Growth, Guests and Ghost Kitchens: C3 Navigates a Future of Possibilities

By.

Larry Carroll

Image Credit: Umami Burger

Some people might tell you the restaurant industry is at a crossroads. Adam Rinella, however, will be the first to tell you that it’s actually at the intersection of about a dozen crossroads.

“It’s really exciting to be at the end of the tunnel and seeing the light,” Rinella, the Senior Vice President of Development at C3 says after a year lost to COVID-19 lockdowns, yet one that has afforded smart industry execs the time to plan a path forward. “There’s a pent-up demand right now. We’re seeing sales in the markets that have re-opened early — Texas, Florida — that are 20 percent higher than they were in 2019. People want to go out, they want to go to restaurants and get back to regular life.”

A division of lifestyle hospitality company SBE, C3 spent much of 2020 navigating the unprecedented pandemic — while simultaneously exploring opportunities via ghost kitchens, celebrity influencers, software development and food halls that Rinella sees as potential ways to capitalize on this “pent up demand” and emerge with a business stronger, smarter and more nimble than ever before.

Sticky Rice
Credit: Sticky Rice
Image credit: Krispy Rice

Maintaining the culture

“We operate 20-plus brands, and we do that through a variety of kitchens,” Rinella says of a C3 roster list that includes big names like Katsuya and Umami Burger, paired alongside rapidly growing delivery-only concepts (at least for now) like Sam’s Crispy Chicken, Plant Nation and Krispy Rice — which saw triple its expected business during the shutdown and currently has 40,000 followers on its lively Instagram without so much as a single location.

Even before shutdowns accelerated mass adoption of delivery apps, C3 experimented with “ghost kitchens” and “dark kitchens,” but the company quickly realized such departures didn’t promote the sort of culture it wanted to embrace.

“We realized pretty fast that we’re in the hospitality industry, and when you eliminate the front-of-house piece, you lose that ability to connect with the customer,” he explains. “It was kind of a dismal operation.”

So instead, they pivoted to a plan where they would use existing kitchens in brick-and-mortar restaurants and hotels, simply setting up additional stations for the delivery-only brands. But even that plan, early on, had its hiccups.

“We figured out something really quickly,” Rinella laughs, remembering the confusion as drivers arrived at Umami Burger looking for a sushi restaurant. “The first day was a disaster. We had all these drivers showing up to the location, and they would put into the app ‘this restaurant doesn’t exist, it’s not here.’ We realized you’ve got to have some kind of way of finding signage for the drivers so they know they’re in the right place. We very quickly came up with a system of A-frame signs, wall signs and parking spaces.”

Now that those initial kinks have been worked out, C3 has positioned itself to thrive. Today, virtual and brick-and-mortar brands share space in their vibrant kitchens — and instead of retro-fitting such spaces to make room, future kitchens will be constructed with these shared-space learnings in mind.

“Now, we’re designing from scratch versus converting existing kitchens, and we’re designing them in a way that will cross-utilize equipment across brands and be set up in a way that considers which concept can be set up next to which concept — which will allow cross-utilization of equipment, labor and even ingredients,” he explains. “We’re getting things down to a science, and focusing on using every square inch of the kitchen to accommodate five, six, seven brands rather than just converting from an existing, single kitchen in a traditional restaurant.”

Sam
Credit: Sam's Crispy Chicken
Image credit: Sam's Crispy Chicken

Friends in high places

When SBE began as a nightclub company in the early 2000s, founder Sam Nazarian learned how to harness the power of celebrity. Such lessons have carried over to SBE, and today the company’s well-established relationships with influencers are paying off.

“There are so many choices when you go on DoorDash or Postmates; you have to know how to stand out,” Rinella explains. “One thing that has been brought along from our legacy SBE days is the social influencers, the celebrities and other things that were part of the nightclubs being very popular. Now, when we’re building these fast-casual brands, whether it’s through a ghost kitchen or brick-and-mortar, if you have huge celebrities and social media influencers endorsing your brand through their social media, that can be a huge differentiator.”

Hollywood power couple John Legend and Chrissy Teigen have professed their love for Krispy Rice, with Teigen telling her 34.7 million Instagram followers “you must order from them, and do not skip the shrimp!”C3 has also been working with the likes of Justin Bieber and Diplo.

“Sam has genuine friendships with these people; he’s known them forever, so he introduces them to the food,” says Rinella. “They’re not going to endorse something unless they think it’s of quality, and it’s on-brand for them ... it’s an intrinsic quality of C3 that we attract those people and they want to be a part of it.”

With such connections in mind, Rinella watched closely as Jimmy Donaldson — the 22 year old YouTube sensation known as “Mr. Beast” — recently sold more than a million burgers during the pandemic by launching a ghost kitchen chain called MrBeast Burger in partnership with Planet Hollywood founder Robert Earl. The takeaway was clear: to successfully target Gen Z, look to their favorite YouTubers for branding opportunities.

“That was a huge success; people would order the food because they love Mr. Beast,” says Rinella. “So, we went out and partnered with several really big influencers ourselves, YouTubers with between 5 and 30 million subscribers. We’ll be creating brands with these people to do something similar; if you follow them on YouTube or Instagram, they’re going to have these little mini-brands based around them and the food they love, and people will be able to order that food through our kitchens all over the country.”

The difference, Rinella believes, will come from their high-quality brands. With C3 staff trained to not only create memorable food but also delectable food, the company is in a position to make such partnerships not only exciting, but also result in food actually worth eating.

“The way our kitchens are set up, with the equipment and skillset of our back-of-house employees, we’ll be able to produce everything at a very high level where it’s very good and craveable and people will want to re-order it,” he insists. “It will be the same sorts of followers, Gen Z marketing, but we’ll be hoping to execute these partnerships at a much higher level.”

Plant Nation
Credit: Plant Nation
Image credit: Plant Nation

Deck the halls

As the world reopens, Rinella has an eye on two additional emerging fronts: proprietary technology and single-ownership dining halls.

“We’ve created our own technology called CitizensGo, it’s a marketplace that launched a few weeks ago available on the web or via app,” he says. “You can build one cart from several different brands, have one financial transaction, and then have all the food come to you at once.”

If you’re looking to grab lunch for your family or office, CitizensGo eliminates the need to order from two or three different restaurants to satisfy everyone’s cravings. For the customer, the food arrives at the same time, paid in one easy transaction. For C3, instead of giving a sizeable percentage to a delivery app, they can negotiate a more reasonable fixed amount for last mile delivery.

“The fixed rate makes it more profitable and easier to plan. In addition, the data and customer account becomes your own, so you can get them into your loyalty programs and send them offers when you need to increase interaction,” Rinella says. “That’s the big pivot for us, trying to drive people through our own technology and originating the customer on our platform.”

But, there is still something to be said for dining in. So Rinella is always looking to carefully balance the tangibility of real-world locations with the flexibility of virtual brands.

“Rather than individual brick-and-mortar restaurants for all these brands, we’re building food halls,” he says of locations in various states of development in markets like Manhattan, Atlanta and Seattle. “We can say to a landlord, instead of negotiating with ten different tenants for ten different stalls and ten different rent checks, we have all these amazing brands we want to deploy in this community.”

The food halls give customers the type of choice they desire, and C3 the sort of opportunity to fine-tune plans on the fly that they embrace.

“We spread our brands throughout these stalls to make it a real brick-and-mortar place for these brands to live. If for some reason one of the brands doesn’t work in that community, we just quickly flip that stall to a different brand and see if that works any better,” Rinella explains. “So, the food is being deployed somewhere people can look and touch and feel, while we’re also putting those brands in the back of these restaurants and delivering others via virtual kitchens.”

Katsuya
Credit: Katsuya
Image credit: Katsuya

Maximizing equipment, minimizing delays

With so many crossroads to be navigated, and so many bold ideas moving the company forward, C3 is thankful for a Facilities Management solution that empowers them to manage their equipment, find footing in new markets and increase operational efficiency.

“Our in-house facilities techs across the country are set up with vendors in Ecotrak,” Rinella explains. “For managers, that gives them the ability to send work orders to an in-house technician or vendor using a standardized system and protocols, whether they need an in-house person to come out, or a vendor.”

As Rinella and his team move from their California strongholds to expansions in Chicago, Austin, Miami, Atlanta and other markets, they also find it immensely helpful to have a system that recommends proven, competent local vendors.

“If it’s a new market, we’re able to get feedback and recommendations from Ecotrak on vendors in that market, and we can onboard them so that right away, when the store opens, the restaurant managers have the ability to place work orders if they’re having some sort of trouble with facilities,” says Rinella.

It also empowers staff at all levels to keep things moving in the right direction. “The facilities manager becomes an air-traffic controller, seeing everything and evaluating work orders as they come in, giving feedback to the managers and helping them troubleshoot, managing the technicians and the vendors,” he adds. “Ecotrak is a huge tool for being able to see the 30,000 foot view constantly, while at the same time managing individual work orders and problems in real time.”

With palpable excitement around the re-opening restaurant industry, and customers eager to interact with brands both established and new, virtual and otherwise, C3 is re-opening businesses with the confidence that they’re in a position to succeed.

“We’re growing incredibly fast,” says Rinella. “Having Ecotrak as a tool on the facilities side allows us to scale quickly.”

How to Ramp Up Hiring as You Prepare for Full Capacity

By.

Restaurant365

As your business shifts from no or low capacity to full capacity, it's time to review your hiring practices.

The COVID-19 pandemic had an enormous impact on nearly all areas of business, including your staffing. But now, capacity restrictions are beginning to ease.

While this is certainly good news for facilities, this new phase comes with its own challenges. Your next phase of re-opening? Staffing your facilities to meet new demand from your customers, in the middle of a hiring shortage.

If you are ready to ramp up your hiring for the upcoming season, it's worth examining your employment process. Here are eight hiring tips to start with as you prepare for full capacity.

1. Target your jobs postings

The vast majority of job candidates are now starting their job search online. While a digital job board means you may be able to reach a wider audience than before, this wide net can also be a challenge.

If your positions are in a niche area, like hospitality or retail, consider using industry trade publications, university job boards, or certain social channels to post your listings. You are actively recruiting candidates, so post your jobs to reach the best applicants where they are.

If you use large job sites, consider leveraging geo-targeting for your posts to get your listing in front of workers who live in your area. Local applicants may already be familiar with your business, or at the very least, a long commute won't be a discouraging factor.

2. Write descriptive job roles

Almost every single industry seems to be hiring right now. Why should someone choose to apply for your company?

Many facilities jobs can look similar on paper. The responsibilities may overlap significantly between similar positions at different companies. With this in mind, don't open a job description with just the bulleted list of responsibilities.

Instead, capture a candidate's attention by highlighting the strengths of your company. Talk about the culture and mission. Leverage current team member testimonials or descriptions. Make it clear to a potential applicant why they would love to work with your company before you go into the details of the role.

Next, although you want to be creative in describing your business, make sure to still optimize your posting for what candidates are searching for. While "mixologist" may sound exciting to you, the perfect candidate may be searching the common word, "bartender". Use the most common and simple job title for an open position.

Finally, make sure that you include a salary or wage range for your postings. It's a competitive hiring field right now, so being upfront can be an advantage. Avoid general phrases like "plus tips" or "signing bonus." When candidates know that your wages will cover their cost of living, they will be more likely to apply.

3. Look for ambition, not just experience

In today's hiring shortage, you may not be able to find candidates with every single skill that you need for the role. However, ambitious applicants can usually learn the skill sets required. When interviewing for a role, look beyond an applicant's on-paper job experience to see their potential. While this will require investing in employee training, it is also an opportunity to teach an employee the exact skills they need for your company.

In addition, if you have found a candidate who is a good fit for a role, don't wait to make the job offer. Most job applicants are applying to multiple places at once, and in today's labor crunch, they may receive other job offers quickly. If you find someone who is a good fit, consider making the job offer as soon as possible—potentially on the spot, or within 24 hours.

4. Feature a professional career page

Potential candidates aren't just looking for a job; they are looking for a career. Let them know that they've found the right place. Communicate that working with your company isn't just an hourly opportunity, but an opportunity for career advancement.

Showcase this career path prominently on your website with a "careers" page. Make this commitment obvious by naming the page Careers, not Hiring or Jobs.

Use the page to show potential applicants how you invest in employees and encourage retention, as well as what job perks and benefits you offer. It's also an opportunity to demonstrate what your team culture looks like and how you celebrate current employees.

5. Prioritize assessments and pre-screen questions

If you are ramping up your hiring for the foreseeable future, an Applicant Tracking System (ATS) can help streamline the process and keep it easy for both your hiring managers and applicants. Many managers know the struggle of scheduling multiple interviews and discover that most people don't show up.

Using assessments and pre-screen questions through your ATS can help ensure that only the most committed applicants are moved through to the interview round. With these questionnaires, you can not only assess the skill levels of applicants, but you can also see who is more likely to follow through. When applicants take the effort to go through these extra steps, you know they are much more likely to show up and engage in your in-person interviews.

For the applicant, these assessments and pre-screen questions can serve to become invested in the role and see that a facility is taking the hiring process seriously.

6. Champion diversity and inclusion

Diverse, inclusive teams are talented teams. Work toward your diversity and inclusion goals by using what resources you have, like your applicant tracking system.

If your ATS meets diversity and inclusion standards, it can help your management create a repeatable, thorough evaluation process. Interviewers can use the ATS to rate candidates based on the same consistent framework. With these metrics in hand, your managers can compare applicants on equal terms during the hiring process.

7. Focus on retention

If your business demand is growing again, it's inevitable that you will need to do more hiring. However, in the rush to hire new employees, make sure that you don't forget to prioritize retention of existing staff as well.

All employers know that high turnover is costly. When you need to fill an open position, you must recruit, hire, onboard, train, and go through a period of employee development. If you cannot fill the open position right away, you also have the cost of operating your facility with an unfilled team role, which can be difficult for your existing staff and affect customer service.

To avoid this cost as much as possible, examine your retention track record. Traditionally, retention tactics commonly center around increased pay, adding benefits, and career advancement opportunities. While these should still be a focus, you may want to go even further.

The past year has been difficult for workers and companies alike. Consider examining your company's accountability, flexibility, and investment in employees, and how these policies may impact retention.

Your company culture affects retention, for both your current employees and any future ones. The goal? To have your current staff telling their friends and family what a great place your company is to work.

8. Consider implementing a referral bonus

Finally, alongside retention, consider using your current staff as recruiters to help you find new applicants. Current employees can be an asset to help you attract quality applicants. A referral program can get everyone involved in the recruiting process.

Before implementing the program, make sure to communicate to employees why you are working with them for referrals: because you want more employees like them. If your staff feels invested, they will likely be more helpful in your referral search.

Of course, your referral program should also include a referral bonus as incentive. Make the bonus large enough to matter (something no less than $250) and pay it quickly (no less than 90 days). Making the bonus meaningful and timely can help your staff understand the beneficial impact of a great referral.

Conclusion

As business ramps up to full capacity, it's more important than ever to invest in quality recruitment and retention. With these tips in mind, you can be better prepared to meet the challenges of full staffing once again.

Restaurant365 incorporates restaurant accounting software, restaurant operations software, inventory management software, payroll + HR software, and scheduling software into a cloud-based platform. R365 HIRE makes it easy for you to filter, hire and onboard the optimal employees for your business.

Mendocino Farms’ First Cloud Kitchen (aka Ghost Kitchen)

By.

Gene Davis

Mendocino Farms Cloud Kitchen
Credit: Mendocino Farms Sandwich Market
Image Credit: Mendocino Farms Sandwich Market

Mendocino Farms opened its first cloud kitchen in Long Beach, California in November 2020. We caught up with Gene Davis, CRFP, Senior Director of Facilities, to talk facility management technology, cloud kitchens and how the brand fared during the pandemic.

Mendocino Farms recently implemented Ecotrak Facility Management Software. Why did you go with Ecotrak?

We were with ServiceChannel, and we switched to Ecotrak. I've spent a lot of time with ServiceChannel. I rolled out ServiceChannel in my last two companies, and Mendocino Farms already had ServiceChannel. I knew about Ecotrak, and after seeing their demos, I decided to switch. ServiceChannel served us well, but Ecotrak is more intuitive, easier to use, has more analytical tools, and for our younger managers, it's mobile-based and just a cooler technology. The other reason is the price. ServiceChannel and Ecotrak offer similar features, but ServiceChannel tacks them onto the price. Everything was a la carte. With Ecotrak, we get one price and all the features, and that was appealing to us.

How has your customer experience been with Ecotrak?

I've received great service during the transition. With ServiceChannel, if you have a problem, there's a help desk. You submit an email and it goes back and forth. Ecotrak has amazing support. They have somebody manning the phone 24/7. If I have a question, I like to pick up the phone and talk to somebody versus typing a message like a service request and then waiting for an email response. I’m in California; my stores are in California, and Ecotrak is based in California. I'm excited about having a better support system. That was a big factor.

How is the transition going?

It’s good. We have a client success person, Michael, who is great. It was easier than I thought it would be. The salesperson said, "This is going to be really easy." And I said, “Okay, great,” but I was skeptical. Nothing is easy, especially in facilities. Anything that can go wrong will go wrong. But we've had weekly calls. They've done a lion's share of the dirty work: the loading of assets and PMs. We're about to start the final phase: training. They have a great trainer and training program.

How have your restaurants fared during the pandemic?

Our brand is delivery heavy. That’s one of the reasons we've done so well during the pandemic. The brands that had drive-through and delivery in place made it through.

The company opened its first ghost kitchen. Why don’t you call it a ghost kitchen?

People call them ghost kitchens or virtual kitchens, but we say cloud kitchens. “Ghost” sounds like there's nobody there, but there are lots of people at our cloud kitchen.

Did Mendocino have a cloud kitchen before the pandemic?

No, we opened one in the middle of the pandemic. At the time, opening restaurants was difficult. It was easier to open a cloud kitchen. It shares a facility with 12 or 13 other concepts.

What challenges did you face with opening the cloud kitchen?

Two ways. They can use popular food-delivery apps, such as Grub Hub, Uber Eats, Postmates or Door Dash – we partner with all of them – or use the Mendocino Farms app. Customers can also pick up their orders. The facility has food lockers. A staff member tells them their locker number. It’s contactless since they paid on the app. On our website, it's promoted as “Long Beach Kitchen – Delivery and Pickup Only” to make that clear for guests so they don't get dressed up and show up for dinner at that location.

Does the cloud kitchen support catering?

Yes. Pre-pandemic, catering was an enormous part of Mendocino Farms’ business. We were known for our catering. So, we hope, as people go back to the office, and things slowly go back to whatever the new normal is, that we will be catering a lot more out of Long Beach.

Are there more cloud kitchens in Mendocino Farms’ future?

We've had great success with the first one. Sales are great. The Operation is great. So, we're looking at a couple of different sites – one by Berkeley and one in San Francisco. The small footprint makes it easier to add more to our portfolio. We're convinced that adding more kitchens will strengthen our brand.

What trends have you noticed?

Consumer behaviors have transitioned to online ordering. People like having their groceries delivered because of the convenience. This translates to cloud kitchens well. People will continue ordering food online for delivery or pickup. People get into a routine and it becomes the norm. People are used to it. They're comfortable with it, and they like the new way better in some cases.

Gene Davis , CRFP, is the Senior Director of Facilities at Mendocino Farms Sandwich Market.

Seven Lessons Learned Post COVID-19

After more than a year, the restaurant industry has learned important lessons about how to navigate COVID-19 in 2021 and beyond. Here are seven common lessons that many organizations have learned during recovery.

1.  Concepts with existing delivery and drive-through models thrived.

These restaurant brands did not have to re-tool operations to continue serving guests when the pandemic closed indoor dining. Instead, they double-downed on their model by staffing up the drive-through with outside attendants to take and deliver orders. Brands also added double kitchens to maximize output to meet guest demand.

2. Partner with more suppliers, especially regional ones.

The pandemic served as a reminder for restaurants to streamline their procurement processes, consider partnering with more than one supplier, especially a regional one, and nurture vendor relationships to minimize disruptions. It’s also prudent to eliminate difficult-to-source ingredients and broaden the menu to distribute risk.

3. Ghost kitchens are trending.

The pandemic created a high demand for food delivery and pickup service, which has led to the growth of concepts without dining rooms. By minimizing overhead, brands can stay in the black, and staff and guests can stay safe with minimal people in the space.

4. Expand outdoor seating.

In addition to spacing tables to achieve the recommended 6 feet of social distancing, restaurants are also expanding outdoor seating to make up for lost seating in the dining room. They are investing in canopies and heat lamps to extend the outdoor dining season.

5. Promote consumer trust.

Restaurants must ensure guests and staff feel comfortable and safe in their space. Post the company’s detailed covid response on the website. Explain how the brand is keeping its staff and guests safe and healthy. Post scannable signs in the restaurant that quickly detail safety measures. Designate staff whose sole responsibility is sanitizing surfaces throughout the restaurant. Details matter, so provide access to hand sanitizers, keep used and sanitized pens in separate containers, and if staff handles credit cards, wipe them down afterward with sanitizing wipes in guest view.

6. App development for ordering and payment

If restaurant brands didn’t have an app before the pandemic, they do now. The development of apps exploded during the pandemic to give guests a convenient way to order, pay and track deliveries. Even small restaurant concepts benefit from apps as neighbors feel compelled to support local businesses during this time.

7. In-house experts in local governance

Restaurant brands now have in-house experts in local regulations to keep leadership apprised of constantly changing guidelines.

Indoor Air Quality Best Practices

By:

Erich Munzner

As on-premise dining reopens across the country, restaurant operators continue to adapt their safety procedures to protect guests dining indoors. Restaurants are taking indoor air quality more seriously and taking a proactive approach to disease prevention through ensuring cleaner, safer, more efficient ventilation systems by implementing a variety of indoor air quality best practices.

What is Indoor Air Quality (IAQ)?

Indoor air quality is the air quality within and around buildings and structures. IAQ is known to affect the health, comfort, and well-being of building occupants.

To help guests feel comfortable with indoor dining, restaurant operators can follow CDC, EPA and ASHRAE recommendations for maintaining good restaurant ventilation to reduce indoor airborne transmission of COVID-19. A combination of air cleaners, HVAC filters and IAQ best practices are recommended.

To assist you in your reopening strategy, we’ve compiled a checklist of Indoor Air Quality Best Practices:

HVAC and Air Circulation

• Conduct preventive maintenance on HVAC systems to ensure they are fully operational, especially if the restaurant was closed or operating at a lower capacity.
• Run the HVAC system at maximum outside airflow for 2 hours before and after occupied times.
• Open outdoor air dampers beyond minimum settings to reduce or eliminate HVAC air recirculation.
• Increase circulation of outdoor air as much as possible by opening windows and doors. Use caution in highly polluted areas.
• Use fans to increase the effectiveness of open windows. Avoid placing fans that could cause contaminated air to flow directly from one person to another. Window fans help draw in fresh air without generating strong room air currents.
• Disable demand-controlled ventilation (DCV) controls that reduce air supply based on occupancy or temperature during occupied hours.
• Don’t let HVAC air intakes or open windows pull exhaust air back into the building.
• Set the fan to the “on” position instead of “auto.”
• Keep relative humidity between 40% to 60%.
• Between occupancies, flush the space with three times the amount of fresh air.

Air Filters

• Wear N95 respirators, eye protection (safety glasses, goggles or face shields), and disposable gloves when changing filters.
• Upgrade air filters to MERV-13 or higher.
• Check filters to ensure they are within service life.
• Inspect filter housing and racks to ensure appropriate filter fit and check for ways to minimize filter bypass.
• Use the bag in/bag out air filter replacement method when replacing air filters to mitigate exposure.

Exhaust Fans

• Ensure restroom exhaust fans are working at maximum capacity and are set to stay on.
• Inspect and maintain local exhaust ventilation in areas cooking areas. Operate these systems when these spaces are occupied. Consider operating these systems even when the space is not occupied to increase overall ventilation.
• Generate clean-to-less-clean air movement by re-evaluating the positioning of supply and exhaust air diffusers and/or dampers (especially in higher-risk areas).

Restroom Air

• Keep restroom doors closed, even when not in use.
• Vent separately where possible.
• Keep bathroom windows closed if open windows could lead to re-entrainment of air into other parts of the building.

Products to Consider

• UV-C products
- LEDs
-  In-duct air disinfection systems
- Portable room decontamination systems
-  Ultraviolet germicidal irradiation (UVGI) systems
-  Upper-room UVGI systems provide air cleaning within occupied spaces
-  In-duct UVGI systems provide air cleaning inside central ventilation systems
Bi-polar ionization air purifiers such as Nu-Calgon’s iWave technology
• Portable HEPA fan/filtration systems to help enhance air cleaning

When in doubt, decrease occupancy in areas where outdoor ventilation cannot be increased. Interested in improving Indoor Quality for your business? Contact Erich Munzner at emunzner@ecotech-hvacr.com.

Erich Munzner is the VP of Business Development at Ecotech Refrigeration & HVAC.

Source:
The American Society of Heating, Refrigerating and Air-Conditioning Engineers
National Restaurant Association, COVID-19 Operating Guidance

Q&A with Larry Kruguer

We sat down for a virtual Q&A with Larry Kruguer, former COO of Wingstop Inc., to discuss global restaurant expansion, technology and emerging trends in operations.

Larry served as Chief Operating Officer and EVP for Wingstop Inc., where he led global operations, supply chain, training support and international business initiatives. He also served as VP of International Joint Ventures and Key Markets at The Wendy’s Company., where he led overseas efforts in marketing, business development, real estate and finance.

Today, he leads Floresta Franchise Consulting and serves as a key advisor to Floresta Partners. Additionally, he created KR Ventures, where he serves as Managing Partner/Angel Investor/Advisor in early-stage concepts in the technology, retail and sports-related sectors.

Read the full Q&A with Larry below.

What were some of your career milestones in the restaurant industry?

I entered the industry in 2007 with Wendy’s as head of marketing for its international division. My broad international business background allowed me to re-start the company’s business development efforts. It had not entered a new market in almost a decade and had lost major traction to the other major burger brands. A major milestone was successfully entering major markets and territories it had backed out of prior to my arrival or had never entered. I am most proud of re-entering Argentina and launching Brazil and Chile in South America, re-entering eastern Europe and Japan, and creating a unique menu/retail experience in India.

At Wingstop, I am most proud of being part of the executive team that took the business post-IPO to a very successful run and expansion. My initial role in overseeing the international business included some great milestones, such as building a global team with multi-brand experience and helping to expand into Europe, Latin America and Asia. As COO, the opportunity to oversee the roll-out and expansion of our delivery business, which was completed before the COVID outbreak, has been a major factor in the brand’s continued success despite the pandemic.

What were some of your most memorable experiences at Wingstop and Wendy’s?

Expanding on the above, the opportunity to explore new parts of the world and find ways to grow the respective brands by leveraging their core DNA and understanding the need to adapt to local customs/habits as well as competitive pressures really tested one’s ability to self-evaluate and strategize.

At Wendy’s, developing Wendy’s Café, a more fast-casual experience, differentiated us from other major burger brands and advanced the company’s footprint.

At Wingstop, the opportunity to roll-out delivery overseas helped us refine operational processes when we were ready to launch U.S. efforts. Our willingness to test a more casual dining/sports experience in Mexico allowed the business to flourish. It became the No. 1 market outside the U.S., nearing 100 outlets in 10 years.

What has been the proudest moment in your career?

I am not sure there is one moment. Obviously reaching the level of COO for a highly successful publicly traded company is a proud accomplishment. Yet, I am most proud of the ability over my career to translate my experiences across different stages of a business, multiple industries and challenges into success. I have been asked many times how I was able to cross over multiple sectors and functional roles. My answer has always been if you are always customer-focused, listen to those around you and understand the common threads of success, no matter the industry, you can translate these into successful building blocks.

Who has inspired you as a leader?

I do not have one person who Inspired me. Rather I have had the opportunity to interface with many senior leaders—both good and bad—over my long career, and I have learned from all of them. Early in my career, I was inspired by Stephen Covey’s book, “7 Habits of Highly Effective People.” I was drawn to the ideas of putting yourself in other people’s shoes, treating others as you would want to be treated and creating win-win opportunities. The lessons became the foundation of my leadership/team-player style. People seek an inspirational leader who is consistent, stable and willing to tell it like it is, yet is respectful of others and can balance the highs and lows. An organization puts its faith in a leader who is transparent, consistent and loyal.

To what do you attribute to your success in operations?

I did not grow up in operations; my core background was marketing. I attribute my success to surrounding myself with great seasoned operators and providing them with a customer-focused mentality. We often measure KPIs or processes that have little to do with the end customer. We can be too inward-focused. Success at the end of the day is consistently delivering a fantastic experience to the end customer, which requires operational proficiency. At Wendy’s, for the longest time, it was all about speed of service at the drive-thru. Everything else was a distant second. Our inside dining experience deteriorated; the dining areas became old and tired. The emphasis on speed even outweighed making little mistakes in ensuring order accuracy. There is nothing worse than driving away and noticing your fries are missing. Balancing speed with 100% accuracy with having a great, clean and attractive asset is critical in ensuring customers enjoy their experience and want to come back, time and time again.

Tell us about Floresta Partners and your current role?

Floresta is one of the ventures I am focused on now that I have stepped down from the big corporate world. My partners and I are involved in helping earlier-stage concepts, primarily in F&B, define a clear strategy and growth opportunity. We specialize in defining their development path, asset plan and offering a global perspective if they are a U.S. concept or a foreign concept looking to enter the U.S. market. We have also found a niche in supporting key suppliers/service support providers to restaurants by innovating ways to accelerate their offering and help push the industry towards continued advancement.

As the restaurant industry continues to struggle amid the pandemic, what advice do you have for restaurant leaders?

Be customer-focused. Learn from the challenges we are facing and understand how you can best adapt your business. Most importantly, come out stronger on the other end of this pandemic. Rethink your asset or service formats. Delivery and take-out/drive-thru have been critical during this period, and it’s safe to assume the trend will continue. Maximizing these channels today will have major implications for ongoing success. Are there opportunities to lower your asset investments or improve labor efficiency to better deal with future downturns? Learning from the challenges and keeping the end customer in mind will separate those who succeed from those who may be unable to overcome the current situation.

Headed into 2021, what emerging trends do you think we will continue to see in restaurant operations?

Delivery, smaller asset formats, more narrow menus with fewer SKUs, improved use of labor and ghost kitchens.

What are some tips or tools that restaurant operators can adopt post-pandemic?

Look at brands that have sustained or shown significant growth during the pandemic. They have followed the lessons I have described above, but there may be other tidbits to learn. There is nothing wrong with learning from others’ success.

You are very active in early-stage technology ventures. How important is technology for restaurant and retail operations?

It is very important. In addition to my Floresta efforts, I have invested in early-stage technology companies that are not F&B focused. The common trait is by being customer-focused, the continued improvements that a company can achieve through advances in technology are significant. Technology can significantly improve internal operating procedures that benefit the end customers and deliver new channels for your customers to interface with you. The pandemic requires social distancing, but technology has helped people find ways to communicate, interface and exchange services. Without technology imagine the repercussions on our economy and way of life.

Where do you see technology headed in the next 5 years for the restaurant industry?

I see the involvement of technology accelerating in the next 5 years. With labor costs increasing and the post-pandemic challenges, leverage technology to improve processes, efficiencies and efforts. Technology will be critical in profitability margins and improved service.

Do you have any books or podcasts to recommend?

Actually, my recommendation is to spend more time in your restaurants. Spend time speaking to customers and front-line personnel. Visit other concepts that are growing and expanding or have received great reviews. Patron them and see what they are doing and how their best practices can be adapted to your business. Do not spend too much time behind a desk.

What are some of your interests outside of the business?

I love to spend quality time with my family. I have four children who span in ages from 28 all the way down to 7, so the breadth of conversation, interests and opinions vary quite a bit – keeps me on my toes to say the least! I love to travel globally; COVID has not helped this year and looking forward to starting again later in 2021. Lastly, I love all sports—both as an active participant and as an observer; nothing is better than spending time outside in the fresh air and keeping both mind and body in shape.