Friends of Branded!
Happy Saturday and I hope you had a great week.
In last week’s Top of the Fold I offered up An Ode to Start-Ups b/c I feel nothing is easy and I wanted to tip my hat to the crazy ones (no, I’m not going to use that (awesome) quote from Mr. Steve Jobs again this week).
I enjoy receiving comments each week on the newsletter and whether they’re good, bad, or otherwise, I appreciate the feedback, and suggestions (and that includes the pointing out of my many typos).
One of the comments I received was the inspiration for this week’s TOTF (yes, I’m testing out whether I can make this acronym for Top of the Fold fly…oh like This Week in Baseball’s “TWIB” is so much better?) b/c it suggested I was cheering for the whole industry. How can I cheer for all, when “all” can’t win. I took the comment to suggest I was singing the spiritual song known as “Kumbaya” or even handing out participation trophies for all members of the hospitality industry (or at least that’s how I read it).
I do cheer for the industry and all the good people that comprise it, but don’t mistake my kindness for weakness. There are winners and there are losers (are we still allowed to use the word “losers”, or do we now call them “not winners”?).
At my daughter’s first spring basketball game last Saturday, our team lost by a score of 23 to 10 and the winning team actually had two-on-goals (or whatever you call it when a team scores a basket for the opposing team). Two players on the opposing team got mixed up at which basket they were shooting at, so I feel the score of this first game was really 27 to 6. I share this quick story not b/c I expect anyone to care about a basketball game played by 7 and 8-olds, but to share that one of the kids on my daughter’s team cried after the game b/c she didn’t like losing. I like that kid. She cares and losing sucks.
It made me think of the title of this week’s H^2 and (of course) this famous quote, “sometimes you win, sometimes you lose, sometimes it rains,” from the 1988 American romantic comedy, Bull Durham, staring Kevin Costner, Tim Robbins, and Susan Sarandon (which also ranks 3rd on my all-time list of favorite baseball movies).
Let’s not kid ourselves, there are restaurants that fail. They don’t fail at the level of the urban myth that “90% of restaurants fail in their first year.” That statistic, which is widely repeated, is simply not accurate and has been debunked by more studies than the number of times our ‘rat pack’ has sung Happy Birthday to Schatzy when we gather for dinner. The actual first-year failure rate for restaurants is about 23%, which is similar to other service-based small businesses.
We’re in an economic environment that I believe we can all agree is challenging and where consumer confidence is waning for a variety of reasons, including the uncertainty around international trades rules (which will prove to be particularly damaging to small businesses). But despite this environment, we still, of course, are witnessing winners and losers. I’ll go further and say it’s in environments that are particularly challenging that you really see what separates the winners from the losers.
There was a quote that my mother particularly liked, and she once used at a meeting to the dismay of the people it was directed to and to the utter joy of my father who still regales in the telling of the story of her doing so – “don’t confuse brains with a bull market.” To be clear, I don’t think the restaurant industry is ever or has ever been easy, but as the lines have been blurred and guests have more dining options than ever before, combined with a challenging economic environment and consumer confidence falling, this is a truly difficult market to operate in (maybe not pandemic-tough, but tough all the same).
Think about it, when one of the industry’s favorite and best-performing companies, Chipotle, announces a drop of 0.4% in same-store sales in Q1 2025 (its first quarterly drop since the pandemic), the restaurant industry takes that as a warning sign and an indication that we’re seeing a broader slowdown in consumer spending.
I read an article this week that shared a bevy of well-known and (once) popular restaurant brands that have filed for bankruptcy. I don’t want to throw shade, but I believe its understood that TGI Fridays, Red Lobster, and On the Border Mexican Grill & Cantina are just some of the brands with meaningful unit counts that have filed for Chapter 11 bankruptcy protection.
But this is what I want to hammer home - there are restaurants that are winning and when you dig into how these companies are doing it, a picture of a winning formula starts to emerge. I can attribute the companies that are outperforming their peers (competition) to a combination of strategic execution, market positing and operational adaptability, but if I don’t dig deeper, that’s like saying the New York Knicks beat the Detroit Pistons on Thursday night to win their first round of the NBA playoffs b/c they scored more points (and now the Knicks get to face-off against the defending champions, the Boston Celtics. Following the Knicks dramatic victory, JB congratulated me on the Knicks “winning the JV series and looking forward to our now moving onto playing the Varsity.” Well played, JB, well played. Now let’s get it on!). 😊
You want your restaurant to win? Then let’s focus on what is truly separating the winners from the losers (how many times in this TOTF am I going to use the word “losers”? Will there be a 7th time?).
