Latest / Choppin’ It Up by Bloomberg Intelligence / Honeygrow Posts Net Income Despite Rapid Growth

Transcript

Honeygrow Posts Net Income Despite Rapid Growth · Choppin’ It Up by Bloomberg Intelligence

• 0:20
  Speaker 1: Welcome to Chopping It Up. I'm your host, Mike Hallon,
• 0:22
  Speaker 1: the senior restaurant and food service analyst at Bloomberg Intelligence.
• 0:25
  Speaker 1: Today we're joined by Justin Rosenberg, founder and CEO of
• 0:28
  Speaker 1: Honey Grow.
• 0:29
  Speaker 2: It's up.
• 0:30
  Speaker 1: That's up, man, Thanks for doing this, Thanks for having me.
• 0:33
  Speaker 1: Let's just hop right in. Man, you weren't always a
• 0:35
  Speaker 1: restaurant tour I was not. Tell us a little bit
• 0:37
  Speaker 1: about that.
• 0:38
  Speaker 2: Yeah, I was, you know, from here. Always great to
• 0:42
  Speaker 2: be back in my hometown, New York, even though my
• 0:43
  Speaker 2: Phillies had on go. Phil's been in Philly for twenty years,
• 0:47
  Speaker 2: which is a wild wild thought for me. But born
• 0:50
  Speaker 2: and raised Long Islands, and I went to Penn State undergrad.
• 0:54
  Speaker 2: Met a girl got me to Philly. Now she's my
• 0:56
  Speaker 2: wife and mom of our three kids. And it was
• 0:59
  Speaker 2: in finance in the beginning, and you know it just
• 1:02
  Speaker 2: didn't love working in my cubicle. But it was great
• 1:06
  Speaker 2: in many different ways, and did it for five years.
• 1:08
  Speaker 2: But my passion's always been food and the idea of
• 1:10
  Speaker 2: scaling something and building a business. Had some health challenges
• 1:14
  Speaker 2: in my mid twenties. I waited a lot more in
• 1:16
  Speaker 2: a bad way and went to the doctor, and you know,
• 1:20
  Speaker 2: they're like, hey, you got really high blood sugar and
• 1:21
  Speaker 2: high cholesterol and scared me. I just had a first kid. Verbatim,
• 1:26
  Speaker 2: He's like, do you want to see her walk down
• 1:27
  Speaker 2: the aisle one day? And scared me enough to say
• 1:29
  Speaker 2: yes and get my life in order. Went vegan for
• 1:33
  Speaker 2: about two years, but I was making salads for lunch,
• 1:35
  Speaker 2: stir fry for dinner at the company I worked for,
• 1:38
  Speaker 2: company called PRET It's a real estate investment trust. I
• 1:41
  Speaker 2: would get the access for all the sales for all
• 1:43
  Speaker 2: these different tenets. So like Chick fil A was doing
• 1:45
  Speaker 2: insane numbers, right, I think there's like eight five today.
• 1:49
  Speaker 2: But I would just people in a way, like why
• 1:51
  Speaker 2: are these concepts doing so well? Why is the Apple
• 1:53
  Speaker 2: store doing four thousand a square foot? What can I
• 1:56
  Speaker 2: do to really create a great brand? You know, what
• 1:57
  Speaker 2: are they doing that other brands are not doing? So
• 2:01
  Speaker 2: I really wanted to create something that's not been done.
• 2:03
  Speaker 2: I think there's so many bowl concepts out there, and
• 2:05
  Speaker 2: this is like, you know, I'm part of that twenty
• 2:06
  Speaker 2: tens boom. I didn't want to do you know, burgers,
• 2:10
  Speaker 2: Mexican salad, it's all been done and you know, honey
• 2:14
  Speaker 2: grop eighty five percent stir fries. So we're not a
• 2:16
  Speaker 2: solid concept per se. And that was kind of it.
• 2:19
  Speaker 2: Just got after it and rode a business plan and
• 2:21
  Speaker 2: a lot in between. But that was the beginning, your
• 2:24
  Speaker 2: brave soul.
• 2:25
  Speaker 1: Did you know how difficult the restaurant business is going
• 2:28
  Speaker 1: to be?
• 2:29
  Speaker 2: No, I had no idea. I mean I worked for
• 2:30
  Speaker 2: a buddy of mine on the weekends in DC in
• 2:33
  Speaker 2: a kitchen and busted. My ass was just quiet, nobody
• 2:36
  Speaker 2: knew who I was and just cooked and learned and
• 2:38
  Speaker 2: got beat up in the kitchen. But I mean, any
• 2:42
  Speaker 2: scaling a business career, you gotta be nuts man like,
• 2:44
  Speaker 2: like you have to do. Something's wrong with us entrepreneurs,
• 2:46
  Speaker 2: so like do what we do and withstand what we do.
