall results from the study. And we talked about what restaurant companies can do to improve the delivery experience for customers. We’re talking delivery on A Deeper Dive so please check it out.

Why is McDonald’s taking on the tip credit? This week’s episode of the Restaurant Business podcast A Deeper Dive takes a hard look at the fast-food giant’s stand on the tip credit, which enables businesses to pay a subminimum wage to tipped workers, so long as the tips make up the difference. We feature three guests on this podcast: Saru Jayaraman, the president and cofounder of the labor advocacy group One Fair Wage; Martin Murch, an independent restaurant operator out of Chicago, and Joe Kefauver, managing partner of Align Public Strategies and cohost of the Working Lunch podcast. (Working Lunch also looked at the topic last week.)We examine the tip credit, why McDonald’s and labor groups are against the wage and why many full-service restaurants believe they need it to remain in business. We also examine McDonald’s strategy in taking the topic on, and why it would choose to leave the National Restaurant Association over the issue. We also examine whether it really does give full-service restaurants an advantage. We’re taking on the tip credit on A Deeper Dive so check it out.

What is the country’s fifth largest pizza concept doing to expand its reach?This week’s episode of the Restaurant Business podcast A Deeper Dive features Tom Brennan, the chief merchandising officer for the Iowa-based convenience-store chain Casey’s.That is right. Casey’s is the fifth-largest pizza concept in the U.S., at least based on sales. This is a fascinating conversation with a top executive of a company that is a growing competitor with a number of different restaurant chains, including much of the pizza business. We talk about that pizza business and how it became so vital to the company. Casey’s has been generating strong pizza sales this year even as fast-food pizza chains have been stagnant. Tom explains the company’s secret.We also talk about the company’s broader foray into the food business and we also talk about beverages and how Casey’s plans to improve its sales in that area. We’re talking convenience store pizza on A Deeper Dive so please check it out. 

Why are some restaurants having such a tough time this year?This week’s episode of the Restaurant Business podcast A Deeper Dive features Chad Moutray, the chief economist for the National Restaurant Association. We wanted to talk with Chad for two big reasons: First, the association published its data abstract on the restaurant industry, which shows some surprisingly low profitability for both full-service and limited-service restaurants. We talk about why restaurants are less profitable today compared with before the pandemic.But we also talk about the economy and why it’s so unfriendly to fast-food restaurants in particular. Many fast-food chains are seeing weak traffic, which has some speculating that lower-income consumers are cutting back. Moutray helps clear that up.We’re talking about the restaurant economy on A Deeper Dive so please check it out.

What is Todd Penegor doing at Papa Johns?This week’s episode of the Restaurant Business podcast A Deeper Dive features Todd Penegor, who has been CEO of the Atlanta-based pizza chain for just over a year. This is a great conversation. Penegor has helped Papa Johns regain sales momentum during a particularly difficult time, both for the sector and the fast-food business in general. The company has done this through a variety of means. We talk about the company’s focus on its core pizza. Todd talks about that effort, and he gives some hints at what may be coming. We talk about technology, including artificial intelligence, and the work being done on that front. We talk about loyalty. And we talk extensively about third-party delivery, and how Papa Johns can maintain its first-party service even as aggregators take more delivery business away.We also talk about marketing, and especially local marketing. Papa Johns has worked to shift marketing back to local after moving that spending nationally under the previous management.We’re talking pizza on A Deeper Dive so please check it out.

How are franchisees dealing with the current operating environment?This week’s episode of the Restaurant Business podcast A Deeper Dive features Raj Patel, a multi-brand franchisee out of the Chicago area. Patel’s group operates nearly 100 Dunkin’ locations and a number of Dave’s Hot Chicken restaurants, among others. We wanted to talk with him to get a franchisee’s perspective of the current environment. He provides some insight from a franchisee’s view of both those brands and why they are doing really well right now. What makes those brands tick?We also talk extensively about development strategies. Patel provides some interesting insight into competition for restaurant real estate right now. He talks about what sites cost more, whether drive-thru-only locations make any sense and the best time to walk away from a potential location.We’re talking restaurant development and franchising on A Deeper Dive so please check it out. 

What kind of technology are restaurant companies looking for?This week’s episode of A Deeper Dive features Juan George, a former Olo executive and cofounder of 858 Partners, which connects restaurants with technology companies.Technology remains a key area of investment for a lot of companies. We were interested in hearing from George about what companies are looking for. He does not disappoint on that front. We also talk about a lot of other stuff, including the state of technology mergers and acquisitions and why there is so much consolidation in that sector right now. Restaurant tech firms were getting massive, often ridiculous valuations a few years ago. We also talk about what will happen with Olo as a private company.We’re talking Tech on A Deeper Dive so please check it out. 

In this discussion, Bernard Acoca, CEO of Zaxby's, the fast-casual chicken chain, shares his journey as the first non-founder to lead the brand. He reveals strategies for revitalizing Zaxby’s amid recent sales challenges, focusing on AI-driven drive-thru enhancements and operational improvements. Acoca discusses the balance between growth and preserving core values during leadership transitions, the importance of stable supply chains, and the ambitious plans for expansion and franchisee training, all aimed at establishing Zaxby’s as a major player in the chicken market.

How does a restaurant chain go from parking lot startup to $1 billion valuation in less than a decade?This week’s episode of A Deeper Dive focuses on the recent sale of Dave’s Hot Chicken to Roark Capital. It features the fast-casual chain’s CFO, James McGehee, and SVP of Finance Scott Putman. Dave’s Hot Chicken was founded in a Los Angeles parking lot—yes, a parking lot—by four friends in 2017. They got favorable local reviews and the concept took off. It brought in investors and professional management and took advantage of a consumer that wants a lot more chicken and spicier options. Dave’s has been one of the fastest-growing restaurant chains in the U.S. over the past several years, including nearly 60% system sales growth last year, according to Technomic. And it earned the company a $1 billion sale to the private-equity firm Roark Capital.While some industries such as technology can reach $1 billion valuations in a hurry that kind of growth is nearly unheard of in the restaurant space. We explore exactly how a company can achieve that kind of success, that quickly. Check it out.