Guests want value and I’m NOT saying cheap or even inexpensive, I’m saying “value,” which I define as how a guest feels when it’s time to pay the bill? Do they feel they received value for the price of the meal and / or the experience? This isn’t about QSR. It’s about the full spectrum of restaurants from QSR to FSR and everything in between.
You want to know who is winning by showing value? Both YUM Brands and Chili’s are continuing to demonstrate that they offer value their guests.
YUM announced this week that global same-store sales rose by 3% led by Taco Bell (9%) and KFC (2%). The company posted higher revenues despite the challenging environment. Yum Brands! is winning with innovative menu items and value-focused promotions. These offerings are resonating with cost-conscious consumers that are leaning into affordable dining options. But YUM has also invested heavily in digital initiatives and that includes the launch of “Byte by Yum!”, a propriety AI-driven platform aimed at optimizing mobile ordering, kitchen operations and delivery processes. At YUM, digital sales now account for over 50% of total sales, and the company deserves to be recognized for its successful digital transformation.
Chili’s same-store sales rose 31% driven mostly by a 21% increase in year-over-year traffic. As highlighted recently in the TOTF (😊), Chili’s has a second-to-none advertising & marketing strategy where it highlights its value (and arguably the best jingle in the restaurant game), but they also leverage operational improvements including a new kitchen display system that streamlined its workflow and enabled faster ticket times.
I know we’re a people-first industry and then a food & beverage one, but the correlation between the brands that are winning, and their embracement of digital and off-premises solutions is too clear to ignore. Those that have adopted a digital infrastructure are winning in the game of guest engagement and operational efficiency. What’s more important than winning in guest engagement and operational efficiency? I don’t Mrs. Lincoln, other than that, how was the play?
If you’re late to adopt off-premises and mobile technology solutions, you’re losing market share to those that have done just that.
Friends, don’t shoot the messenger, but no matter where you play on the restaurant spectrum, you need to deliver value to your guests. You need a digital and data-driven strategy b/c you need to know your guests. You need to fight to remain relevant and that means menu innovation and I’m sorry not sorry, cultural relevance and if you want to resonate with Gen Z, you need to be purpose-driven.
None of this is easy, but we’re also in an age where the tools available to win in this digital transformation aren’t limited just to Yum Brands! or the biggest players. The democratization of our industry continues and the ability for independents and SMBs to run a comparable digital playbook to operators of all shapes and sizes is available. But being big and having a large unit count doesn’t remotely guaranty safety as some of the names I highlighted above should tell you. Delivering value to your guests and embracing the digital tools that are readily available is now table-stakes.
Yes, I’m cheering for our industry and everyone in it, but there will be winners and losers (#7) and Branded can only help and work with those that understand what it takes to win as the digital transformation continues to roll forward (and gain momentum).
It takes a village.
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We're now in the month of May and that gives us a number of fun holidays and things to celebrate.
May Day, a day that celebrates workers, May the 4th (be with you), which celebrates all things Star Wars, Cinco de Mayo, which commemorates the Mexican army’s victory over French forces at the Battle of Puebla on May 5th, 1862. Ironically (or maybe not so much), Cinco de Mayo is a smaller holiday in in Mexico than it is in the US as it’s become a significant celebration of Mexican American culture.
A little walk down memory lane, Cinco de Mayo was also the single best sales day of the year at one of our restaurants, Duke's Original Roadhouse, not b/c we were a Mexican restaurant, but b/c we were upstairs from El Rio Grande and the rollover from that Mexican / Texas themed restaurant was enough to make it Duke’s busiest day of the year. Location, location, location.
So, despite being clearly in the month of May, I’m leaving some Easter Eggs in the Shout out section this week! 😊
The FIRST shout out this week goes to our friends at Olo, the enterprise markets leading online ordering platform and digital platform. The Branded Team LOVES working with our friends at Olo and our recent work together at the Restaurant Leadership Conference was just one such example of how we collaborate to beyond the 4 walls of restaurants (😊).
A former boss of mine once shared the Flemish expression that translates to “the tallest trees get the most wind.” Olo is one of our industries tallest trees and has pioneered online ordering and then took it platform into digital marketing and payments.