• 2:48
  Speaker 2: But like it's also just in our DNA and it's
• 2:51
  Speaker 2: it's been fun.
• 2:52
  Speaker 1: Yeah, and it's cool. It's interesting that you know health
• 2:55
  Speaker 1: struggles and being overweight. Yeah, you know, because I just
• 2:57
  Speaker 1: know you as being in shape.
• 2:58
  Speaker 2: You want to see a picture. Yeah, I wish we
• 3:00
  Speaker 2: had the cameras in here every phoner.
• 3:01
  Speaker 1: Yeah for the listeners. Justin beat me up in jiujitsu
• 3:04
  Speaker 1: class weeks ago.
• 3:05
  Speaker 2: And we should we should talk about that, dude. This
• 3:08
  Speaker 2: was me on jiu jitsu on awesome.
• 3:10
  Speaker 1: Yeah, he chained with a bunch of savages in Philly,
• 3:12
  Speaker 1: their monsters.
• 3:13
  Speaker 2: All right, So this is a picture of me. Got
• 3:15
  Speaker 2: married in the two thousands, So this is I think
• 3:18
  Speaker 2: it was my twenty two or twenty three. Here that's
• 3:20
  Speaker 2: my now wife.
• 3:22
  Speaker 1: Dude, that doesn't even look like you.
• 3:23
  Speaker 2: I don't even know what she said. Yes, I genuinely
• 3:27
  Speaker 2: don't know. Why what are you thinking? This guy's gross?
• 3:31
  Speaker 2: But uh, I got some funny pictures. I can share
• 3:33
  Speaker 2: it with you too. I'll shaw after this.
• 3:35
  Speaker 1: I have a funny license where I was like, it
• 3:38
  Speaker 1: was like, you know, I was going through a tough
• 3:40
  Speaker 1: time in my marriage and I was really overweight, and
• 3:43
  Speaker 1: he was around Christmas when I got you know, I
• 3:45
  Speaker 1: had put on some weight after Thanksgiving and Christmas. I
• 3:47
  Speaker 1: was probably like two forty. Right now I'm like two fifteen,
• 3:50
  Speaker 1: and uh, you know, I look like a totally different person.
• 3:52
  Speaker 1: But it was so funny, Like get handing my ID
• 3:55
  Speaker 1: to people, they would look at the IDA, look at me,
• 3:57
  Speaker 1: look at the ID, look at me, and I'd be
• 3:58
  Speaker 1: like it was just rough. Cri SMIs you know, family
• 4:01
  Speaker 1: to be you know, stuff like that.
• 4:03
  Speaker 2: Well, you know it's the holidays. Dude, you you're but
• 4:06
  Speaker 2: you're two fifteen. Let's talk about jiu jitsu real quick,
• 4:09
  Speaker 2: because you're very well distributed to fifteen. You know, for
• 4:12
  Speaker 2: all Mike's listeners out there. He actually, to his credit,
• 4:16
  Speaker 2: drove in from Jersey to Philadelphia, central Jersey, not like
• 4:19
  Speaker 2: you know, over the bridge, but central Jersey and then
• 4:22
  Speaker 2: like doesn't know anyone in this this school that I
• 4:24
  Speaker 2: go to Balance Studio. Shout out to my crew there.
• 4:27
  Speaker 2: You know who you are and you and after it, man,
• 4:30
  Speaker 2: like you like you really you trained stuff, but like
• 4:33
  Speaker 2: not the ju jitsu side. Yeah, and you're formidable like
• 4:37
  Speaker 2: you were like you had like like strong legs, like
• 4:40
  Speaker 2: I couldn't get certain like moves on you, and you
• 4:42
  Speaker 2: know you held your own. Dude. I was saying before,
• 4:43
  Speaker 2: like I just kept checking on you. I'm like down
• 4:46
  Speaker 2: the hall like the matt like getting my butt kicked
• 4:48
  Speaker 2: and like keep an eye on you. And you were
• 4:50
  Speaker 2: like you're getting after it. So you should be proud.
• 4:52
  Speaker 2: That's cool.
• 4:53
  Speaker 1: Thanks, man, It's fun. What I love about it. And
• 4:55
  Speaker 1: MMA two is like it's such a humbling experience. Man,
• 4:58
  Speaker 1: it is such a humbling exp experience and I think
• 5:00
  Speaker 1: everybody needs that in life, you know what I mean.
