A Deeper Dive

What happens when you combine chicken wings and sandwiches? This week’s episode of the Restaurant Business podcast A Deeper Dive features David Bloom, chief operating and development officer for Capriotti’s, a Las Vegas chain of sandwich shops. Capriotti’s acquired Wing Zone in 2021. Capriotti’s operates 175 locations. Wing Zone now operates 61. Bloom talks about that combination and what the company saw in Wing Zone and how it has integrated that chain into its system. He also discusses both chains’ growth plans, as well as its overall franchising strategy. Both brands have strategies in place to ramp up unit growth in the coming years. We talk about plenty of other things, including commodities and why Capriotti’s sometimes has to hoard stuffing. We’re talking sandwiches, wings and stuffing on A Deeper Dive, so please have a listen.

How are younger consumers reacting to inflation? This week’s episode of A Deeper Dive features Lori Rakoczy, associate principal with Restaurant Business sister company Technomic and one of the co-authors of the blog Technomic’s Take. And we’re talking about inflation. Specifically, we’re talking about how younger consumers are dealing with high prices. Menu prices have taken off over the past year-plus—they were up 8.5% year over year in December. Rakoczy wrote recently that younger Gen Z consumers are not necessarily cutting restaurant dining out altogether as a result of the higher prices. But they are changing their behaviors. They’re more likely than other consumers to price shop and keep eating out. Rakoczy discusses how operators should adapt and what this could mean for restaurants. She also talks about convenience and why that is so important in the restaurant business. We’re talking about Gen Z consumers on A Deeper Dive so please have a listen.

What is Killer Burger and where is it going? This week’s episode of the Restaurant Business podcast A Deeper Dive features John Dikos, CEO of the 20-unit Killer Burger, along with VP of Financial Planning Adam Sanders. The episode was recorded at the ICR Conference, where we spoke with the two about the burger chain and its overall growth strategy. Killer Burger operates 20 company and franchised locations in the Pacific Northwest and says it is “redefining” the American diner burger for the “modern world.” The company is part of a generation of fast-casual concepts that promise a higher level of service along with alcohol. Dikos and Sanders talk about how they plan to grow, what they’re doing to get the company ready for that growth and the overall state of the industry.

How is Cava Group’s integration of Zoe’s Kitchen restaurants going? This week’s episode of the Restaurant Business podcast A Deeper Dive features Brett Schulman, the CEO of Cava Group, who talks about a wide variety of topics, but particularly his company's integration of Zoe’s Kitchen. Cava acquired Zoe’s in 2018 in one of the more interesting deals of recent vintage. Both were fast-casual Mediterranean chains but Zoe’s was publicly traded at the time. Since then, Cava has been converting Zoe’s restaurants into Cava locations. Such conversions used to be relatively popular in the industry in the 1990s but have been relatively rare since, though First Watch used conversions to grow quickly several years ago. Schulman Talks about why that strategy makes sense and what it’s doing for Cava. He also talks about digital sales, the current state of delivery and Cava’s potential plans for catering. And Schulman talks about his company’s strategy to balance demand from all these channels. We’re talking with one of the premier fast-casual executives in the industry on A Deeper Dive so please have a listen.

What is the story behind Dave’s Hot Chicken? This week’s episode of the Restaurant Business podcast A Deeper Dive features two people behind one of the hottest chains in the country: Bill Phelps, Dave’s CEO, and Arman Oganesyan, one of the company’s cofounders. Dave’s is the fastest-growing restaurant chain in the U.S. right now. The chain, which sells a menu of spicy chicken tenders or sandwiches, was started out of a California parking lot in 2017. It went from seven locations in 2020 to more than 100 now, with deals for another 750 and locations coast to coast. Bill and Arman tell the story of the chain and its growth. They also talk about the strategies to avoid the pitfalls of overly fast growth, something that has caused problems at many concepts over the years. But they also talk about the secret behind the brand’s seemingly overnight success. It is a fun look at one of the most interesting restaurant chains in the country today so please have a listen.

Restaurants are in a stronger financial position now than they were before the pandemic. This week’s episode of A Deeper Dive features Michael Swanson, an agricultural economist and consultant for Wells Fargo. Swanson has been on the podcast before and talks about the current and future state of food costs. Commodity price inflation hammered the industry last year. Those costs have started to ease already and Swanson talks about what to expect come 2023. We also talk about the state of the industry after the pandemic. Restaurants that survived the pandemic are in better shape. Profits actually soared in 2021, thanks to the combination of government assistance and improving sales. And though margins were squeezed in 2022 because of inflation, it still puts the industry in a better position heading into a potential recession. In addition, Swanson talks about why consumers remain reluctant to cut much from their food spending in a downturn.

Is tipping out of hand at fast-food restaurants? This week’s episode of A Deeper Dive I speak features Robert Byrne, director of consumer and industry insights with our sister company Technomic, who talks about convenience, value and tipping. Byrne oversees consumer surveys with Technomic talks extensively about consumers’ views on a host of issues related to restaurants. He discusses why consumers use restaurants, including why convenience is so important to consumers and what they think about when it comes to value right now. He also talks a lot about tipping. More counter service restaurants have been adding tipping as an option but have also run into at least some consumer resistance when they do. Are QSRs asking for too much when they suggest a tip? Is that a risk to their relationship with consumers. Byrne discusses these and all other issues.

Why do companies franchise their business? This week’s episode of the Restaurant Business podcast A Deeper Dive features Gary Occhiogrosso the founder of Franchise Growth Solutions, who talks about the opportunities and challenges involved in franchising. Occhiogrosso has been involved in the business for a long time and we talk about his history, first as a franchisee and later as the founder of a franchise development and sales firm. Franchising remains a popular method for restaurants to expand, but not everyone can expand successfully and there are a number of potential pitfalls when chains start selling the right to operate their brand to individual investors. Occhiogrosso discusses this and what goes into taking a successful restaurant and making it a franchise. We talk about the factors that go into franchising a business. He also provides some recommendations for companies considering the option.

Did Starbucks win its labor battle? This week’s episode of the Restaurant Business podcast A Deeper Dive features a debate between myself and Peter Romeo, the editor at large of RB, on the success of Starbucks’ pushback against unions. For some time, it seemed that another Starbucks store formed a union every few hours. The push, the most successful effort to unionize a restaurant chain, contributed to massive changes at the Seattle-based coffee giant, particularly in the executive team. That push has slowed in recent months. Romeo and I debate whether that’s a sign that Starbucks has won. We also talk about a potential rail strike, which could inject yet another black swan event onto a restaurant industry that has dealt with several of them over the past three years. And we talk about the U.S. Small Business Administration’s recent decision to send out more Restaurant Revitalization Fund grants to operators.

Restaurant automation is coming rapidly. But how much of an impact will it have? This week’s episode of the Restaurant Business podcast A Deeper Dive features Juan Martinez, principal with the consulting firm Profitality, who talks about the growing use of automation. Martinez is a periodic guest on the podcast and he works with restaurants to improve their overall profitability. Automation has been one area that restaurants have been targeting over the past couple of years as they faced numerous challenges, including the pandemic, resulting labor shortage and now wage inflation. But there have been doubts about the true impact of automation on labor costs. Martinez talks about this, and he provides some recommendations for operators that are looking into using machines to take over some of employees tasks.