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Transforming Restaurant Profitability: How Franklin Junction Maximizes Extra Kitchen Capacity · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. My name is Anthony Kotaspodi and
0:17
today's guest is Rishi Nigam, CEO and Co founder of Franklin
0:22
Junction. They are the world's first and
0:24
largest host kitchen marketplace, not to be confused
0:28
with Ghost Kitchen. They help restaurants earn extra
0:32
revenue by using their spare kitchen capacity to prepare
0:36
meals for delivery only brands. Through this approach, they help
0:40
businesses expand their reach, boost revenue, and bring more
0:44
delicious meals to customers in new markets.
0:47
Franklin Junction was also named one of the World's Most
0:50
Innovative Companies by Fast Company in 2023, which reflects
0:55
their leadership in the virtual dining space.
0:58
Before starting Franklin Junction, Rishi honed his
1:01
hospitality and entrepreneurship skills across multiple ventures,
1:05
including as Director of Operations at Aramark and Vice
1:09
President at NASCAR. Now before we get into all that
1:13
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1:53
All right, back to our guest today, CEO and Co founder of
1:56
Franklin Junction, Rishi. I appreciate you making the time
1:59
to Share your story today. Thanks, Anthony.
2:02
I'm excited to be on with you. Appreciate the opportunity.
2:05
All right. So before Franklin Junction,
2:07
which I'm really excited to talk about, you had a pretty
2:10
impressive career in sports and entertainment, including a role
2:14
as AVP at NASCAR. Can you tell us about the work
2:18
that you did there and how the skills you learned would later
2:22
become helpful in what you're doing today?
2:24
Yeah, absolutely. I started working in sports
2:28
venues when I was in college. I actually worked in in
2:31
restaurants on on the college campus and then just found this
2:36
great connection where I was studying business.
2:40
I really enjoyed food service and I played competitive sports
2:42
my whole life and all of those things could come together and
2:47
running the business of food service at sports venue.
2:50
So it was a way for me to kind of continue that dream of
2:53
somehow being connected to pro sports.
2:55
I wasn't obviously going to make it with my on field talent and,
2:59
and so this is a way for me to explore a few different
3:02
passions, but also also use my business skills.
3:05
And so I started working in minor League Baseball venues,
3:09
graduated to NBANFL Major League Baseball venues with Aramark and
3:14
it was a it was a great time. It was early 2000s.
3:17
At that time we were going from just basic hot dogs, burgers and
3:22
nachos at sports venues to actually incorporating local
3:26
restaurants, celebrity chefs, national chains.
3:30
So there's a lot of going around with the experience that fans
3:35
wanted inside a venue, and the food service was one of the key
3:39
ways to lead that experience change.
3:43
So after several years of doing that with NASCAR, I had an
3:46
opportunity to go over to, excuse me, with Aramark.
3:49
I had an opportunity to go over to NASCAR and at NASCAR those
3:53
services were owned in house. So we did not outsource to an
3:58
Aramark or another concessions company.
4:01
We actually owned the food service, retail merchandise and
4:04
all of those experiences within our our company.
4:08
So that was a unique dynamic. There was the track ownership
4:12
which which we owned the tracks. Then we were selling the
4:15
tickets, we were doing the marketing and we're running all
4:18
of the services in house. So rather than necessarily be
4:21
having a contractual relationship, we all functioned
4:24
as one company, which I think allowed us to deliver more of a
4:28
unified experience to fans. However, these NASCAR venues
4:33
were stuck in the 60s basically. So forget nachos and hot tubs
4:38
and burgers, they barely had that.
4:39
So in some of these concession stands, they were just selling
4:42
cold sandwiches or just beer. I mean, there wasn't even cooked
4:45
food. So, so the infrastructure was
4:48
really lacking the thought process.
4:51
They had not had any management come in from those outside
4:54
venues. So they didn't realize what had
4:56
been happening the last 50 years, let alone the last 20
5:00
years. And so, so basically my mission
5:03
was come in there and bring NASCAR venues to the 21st
5:07
century. And I'm very thankful that we
5:10
were able to have the right resources to do that, to build a
5:13
team that could deliver that, to have financial resources that
5:16
would allow us to create those experiences.
5:19
And then most importantly, to have fans that were very engaged
5:23
with what we were trying to do. And they were, you know, very
5:27
easy adopters, of course. Like, they're like, yeah, happy
5:30
to not bring a cooler and buy food at the track if you sell me
5:33
something good at a decent price.
5:35
And so all of those things were great.
5:38
I got to learn a lot of different things there that, you
5:41
know, you normally don't get. I mean, I was in my mid late 20s
5:45
when I went to NASCAR and got to take over that division.
5:48
You know what, what it's like to create and sell a vision,
5:52
identifying who the stakeholders are, creating a strategy,
5:57
leading collaboration with people who don't necessarily
6:00
want to collaborate. So how do you inspire them and
6:02
get them on board and then, you know, creating ambassadorship
6:06
with with some of those people that do participate and enjoying
6:11
that success of that. So it was really cool, man.
6:14
I mean, there's just there's a lot of media out there from the
6:16
things that we did during that time there.
6:18
But I do think we fundamentally transformed some of these race
6:22
tracks where, you know, they were places where the race
6:25
almost took a back seat to the rest of the fan experience
6:28
inside the venue. And I think, you know, our our
6:31
team as well as a lot of other folks that we work with deserve
6:34
credit for bringing the relevance of race tracks back to
6:37
these communities. So that's really interesting.
6:40
Your time at Aramark, you were involved in elevating the food
6:44
experience from nachos and hot dogs to something more upscale,
6:49
local and, you know, celebrity chefs and whatnot, which had to
6:53
have been a cool experience to be a part of.
6:55
And then you're sort of taking, I don't know, in terms of
6:58
progress, a giant step backwards to the NASCAR experience, which
7:01
wasn't even to nachos and hot dogs.
7:04
Were you surprised at sort of the the state of things?
7:08
Because it's not like NASCAR is, you know, some little upstart,
7:11
like they've got some deep pockets.
7:13
They've been around for a while. Yeah, I don't think so.
7:16
I don't think I was surprised because I'm from North Central
7:19
Georgia. I think I know the core customer
7:21
that NASCAR has and I also know the logistics challenges of
7:28
being able to develop to a venue of that side and size and a
7:32
crowd that's that size. So when you go to a normal local
7:37
ballpark at a stadium or arena, they have dozens if not hundreds
7:40
of events every year. It's it's easier for them to
7:44
spread out that investment over the course of a few years and
7:47
get and see a return on it and serve their customers.
7:50
It's also a very consistent customer.
7:52
But NASCAR, it's more of a traveling roadshow, right?
7:55
We're going to these race tracks week to week and in a given
7:58
racetrack, it may be only operational one or two weekends
8:02
a year. And you're basically building a
8:04
little town to serve a few 100,000 people and then it's
8:07
over after one week. And so the same investment does
8:12
not pencil out for them. And that customer is not looking
8:15
for, let's say you have season tickets to your local baseball
8:18
team. You're probably not going to eat
8:20
bundle cakes and nachos every week.
8:22
Most of the time you're probably just going to eat a burger or a
8:25
grilled chicken sandwich or something a little bit lighter.
8:28
You might not even eat because it's just somewhere that you go
8:30
a few days a week every week for six months.
8:33
But when you're going to NASCAR, you wanna eat a lot of different
8:36
things and experience things that you're only gonna get once
8:39
a year. It's almost more like the State
8:40
Fair than it is like having season tickets to a normal
8:44
event. So that's also something
8:47
different is like you have to understand what is that
8:49
consumers needs. And again like I said, we were
8:53
in the hospitality business. Secondly, our primary business
8:57
was actually logistics. It's like, OK, we got to build
9:00
town, there's no plumbing, there's no sewage.
