Fast Casual Executive Summit
10 missteps to avoid in launching, expanding a fast casual brand
Whether you are a seasoned restaurant operator or new to the industry, it’s always best to learn from other’s mistakes instead of making your own. Here are the top missteps to avoid from three fast casual brand leaders.
October 23, 2020 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
One of the best ways to learn is to avoid the mistakes and pitfalls others have experienced when it comes to launching a fast casual brand or expanding brand locations.
And that's exactly what attendees at this week's Fast Casual Executive Summit had the opportunity to do during a panel talk called "Don't Do Business Like a Rookie."
The panel featured leaders from three brands: Charlie Guzzetta, president of BurgerFi; Nick Vojnovic, president, Little Greek Franchise Development and Stacey Kane, a marketing expert with more than 25 years of working with multi-unit restaurant chains.
The session talk was one of nearly a dozen panels at the virtual summit, hosted by Networld Media Group. As the panelists offered up 'what not to do as a rookie,' insight they also shared personal career experiences.
10 missteps to avoid
No. 1: Don't run out of cash
This, according to Vojnovic, is a big misstep by many a new brand. "You need 20% to 30% more money than you initially estimate in my experience. You also need to watch every penny," he said.
Vojnovic started working at age 12 as a dishwasher in his neighborhood's Italian restaurant in Pittsburgh, Pennsylvania, and is president and majority partner of Little Greek Franchise Development, LLC, since April of 2011. In 2015, he became the owner the USF/Fowler Avenue location in Tampa and rebranded the company to Little Greek Fresh Grill. When he took on the role as president, there were four locations. Today, there are 43 locations. He has also served for 12 years as president of Beef 'O' Brady's Family Sports Pubs.
No. 2: Keep a close eye on vendor contracts
Contracts can be the undoing of a business if operators aren't paying close attention to what's in the contract before signing the document, said panelists. There should also be quite a bit of negotiation well before any contract is hammered out on everything from rent to lease period. "Keep an eye on the renewal aspect," said Vojnovic.
No. 3: Take site selection extremely seriously
Determining where to open that first location or the 100th location is critical to success, said the panelists, so the focus should be a systematic approach. "You may have the best restaurant in the world but if no one can find you it's not going to be a success," said Vojnovic. Parking is a critical aspect of any site selection, he added. Guzzetta advised having a substantial site selection criteria checklist and sticking to it even if others try to convince you other otherwise.
Guzzetta is part of the strategic leadership of BurgerFi, a fast growing international better burger concept headquartered in North Palm Beach, Florida. In the past seven years, he has been instrumental in growing the company from a 20-restaurant regional chain to a 125-restaurant international brand in roles spanning from marketing, operations, sales, and now serves as the company's chief brand development officer.
No. 4: Join local business groups and network with other operators
One of the great aspects of the fast casual industry, said Vojnovic, is how those in the industry are always supportive and always willing to help and share. That's why any new or longstanding brand operators should be joining local, state, and national restaurant and industry groups. "In our industry we work together and help each other out. Get involved and you'll find great resources," he said.
No. 5: Take a long look at the lease more than once
One of the biggest decisions for a fast casual operator is signing the location lease and it's not something to be done in a rush or without serious intent. "If it's 15 to 20 pages that's a good sign. If it's 50 pages that's a nightmare," said Vojnovic. He also advised talking to other tenants and zoning in on the 'guarantee' aspect. "Ask for free rent for months you're not yet opened, and the goal is to control the site as long as possible so look for five-year, 10-year options," he said. Other aspects to investigate include what's allowed with signage and a non-compete clause. No fast casual brand wants a competitor moving in next door or below their location, he added.
No. 6: Find the right marketing partner
Marketing is key even before a brand launches a store, and finding the right marketing partner is important, said Kane. "Find freelancers who know the market and have connections and can get the work out in an authentic way. The PR person is an extension of your brand and you need a good relationship," she said.
Kane has worked with California Tortilla, Think Food Group, Subway and East Coast Wings. She is one of the pioneers of using social media in the restaurant space and was named a Top 20 Movers and Shakers by Fast Casual Magazine twice. Currently, Kane is a fractional CMO for several fast casual brands and works as a marketing consultant for CORE: Children of Restaurant Employees a non-profit that serves food and beverage employees with children.
No. 7: Make good equipment choices
Every brand aims to save money but sometimes trying to save and go economical with vital kitchen and operating machinery and appliances can have disastrous impacts. In deciding whether to go new or old (used), Guzzetta advises first determining the value of the needed equipment to the business.
If a brand is burger and fries then the grill and fryers are critical. "Don't skimp on the grill and fryer in that situation," he said. "Identify the most important piece of equipment driving profitability and get the right equipment in place." He shared how one store grand opening was negatively impacted when a second-hand fryer went kaput during the important event.
No. 8: Be diligent when signing on with services
Everyone wants to be a new brand location's partner, warned Kane, and operators are inundated with offers and sales pitches. "Everyone will try to sell you something but don't ever sign anything with a long contractual date. Make sure it's a short time frame in order to test the service or offer," she said, adding operators need to give ample time to testing before signing any sort of long-term deal.
No. 9: Don't underestimate the social media commitment
Social media is invaluable to a first location opening or latest store opening, and many operators believe managing the necessary social media isn't a big time commitment. That's a big mistake, said Kane, as it requires substantial effort and it's worthwhile to invest and embrace social media platforms that let operators "listen" to social media feedback and schedule media messaging. "It will save hours and hours," she said.
No. 10: Go big on philanthropy
Fast casual brands have a great opportunity to support the local community so establishing a philanthropic strategy is important. The panelists recommend aligning with other like-minded companies as well to foster the strategy. A growing number of consumers are proving to be more loyal to those they see as giving back to the community as well as those trying to protect the environment.
Don't ignore technology
When it comes to technology, the panelists offered tips on ensuring the technology investment is worthwhile.
First and foremost, technology, said Guzzetta, is a must-have. "You need to use technology to enhance the brand, grow the brand, strengthen the profit. Yet don't let technology run your business for you. If not used properly, it can be costly and cause issues."
He also recommended vetting and piloting technology before signing on with a full commitment.
"You need to figure out beforehand how to internally allocate people and money and resources need to manage it," he said.
About Judy Mottl
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