Friends of Branded!
Happy Saturday and I hope everyone had a great week.
Everyone knows at least some variation of the verse, “if you want to make God laugh, tell him about your plans.” I’m going to credit Woody Allen with this quote, but a simple Google search will give credit to others that used this proverb from the Bible in Section Hesitations 13:6.
The Yiddish saying, “Mann Tracht, Un Gott Lacht” translates to “Man Plans, and God Laughs,” meaning, despite our most careful planning, the road of life is unpredictable. I like that. How boring would life be if everything was scripted and predictable?
Why am I starting out this week’s H^2 with this topic? Because despite my having a clear plan as to what I was going to write about for the Top of the Fold, things changed on afternoon Friday (and no, it wasn’t the 4.8 magnitude earthquake that shook NYC in the morning).
Friday is my writing day for the H^2 and I was ready, until I wasn’t. What threw me off my game or rather changed where my head is at? Two quick service restaurant (“QSRs”) brands – one a juggernaut and the other, an emerging juggernaut.
News hit the wires on Friday that Blackstone will be acquiring Jersey Mike’s for around $8bn. The sandwich chain has reportedly been open to a deal since last June and Blackstone has been one of the suitors whose name continues to come up.
As of my writing this piece, neither Jersey Mike’s nor Blackstone have confirmed or denied any agreement, but the legendary CEO, Peter Cancro has made it clear that with the valuations that other fast-food chains have secured from Wall Street and P/E firms, it wasn’t lost on him that the environment might be right for a sale of his company.
A quick walk down the recent memory lane and you’ll find Inspire Brands purchase of Jimmy John's for $2.3bn and Roark Capital acquisition of Subway for $9.6bn. In the public markets, CAVA Group is now valued at $7.59bn. All these transactions and the hunger (pun intended) for QSR brands puts Jersey Mike’s in a most attractive position.
As an active investor in emerging technology, innovation, and brands, I’ve had more than my fair share of people tell me about their concerns around the economy and the frothiness in the hospitality industry. My position is different and is based on the criticality around fast-food chains and their resilience. These numbers above and investor enthusiasm for existing QSR juggernauts shows no signs of letting up.
So, all of this is about the big guys, right? The Jersey Mike’s, Jimmy John’s, Subway, CAVA and billion-dollar franchises?
Nope. Not at all!
And this is where things get interesting, and I dare say quite fun.
Late this week, the folks at The Wolf of Franchises wrote an article about our friends at Big Chicken and what an article it was! You can check it out here: 🍟 4/4/2024 - Shaquille O'Neal's Big Chicken is BALLING 🏀.
As someone who is enthusiastically cheering for Big Chicken (IYKYK), The Wolf nailed it! The regional strategy of this emerging QSR brand may be confusing to some, but when you look at the quality of the operators that are aligning with Big Chicken, the growth plan makes complete sense and is amazing!
According to The Wolf, the brand has over 350 locations in development (I’ll bet the over that amount, but what do I know 😊) and it’s clear that rookie operators need not apply.
· March 2022: Firehouse Subs franchisee signs 6-unit agreement
· April 2022: Convenience store behemoth signs 50-unit agreement in Texas
· July 2023: Massive 7-Eleven franchisee signs development deal in Illinois
· September 2023: 20-unit development agreement signed in Michigan
· November 2023: Crumbl cookies franchisee signs Big Chicken agreement
· April 2024: Restaurant operator signs 6-unit deal to build in Louisiana
I’m not writing this as a puff piece or love-letter to Big Chicken, but rather as a challenge to those that think this brand is nothing more than celebrity hyperbole that lacks depth and operational expertise. This might be a youthful company, but it’s building with the intentionality of growing up, fast, strong and well, BIG!
The Branded team has consistently been impressed and feel fortunate to have even been associated with some of Big Chicken's tech-stack decisions. Partnering and leveraging Sysco as its food suppler was a BIG person decision. So was partnering with PAR Tech for its point-of-sale platform. What does Mr. O’Neil know about restaurants or franchising you ask? Shame on you! The man is already a massive franchise owner with Auntie Anne’s, Papa John’s, and Five Guys.
