Comparing Franchise Models Against Market Data

And we also have Clinton Anderson, the CEO of 4th, who will be moderating the discussion with Jason. Jason, how about I let you give the audience some information about your background and you can likewise tell them a little bit about Chop Shop.

Thanks Christina. My name is Jason Morgan, CEO of Original Chop Store. I have actually been doing this for about nine years now. We bought the brand name in 2016three unitsand I have actually grown it to 26. Prior to this, I've invested the majority of my profession in hospitality in some shape or form. After a short stint of attempting to be an accounting professional for about a year and a half, I transitioned into casino residential or commercial property and worked in corporate financing.

I was the very first worker there after private equity bought the business. Helped grow that from 20 to 150 places, took it public in 2014, and then left about a year and a half after going public to do this at Chop Shop. My hope is that we can duplicate the success we had at Zos, and we're off to a really good start.

We're at the counter, we bring the food to the table. It is mostly protein bowlsabout 40 percent of the mix. We likewise do salads, sandwiches. The secret to the program is we have a beverage component also with fresh-squeezed juices and protein shakes. We do all stables, we do breakfast throughout the day.

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A little more complex than a few of the walk-the-line concepts that are out there, however we believe we have actually got something quite unique. We're going to add another shop this year and at least 4 shops next year. So we will be 31 or so stores by the end of next year.

Comparing Franchise ROI Against Market Trends

I've been in this function for about six years. Fourth, as many of you know, is a leading company of software services to the dining establishment and hospitality industry. Our goal is to help our clients be successful in driving success and being efficientmanaging labor, handling inventory, and essentially offering them with tools they require to provide their vision.

It's uncommon to have business that are cherished and growing quickly, that can repeat that success every year. Jason, among the reasons I was so excited to have you join our session is the success at Zos was remarkable. I have actually just satisfied a handful of brand names where there was such a strong customer affinity for the brand name.

When you talk to customers about Chop Store, they love the place. And to be able to take what is a relatively complicated principle in terms of providing a fantastic experience for the consumer, and be able to grow that from a few shops to now north of 30 shops next yearit's incredible.

We're going to speak about how to scale a restaurant organization. Every restaurateur I ever talk with has dreams of taking one shop, two stores, 5 stores, and turning it into something much biggerexpanding across the city, across the state, into numerous states, and eventually national, even global reach. However it's difficult, specifically in today's environment.

Labor is difficult. Stock expenses stay high. It's not a simple time to drive success and growth at the same time. However we're grateful to have you here today, Jason, because we're going to dig into that topic. The questions are going to be actually around: how do you grow a company? How do you scale it and make it successful? How do you replicate early success? And from there, after we talk about your experience and the lessons you've learned, we 'd enjoy to then say: well, appearance, how could technology help? How can you utilize innovation as a multiplier to reproduce early success to far-reaching success? Second, beyond innovation, how do you scale terrific teams? And last but not least, AI.

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The very first question I have for you, Jasonlook, you have actually done this two times now in the dining establishment market. What has your experience been in terms of what it takes to really drive success in expanding dining establishments?

We talked a bit before we began about LinkedIn, and I have actually got a post teed approximately follow this next week about what the playbook is likepoint by pointfor growing an organization. To me, one of the crucial things, and I feel very fortunate, is that both brand names I've been involved with are special.

And there's absolutely nothing precisely like Chop Shop in regards to what we're making with a large, diverse menu. Most brand names today are extremely singularly focused in terms of what they're providing from a food. I feel like we began at an advantage with both brands by having something unique that filled a specific niche nobody else was doing.

Since it's just more difficult to stand apart when there are 10, 20, 50 ideas within a 2- or three-mile radius trying to do the specific same thing. So a great deal of it starts with the brand. Does your brand name have something unique that nobody else is doing? That's rare.

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The second thingI came from a finance background, so a great deal of my knowings are more finance and data-driven versus a lot of early start-up restaurateurs who are innovative types. They enjoy the food, they built the menu, they built the brand name. I most likely couldn't do that from scratch. If you gave me something that has all those parts in place, I can take it from there and put the playbook in location.

They don't understand their breakeven sales. They do not understand how margin improves as sales increase. They don't understand cash-on-cash returns. I've seen so numerous companies where the numbers simply do not work. And yet people say: let's open 10 more. And I'll state: why? It does not earn money. Stop. You need to find a principle that is unique.

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If you don't have those 2 things, you shouldn't be building shops. Because as I hear your description, you have actually highlighted three things: execution, brand name distinction, and financial practicality.

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Second, you need an engaging brand or special principle that resonates with clients. And third, the math needs to work. If you do not understand your unit economics, your repaired and variable expenses, you might be expanding blind and losing cash. Precisely. And another key lesson is about entering new markets.

But when we expanded to Dallas, I anticipated new shops to do 5070% of Phoenix sales in the very first year. Too many operators presume new markets will open at complete volume the first day. That practically never ever happens. And when the shops open slow, but you've signed leases and developed a financial design based on higher volumes, you get overextended.