9:03
We got to make sure we we have sanitation in place for food
9:06
service. So understanding what you can do
9:08
is different than what you want to do so.
9:11
And so how did you sort of find that intersection of, hey, we
9:15
would love to be able to offer the celebrity chef like we did
9:18
at Aramark, But here's the the actual infrastructure that we
9:22
have to deal with like. Yeah.
9:24
Was it, was there still like some kind of a significant
9:27
investment in equipment that you could take from location to
9:29
location that allowed you to do other things?
9:32
Yeah, just in my 7 years, we had over a billion dollars in
9:35
capital improvement projects. And so that included, you know,
9:40
infrastructure, whether it comes to our side of it, kitchens and,
9:44
and hospitality areas, but also goes into fan areas and
9:48
restrooms and even simple things like electricity, Internet,
9:52
plumbing, you know, just be, you know, to be able to create these
9:55
areas. So a lot of credit to the France
9:57
family for continuously investing in their fans and
10:01
their and their and their race tracks to make sure that, you
10:05
know, they are not just up to standards, but defining what the
10:08
new standard is. So if they can do this for race
10:11
tracks and for hospitality for, you know, events that are once
10:14
or twice a year, it actually puts the pressure back on the
10:17
stadiums that are operational every single week to to push the
10:20
envelope a little bit. So that was cool.
10:23
I mean, I think having resources was a key, a key reason for why
10:27
I went to NASCAR when I was looking at other opportunities.
10:30
I'm like, you know, there's a lot of teams that I interviewed
10:34
with, a lot of other venues, opportunities, even things like
10:38
the Olympics and stuff. And it's just like they don't
10:40
all necessarily have the same resources that somebody like
10:43
NASCAR does. And so I think having resources
10:47
to actually execute your vision is super important.
10:50
I like it. OK, before we jump into where
10:53
the idea to start Franklin Junction came about, maybe just
10:57
a quick definition for people to clarify the difference between
11:01
host kitchen, which is what you are, versus ghost kitchen, which
11:05
is something a lot of people heard of coming out of the
11:07
pandemic. Yeah.
11:08
So the ghost kitchen idea is that there are restaurant
11:14
operators or brands that want to be in a new market, but they are
11:18
willing to go operate that. So what a ghost kitchen does is
11:21
create new infrastructure for operators and says here's a
11:25
building we built, you know, 20 subdivided kitchens in there and
11:29
we're going to go lease those out to people.
11:31
So think of it like we work for restaurants and we know how well
11:34
we work worked out. So, so the idea that we had is
11:38
that, well, infrastructure is not really the issue.
11:42
You know, there's not really that many operators necessarily
11:45
looking for more spaces. What there are is a lot of
11:48
kitchens that already have underutilized kitchen capacity.
11:53
And so we created a model that we call host kitchen HOSTNNR
11:57
model. You take existing kitchens like
12:01
restaurants, hotels, convenience stores, etcetera that are maybe
12:05
not maximizing the use of the equipment and staff that they've
12:09
already invested in and they can use that to produce delivery
12:14
orders for other brands. So I would liken that to Airbnb.
12:19
It's maybe a little more complex than Airbnb because we're in the
12:21
food production business, but you're there's no new capital
12:25
being deployed, no new capacity being created.
12:27
You're monetizing existing underutilized capacity.
12:32
So where did the actual idea percolate from?
12:35
Like as you're describing it, it's like, oh, that makes a lot
12:38
of sense. But how did you have the insight
12:40
that there were a lot of these underutilized kitchens out
12:42
there? Yeah, so my Co founder is a guy
12:46
named Aziz Ashim. Aziz had the original idea for
12:49
this several years before COVID. Even so we launched in 2020
12:52
during COVID. But several years before that he
12:54
had mentioned the idea to me. He'd already been thinking about
12:57
it. Aziz is one of the, you know, at
13:00
one point was one of the largest franchise operators in the
13:02
country, heavily awarded by a lot of organizations, former
13:07
chairman of the International Franchise Association.
13:10
So somebody that really understands a variety of brands
13:13
and operations and has also invested 10s of millions of his
13:17
own dollars into building these restaurants all over the
13:21
country. And so Aziz had been dealing
13:23
with this issue for decades, and it's something that was a
13:27
persistent and pernicious issue, as he said, across all of his
13:30
brands where they had underutilized kitchen capacity.
13:33
So he had already had the wheel spinning about, OK, I have X
13:37
amount of these, you know, these kitchens.
13:39
And I have this other brand that I could maybe leverage in this
13:42
market. How do I make that happen?
13:44
So he'd already been thinking about the idea.
13:47
He discussed it with me prior to, I think when COVID happened,
13:52
we were already trying to take this idea to more of a beta
13:57
state. I had just left another group I
14:00
was partnered up with on a, on a separate business.
14:03
And you know, that's when we kind of got together and said,
14:07
is this the right time to build this host kitchen idea?
14:10
And, and of course, COVID was the kick in the butt that we
14:14
needed. It's like, yeah, all these
14:15
kitchens are about to shut down their dining rooms and relies
14:18
strictly on delivery. So let's get moving on this.
14:21
And, and so that's that, that was where we saw the big
14:24
opportunity. The idea resonated with me when
14:27
he first told me about it, because I think back to about
14:30
20. This is, I can't believe I'm
14:33
saying this. Almost 25 years ago when I was
14:35
in college working at a pizza shop, we had three pizza ovens.
14:39
And every Monday morning, we would throw away the leftover
14:42
dough that didn't sell over the weekend and shut down two of the
14:45
three pizza ovens for midweek. And then the next weekend, we
14:48
would turn on all the ovens again and make a ton of pizzas
14:51
for the weekend and then shut it down again.
14:54
Our owners, as well as some of us that worked at the
14:56
restaurant, worked on an idea where we would take this
14:59
leftover dough and stretch it out into loafs of bread,
15:03
basically, and created a sandwich concept that would
15:07
allow the ovens to be on the dough, not to get wasted, and
15:11
something that would serve the students midweek when they
15:13
didn't necessarily want to eat pizza late night.
15:15
So they became a sandwich concept, something lighter,
15:18
something more in tune with lunch, something even professors
15:21
wanted. So it was something that allowed
15:23
us to utilize our equipment and, and the ingredients that we
15:28
already had and cut down on waste and improve profitability.
15:31
You're going to know this, some of our listeners may not know
15:33
this, but there was no Uber or DoorDash 25 years ago.
15:37
So now we marketed that by getting a second phone line and
15:41
flyering a bunch of cars and dorms.
15:43
And that's how we told people so.
15:45
So if there's a call on line one, we knew it was for pizza.
15:48
If there's a call on line two, it was for sandwiches and we
15:50
were able to launch a virtual concept that way.
15:53
So this is work. It was great.
15:56
It was phenomenal. I mean, they're still selling it
15:57
25 years later. I just checked the website the
15:59
other day in preparation for this call.
16:01
I'm like, yeah, they're still crushing it with the grinders.
16:03
And so I thought that was pretty cool.
16:07
So, you know, restaurant operators are very in tune with
16:12
what's going on with their business.
16:13
They're very creative. So, you know, when we discussed
16:17
this idea with people that have never worked in restaurants or
16:20
owned a restaurant, it seems like a very foreign or super
16:24
genius idea. But when we talk to restaurant
16:26
operators, they're like, yeah, man, I've been trying to figure
16:28
this out for years. So they've, they've already been
16:30
thinking like that this is just kind of a Eureka.
16:33
Like yes, what we need is a is a partner who's created some
16:37
recipe for success to do this. Interesting.
16:40
See, I had assumed that going in and trying to have these
16:43
conversations like, hey, would you make somebody elses food is
16:47
gonna be just an uphill climb. Yeah.
16:49
But so many of these operators are like, no, we've had the same
16:53
idea. Yes.
16:53
Please help us sign this up. Yeah, I would say it's a blend
16:56
of both. I mean, there's 700,000
16:58
restaurants out there in America.
16:59
So we hear all sorts of objections as well as support.
17:03
So that's a lot of what our job is, is just filtering that out
17:07
and figuring out how this can be appealing to to a majority of
17:10
them. What's the biggest objection
17:12
that you run into and how do you speak to it?
17:14
Well, I think the main one that we get is is rarely anything to
17:19
do with us. It's not like, oh, I don't want
17:21
to create another brand or bring these items in.
17:24
It's usually other priorities that they have.
17:27
There's a lot of tectonic shifts going on in our industry around
17:31
labor models, technology integrations.
17:35
People are revamping their entire tech stacks the way they
17:38
think about point of sale and restaurant service, ETC.
17:43
And then there's also challenges with cost of goods.
17:46
Food cost has increased at a faster rate in the last four
17:49
years than it has in the previous 20 years.
17:52
And so so there's just a lot of other challenges.
17:54
And what happens is that we are a quote, good idea, but we get
17:58
de prioritized with some of the other issues.
18:01
And so I think that's just it, it's just finding a timing and
18:04
it's saying, OK, when we have, you know, a few months to spare,
18:07
we'd love to integrate your concept into it.
18:09
So it's, I think rarely at this stage, you know, five years into
18:13
it, do we get objections about things that we could do better
18:15
with our business model. It's just figuring out the right
18:18
time to slot in with them and. So when you have a conversation
18:21
like that where they're like, yeah, this is intriguing, not
18:25
right now because of XYZ. What's sort of your business
18:29
process to keep in touch with those folks, stay top of mind
18:32
with with them without sort of being annoying?
18:34
Yeah. Well, we didn't really have one
18:37
other than me just checking in with people randomly or seeing
18:40
them at conferences. A tremendous amount of our
18:42
business still gets done at industry events, whether that's
18:45
conferences or round tables, etcetera.
18:47
So that's still a big part of of how we connect with customers
18:51
and and the restaurant industry. But last year, we hired a great
18:54
leadership person on the sales side, and his name is David
18:58
Goldstein. And David has been able to put a
19:01
real CRM into place. It's a software called Sunday.
19:06
And we put processes in place on how we do outreach, how we stay
19:09
in touch with customers, how we onboard them, how we measure
19:12
success with them, how we communicate with them.
19:14
And that's been huge. I mean, we've gotten our
19:16
onboarding times down from three months to three weeks.
19:20
Our clothes rates are much higher.
19:22
Our top of funnel is a lot more productive.
19:25
So a ton of credit to David and the rest of our team that's on
19:29
boarded the the Sunday software and and allowed us to have some
19:33
more tools and processes in place for our GTM.
19:37
Do you remember signing up the first customer?
19:39
Oh, absolutely. Yeah.
19:41
How did that go? To be fair, I mean, they were
19:43
Aziz owned restaurants, so they were Aziz's restaurants.
19:46
So I think it was, it was pretty well received because, you know,
19:50
he had management in place that already embraced agility and
19:54
innovation. And so, so that that went pretty
19:56
easy. But the first non related
19:58
customer we signed up, you know, they were, they were just again,
20:03
very, you know, I don't think, I don't think I'm at liberty to
20:07
mention their name. They are a public company, but I
20:09
think they're, you know, they, they were just interested in
20:13
figuring out. What to do with all these extra
20:17
fryers they had purchased right before COVID And they're just
20:19
like, we bought a, you know, at that time, I know people weren't
20:23
ordering like French fries and chicken tenders or anything that
20:26
was fried for delivery because your delivery times are 45
20:29
minutes to an hour. And it's a horrible experience.
20:31
And so a lot of brands didn't even sell their fries for
20:33
delivery back then just because they knew it was bad.
20:36
Fast forward to today, people are just buying French fries
20:38
anyway. They're like, I know they're
20:39
going to be cold and soggy. I don't care.
20:41
I want fries, you know. And so I think the expectations
20:44
sadly were a little bit higher five years ago than they are
20:47
now. So this company had just bought
20:48
a bunch of fryers and, you know, to sell their chicken wings and
20:52
fries and they were not able to. And, and, you know, we just, we
20:56
come in there and we're like, hey, have you ever thought about
20:58
using your fryer to make something else, you know, or
21:01
another brand that you would be happy selling?
21:04
And they embraced it and it worked out pretty well.
21:06
So. So as you give that specific
21:09
example, it occurs to me that there has to be some kind of
21:13
intersection of the Venn diagrams in terms of what that
21:17
kitchen is set up to already produce and what, you know, sort
21:22
of what do you call the the brand that comes in and and uses
21:25
their kitchens? What?
21:26
We call them Cloud concepts. Cloud concepts.
21:29
So the the cloud concept, they have to be looking for that kind
21:33
of a fryer for for their food and the host kitchen has to have
21:37
that kind of fryer, right. Yeah, I think most equipment is
21:40
pretty universal in nature. If you went to I'd say 50% of
21:45
restaurants across America, they're going to have very
21:47
similar type of equipment, ovens, grills, ranges, fryers.
21:50
And yes, there's going to be some different on specs and
21:53
firepower and things like that, but all of those can be adjusted
21:57
to make pretty much any food. And so it's not that hardcore of
22:01
a spec unless you have a very specific ingredient driven
22:05
concept. For example, Chick-fil-A is
22:07
going to have a very specific prior and you need to use that
22:09
exact fryer spec. But does that mean that there's
22:13
no other fryer that can make fried chicken?
22:15
No, that's not the case. And so, so I think that is why
22:20
we exist is there is a lot of complexity and trying to sort
22:24
through like what that Venn diagram looks like is something
22:27
that hosts and brands are not going to be able to figure out
22:31
on their own. So where we sit here is
22:35
evaluating what are those common things that will allow a
22:39
successful match. So with a host kitchen, it's
22:42
identifying location, supply chain, equipment, Staffs,
22:47
competencies, the demographics of a market, what suppliers they
22:51
use, etc, to be able to figure out what is that capacity, what
22:55
could you optimally make and where do you have room to make
23:00
more? And then vice versa, when we
23:02
look at a cloud concept, it's taking one of our brand partners
23:05
and saying where are you gonna be most successful?
23:09
What sort of equipment is required, what sort of supply
23:12
chain is required? What sort of demographics are
23:15
you targeting? What's your price point?
23:17
And then figuring out what that matches in the long run.
23:21
We do have an algorithm for that that's got a patent pending on
23:25
it, but there's going to be a tremendous amount of data
23:28
through our existing matches and sales where people are going to
23:32
be able to log onto our website, fill out some information, and
23:34
it's automatically going to create matches for them where
23:36
they can sign up. In the short term, I think it
23:39
still requires quite a bit of quite a bit of human
23:41
intervention. There are, as I mentioned,
23:44
700,000 restaurants, but also 10s of thousands of brands in
23:48
America. So there, it still requires a
23:51
bit of a human touch to figure out what's going to be the
23:54
optimal match. But but yeah, it's, it's super,
23:56
super exciting when you look at the dozens of layers of data
24:00
points that we have on both the host and and concept side to
24:04
figure out what creates an ideal match.