And since Branded subscribes to the ethos that it takes a village, Shaq brought JRS Hospitality and Authentic Brand Groups to be part of his village!
JRS Hospitality is a strong restaurant operator in Las Vegas and Authentic Brands Group is a $20 bn holding company with brands such as Reebok, Forever 21, Brooks Brothers, Aéropostale, and Nautica. They also have licensing deals with Elvis, Marilyn Monroe, Muhammad Ali, and Shaquille O’Neal. This roster of celebrities is what drove the title of this week's H^2 as it made me think of the famous line from the 1987 science fiction movie RoboCop, “dead or alive, you’re coming with me.”
Last, but most certainly not least, the Big Chicken team is not only rounded out, but led by friend of Branded and fellow member at B Works, Mr. Josh Halpern, the CEO of Big Chicken and Beer Park. Josh is a CPG, retail and restaurant expert and happens to be maniacally focused on franchisee economics.
And this is where the whole Top of the Fold section this week comes together.
I was on a call with Mr. Halpern on Friday afternoon with a group Branded brought together to talk about the journey Big Chicken is on as I started receiving texts and e-mails about the deal with Jersey Mike’s and Blackstone.
Was this an old guard/new guard moment? A point of inflection with the potential takeout of a legendary brand and the ramping up of a new one? Does my even writing about a brand with 2,401 stores in the US alone and an emerging brand with 34 units make any sense at all?
It made me think of Arnold Schwarzenegger’s cameo in the 2003 film “The Rundown” starring Dwayne Johnson. It was a quick moment, but for those interested, here you go: Arnold to Dwayne "Have Fun"
Branded loves the biggest players, the emerging ones and everyone in between. That includes the brands as well as the technology and innovation companies making things happen to improve our industry.
We cheer for the entire ecosystem b/c this industry is important (10% of the US workforce is in the industry) and we know that embracing the new kids on the block will help push the old guards to continue to raise their own games.
As my own and most personal Mr. Wolf once told me, if you’re standing still, you’re falling behind. Companies like Jersey Mike’s have raised the bar for our industry and emerging brands like Big Chicken are going to do the same.
It takes a village.
This week’s Branded portfolio company shout outs go to our friends at Chowly and Copia.
Kicking this off with our friends at Chowly, do you like donuts? Well, checkout the link where Chowly shares a case study on its success with Rustic House Oyster Bar & Grill. How do you like them donuts?
Chowly + Rustic House Oyster Bar & Grill Success Story
Spoiler alert, thanks to Chowly’s Smart Pricing solution, Rustic House has boosted their online ordering profitability and specifically increased its average basket size by 12%.
In my next shoutout, I have the privilege of not only boasting about Branded’s portfolio company Copia, but I get to also give props to our friends from PAR Tech.
This week Copia and PAR Tech announced a partnership aimed at offering surplus food donation solutions to PAR’s extensive network of restaurants.
According to the press release, this collaboration enables PAR to connect its current and future customers with Copia’s food redistribution technology, aiming to reduce food waste and combat food insecurity across the country.
In 2022, America witnessed an alarming surplus of food estimated at nearly 90 million tons, much of which stemmed from the foodservice industry. By partnering with Copia, PAR is spurring a shift in surplus food management. Instead of discarding excess food, restaurants can utilize Copia’s tech to easily donate to local nonprofits, diverting food from landfills while fighting food insecurity on a local level.
A key factoid and value proposition by leveraging Copia’s platform, restaurants can maximize savings through enhanced tax deductions for food donations. This strategic partnership underscores PAR’s unwavering commitment to delivering sustainable solutions tailored to the evolving needs of its restaurant network.
PAR Tech’s CEO and Friend of Branded, Savneet Singh commented on the partnership, “enabling sustainable business practices lies at the heart of our ESG initiatives, and our collaboration with Copia represents a pivotal step forward in achieving this goal. By harnessing Copia's innovative technology, we empower our customers to make a tangible impact on food insecurity in the communities they serve. This partnership not only reinforces our commitment to sustainability but also underscores our dedication to driving positive change within the restaurant industry.”