Earlier this week, the good people at Olo shared a LinkedIn post on The Importance of Catering and specifically the catering maturity curve. The business of catering is so important to operators and while Branded has no direct involvement in the following, I want to use this first shoutout to share the “lunch & learn webinar” Olo is hosting on May 20th. You can register for the webinar here: 4 Ways to Grow your Catering Business and yes, lunch is on Olo for all participants.
Good people doing good things for the industry Branded loves deserve to be recognized. It’s in the best interest of operators to streamline catering operations in order to maximize efficiency and profitability. That’s what Olo offers with its fully integrated catering solution. Click here to learn more: Olo - Catering
And for those waiting for it, here’s the Catering Maturity Curve I enjoyed and wanted to share. It must have been a cool AI-platform that created such an amazing graphic (I love and respect going old school!!!)
But wait, there’s more.
Fresh off the presses (I write the newsletter on Thursday nights), according to Bloomberg, Olo has received interest from potential buyers and is considering a sale.
Taking page from H^2 of years ago, here’s an article that I want to share from our friend Mr. Joe Guszkowski from Restaurant Business: Restaurant tech supplier Olo is reportedly considering a sale
Pulled from the article (b/c I know the click-rates), a buyer of Olo would not only get the highly regarded technology, “but also its client roster of more than 700 restaurant chains. The company has said that about one out of every six restaurant transactions run through its platform.”
I have no further comments on the potential M&A action involving Olo and potential acquirers, but in my subscribing to Mr. Doug Quinn’s Laws, choose sides and stand talk. I stand with Olo!
The SECOND shout out this week goes to our partners at Fishbowl, the modern restaurant marketing platform.
I’ve written about Fishbowl before, b/c if they keep making news and doing great things for operators, I’m going to keep celebrating this operator-centric company.
People who know Branded know our obsession with guest relationship management and the importance of unifying guest data, driving loyalty, and automating marketing. That’s why we have a big love of Fishbowl and if you’d like to learn about Fishbowl’s Guest Relationship Management platform (that’s made with love for restaurants), you can click here: Fishbowl - Guest Relationship Management
Fishbowl’s CEO, Adam Ochstein, is celebrating 3 years at the helm and since I want to break a record for the number of friends and companies mentioned in a single shoutout, I’m sharing the podcast Restaurant Influencers, powered by Toast, hosted by Mr. Shawn Walchef’s, of Cali BBQ Media, here: Powerful Data Helps You Understand Customers and Enhance The Guest Experience
But I might argue that the shoutout to Fishbowl, this week, has more to do with our partner and Branded’s Go-To-Market specialist, Seth Temko.
Mr. Temko wears a number of hats, but all of them are focused on helping brands go to market and win in this most competitive industry. This week Seth wrote about his direct engagement with Fishbowl, and you can see his post here: FullON Strategy + Fishbowl
You can also dive into FullON’s assessment and work here: Fishbowl Positions itself for Growth
Is this shout out really about Fishbowl or is it about FullON Strategy?
Yes, yes, it is.
The THIRD and final shout out goes to our friends at Middleby, truly one of the giants in our industry that is a most trusted partner to so many respected and broadly recognized industry brands. Middleby is the leading provider of innovative solutions for all facets of food preparation, beverage and IoT. This a worldclass organization that has been supporting restaurants for decades.
So why the shout out this week? Baby Back, Baby Back, Baby Back, Ribs! 😊
Since having our new friend, Mr. George Felix, the CMO at Chili’s on our podcast, I’ve became an obsessed fan of this brand. I liked Chili’s before, but now I’m obsessed with this 50-year-old company that is quite simply getting better with age (and there’s nothing simple about that).
I wrote above about Chili’s strong performance and as I dug in further, I learned that one of companies Chili’s owner, Brinker International, gives credit to for helping them drive performance was Middleby and specifically its brand, TurboChef. Brinker’s CEO, Kevin Hochman talked about the operational improvements the company has been focusing on and how the elimination of its wings station that was used to support its virtual brand, It’s Just Wings, without removing the menu item.
Mr. Hochman credits TurboChef’s and its double batch ovens that replaced previous conveyor belt ovens. The plan, according to its CEO, is to convert all its Chili’s to using TurboChef and that this rollout has been gradually underway for about 3-years.