24:06
So can you paint a picture for us in like who these cloud
24:11
concepts are? Are they, are they brands that
24:14
just sort of exist in the cloud, like they don't have any of
24:17
their own physical locations or are they brands that maybe
24:20
they've got a strong presence in the Northeast, but they're what
24:25
they want to test the waters in the Southeast and see if, you
24:27
know, their concept is sort of appealing to people.
24:31
Yeah. It's, it's a combination of all
24:34
of those. So we have over 40 brands on on
24:37
our platform. And of those of those brands, I
24:42
would say about five of those probably only exist as cloud
24:45
concepts. They are or or maybe they don't
24:49
have brick and mortar St. side. They may also have non
24:52
traditional locations like college campuses, stadiums that
24:57
we spoke about earlier and stuff.
24:58
So they may exist in that sense, but they're not going to be a
25:01
restaurant that you walk into off of Main Street.
25:05
That's, like I said, about five of them.
25:07
The rest of them are established, well known
25:10
restaurant brands. You have a combination of global
25:14
brands like a Nathan's Famous, you have regional brands like a
25:17
Romano's Macaroni Grill or a Milk Bar, and then you also have
25:21
national brands like a California Pizza Kitchen.
25:24
So these could be emerging brands or legacy brands, but
25:27
they're brands that at some point want an extension to their
25:30
brick and mortar network and want to enter new markets
25:33
without necessarily having to build stores in those markets.
25:37
And so that's they'll come to us as basically a growth lever and
25:41
say, how can you get me into this market?
25:43
Can we tap into your host kitchen network and and do it
25:46
that way. And that's what we enable them
25:48
to do. And so on the host kitchen side,
25:51
before they agree to something, are they wanting to see a
25:55
certain level of penetration or sales in other markets?
25:58
Because obviously there's some setup involved.
26:00
They got to learn how to make this thing and, you know, get
26:03
the packaging right and, and all of that.
26:05
So they're not going to want to do it for, I mean, if I came to
26:08
you with an idea and like, hey, I want to create, you know,
26:10
Anthony's pizza brand, you're probably going to say, Anthony,
26:13
you don't really know food. You don't know what you're
26:15
doing. Like this isn't for you, right?
26:18
Yeah, I think that's exactly right.
26:19
The host kitchens themselves again we work with primarily
26:23
with small to mid sized enterprise restaurants.
26:25
So these are restaurants that have anywhere from 25 to 2000
26:29
plus locations. They have their own brands, they
26:32
value other brands. And so they understand that
26:36
somebody with brand equity out there that has a story, that has
26:41
a vetted product, that has an established supply chain, that
26:45
has quality marketing collateral, is going to have
26:49
longer sustainable sales and also going to be something that
26:53
they can respectfully take to their employees or their
26:57
operators and say, we're going to produce this food.
27:00
So producing a brand name pizza might be a more attractive
27:04
proposition to them than making Anthony's pizza.
27:06
And so I know, and I bet your pizza is delicious, by the way.
27:10
I mean the name like gold, the spotty, how can it not be?
27:12
You know, so, but yeah, I, I do think that they appreciate the
27:17
fact that creating off a little bit of complexity for serving a
27:22
brand has its has its merits. And so, and, and to your earlier
27:27
point, there are definitely brands out there that reject
27:31
that. And they're like, look, I, I
27:33
have a well established casual dining brand.
27:34
I'm not going to serve another brand out of my kitchen.
27:37
And for that we have these handful of brands that maybe
27:40
only exist as virtual or non traditional brands and they
27:43
don't see that as much of A threat or a conflict of interest
27:47
for themselves. Can you give any metrics that
27:50
show sort of the success for the host kitchen themselves?
27:55
Sure. So our target average is about
27:58
$2000 a week in top line revenue for restaurants.
28:02
And as I mentioned, we're normally targeting restaurants
28:05
that are doing under $2,000,000 in top line revenue every year.
28:08
I would say the average restaurant in America just based
28:10
off the statistics from National Restaurant Association is still
28:13
doing about $1,000,000 a year in top line sales.
28:16
So so when we bring them, so you're.
28:18
Targeting most restaurants. Yeah, I would say most
28:21
restaurants, right. So, so that that $100,000 a year
28:26
in top line revenue that we bring them could be anywhere
28:28
from 5 to 10% incremental revenue.
28:32
And because the overheads already been paid for by their
28:35
main operation, this incremental revenue only has food costs
28:39
attached to it. So whatever additional
28:41
ingredients you need to buy to produce this cloud concept is
28:45
your only incremental cost. The staff that's already there,
28:48
the kitchen's paid for, the utility bills are paid for, your
28:50
rent's not going up if you make an extra 10 orders a day.
28:53
So that allows them to have a really high margin on this
28:57
business. So if you don't have Franklin
28:58
Junction, your core business is doing about a 5 to 7% profit
29:02
margin. That's the average in in America
29:04
for restaurants. If you add Franklin Junction,
29:07
this incremental 10% revenue actually has about a 27 to 30%
29:12
profit margin just on that. So it can materially improve
29:16
your four wall all, you know, profit just by adding a couple
29:21
concepts that you know, it's, it's maybe 10 orders a day.
29:25
So operationally, not a heavy lift, but the power of
29:28
incrementality really, really shows through when you look back
29:31
on your results. And then how do those orders get
29:33
delivered to the customer? Is it, you know, you're using
29:36
like a DoorDash or an Uber Eats? Yeah, you got it.
29:39
So the orders are generally originated on those
29:42
marketplaces. So we will list the cloud
29:44
concept on those marketplaces. The order is then given to the
29:48
host kitchen. The host kitchen produces the
29:50
order and then they hand it back out to the driver from that
29:53
marketplace to take to the end user.
29:56
You've obviously you've worked with some pretty big restaurant
29:59
chains and I'll leave it up to you if you want to mention any
30:01
of the names. Curious if there's anything in
30:04
particular that's surprised you about how they operate and how
30:09
they sort of look at this incremental revenue?
30:11
Yeah, I like, you know, using Denny's as an example, they're a
30:16
very large company. They've been around a long time.
30:19
It's a brand that was very important to me to get on board
30:23
for a couple different reasons. One is I probably ate at Denny's
30:26
like three days a week in college.
30:28
So it was, and I don't think I ate there since college.
30:31
So I mean, it was, it was like very important to me in my
30:33
younger years. And then I'm like, why isn't
30:35
Denny's, you know, relevant to me anymore?
30:36
So I really wanted to help, help them kind of be successful. 1/2
30:42
is there are 24 4 hours and they have full service kitchens.
30:45
I mean you could literally make anything in a Denny's kitchen
30:49
and they're located in 1600 locations across America and
30:52
they're 24 hours. I find a lot of great value as
30:56
somebody who's spent a lot of their life working till 345 AM.
31:00
I love the, you know, value of a restaurant that's just there for
31:05
for people to eat at. And so I really wanted them to
31:08
continue to be successful in that 24 hour business model.
31:13
And then last thing, just like conversations with their
31:16
leadership, I was really inspired by their ability to
31:20
kind of think globally and act locally.
31:22
And so, you know, they thought about the Denny's brand and how
31:26
it's evolving, but at the same time, they were willing to
31:29
partner with us to make their franchisees and operators
31:32
successful at an individual store level by helping them gain
31:36
profitability, allowing us to use our model to drive those
31:40
overnight sales, which would help keep them open 24 hours and
31:44
then bringing variety to these markets.
31:46
So people like me who have maybe, you know, graduated from
31:50
eating late night at Denny's could now still order online
31:54
variety of cuisine and it's still made by my local Denny's.
31:56
So I'm still having that sort of contact.
32:00
So I really thought the whole story kind of came together with
32:04
them. And there's somebody who live
32:07
and breed that culture of, again, like thinking, thinking
32:11
big, but acting tactically. Tactically.
32:14
So, yeah, I was a college student once, stayed up a little
32:17
bit later than I do now. I mean outside of that market,
32:20
is there much of A demand for sort of this late night kind of
32:24
food? Yeah, everywhere.
32:26
I mean to be honest, it's a it's a fastest growing day part that
32:30
we've witnessed in the last six or seven quarters in a row now.
32:33
So, so I think the enablements of technology as, as a career
32:41
choice for a lot more people. Basically when people say they
32:44
work in AI or tech, I'm like, well, what's that mean?
32:46
Everything is AI or tech. And so people are working, you
32:51
know, at their own hours, a lot of times their own location,
32:54
work from home or these hybrid schedules have allowed people to
32:57
have schedules that are a lot more flexible.
32:59
I think you have a lot more individual contributors now
33:02
because of that. And so just I think seeing the
33:05
overall trend of how people work and live has changed.
33:09
And shockingly, most people are not built to wake up at 7:00 AM
33:14
every day, commute for an hour to work, work 9:00 to 5:00, not
33:17
see your kids, not take your pets for a walk.
33:19
And then, you know, come home, buy groceries, make dinner,
33:23
rinse and repeat. And you know, so, so I think, I
33:27
think this has allowed people to maybe live what their best life
33:31
is. And, and what that means for a
33:33
lot of people could be eating late night or midday, maybe
33:37
having lunch at 3:00 PM or dinner at 9:00 PM or maybe
33:41
dinner at 4:00 PM and then go to the gym and go to bed.
33:43
And so I think just having that flexibility is probably going to
33:47
make us all better and happier people in the long run.
33:50
And so we do see a lot more people that prefer to work late
33:53
night and they order at midnight, 12 AM and that's, that
33:56
might be their lunch break. Interesting.
33:59
And Rishi, as you think back to kind of where you guys were and
34:03
how things operated when you first started versus where you
34:07
are now. I'd be curious to hear about
34:10
maybe one of the more significant changes that you
34:12
made in that in between time that has really helped in terms
34:16
of overall customer experience efficiency or whatever it might
34:20
be. Sure.
34:21
Well, I think we had a lot of aspirations from the get go to
34:24
be lean and be a technology enabled company.
34:27
And and what I mean by that is our customers, restaurants work
34:33
on very lean margins. They don't have the ability to
34:36
pay high prices to cover large overheads for their tech
34:40
partners. So if we're going to come on
34:42
board and offer them something, it has to be at a price point
34:45
that makes sense for them, at a margin that makes sense for
34:48
them. And we have to make money doing
34:50
it. Otherwise we're not going to
34:51
sustain. I don't think we ever set out to
34:53
build a model for venture capitalists and take a bunch of
34:56
money and redistribute it to restaurants through cheaper free
34:59
products. And so, so we wanted to build a
35:02
business that we thought would be lean and tech enabled that
35:06
would allow us to offer those attractive price points and
35:09
remain profitable. And I'd like to take credit for
35:12
a lot of the things that we're doing now, but it's really more
35:16
of just this global outpouring of growth around AI and
35:19
technology that's allowed us to Fast forward a lot of the road
35:23
map we had. So all the things that we see
35:25
out here, this is not new. AI has been in development for
35:28
decades, probably since, you know, I was in high school,
35:31
people are already working on AI solutions and stuff like that.
35:34
So it's not new. I think we had a lot of AI in
35:37
tech in our road map, but the evolution of platforms and being
35:41
able to use APIs to build you know bots and use AI in
35:48
different ways to help some of the repeatable processes we
35:51
have, a lot of the data analytics we have.
35:54
Those things have allowed us to Fast forward some of our growth
35:58
and also get to better unit economics for for everybody, for
36:01
ourselves, for our customers, etcetera.
36:03
So, so I think that's something that I was probably not
36:07
forecasting to happen so fast. I thought we would have to
36:10
invest more money into building this stuff.
36:12
But I've talked to founders recently where, I mean, they're
36:15
building 1,000,000 AR companies and they have like one or two
36:18
employees, right? They've got like 2550 hundred
36:21
different bots working for them and they're doing all this
36:24
stuff. And we're certainly not on that
36:26
level yet. We believe in the hospitality
36:29
business, you kind of always need a little bit of that human
36:32
element and that includes a lot of the stuff that we do.
36:36
But we're certainly implementing A tremendous amount of
36:40
technology resources that were unaffordable or unavailable four
36:43
or five years ago, and that's been really awesome to see.
36:46
Can you give a specific example of the ways that you're
36:49
leveraging AI tech or you know, the agents and the bots?
36:53
Yeah. When you think about what we
36:54
really do, it's, it's marketing. So we're putting a new brand in
36:58
a new location and then we're going and acquiring customers
37:01
for it. So the host kitchen side is the
37:03
infrastructure solution is there, but the host kitchen is
37:05
ultimately A fulfillment partner for Franklin Junction.
37:08
We've signed them up to make orders on our behalf for this
37:11
brand that we've distributed into a new market.
37:13
But how we actually grow sales is that we'll go put a cloud
37:16
concept on these third party marketplaces and then we
37:20
understand how to target that customer with pricing, with ads,
37:24
with promos, how to communicate to that customer on their
37:28
experience and then you know, better refine that.
37:31
So this brand continues to grow in that market.
37:34
And so a lot of the data that we've collected around that
37:38
sales transaction and that relationship with the customer,
37:42
there's a lot of unique things we can build around that.
37:46
We can build a lot of rules around when to target which
37:49
customers, what they like, how much should we spend on that,
37:53
what are other competitors of the similar product doing in
37:56
that market. So we kind of know the push and
37:58
pull on the marketing budget. What are, you know, customers
38:02
enjoying or not enjoying, what's seasonal, what's not seasonal?
38:06
That lets you get into dynamic menuing and maybe automated
38:10
pricing adjustments. And so a lot of that marketing
38:13
used to be done even when we started on a very manual level.
38:17
So we had built a lot of machine learning into our BI tools, but
38:22
at that time we were still sitting there and running
38:25
regressions and trying to figure this out ourselves and saying,
38:28
OK, here's how we performed last week, last month, last quarter,
38:32
let's refine this, you know, marketing strategy.
38:34
And that marketing calendar would be 3 months, four months,
38:37
five months, six months out. And I think inherently selling
38:42
online, selling digitally only with these brands allows us to
38:46
be very agile and adjust our strategies not even week to
38:50
week, but on the fly. Like during a shift, you can
38:53
adjust what's available on a menu, what's not available.
38:56
Prices can be adjusted day-to-day.
38:58
And I think we can take advantage of that through a lot
39:01
of the automations that we built.
39:03
So taking all of these marketing functions that were at one point
39:06
very reactive and required a lot more brain power from the human
39:10
side have now become, using our platform, very automated.
39:14
And basically, you know, we set a bunch of rules and we set
39:18
budgets and now the computer basically digests the data
39:22
points and it goes and executes, you know, different campaigns
39:26
and strategies to drive sales optimally.
39:30
So that's the part that's surprising to me.
39:32
I guess I didn't realize that. I thought you guys were
39:35
primarily sort of the matchmaking service here.
39:37
Yeah, but you're also taking over the marketing of the cloud
39:41
concept? Yeah.
39:42
We actually own the license to the cloud concepts and we're not
39:45
sub licensing that to the host kitchen.
39:47
It's still our license. So technically, let's say we
39:50
have 200 Nathan's Famous out there.
39:52
Those are Franklin Junction, Nathan's Famous locations that
39:56
exist does. Are you like a franchise in that
39:59
respect? Or that's a licensee, which is,
40:02
you know, similar concept but maybe a little less restrictive.
40:05
You know, franchise rules have a lot of restrictions in place and
40:08
they're meant for brick and mortar or physical
40:11
representations of our brand. License structures is what you
40:15
use in more non traditional settings like a sports venue,
40:18
college campus or in our setting, online marketplaces
40:22
where you need a little more flexibility with the brand.
40:24
So you're not representing that you're going to be an exact 1 to
40:28
1 representation of that brand, but more that you are some sort
40:31
of derivative business. So it's certainly got the same
40:34
requirements around certain things when it comes to recipes
40:38
or production or execution of the food, but gives you a little
40:41
more flexibility with menus, pricing and things like that.
40:45
Marketing for sure. And as you're saying that I'm,
40:48
I'm sort of like hitting myself like duh, it makes a lot of
40:51
sense because now your goals are really aligned right?
40:54
Like you guys want to help move as much product for both the
40:57
host kitchen as well as the cloud concept as possible
41:00
because then all three sort of partners in all of this win.
41:03
That's right, That's right. Grow the pie.
41:05
Yeah, fascinating. Have you had any of your cloud
41:10
concepts sort of graduate into say, hey, we weren't in, you
41:15
know, Atlanta, GA before we, you know, tested that market using
41:19
Franklin Junction. It worked really well.
41:21
Now we're going to open up a physical location there.
41:24
Yeah, we, we have seen that. We've seen even brands enter
41:28
from outside the country. You know we've licensed Canadian
41:32
brands, Japanese brands, European brands before and
41:35
brought them over here and they've used that as a test to
41:38
see how it works in this market. It's a 0 cost way to penetrate a
41:42
new country that otherwise might take many, many years and
41:46
hundreds of thousands or millions in capital to do.
41:49
And so I think we've been a platform for not just within the
41:52
States, but allowing for cross-border penetration, which
41:56
has been really, really cool. And then we've seen our host
41:59
kitchens actually even have success with a brand and then go
42:03
on to sign a franchise agreement for that brand and say, wow,
42:05
this is doing so well on delivery through my kitchen.
42:08
Why didn't I just pop one open down the street?
42:11
And, and that's been a cool story too.
42:13
So I definitely have seen kind of the, the, the, the network
42:18
effects of being able to do that.
42:20
Yep. Any plans for you to go and
42:23
offer this to host kitchens outside of the US?
42:28
I do think we'll revisit that. So in our early days, we
42:31
definitely did that. We've done England, Europe,
42:34
we've been in several countries in Europe, Asia, Japan, we've
42:38
Korea, we've tried a lot of other countries and we've done
42:42
some exploratory work in Middle East and India and stuff.
42:45
But we set our focus really on America coming out of Covad.
42:49
We just saw that the growth is really great here.
42:54
The consumer purchasing power is great here.
42:56
It's our backyard. It's everything we know really
42:59
well. We have deep contacts with
43:01
supply chain partners, third party marketplaces and it's a
43:05
market that ultimately we understand through and through.
43:07
So I definitely think that we will revisit international
43:12
growth opportunities, but at the moment we're going to focus on
43:14
the US and Canada and continue to see a lot of success there.
43:18
And then you know, once we feel like that we have a a
43:21
significant customer base here, then we may go go back and
43:26
revisit, revisit some other markets.
43:29
As I think about cloud concepts and host kitchens, you sort of
43:33
need to have a balance there, but where is it that you are
43:37
putting more of your energies to find more?
43:39
Of yeah, certainly host kitchens, I think ultimately
43:43
it's more of a a pull versus a push.
43:46
So with the concepts you're kind of pushing and that's the supply
43:50
side of your, excuse me, the demand side of our equation.
43:55
And so unlimited number of brands ready to sign up with
43:58
Franklin Junction and, and expand.
44:00
I mean, if I need a pizza concept, I think I can get 10 by
44:03
the end of the day today. You know, they'd, they'd all be
44:05
like, here's my license, you know, here's the ingredients,
44:09
knock yourself out and, and go get us live in these markets.
44:12
The host side is more complicated because we go
44:15
through a very heavy qualification process here.
44:19
So it's not that there's not just as many hosts that want to
44:22
sign up and say, hey, I want to make more food.
44:25
It's that they're making food on behalf of us and under
44:28
technically our license and so of these brands.
44:31
And so we want to make sure that they're highly qualified when it
44:35
comes to production standards, sanitation and health standards,
44:39
training standards and that they're really able to sustain
44:43
and execute operations to our standards.
44:46
And and as I mentioned earlier, I have a culinary background.
44:49
Everybody at our company has spent anywhere from 10 to 30
44:53
plus years working in the industry and we have people that
44:56
have worked at places like Ritz Carlton and stuff before.
44:58
So there's very high standards on our side on what we consider
45:02
high quality execution. And I think we're a lot more
45:05
measured on who's going to produce that food on our behalf.
45:09
So while there's a there's a big market out there, we believe
45:13
that we need to be very judicious with who gets to
45:16
produce that food on our. Behalf, so a lot of energy being
45:19
focused, excuse me, on scaling and activating those kitchens,
45:23
the right kinds of host kitchens.
45:24
That's right. I'm curious, Rishi, is there
45:27
sort of like a bigger vision at play here?
45:29
Like do you see this model potentially transforming not
45:33
just how restaurants operate, but how we think about food
45:36
distribution and hospitality kind of in a bigger?
45:39
Picture Yeah, I my idea is to decouple this thought process
45:45
that a restaurant is 1 unit. The restaurant's actually
45:48
composed of a few different modules.
45:50
You have your dining room, which can be thematic and service
45:54
based, and then you have your kitchen, which is actually a
45:56
production facility. It's a factory to produce food.
45:59
So the idea to transform the thinking that those two have to
46:03
be tied together is, is something we want to get people
46:08
away from the kitchen. The, the, the dining room is
46:11
designed to service the on premises people.
46:13
The kitchen's job is to maximize production and that that
46:17
includes the dining room, but also includes your side door
46:20
where you can service customers that may be dining off premises.
46:25
And So what that does for, you know, from a, you know, an
46:30
altruistic point of view is that it restores the restaurants
46:35
importance within a community. I think the restaurants are
46:38
always a gathering spot somewhere where people went to
46:40
explore new ideas, new concepts and experience hospitality.
46:46
And as customers kind of get away from on premises dining and
46:51
go more towards dining anywhere, homework, the park, their car,
46:57
anywhere but inside a restaurant.
46:59
I think we want to restore that relevance to where restaurants
47:02
don't feel like they have to be so reactive to that, but can
47:05
take part in promoting that and saying, look, we are still that
47:09
that central piece of of providing that experience to you
47:14
and and doing that. So I think that's one thing.
47:18
And then the other part to me is just thinking a little more
47:21
broadly about how many eating occasions we can serve these
47:28
customers. It goes beyond restaurants.
47:30
We have tried and tested successfully with hotels,
47:35
convenience stores, grocery stores, family entertainment
47:38
centers, soon college campuses. And so we've proven that any
47:42
kitchen can be converted into this this virtual food hall that
47:47
that can serve customers. So the idea is just to create a
47:50
little more responsibility around the infrastructure that
47:54
we built in this country where we don't need to pop up more
47:58
kitchens that are continuing to, you know, suck on energy and not
48:03
get a return. We have a tremendous
48:05
oversaturation right now, which is why you see some industry
48:08
leading brands not comping positively year over year,
48:12
quarter over quarter. You're like, how can brand XYZ
48:14
not, you know be making more money than last year?