PAR’s restaurant partners rely on the company to provide best-in-class customer service and engagement tools. Partnering with Copia strengthens PAR’s dedication to delivering top-tier services and supports initiatives tackling critical social issues like food waste and insecurity.
Branded is both excited and proud to have Copia as a most important part of our portfolio as it’s the only technology-enabled food recovery service connecting food donors with recipients across the United States, Canada, and Puerto Rico.
Copia’s CEO, Kimberly Smith shared, “Copia is excited to join forces with PAR to bring Copia’s food donation engine to their ever-growing network of restaurant partners. By providing access to Copia’s suite of tools to a wide range of restaurant companies, PAR is demonstrating a genuine commitment to food waste reduction. Our collaboration is generating a whole new level of access and education to restaurant operators who may not have previously known that tech-enabled food recovery is now simple to implement, use, and scale. As an operator-centric business, PAR understands the value that Copia brings to their customers' business: providing easy-to-use impact tools that also improve the bottom line.”
Two operator-centric technology platforms, one among the largest and the other an emerging company entering the arena loud & proud, coming together to do both good and important things for hospitality operators and the communities they support.
Now this is a dynamic duo I’m proud to be associated with!
Readers of the Hospitality Headline, that are interested in learning more about Branded’s portfolio companies, investment strategies and future opportunities, are invited to explore becoming part of our Access Hospitality Network.
In today’s episode of Hospitality Hangout, Michael Schatzberg, “The Restaurant Guy,” and Jimmy Frischling, “The Finance Guy,” are joined by Sterling Douglass, Co-Founder and CEO of Chowly, Inc., and Andrew J. Nash, CEO of Targetable.
Sterling and Andrew talk about Chowly’s recent acquisition of Targetable and the benefits this strategic move brings to restaurant operators. They discuss their combined vision of creating an all-in-one digital ordering and marketing solution tailored specifically for small and medium-sized businesses. The duo emphasizes simplifying technology processes, minimizing workloads for operators, and providing comprehensive, done-for-you services. Their goal is to address the entire customer journey from awareness and acquisition to retention marketing.
You can tune in on Spotify, Apple, Amazon, iHeart, or your favorite listening platform!
Make your drinks go viral!
Craft personalized drinks for an unforgettable guest experience!
Digital Restaurant Association
We champion restaurants to thrive in a digital world
TECHNOLOGY
Unlock Explosive Growth: Launch Your Tech Referral Program in Just 3 Months!
By: Seth Temko, Solutions Services Partner at Branded Hospitality Ventures
Navigating the restaurant industry's market scape can be challenging and growing revenue a fierce challenge, but with the right strategies in place, restaurant technology companies can layer on growth. One strategy is implementing a referral program.
Learn the secrets to skyrocketing your restaurant technology sales with a dynamic referral program, expertly crafted to boost client engagement and multiply your customer base in a matter of months.
Welcome to the new IFMA
The future of food-away-from-home is evolving—and so is our membership structure.
MARKETING
Do You Put Emojis in Email Subject Lines?
By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures
The 2024 Digital Restaurant Association (DRA) Restaurant Marketing Summit, Powered by Branded is coming back for a FREE 1 day encore. Get all the tips, tricks, and tactics you need to shortcut and speed up the marketing process.
About ACG New York
Founded in 1954, ACG is the premier M&A deal-making community with a mission of driving middle-market growth. ACG’s global network operates within 61 local markets worldwide and comprises more than 100,000 middle market professionals who invest in, own and advise growing companies. ACG provides events, conferences, bespoke meetings, deal-sourcing forums, unique experiences, educational seminars, and numerous benefits to non-members and members alike.
ASK THE HEADLINE
🔍 Got Questions? We've Got Answers! 🌟
Satisfy your thirst for knowledge? Look no further! It's time to dive into our brand-new segment: "Ask The Headline"! 🎉
📅 We'll be answering YOUR questions every week. And here's the best part: you can choose to stay anonymous or receive a fabulous shout-out when we feature your question!
That’s it for today!
See you next week, (about the) 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 advisory platform at the intersection of food service, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its portfolio companies through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance