Friends of Branded!
Happy Saturday and I hope you had a great week.
Today’s newsletter will proceed as usual, but I did feel it was important to acknowledge the market turmoil that unfolded at the end of the week as a result of the now global trade war that effectively started on Wednesday.
The US Jobs Report announced yesterday was better than expected as 228,000 jobs were added for the month of March, but despite the positive report, there are rising concerns about the economy and the increasing risks that we’re heading towards a recession.
We’re going to return to our original programming now, but for those interested, I’ve added a Bottom of the Fold section to this week’s newsletter for those interested in my take on the markets, the landmines around us, and of course the opportunities.
Now let’s kick off this Saturday together, as we’ve done every Saturday, for the past 4 years!
Thursday night is my writing night for the H^2, so as of the writing of this week’s Top of the Fold, we have seven #1 seeds and one #2 seed playing in the respective Final Four of the NCAA Women’s and Men’s basketball tournaments (the women playing on Friday and the men on Saturday).
I believe the Women’s and Men’s NCAA basketball tournaments are among the greatest of sporting events every year and with seven top seeds and a #2 seed advancing to these Final Fours, one could argue that the respective tournament committees nailed the seedings and that the proverbial cream most certainly rose to the top.
For the hospitality industry, the NCAA tournaments are big wins for the US restaurant industry, and that’s especially true for casual dining restaurants, quick-serve restaurants, and delivery-focused venues.
The increased foot traffic to bars and restaurants that proudly show the games, especially the early rounds where games are played from Thursday to Sunday, is thoroughly embraced by operators as March Madness fills the void left by the end of the NFL season and the upcoming NBA and NHL playoffs. Sports bars specifically see a spike in business of 25% (although I admit, based on the in-office attendance at B Works the past few Thursdays and Fridays, I expected that percentage to be higher). Cities that play host to the NCAA games see an increase in restaurant sales of 10% to 20% during March Madness.
Bars? Sports? Spikes in foot traffic? Watching TV?
This segment of the H^2 is (unofficially) brought to you by the good people at DIRECTV FOF BUSINESS, who continue to be the dominant provider of TV for US bars & restaurants and are embraced by operators for creating experiences that keep guests coming back and staying longer with its entertainment packages and offerings. For anyone reading this who may or not remember a New York City joint I bartended at that may or may not have run a cable wire from an apartment upstairs from the bar to show certain boxing match, the statute of limitations has long since run out and besides, I don’t even remember if that happened. 😊
DIRECTV FOR BUSINESS: “Beyond business cable. Beyond expectations.”
But it’s the delivery and takeout business during March Madness that sees the biggest spike in revenues. The sales of wings and pizza alone jump 30% to 40% during the tournament. For off-premises business and delivery companies, you can think of March Madness as something akin to a Super Bowl that’s stretched over 3-weeks.
These respective NCAA tournaments may have started with 64 teams (not including the play-in games) and are now down to the Women’s and Men’s Final Four, but the fierce competition in NCAA hoops is soft when compared to the competition that has led to the BIG-3.
And when I say BIG-3, I’m referring to Third-Party Delivery (aka “3PD”) companies.
That’s right, the BIG-3 here is not the same thing as the BIG-3 which is the 3-on-3 basketball league founded by musician and actor Ice Cube and entertainment executive, Jeff Kwatinetz (and whose logo I borrowed for this week’s edition of the H^2).
In the years leading up to the pandemic, the 3rd party delivery market was fiercely competitive with about 15 notable companies all fighting for local and regional dominance. As of today, 98% of the 3PD market is controlled by just three companies: DoorDash (67%), Uber Eats (23%) and GrubHub (8%).
I talk (write) a great deal about the fragmentation of the US restaurant market and how over 70% of the industry is comprised of independent or small regional chains. This needs to be hammered home – the US restaurant industry remains one of the most fragmented sectors in the economy and that fragmentation creates both chaos and opportunity. The chaos is caused by the challenges for consistent profits and scaling, while the chaos creates tremendous opportunity for innovation.
Did you know Sun Tzu, the Chinese military general, strategist, and philosopher, was also a restaurant owner and his quote “in the midst of chaos, there is also opportunity” was about the restaurant industry?
You didn’t know that? Good, b/c it wasn’t, but his quote is still applicable here.
To put this US restaurant fragmentation into some context, the Top 4 companies in Soft Drinks, Telecom, and Airlines control 95%, 90% and 70% of their respective industries.
That means the Third-Party Delivery market is more concentrated than the Soft Drink market with 3 players accounting for 98% of the food delivery market share!
The announcement this week that Domino’s Deepens Third-Party Ties with DoorDash Partnership (with attribution to our friends at QSR Magazine for the coverage of the story) caught my eye and resulted in my digging into this a little further.
Given Branded focus on emerging technology for the hospitality industry, I always find it necessary to say that Domino’s is NOT a technology company that also sells pizza. They’re a pizza company that leverages technology.
But that shouldn’t take away from the fact that this company has been on the forefront and remain leaders when it comes to the embracement of technology and specifically delivery, loyalty, guest engagement and operational efficiency. Domino’s is fundamentally an off-premises-focused brand, meaning, 100% of its business is either delivery or pick-up. This a company that ran a campaign that would pay its guests $3 to get them to come pick-up their orders (suggesting that food delivery is a most challenging market even for the industry’s leading player).
For years, Domino’s rejected the idea of working with 3PDs, but as the attached article highlights, that changed in July 2023 when the brand struck a deal with Uber Eats. While there’s several well-articulated reasons and justifications as to why Domino’s made the decision to work with Uber Eats (and now DoorDash), I’m going to embrace the KISS theory here for the fundamental reason: “if you can’t beat them join them.”
This phrase is widely believed to be of unknown origin, but similar to how my adopted phrase, “it takes a village” is widely attributed to an African Proverb, I have elected to give attribution for it to my mom who said it at my younger brother’s wedding.
The phrase “it you can’t beat them, join them” has often been attributed to Aristotle, Mark Twain, or Benjamin Franklin. Since I’m not capable (didn’t have time) to write a short newsletter, I’m giving attribution of the phrase to Mr. Twain!
I’ve been of the opinion that until we have autonomous vehicles, food delivery is a race to the bottom. The best off-premises opportunity for restaurants is pick-up and then its First-Party Delivery.
The basic math here is pretty simple: restaurants have tight margins (typically 5% to 10%) and Third-Party Delivery platforms charge 15% to 30%. When the delivery market had many players, price wars were common, and platforms would subsidize fees or offer steep discounts to win business. Discounting fees is never a successful long-term business strategy, but as the number of competitors dwindled, pricing power returns to the 3PDs that remained (“to the victor belong the spoils,” New York Senator William L. Macy, referring to the victory of Andrew Jackson in the election of 1828).
To be clear, I wrote above that “food delivery is a race to the bottom,” but as these dominant 3PDs diversify their offerings and expand into grocery, alcohol, convenience and retail delivery, things start to look a little different. The food delivery market is cutthroat, capital-intensive and profitability-challenged, but the 3PDs are winning the customers and to some extent, are owning the customers. As they diversify their offerings and become a more complete concierge solution for customers, the long game for these companies looks very different and by that I mean positive.
As an alley to hospitality operators, Branded wants to see the operators win. We believe content is more important than distribution channels, but the two most certainly are correlated and therefore need to work together. The reduced competition in the Third-Party Delivery market and the embracement by some of the industry’s elites (Domino’s) at least suggests that the terms may be balancing out (meaning that the 3PDs are NOT charging the rates highlighted above).
Will that translate and result in benefits for the 70% of the US restaurant market comprised of independents and small and medium sized businesses?
To be determined, but below I share a thought or maybe a bit of optimism.
If the 3PDs are betting on the long-term value of hospitality guests for the expansion of their respective platforms, this race to the bottom for food delivery may very well prove to benefit not just this segment of the market, but the customers as well in the form of cheaper prices for the luxury that is the speed and convenience of food delivery.
I’ll end here with a catchphrase from the world’s most famous Wall Streeter, the fictitious, Gordon Gekko, who made famous the expression, “greed, for lack of a better work, is good” (from the 1987 film, Wall Street).
The competition among the delivery companies may result in the underpricing of the otherwise costly business that is food delivery for restaurant operators and their guests in order for these 3PDs to win the ultimate and profitable prize that is delivery concierge solutions for consumers.
For the benefit of 70% of the restaurants in the US, I hope it plays out this way.
It takes a village.
Picking up from where I left off at the very Top of the Fold, the US markets closed with steep losses after the tariffs were announced on Wednesday and China announced its retaliation on all goods from America on Friday.
The US markets suffered its worst performance since June 2020. Specifically looking at the Dow Jones Industrial Average, the market fell 1,679 points on Thursday and 2,231 points on Friday, marking the first time ever that the Dow has shed more than 1,500 points on back-to-back days.
The uncertainty results in strategic pauses among investors. Specifically, valuations of the multinational companies suffered the most while tech companies dropped as the environment has shifted to one of a risk-off environment.
No one reads the H^2 for stock advice, so I’m not remotely going to offer any here.
What I will say, however, is that we’re seeing public market valuations fall to what I would argue will start to look more in-line with private company valuations. Highly liquid assets (public markets) valuations adjust quickly and often overreact and you of course have panic-selling and the potential for margin calls, which exacerbates losses and the downward momentum.
To the contrary, private markets, tend to outperform public equities in market downturns. This is NOT to suggest that there isn’t risk and that the public markets creating a risk-off environment doesn’t impact the private markets (b/c it does), but as a result of these assets are not mark-to-market daily, these markets are less volatile.
This brings me to one of my final points on this topic, which is the fundamentals, and how the private and public markets converge on this issue during downturns.
Short-term price movements are often driven by sentiment, liquidity, and momentum (which are all negative right now). Equities with solid fundamentals can still trade down hard b/c of sentiment and momentum, resulting in valuations that overshoot to the downside.
The private markets, again, are assets that are not marked-to-market daily, and therefore rely more on the performance of the companies and less on the sentiment.
The bottom line, value in both public and private markets are driven by the fundamentals, but in the public markets, sentiment and momentum will rule the day.
My final point, Wall Street is not the same as Main Street. Wall Street refers to the stock market, big banks, investment firms and basically the world of finance.
Main Street refers to small businesses, local economies, and the broader population's financial well-being.
I'm Branded's Finance Guy, and my highest priority is to deliver value to Branded's LPs and investors, to support our portfolio companies, and to have a positive impact on the industry I love and am committed to.
Here's one thing I can promise you (yes, my attorneys hate it when I use that word), everyone you know will eat and drink, every day, for the rest of their lives. How they go about doing that and where they do that is a different topic, but when it comes to the foodservice and hospitality industry, it will go on forever (that's for you EF).
Remember friends, from chaos, comes opportunity.
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The FIRST shoutout this week is again about INFORMA’s upcoming Restaurant Leadership Conference.
I’m biased, but I believe this is shaping up to be a truly awesome event and that all starts with the industry leaders rallying to Arizona for the event.
Branded is proud to announce this week the inclusion of two additional partners in our Influencer Row and since a picture says 1,000 words, I’ll share our Final Logo for the event.
Branded is super proud to announce that in addition to our corporate partner Foodbuy, we now have Dinova and Qu joining us in what I will refer to going forward as, The Row!
What happens at The Row out at RLC in Phoenix, Arizona, stays in PHX, AZ!
The Branded Team and our partners have a lot of stuff planned for The Row, but you’ll have to be there, to see it.
The SECOND shoutout this week goes to our friends at and partners at Fishbowl and the milestone that this company is now 25 years old!
I was thinking about this amazing milestone this week as we recorded a podcast with the CMO at Chili’s Grill & Bar, George Felix.
While I promised our partner and Branded’s CMO, Julie Zucker, that I would give nothing away this week about that podcast, it did make me think about some the brands and tech companies that might not be all that youthful (then again, neither am I) but are still the best-of-the-best (I'm still a work in progress)!
I’ll give a quick shoutout 2.5 here to our partners at LDV Hospitality who after 16 years, put up its best year in 2024 at its signature brand, Scarpetta (I see you John, Rob, Sarah, and team)!
But this shoutout is about Fishbowl, a dream by its founder, Scott Shaw, (now a member of The "B" List community) and a mission to help restaurants get to know their guests better.
Fishbowl may have started with, well, a fishbowl and the collecting of business cards, but today it has evolved into one of the industry’s leading CRMs and Guest Data Platforms. No company in this space can more proudly own the Guest Relationship Management tagline for some of the world’s most beloved brands than our friends at Fishbowl.
From e-mail & SMS marketing, and loyalty to personalized guest journeys, and advanced data and analytics, Fishbowl continues to help restaurants build stronger, smarter connections with their guests.
The Fishbowl team is NOT resting on its laurels and continues to innovate and lead the industry in guest relationship management.
Fishbowl and Branded are looking forward and I’ve attached a link to article by Fishbowl here: Rethinking Restaurant Marketing: CRM Over Mass Messaging
To my new friends at Black Seed (Matt & Noah), you can now make 3x that you’ve heard (or read) the expression, “spray & pray” (but this time the attribution goes to the good people at Fishbowl). 😊
The THIRD and final shoutout this week goes to Papa Johns who announced this week (thanks again to our friends at QSR Magazine) that it wants to reclaim tech leadership through AI Innovation.
If you’re paying attention (and I know that you are), I’ve given shoutouts to other restaurant companies, including the industry leading YUM! Brands for its embracement of AI-solutions and I intend to keep doing exactly that.
Papa Johns Looks to Reclaim Tech Leadership Through AI Innovation
Papa Johns is reimagining its ordering and delivery experience with the power of AI and Google Cloud. According to the article from QSR, this pizza giant created an innovation team, named PJX, that will use Google Cloud’s AI, data analytics, and machine learning to remove friction inside stores and throughout digital channels.
In case you not interested in checking out the article, here’s the money quote from Papa Johns CEO, Todd Penegar: “At Papa Johns, our aspiration is to be the best pizza makers in the business. Being the best means crafting great pizza and providing every single customer a superior experience along every part of their journey—from ordering and delivery to our loyalty program and Customer Relationship Marketing. Our partnership with Google Cloud will enable us to take personalization to the next level. We’re not just reacting to orders—we’re anticipating our customers’ needs and proactively providing tailored recommendations and offers. This isn’t just about convenience; it’s about creating a truly joyful and personalized pizza experience that builds lasting loyalty.”
I can’t end this THIRD shoutout without a mention (shoutout 3.5?) to our partners at ARI Venture Studio, the first venture studio to focus exclusively on AI-solutions for restaurants. Creating the next generation AI-enabled solutions doesn’t need to be limited to folks at YUM or Papa Johns.
The Branded Team is super proud to welcome Michael Atkinson, the CFO and a Founder at ARI-VS as a contributor the H^2. “Atkinson on AI” is a welcomed addition to our line-up of industry experts and you can find Mr. Atkinson’s first article, “The Data Goldmine: How AI Turns Your Restaurant's Information into Profit,” below.
Welcome to the H^2 team Michael!
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Branded invites readers of the H^2 that are interested in learning more about our portfolio companies, and investment strategies to become part of our Access Hospitality Network.
This week, I want to use the Access Hospitality section to talk not just about a cool and operator-centric business, but specifically a sexy business.
That's right, I'm going there.
What are "sexy" businesses? That's a great question; we need to first define this category.
Fashion and specifically luxury brands have forever been known as “sexy” industries b/c of its prestige, craftsmanship and lifestyle.
Entertainment and media, yup, they've also achieved the status as “sexy” industries for its star power, story-telling and influence.
Yup, the music industry is definitely “sexy,” b/c of its edge and cultural trendsetting and I think most people would accept the sports industry as being pretty darn “sexy” for its athleticism, style and the personal brands it creates.
Where am I going with this in connection with the Access Hospitality section?
That's a great question, of course, I do need to define what the word “sexy,” in this context, means.
Sexy is magnetic, desirable, and compelling. Sexy is vibe over visuals. Sexy is stylish, it’s forward-thinking, it can be exclusive, and maybe even emotionally compelling. Sexy grabs attention and admiration.
Let me also add what sexy does not mean to me. It does not mean superficial, and it doesn’t mean more valuable.
So, this week, let me now share one of Branded’s partner companies that I think is dead sexy - SupplyCaddy
That’s right, this leading global manufacturer and supplier of packaging and disposables for the foodservice industry is not only a favorite of Branded’s, but we think this is a sexy freaking company.
In a world where off -premises now make up about 60% of foodservice orders, if you don’t think product packaging is one of the most powerful tools in a brands arsenal, you’re not paying attention.
Product packaging is important. Responsibly sourcing the highest-quality materials is important. Being committed to having consistent product and a reliable supply chain is important.
That's why this is an absolutely sexy business, and no one is delivering better for its restaurant customers than our friends & partners at SupplyCaddy.
If you’re judged by the company you keep, below please find just a few of the brands that are trusting SupplyCaddy with their packaging and disposables.
One of the reasons I feel the Branded and SupplyCaddy teams work so well together is b/c both companies value the community we’re building and the many ways we can engage, create & capture value together.
Specifically, I want to highlight the podcast hosted by SupplyCaddy’s Founders, Zachary Stein and Bradley Saveth.
I’m going to do this by pasting a link not just to SupplyCaddy's podcast, Delivered: The Journey of Packaging, but specifically to an episode with our friend & partner, the Chief Executive Officer at Big Chicken and now the Chief Business Officer at Craveworthy Brands, Josh Halpern
Big Chicken Makes Big Moves: CEO Josh Halpern on Scaling Shaquille O'Neal's Fast-Casual Empire
But wait, there’s more (only a little more).
SupplyCaddy subscribes to the idea that Thought Leadership is important, and they continue to put out insights on their blog, News Delivered by SC.
There’s a wealth of articles in SupplyCaddy’s website, but when I decided to select just one to share here, I of course chose the article about Friend of Branded, Troy Hooper, the CEO at Hot Palette America and its amazing brand, Pepper Lunch
Why Pepper Lunch is a Rising Star in the Restaurant Industry
SupplyCaddy is such a strong and reliable ally to operators and their brands, they put out a super fun & insightful podcast and they bring intel & interesting topics to the market via their blog.
Schatz: I think this dynamic duo that is Zach & Bradley are just younger, healthier, have superior hairlines and are much better-looking versions of ourselves!
Maybe that’s why we like this company and its founders so much. 😊
In all seriousness, if you’re a restaurant operator that would like to talk about how SupplyCaddy could be helpful to your brand or to learn more about what Branded and SupplyCaddy are doing together, please contact me directly.
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Featured Episode: Behind the BIG Deal: This Is What Success in Hospitality Looks Like
Big Chicken Joins Craveworthy Brands – Here’s What No One Else Is Telling You! On this episode of Hospitality Hangout, we explore the latest hospitality trends, strategies, and brand experiences with industry leaders Gregg Majewski and Josh Halpern. They take us behind the scenes of Big Chicken’s exciting move to join the Craveworthy Brands portfolio, breaking down how the deal came together and what it means for the future of the restaurant industry.
We discuss the business strategies driving this partnership, how it will influence restaurant transformation, and what operators can learn from this type of brand expansion. From growth acceleration and operational efficiencies to market positioning and hospitality insights, this episode is packed with key takeaways for industry professionals looking to stay ahead.
Join us as we connect the players shaping the future of hospitality and uncover what’s next for Big Chicken, Craveworthy Brands, and the broader restaurant landscape.
Listen now and stay ahead of the game! 🎧
Tune into the episode and subscribe to our channel here: Hospitality Hangout With Gregg Majewski & Josh Halpern
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Let’s Celebrate Foodservice Excellence in Chicago!
Join us at Chicago’s Union Station on May 17th for an unforgettable evening honoring remarkable industry icons at the 71st Gold & Silver Plate Awards. Experience a night of tradition, innovation, and celebration as we recognize the best in foodservice. Who will take home the 2025 Gold Plate? Be there to find out!
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The Data Goldmine: How AI Turns Your Restaurant's Information into Profit
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Today's Thought
Becoming Who You Aspire to Be Is a Journey You’ll Be Repeatedly Tempted to Abandon—Don’t.
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Life, in all its complexity, can sometimes feel like it’s pressing down on us from every angle. When it comes to becoming the person we aspire to be, that pressure often appears as doubt, second-guessing, or obstacles we never saw coming
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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