Pulled from an article from Restaurant Dive, “[The TurboChef double batch ovens] cook food much faster and much more evenly. They put out less heat, making the kitchen more comfortable for our team members,” Hochman said. “They save a lot of kitchen space, which helps with kitchen capacity in the future. They are much easier to clean, and they are much more reliable than the current conveyor belt ovens.”
Back of house and specifically kitchen equipment doesn’t get enough attention and when I was reading not only about Chili’s success, but Brinker International giving high praise and credit to TurboChef by Middleby, I knew a place in the shoutout for our friends in Elgin, Illinois deserved a shoutout!
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This week at B Works, we had the CEO of Craveworthy Brands, Gregg Majewski and the CEO of Big Chicken, Josh Halpern, at our office.
We also had the Managing Partner of Big Chicken, Gregg Majewski and the Chief Business Officer at Craveworthy, Josh Halpern, at our office.
Confused? Stay with me friends.
The coming together of these two companies and by that I specifically mean the investment by Craveworthy into Big Chicken and Gregg Majewski becoming the Managing Partner was announced back in Q1 2025. You can re-visit the announcement here: Craveworthy Brands + Big Chicken Announcement
Since that time, the collaboration and strategic work between two of the fastest growing emerging restaurant companies has been something amazing to have a front row seat at.
Maybe more importantly, the specific cooperation and strategic positioning between Mr. Majewski and Mr. Halpern has created more value in a short period of time than Branded, an investor and partner in both companies, could have imagined.
This week Gregg, Josh and I took over Branded’s podcast studio to host a fireside chat with about 100 registered participants. The primary topic was Craveworthy Brands and how this company, which including Big Chicken, is now an owner of 16 restaurant brands, has become Branded’s favorite intellectual property (“IP”) company and is a platform that will monetize brands using its almost 3-decade old tested and proven playbook to build, acquire, accelerate, and monetize brands.
On our fireside chat, we covered a great deal of ground on our just shy of a 60-minute discussion and doing these types of things is just one of the many reasons I love my job and this industry.
Needless to say, we talked about how Craveworthy, in 27 months, has gone from 0 brands, 0 units, and $0 sales to 16 brands, 240 units and over $300mm in system wide sales.
In effort to not bury the lead (although shouldn’t a statement like that come at the top of the section as opposed to the bottom?), we talked about Craveworthy’s North Star – and that’s our friends at Roark Capital. Imitation is a heightened form of flattery and while Gregg, Josh and I hold the team at Roark in high esteem, we also know that the white space between the work Roark and Craveworthy are doing is substantial.
For Branded, having a platform that can help emerging operators level-up and win is incredibly valuable to us, and I expect to a number of technology partners and the other many strategic relationships we feel so fortunate to work with who also want to see operators win.
We talked about scale chain dynamics and how Craveworthy is leveraging its corporate team and growing buying power to create immediate value for its portfolio of brands. We discussed how franchisees that need their own portfolio diversification are engaging and how they see Craveworthy as a valuable partner to scale and grow with.
We talked about the engagement Craveworthy is getting from elite business people and athletes such as Dr. Shaquille O’Neal, Ndamukong Suh, and a to be announced at the National Restaurant Association Show in a couple of weeks additional elite business professional and athlete that will be joining our band.
We had a fun debate about which brand that was brought into Craveworthy represented the “best-of-the-Craveworthy-model” (and we intentionally left out Big Chicken b/c of the obvious conflict of having Mr. Halpern in the studio with us). 😊 Both taim and Fresh Brothers were discussed in connection with this “best of” topic and let’s just call it a draw and say both are winners (whoops, that sounds a little bit like a participation trophy).
Craveworth’s mission is to build and revitalize emerging, established, and legacy brands. To transform them into high-growth, high-performing multi-unit franchisees that will be recognized nationwide for delivering unforgettable guest experiences through a commitment to a people-first culture and exceptional operational standards.
The Craveworthy platform is one that Branded is thrilled to be partnered with and I invite interested parties that would like to explore collaborating with Branded on this opportunity to contact me directly.
This is unique, this is exciting, and this is going to be fun.
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That’s it for today!
See you next week, same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling
Branded Hospitality Ventures
jimmy@brandedstrategic.com
235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures ("Branded") is an investment and solutions platform at the intersection of foodservice, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its partners through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance
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