48:17
It's because there's too much saturation in the industry and
48:20
we continue to see new concepts, building new infrastructure.
48:23
And ultimately we've, you know, we've created this pathway where
48:29
existing infrastructure can still provide more variety.
48:32
So you're still solving that need of distributing new brands
48:37
and getting customers new variety, but not going out and
48:42
irresponsibly building new infrastructure, which is I think
48:45
is a drain. And, and it's and it's an
48:48
eyesore. I mean, if you drive around
48:50
anywhere from New York City to rural America, there's closed
48:53
restaurants everywhere. And, and it's kind of
48:55
disappointing. Yet you still see news of chains
48:58
opening, you know, hundreds of locations every year and you're
49:00
like, what's going on here? So we're trying to get all of
49:03
that right sized a little bit. Rishi, setting aside humility,
49:08
what is your personal superpower?
49:12
I, I would say communication has been really key to my success.
49:20
It's, you know, it just shocks me how many emails and phone
49:24
calls go unanswered by people that I try to reach out to or,
49:29
you know, I look at, you know, people's inboxes and I'm like,
49:31
how do you have like 75 emails or, you know, 1000 emails you
49:35
haven't either deleted or responded to.
49:37
And I think a lot of my success has just been getting back to
49:40
people and being respectful of their time.
49:42
And, you know, 90% of the time it's a waste of my time, but
49:45
that 10% of the time it turns into something, a positive
49:48
business opportunity, a positive conversation, everything.
49:51
So I think like just basic, you know, etiquette and
49:55
responsibility to, to people has been really beneficial to me.
49:59
So like having strong communication skills, you know,
50:03
good manners and, and just being authentic to people, like just
50:07
very simple things that make you a good person for society.
50:10
I've been really good for my business as well.
50:12
So I, I don't separate the two. I've you can tell by the
50:16
industries I worked in and the work I did.
50:18
These are jobs that are not 40 hours a week.
50:21
I mean, I live at my job. They were 100 hour week type of
50:23
jobs. Every office I had in the sports
50:25
industry had a futon and an office.
50:27
So there's many, many nights I've slept at work.
50:29
And so I, I would, I would venture to say a lot of people
50:33
in the hospitality industry can't draw a line between
50:35
personal and professional. And so I never tried to.
50:38
I just said, you know, who I am as a person should carry over to
50:43
my work. And and that's helped me be, I
50:45
think. Really successful.
50:47
Maybe let's take a look at the other side of that coin, Rishi,
50:50
and talk about a serious challenge that you've had to
50:52
overcome in your life, whether it's personal or professional.
50:55
How did you get through it and what did you learn?
50:57
Sure. Well, I'll share a bit of both.
51:00
On the personal side, I had a back injury about 17 years ago
51:03
and I never could figure out the root cause, whether it was
51:06
caused by sports or a car accident I had previously or
51:10
work, whatever it was. But nonetheless, I ended up with
51:13
a herniated disc and I walked around like a hunchback for six
51:16
months. I like refused to take time off
51:18
of work. It's 2008, you know, there's
51:21
like a crisis going on. Half my friends are unemployed
51:25
and I'm like, well, I'm sure surely not taking time off of a
51:27
good paying job. And, and I, and I suffered with
51:31
it. And basically this isn't, you
51:33
know, I ended up eventually just caving in one day and, and
51:36
calling up the doctor and being like, all right, I'm ready for
51:38
surgery and, and doing that. And now I, you know, basically
51:41
every three to five years I kind of get this flare up and I got
51:44
to work it out through physical therapy or whatever, but I
51:46
consider that a mistake in my life.
51:49
Like I should have actually put health first and said, you know
51:52
what, if I'm off work for a couple months, I'll scrape by.
51:55
I've done a good job saving money and stuff, but it really
51:58
wasn't about the money. It was just this, this incorrect
52:02
prioritization of my work over my, my health.
52:05
And, and so I've been, I've been very, you know, very keen to
52:12
like just being in touch with everything, my physical,
52:14
emotional health and just making sure that that never gets de
52:18
prioritized for anything again. And so, so, yeah, I, you know,
52:22
it's not like I don't go in waves of going on diets and then
52:26
splurging. I mean, you know, it's, it's
52:28
fine. I do all of that.
52:29
But I certainly try to be a little bit more careful with if
52:34
something's wrong, taking care of myself so I can then perform
52:37
optimally at work or at home or whatever it may be.
52:40
So that's, that's kind of the personal side.
52:41
The professional side is, you know, we started this company
52:46
when this whole VC world is out of whack and it felt like all of
52:49
our peers were building these crazy venture backed companies.
52:53
And we're like, well, how come we can't get a fat $30 million
52:55
check for doing nothing, for creating a PowerPoint deck?
52:58
You know, and, and, and it didn't make sense to us, maybe
53:02
because we weren't young startup kids.
53:03
We were people in the restaurant industry with decades of
53:06
experience. We had identified a real
53:08
problem, a real solution, and we knew how to build and execute
53:11
it. So you know, it, there's a,
53:14
there's, there's, there's a little devil on our shoulder
53:17
sitting there and being like, well, build it, you know, just
53:19
say what they, what, what they want, they want to hear and go
53:22
get that big venture check. And then there's an Angel
53:24
sitting here and saying, no, do it the right way and, and it'll
53:28
pay off. And I think we took the road
53:31
less travelled. We had a company that we easily
53:34
could have made attractive for a venture scalable business, but
53:37
we knew it would never survive in our industry and.
53:42
This was a separate business idea.
53:44
This is Franklin Junction. So specifically for the problem
53:47
that we've created here, we knew this is something that required
53:50
infrastructure building and some solid systems and processes.
53:54
And it took something that we had to create a vision and sell
53:59
it over a period of time. We had to go execute it and then
54:02
create ambassadorship. And we knew this is a 10/20/30
54:05
year transformation of the industry.
54:08
So it's not a get rich quick scheme.
54:10
We did not see a lot of value in basically building a business
54:14
for investors. So we kind of stayed a lot more
54:17
lean. We've gotten quarters where our
54:20
team has sacrificed salaries just so we can extend our road
54:24
map or invest in technology, and I'm very thankful for that.
54:28
So when you see all the people at Franklin Junction that are
54:32
working on this, they're truly building something that they're
54:35
committed to, something they have a lot of conviction in,
54:38
something that we see a lot of success with year over year.
54:42
We see the growth happening. We see our restaurants doing
54:45
well. And I think that gives us a lot
54:48
of a lot of lot of energy and motivation to keep going.
54:51
And so we're very close here to where we basically bootstrap
54:55
this thing to profitability, never raise institutional
54:58
capital. And it's a, it's actually kind
55:00
of rewarding. So it's been a long five years.
55:02
We know the next year or two, we're still going to be critical
55:05
for us, but we feel very excited about where we're headed and the
55:08
fact that we've done it kind of on our own accord.
55:12
And meanwhile, we've seen a lot of lot of our peers that did
55:17
kind of follow more of the the money Rd. not make it as a
55:21
company. And it's kind of sad because you
55:23
saw a lot of good solutions kind of go away with that, good
55:25
companies go away with that, and a lot of money, just investor
55:29
money get wasted. So it's it was kind of sad, but
55:33
it was very validating to us that we're doing things the
55:35
right way. You know, and tip of the hat to
55:38
you, because that's not easy to do when you see sort of folks
55:41
around you going down this path. And in the moment, it feels and
55:44
appears to be like the right path, and it's very successful
55:48
and it's very fruitful for them. But, you know, you guys had a
55:52
different vision. Ten 20-30 years that doesn't
55:54
really align with institutional capital, right?
55:57
You're looking for a faster sort of turnover.
56:00
And so, yeah, leaner years kind of leading up to now maybe, you
56:04
know, next year too. But then it sounds like you guys
56:07
are really well positioned to kind of hit an inflection point,
56:11
which is really going to take off.
56:12
And you've maintained that equity internally.
56:15
Yeah. Well, we built something that is
56:19
that is really powerful and I can't do it myself.
56:21
So all the credit goes to my fellow team here that that has
56:25
all thrown in. But also our contractors, our
56:27
vendors, a lot of people have actually sacrificed their normal
56:31
rates or even wrote off invoices to because they believe in what
56:36
we're doing and they support us. And so we built this little
56:39
ecosystem here that really supports what we're doing.
56:42
And it's been it's, it's truly been a gift to be able to, you
56:47
know, work with all of these people that are all, you know,
56:49
built building what we are. And I can tell you there's
56:53
there's no shortage of testimonials out there that'll
56:55
tell you that this has helped a lot of restaurants from closing
56:59
their doors. And that means keeping people
57:01
employed, keeping keeping brands alive in the market, putting a
57:06
few extra bucks in and employees pockets.
57:08
I think all of those things make such a big difference.
57:11
So it's, it's very validating. I mean, we, you can walk into
57:16
one of our customers restaurants and they're happy and they're
57:18
just like, man, we got, we got an an extra few 100 bucks this
57:22
week thanks to the solution. And so it's, it's cool.
57:25
I mean, I think ultimately that's what we're trying to
57:28
prove is that there is there is a better way to to run your
57:33
restaurant so. Rishi, has there been a
57:37
particular book or a podcast, a different like course, some kind
57:44
of resource that's been really helpful to you that you might
57:46
recommend to our listeners? Well, I am a voracious reader,
57:52
although I'm pretty behind since I started building a company.
57:55
It should probably be the other way.
57:56
I should probably read more. But I've probably got about 45
58:00
books that I haven't haven't read yet.
58:02
And I keep buying books like every week or two.
58:04
They'll be like an Amazon box. And my wife's like, what are you
58:06
doing? And I'm like, I need like an
58:08
extra bookcase for all the books I haven't read yet, but but I'm
58:12
going to get to them. I think one of the most
58:14
meaningful ones, It's not somebody who philosophically or
58:17
politically I always agree with, but Warren Buffett's shareholder
58:20
letters are priceless. I mean, like everybody in
58:24
business should be reading those every year.
58:27
I mean, it's just somebody that is super intelligent, has made a
58:31
lot of good decisions, but a lot of questionable decisions, but
58:35
somebody who's not afraid to course correct and speaks in
58:37
plain English. And you just don't get people
58:40
that are on that level that can, you know, bring themselves back
58:45
down to earth and just talk to you like normal, like a normal
58:48
person. And it's somebody who feels like
58:51
they owe it to their shareholders to be very
58:53
transparent and the way they manage the decisions they make
58:57
and just reflecting back on both short term and and long term
59:01
effects of those decisions. And so, so I like to read those.
59:05
I'll reference back letters that were written before I was born.
59:08
And every year I like to, you know, skim through or dive in
59:12
sometimes on a topic that may be interesting to me.
59:16
And I actually pulled a quote out from one last year that I
59:19
read. So I think this is a 20241 if my
59:21
file name is correct. But in there there's a little
59:25
blip where he talks about even on page one, mistakes that they
59:31
made at Berkshire. And so he mentions in here, I'm
59:35
just going to read this little passage.
59:37
So he said during the 2019 to 2023 period, I have used the
59:42
words mistake or error 16 times in my letters to you.
59:46
Many other huge companies have never used either word over that
59:50
span. Amazon, as I should acknowledge,
59:52
made some brutally candid observations in its 2021 letter.
59:55
Elsewhere, it has generally been happy talk and pictures,
59:59
pictures. I've also been a director of
1:00:01
large public companies at which mistake or wrong or forbidden
1:00:04
words at board meetings or analyst calls that taboo,
1:00:07
implying managerial perfection always made me nervous.
1:00:12
And so I just thought, you know, again, this is a little blip out
1:00:15
of what it's. 15 page letter, but it's, it's so important for
1:00:20
both your personal and professional development to read
1:00:22
something like that. And from somebody who is so
1:00:25
accomplished and of that status, it's, it's, it's nice to see
1:00:28
that humility and just kind of realign yourself with how you're
1:00:32
running your life and your business.
1:00:33
So that's just one thing, but I, I guarantee you every letter you
1:00:37
read will have 5 little Nuggets like that.
1:00:40
And and it's a it's just a constant source for me that I, I
1:00:43
reflect back on. Yeah, I really appreciate that
1:00:46
honesty and transparency. Rishi, I've just got one more
1:00:50
question for you, But before I ask it, I want to do 2 things.
1:00:52
First, I'm going to invite all of our listeners to go ahead and
1:00:55
hit the follow button on their favorite podcast app.
1:00:58
We've had a really great and interesting conversation here
1:01:00
today with Rishi Nigam from Franklin Junction.
1:01:03
And I want you to continue to get more great content like
1:01:06
this. Rishi, I also want to let people
1:01:08
know the best way to either get in touch with you or the brand.
1:01:11
What would that be? Sure.
1:01:14
Well, the best way to follow news on Franklin Junction is to
1:01:17
follow us on LinkedIn and you can just follow our channel.
1:01:21
You can connect with me directly, but we post updates on
1:01:24
there every week, new cloud concept partners, new host
1:01:28
kitchen partners, success stories and just general
1:01:30
knowledge about the food tech business and how restaurant
1:01:34
e-commerce is evolving. So a lot of great stuff on
1:01:36
there. And then if you want to reach
1:01:38
out to us about our services, you can go to
1:01:40
franklinjunction.com and there's a simple couple question form
1:01:44
you can fill out there and we get back to you immediately.
1:01:47
Great. And last question for you today,
1:01:49
Arishi, as you think about 12 months out into the future,
1:01:54
we've had a nice conversation here today.
1:01:56
You and I reconnected a year from now and you're celebrating
1:01:59
something, one thing. What is that thing that you're
1:02:02
super excited about? Oh, that's fantastic.
1:02:05
I mean, I'd love to double the size of our employee base.
1:02:07
I mean, I think that's that's a metric for growth for us is that
1:02:11
we have some internal metrics around revenue per full time
1:02:15
employee, customers per full time employee.
1:02:18
And so we have some pretty high bars there on how we can
1:02:20
continue to be an efficient and productive but very tactical
1:02:25
company. And so I'd love to have enough
1:02:27
business where we can double the number of people that we have
1:02:30
working here, but have maintained or improved on those
1:02:33
metrics and continue to be a very robust solutions provider
1:02:38
for our customers. Well, that's some pretty
1:02:40
aggressive growth that you're looking forward to in the next
1:02:42
12 months. That's awesome.
1:02:44
Rishi Nigam from Franklin Junction, I'm going to be the
1:02:47
first to thank you for sharing both your time and your story
1:02:49
with us today. I really appreciate it.
1:02:51
Thank you, Anthony. It's been a pleasure talking to
1:02:53
you. Folks, that's a wrap on another
1:02:55
episode of the Inspired Stories podcast.
1:02:57
Thanks for learning with us today.