• 5:03
  Speaker 1: So I agree. Yeah, it's awesome, man. It's a great
• 5:06
  Speaker 1: you know, stress reliever, and it's fun. It's like three
• 5:10
  Speaker 1: D chests, right, like using your brain and thinking and
• 5:13
  Speaker 1: trying to create traps. I'm not that good to be
• 5:15
  Speaker 1: able to trap anybody, but you know what I mean.
• 5:17
  Speaker 2: It's three D chests and you know, not to go
• 5:20
  Speaker 2: too deep into current events, but for me, and you know,
• 5:23
  Speaker 2: I've been going through a hard time, Jewish people going
• 5:25
  Speaker 2: through hard time, a lot of people going through a
• 5:27
  Speaker 2: hard time, and it's been a chance for me to
• 5:31
  Speaker 2: turn my brain off and you know, Monday morning, Tuesday night,
• 5:34
  Speaker 2: Wednesday morning, I'm not thinking, I'm rolling and I'm just
• 5:38
  Speaker 2: with other humans. I don't care your religion, your race, gender.
• 5:41
  Speaker 2: People there to train and it's beautiful and awesome and
• 5:45
  Speaker 2: I'm very grateful for it.
• 5:46
  Speaker 1: That's cool, man, That's a great gym.
• 5:48
  Speaker 2: Thank you.
• 5:50
  Speaker 1: All right, Cole, let's talk a little bit more about
• 5:52
  Speaker 1: Honey Grow for the people that aren't familiar. Can you
• 5:55
  Speaker 1: talk a little bit about the service model, the menu,
• 5:58
  Speaker 1: customer base.
• 6:00
  Speaker 2: Yeah, so we're based in Philadelphia. Fast Schedule concept. We
• 6:03
  Speaker 2: do freshly made to order stir fry salads, honey bar,
• 6:06
  Speaker 2: which is take some fruit, there's all some honey on
• 6:08
  Speaker 2: top of it. It's actually five percent of our sales.
• 6:11
  Speaker 2: It's like a little snack. That's pretty cool. Everything's made
• 6:14
  Speaker 2: to order order on a Kiosk, which is basically an app.
• 6:18
  Speaker 2: And we have thirty six locations. So we're you know,
• 6:20
  Speaker 2: Boston here in New York and Brooklyn, Hoboken, Jersey, Delaware,
• 6:24
  Speaker 2: Baltimore area, DC, Metro Pittsburgh. Forgetting something which isn't good,
• 6:30
  Speaker 2: but we will be at forty restaurants. But in this year,
• 6:33
  Speaker 2: and thank god, things have been pretty good. It wasn't
• 6:35
  Speaker 2: always good though, Nope, it was good bad.
• 6:38
  Speaker 1: Good about the the bad part a little bit because
• 6:42
  Speaker 1: I think I think listeners could learn a lot about it.
• 6:45
  Speaker 1: And you've always been super open a bad which I
• 6:47
  Speaker 1: think is really cool.
• 6:48
  Speaker 2: Yeah. Look, I I have nothing to hide. I don't
• 6:51
  Speaker 2: really care. It's like, you know, if we're going to
• 6:52
  Speaker 2: be a publicly traded company one day, I don't know,
• 6:56
  Speaker 2: like you're not. The numbers are the numbers at the
• 6:58
  Speaker 2: end of the day. And I think the numbers will
• 7:00
  Speaker 2: always speak for themselves, kind of like actions speak more
• 7:02
  Speaker 2: than words, and that's my philosophy. And you know, the
• 7:04
  Speaker 2: challenges we had was we raised a lot of money,
• 7:06
  Speaker 2: We had the pressure to grow. We opened up a
• 7:09
  Speaker 2: bunch of new markets. I had a second concept that
• 7:12
  Speaker 2: really was more of a business solution than like a
• 7:15
  Speaker 2: passion project. Honeygro is like from my heart and soul
• 7:17
  Speaker 2: in DNA. Minigro was like, hey, like the cost to
• 7:20
  Speaker 2: build a honey grow in twenty sixteen or fifteen was
• 7:23
  Speaker 2: too much. Let's do this smaller version that we don't
• 7:26
  Speaker 2: need to vent and have a simpler line, and we'll
• 7:29
  Speaker 2: do that urban and the honey grow suburban, so instead
• 7:32
  Speaker 2: of doing like one to six and I think, you know,
• 7:36
  Speaker 2: we're all drinking the kool aid. I think this thing was
• 7:37
  Speaker 2: going to be a successful as quickly as honey grow.
• 7:40
  Speaker 2: And the food was great, and it did great until
• 7:42
  Speaker 2: two thirty here in Manhattan, and then all of a sudden,
• 7:44
  Speaker 2: you know, it's the city. But yeah, a lot of
• 7:46
  Speaker 2: mistakes made, so you know, paid crazy rents, you know,
• 7:50
  Speaker 2: just not really mastering that model. I think there was
• 7:54
  Speaker 2: a lot of confusion. I think the best models are
• 7:55
  Speaker 2: the simplest ones, and you can explain, like we sell
• 7:58
  Speaker 2: seraphices and selves as we do. Minigro is like, well,
• 8:00
  Speaker 2: it's noodles, it's bowls, it's salads. Food was great, but
• 8:03
  Speaker 2: I think it was very difficult to really conceptualize and explain.
• 8:06
  Speaker 2: So that was aside. And then with Honey Grow, you know,
• 8:09
  Speaker 2: were really quick and we took on some rents that
• 8:10
  Speaker 2: were pretty crazy and you know, seven new markets in
• 8:14
  Speaker 2: one year, and plus we had a brand new corporate team.
• 8:17
  Speaker 2: So it was just like the textbook of what to
• 8:19
  Speaker 2: never do. And you know, look, it was a really hard,
• 8:23
  Speaker 2: scary time five six years ago. And I think I've
• 8:26
  Speaker 2: told the story, but I remember, you know, looking up
• 8:29
  Speaker 2: my wife and I went to Miami to get away
• 8:31
  Speaker 2: for a weekend, and my wife's on the phone with
• 8:33
  Speaker 2: the kids, not really knowing everything going on in my
• 8:35
  Speaker 2: life because I didn't want to like share all this,
• 8:38
  Speaker 2: but we're running out of cash, and my our CFO
• 8:40
  Speaker 2: at the time, my partner, David, was like, you know,
• 8:43
  Speaker 2: we should really be considering bankruptcy together some of these leases,
• 8:45
  Speaker 2: and you know, my wife's looking at the ocean like smiling,
• 8:47
  Speaker 2: and I'm like I'm like, we're not doing that. We
• 8:50
  Speaker 2: have we're going to create a plan, let's do it.
• 8:52
  Speaker 2: And you know, I knew, and unfortunately, my investors have
• 8:55
  Speaker 2: been very supportive and been very good and that way,
• 8:58
  Speaker 2: a lot of people would have said, this doesn't work.
• 9:00
  Speaker 2: I got our good luck. They put more cash in
• 9:03
  Speaker 2: and let us execute our plan, and we did and
• 9:05
  Speaker 2: then something so by twenty nineteen we were really on
• 9:08
  Speaker 2: our way, and there's COVID. But by the middle of COVID,
• 9:11
  Speaker 2: we're actually doing okay, thank god. And then the last
• 9:15
  Speaker 2: three and a half years, you've been really good. We
• 9:17
  Speaker 2: opened thirteen restaurants producing low twenties and ebada and we've
• 9:21
  Speaker 2: been profitable from a like everyone's talking about ebada, like
• 9:24
  Speaker 2: ajustity whatever, like yeah, we have a lot of that,
• 9:27
  Speaker 2: thank god, but now we actually make money, so we
• 9:30
  Speaker 2: have a net income basis. We've been profitable too. So
• 9:33
  Speaker 2: one of my goals has been, you know, there's been
• 9:35
  Speaker 2: a lot of companies that have gone public and iPod
• 9:38
  Speaker 2: it's super inspirational and it's great, but I you know,
• 9:42
  Speaker 2: I like to keep my gena tight, a little different
• 9:45
  Speaker 2: from some of these other guys that they do what
• 9:46
  Speaker 2: they need to do. And that's fine. But I'm a
• 9:48
  Speaker 2: firm believer after going through what I've been through with
• 9:51
  Speaker 2: cash and everything else. Like, run the business type. We're
• 9:53
  Speaker 2: not a tech company or a restaurant company. Our jobs
• 9:55
  Speaker 2: to make people happy, s have really good food, do
• 9:57
  Speaker 2: it over and over and over and over again. We're
• 9:59
  Speaker 2: not perfect, but you know it's not I'm not creating
• 10:02
  Speaker 2: time travel here. Yeah, I'm not like, you know, creating
• 10:05
  Speaker 2: portals in space. It's like the restaurant business.
• 10:08
  Speaker 1: Yeah, it's a simple business, but it's hard. Yeah right,
• 10:12
  Speaker 1: but yeah, no, that that's great. I think there's a
• 10:14
  Speaker 1: lot of great lessons in there because a lot of
• 10:16
  Speaker 1: chains now are trying to shrink the size of the
• 10:18
  Speaker 1: box because it's expensive to open a new store, construsting
• 10:21
  Speaker 1: construction costs are up. You know, we haven't seen that
• 10:25
  Speaker 1: kind of break in the cost of real estate that
• 10:28
  Speaker 1: a lot of people have been expecting with interest rates
• 10:30
  Speaker 1: being higher and stuff like that. So you're seeing a
• 10:32
  Speaker 1: lot of chains making that move.
• 10:33
  Speaker 2: Yep, yep. Absolutely, We've been flexible in the real estate.
• 10:39
  Speaker 2: So two thousand square feet will take some reason twenty
• 10:41
  Speaker 2: five hundred square feet, but we'll take two thousand if
• 10:44
  Speaker 2: we can make it work, and then we'll take three thousand.
• 10:46
  Speaker 2: We can make it work. But you know, we're all
• 10:49
  Speaker 2: competing for the same twenty five hundred square foot pad site,
• 10:51
  Speaker 2: redcap space, and the challenge is there's not enough of
• 10:55
  Speaker 2: that coming out of COVID and there's there's a lot
• 10:57
  Speaker 2: of big box but there's not a lot of that.
• 10:59
  Speaker 2: And the issue then becomes everyone's growing and they have cash.
• 11:04
  Speaker 2: And I hear this from everybody. It's like it's just
• 11:06
  Speaker 2: everyone's competing for the same real estate, driving up rents
• 11:08
  Speaker 2: and you're getting less from landlords. So for example, we
• 11:14
  Speaker 2: I turned out of space recently because of recently iPod
• 11:19
  Speaker 2: company was willing to pay a crazy rent and I'm like,
• 11:24
  Speaker 2: this is in Pennsylvania, in a suburb of PA and
• 11:26
  Speaker 2: I'm like affiliate. I'm like, go for it. I mean,
• 11:29
  Speaker 2: that's a mistake I made six seven years ago, and
• 11:32
  Speaker 2: that's fine. Like, if they can do it and afford it,
• 11:35
  Speaker 2: go for it. You know, I know the AUVs and
• 11:37
  Speaker 2: they can make it work. Cool, We're going to be
• 11:40
  Speaker 2: disciplined and it's it's good, but it's not great. We
• 11:43
  Speaker 2: move on and that's just how it has to pay well.
• 11:45
  Speaker 1: It's good they're private and you can do that right
• 11:47
  Speaker 1: because you know, once you get that equity money, you know,
• 11:51
  Speaker 1: the Wall Street's pressuring you to open more stores and
• 11:54
  Speaker 1: you've got to hit those bogies or where the evaluation
• 11:57
  Speaker 1: multiple gets dinged and you're on you're on that hamster wheel,
• 12:01
  Speaker 1: you know you are.
• 12:02
  Speaker 2: And I think internally we're really disciplined group, but we're
• 12:06
  Speaker 2: also aggressive. You know, we grew this year. We'll have
• 12:09
  Speaker 2: nine new restaurants into base of thirty one, so you know,
• 12:12
  Speaker 2: next year we're looking to do twelve to thirteen more.
• 12:14
  Speaker 2: So we're not you know, we're certainly aggressive in the market,
• 12:17
  Speaker 2: but you know we're not going to be twenty next year.
• 12:19
  Speaker 1: It's just not possible. Yeah, it's no way. Yeah. And
• 12:24
  Speaker 1: I guess what's the biggest hurdle is it? Is it
• 12:26
  Speaker 1: finding good managers?
• 12:27
  Speaker 2: Always? Always like finding a good GM is always the
• 12:32
  Speaker 2: most key thing you need to successfully run a business.
• 12:35
  Speaker 2: And I you know, recently said on a separate podcast,
• 12:40
  Speaker 2: and it's true, and it's like, you know, this is quoting,
• 12:43
  Speaker 2: it's like Jocko from you know, Extreame Ownership. But it's
• 12:47
  Speaker 2: a great line. It's very true. There's no bad teams.
• 12:49
  Speaker 2: There's only about leaders. And if you have a really
• 12:53
  Speaker 2: good leader, they can remove the low performers on the team,
• 12:55
  Speaker 2: build up your top performers and really like push where
• 12:59
  Speaker 2: you need to go. Whereas if you have a bad leader,
• 13:01
  Speaker 2: like things are going to happen that you don't want. So,
• 13:04
  Speaker 2: you know, one of the key things we've been doing
• 13:06
  Speaker 2: is pushing an elite GM program, which is very similar
• 13:08
  Speaker 2: to the restaurant tour program from Chipotle, but it's very effective.
• 13:12
  Speaker 2: And when you create these cultures of folks that are
• 13:14
  Speaker 2: like all star teams led by really great gms, the
• 13:17
  Speaker 2: food taste better, you know, the experience is better, the
• 13:20
  Speaker 2: vibe is better, the music is the right volume, like
• 13:22
  Speaker 2: everything kind of clicks. The hospitalities there and it becomes
• 13:25
  Speaker 2: a really great experience. And then the P and L
• 13:27
  Speaker 2: is also really strong, not just the sales, but things
• 13:30
  Speaker 2: are managed tight. So it's that balance of like culture
• 13:33
  Speaker 2: and vibe and business results is really key. But it
• 13:35
  Speaker 2: starts with the GM.
• 13:36
  Speaker 1: Cool. Yeah. Black Box Intelligence has done some work on
• 13:39
  Speaker 1: that and they talk about how that's like the biggest
• 13:41
  Speaker 1: correlation with a successful restaurants having a great no question, Yeah, cool,
• 13:47
  Speaker 1: it's financing, tighten up, tightening up.
• 13:50
  Speaker 2: We're not looking for financing, so we've been pretty lucky.
• 13:53
  Speaker 2: We recently extended or got more in a line and
• 13:57
  Speaker 2: the terms are pretty favorable. But I hear other things,
• 14:01
  Speaker 2: so yeah, I.
• 14:02
  Speaker 1: Know franchisees you know who don't have the scale, Yeah,
• 14:05
  Speaker 1: or especially getting squeezed a little bit right now. Yeah, yeah.
• 14:11
  Speaker 1: Can you talk a little bit about your mix of
• 14:12
  Speaker 1: in restaurants sales versus to go and kind of what
• 14:16
  Speaker 1: the pandemic did and how it changed your business.
• 14:18
  Speaker 2: For sure, we were eight percent delivery pre pandemic. We
• 14:23
  Speaker 2: are today sticky it around thirty three, thirty four percent
• 14:26
  Speaker 2: like high a pandemic almost fifty percent kind of stable.
• 14:29
  Speaker 1: Your food travels well, thank god.
• 14:31
  Speaker 2: Yeah, Like it's it's literally like you know you've had
• 14:35
  Speaker 2: like it's freshly made noodles. It's great, by the way,
• 14:38
  Speaker 2: thank you, the noodles of the same duel as David
• 14:40
  Speaker 2: Chang is gonna get more food. But it's like a
• 14:41
  Speaker 2: high quality good product. We're very proud of that. And uh,
• 14:47
  Speaker 2: it travels well. And during the pandemic, a lot of
• 14:49
  Speaker 2: folks discovered us and it helped us stay alive and
• 14:53
  Speaker 2: ultimately thrive, so it was good.
• 14:55
  Speaker 1: Cool. Do you have any plans to franchise in the future.
• 15:00
  Speaker 2: No, I mean, look, we talk about it at the
• 15:01
  Speaker 2: board level, but right now the focus is the growth
• 15:04
  Speaker 2: plan and just executing that.
• 15:06
  Speaker 1: Yeah. Well, I mean you have impressive unit economic uni economics,
• 15:10
  Speaker 1: so it doesn't seems like there's any real reason too
• 15:12
  Speaker 1: at this point until you go international, right, you got
• 15:14
  Speaker 1: to grab that international partner and let them run with it.
• 15:17
  Speaker 2: One day.
• 15:17
  Speaker 1: Yeah, how our staffing levels better?
• 15:22
  Speaker 2: Yeah, twenty end of twenty one, beginning of twenty two
• 15:26
  Speaker 2: was horrible. I remember just like walking in too the
• 15:29
  Speaker 2: restaurants and just seeing like there were days we couldn't
• 15:32
  Speaker 2: even open because we couldn't staff. People just were not
• 15:34
  Speaker 2: showing up. So many no shows on interviews are happening.
• 15:38
  Speaker 2: I mean, it was a really, really, really stressful time.
• 15:40
  Speaker 2: And kudos to the team at Honey Growth for getting
• 15:42
  Speaker 2: through it, in particularly the ops team, who are badasses
• 15:46
  Speaker 2: and shout outs to all you guys and girls. You
• 15:48
  Speaker 2: know who you are. But it was hard, you know,
• 15:52
  Speaker 2: they did a great job.
• 15:53
  Speaker 1: Yeah, all right, good, Yeah, that's what we've been hearing.
• 15:57
  Speaker 1: Things are definitely getting better. Still, some a little bit
• 16:01
  Speaker 1: of issues at late night. But even that's that's getting
• 16:04
  Speaker 1: a little bit easier to staff right now. Yeah, you
• 16:07
  Speaker 1: guys have always seemed to be ahead of the game
• 16:09
  Speaker 1: on technology. I uh, the Kiosks, you were early on those,
• 16:14
  Speaker 1: the virtual reality training. Yeah, I love that kind I
• 16:16
  Speaker 1: love that. So it was fun, Yeah, really really cool.
• 16:19
  Speaker 1: You can find it on YouTube. Uh, you know for
• 16:22
  Speaker 1: the listeners. Is there anything else that you're you know,
• 16:27
  Speaker 1: focused on right now technology wise?
• 16:29
  Speaker 2: Yeah, I mean, look, the the Kiosks, it's essentially an
• 16:32
  Speaker 2: app where one hundred percent digital. As an organization, it's
• 16:35
  Speaker 2: either you know, you're ordering on the app, you're ordering
• 16:38
  Speaker 2: the mobile website. I'm sorry, on the Hunter website, you're
• 16:41
  Speaker 2: ordering on a Kiosk. We're ordering third parties. So we're
• 16:43
  Speaker 2: you know, that's just the way it is. Not intentionally
• 16:47
  Speaker 2: wanting that. Actually, I'm not going to sit here in
• 16:49
  Speaker 2: SA a tech genius.
• 16:50
  Speaker 1: I'm not.
• 16:51
  Speaker 2: I just knew that if you wanted a salad and
• 16:53
  Speaker 2: I wanted to stir fry, the best way to do it.
• 16:56
  Speaker 2: It's also assume that most people don't want to create
• 16:58
  Speaker 2: their own food, which is the number one thing was
• 17:00
  Speaker 2: create on Stuver a chicken excuse me. I knew that
• 17:04
  Speaker 2: that would be the cleanest, best way to do it
• 17:06
  Speaker 2: and also make it beautiful in the process. So yeah,
• 17:10
  Speaker 2: I launched that in twenty twelve. And now yeah, we
• 17:14
  Speaker 2: have the app with it, which is great, and everything
• 17:16
  Speaker 2: gets funneled into the same loyalty system, so you can
• 17:19
  Speaker 2: actually get loyalty rewards on the Kiosk and on the app,
• 17:21
  Speaker 2: which really helps strive frequency in a really cool way,
• 17:24
  Speaker 2: which I know our competitors can't do. Yeah. And then
• 17:27
  Speaker 2: for the future, like you know, everyone's talking about automation,
• 17:31
  Speaker 2: We've we've been looking at some stuff and maybe test
• 17:34
  Speaker 2: some stuff on it. But honestly, like we run like
• 17:38
  Speaker 2: good numbers and not to sound cliche, but like it
• 17:41
  Speaker 2: like annoys me a lot when everyone tries to get
• 17:44
  Speaker 2: very techy and like, you know, we're gonna get rid
• 17:45
  Speaker 2: of people. Like there have been concepts I've seen that
• 17:48
  Speaker 2: have really tried this in the past, say four or
• 17:50
  Speaker 2: five years, and it doesn't feel good. Yeah, and the
• 17:53
  Speaker 2: food's not as good and there's something missing from that.
• 17:56
  Speaker 1: It's almost like it's sterile, I guess is the word.
• 17:58
  Speaker 1: It's like, yeah, it's it doesn't feels like you're in
• 18:01
  Speaker 1: like a hospital or something that in at a restaurant, it.
• 18:03
  Speaker 2: Feels like you're in the hospital. I mean, look, the
• 18:04
  Speaker 2: kiosks don't save us labor at all, Like people think,
• 18:07
  Speaker 2: oh well, yeah, I mean you can make the argument
• 18:09
  Speaker 2: during peak lunch that there's four chios, but I also
• 18:12
  Speaker 2: make the argument that you could go on your app too,
• 18:13
  Speaker 2: So it really isn't saving on labor. And if anything,
• 18:16
  Speaker 2: we have a person on the floor as an ambassador,
• 18:18
  Speaker 2: table touching, cleaning tables and et cetera. So you know, look,
• 18:21
  Speaker 2: I don't I'm a firm believer in finding really great
• 18:24
  Speaker 2: quality folks and we need good folks because we're opening
• 18:26
  Speaker 2: more restaurants and a benefit of working at honeygro Is. Look,
• 18:29
  Speaker 2: if you're a team member and you want to be
• 18:30
  Speaker 2: GM good like, well, we'll train you. That's part of
• 18:33
  Speaker 2: the Elite GM program. Uh so yeah, I mean we're
• 18:36
  Speaker 2: not down that automation path yet. We're checking some stuff out.
• 18:39
  Speaker 2: If we can make the lives with the team easier, great,
• 18:41
  Speaker 2: But you know, I never want to be that sterile
• 18:44
  Speaker 2: concept that's banking on tech.
• 18:47
  Speaker 1: Well, it's great that you have the employees touching the
• 18:49
  Speaker 1: tables because a lot of your fast casual competitors aren't
• 18:51
  Speaker 1: doing that.
• 18:52
  Speaker 2: Yeah, and by the way, we don't beat a thousand.
• 18:53
  Speaker 2: There's sometimes I'm walking in there, I'm like, where's that
• 18:55
  Speaker 2: the ambassador. So it's been a massive push of mine.
• 18:58
  Speaker 2: And again, like I just mentioned this bell to say
• 19:01
  Speaker 2: it again a previous podcast, but Ivan Orkan, who is
• 19:07
  Speaker 2: incredible Roman chef Ivan Ramen. I'm sure you know him.
• 19:09
  Speaker 2: I was on a panel with him recently and he
• 19:11
  Speaker 2: had he had an amazing line that I've been just
• 19:14
  Speaker 2: I've been just pushing home to my team and when
• 19:17
  Speaker 2: I'm in the restaurant, especially with the team members and
• 19:19
  Speaker 2: the gms, it's like, guys like you will never go
• 19:21
  Speaker 2: back to a restaurant where the food is incredible but
• 19:25
  Speaker 2: the service sucks. You're just not gonna you will not
• 19:27
  Speaker 2: go back, Like, I don't know, maybe you will.
• 19:31
  Speaker 1: I don't. There's a great uh tapist place near me
• 19:34
  Speaker 1: at home, and there's I had a bad experience with
• 19:36
  Speaker 1: the service one time, and the food is phenomenal, but
• 19:38
  Speaker 1: I never went back.
• 19:40
  Speaker 2: Yeah, it's you know, quoting. You know, everyone in my
• 19:42
  Speaker 2: generation read Danny Meyer's book, right, And I'm paraphrasing, but
• 19:45
  Speaker 2: it's like, you know, one of the first things that
• 19:47
  Speaker 2: happens when you're born, if anything, is you're being held.
• 19:49
  Speaker 2: So it's like a Nate and you want to be
• 19:51
  Speaker 2: taken care of him. That's part of the restaurant experience.
• 19:53
  Speaker 2: So look, it's if the food, you know, it's the
• 19:58
  Speaker 2: best word for this. Diversely, I guess, you know, contrapositive
• 20:02
  Speaker 2: of that. Conversely, that was what I was thinking of
• 20:04
  Speaker 2: Branda tired. If you're in a situation and the food
• 20:08
  Speaker 2: is good and the service is incredible, you will go back.
• 20:13
  Speaker 2: And like, we're not a Michelin Star restaurant at all.
• 20:15
  Speaker 2: We're not. We don't want to be. But we do
• 20:18
  Speaker 2: our thing and if the service can be really great,
• 20:20
  Speaker 2: we know we can get folks to come back. That'll
• 20:22
  Speaker 2: be the biggest driver of frequency. That will be the
• 20:24
  Speaker 2: biggest driver of you know, people talking about us and
• 20:27
  Speaker 2: marketing and you know that's the restaurant business.
• 20:30
  Speaker 1: Yeah, you know, I guess that is that something that
• 20:34
  Speaker 1: you're doing too, is like trying to hire for emotional intelligence.
• 20:38
  Speaker 1: Oh for sure, Danny.
• 20:39
  Speaker 2: Talks about right absolutely, And again we don't bat a thousand.
• 20:43
  Speaker 2: We recently opened a restaurant. I don't want to say
• 20:46
  Speaker 2: which one, but it's that was great. But an opening
• 20:50
  Speaker 2: day there was an ambassador who should not have been ambassador.
• 20:54
  Speaker 2: And I'm like, you know, what are we failing on
• 20:56
  Speaker 2: here to, you know, like to not recognize that? Yeah,
• 21:00
  Speaker 2: And I realized a lot of our team, you know, leaders,
• 21:03
  Speaker 2: be it in the restaurants or you know, DMS or whoever.
• 21:07
  Speaker 2: You know, some folks may not realize the importance of
• 21:09
  Speaker 2: that characteristic, right, It's not just a person cleaning tables.
• 21:13
  Speaker 2: And today, you know, I'll give a shout out to
• 21:14
  Speaker 2: our DMS or legendary group you know who you are.
• 21:18
  Speaker 2: They're all over it now. It's like, you want to
• 21:19
  Speaker 2: find people who were going to care, yeah, and self
• 21:24
  Speaker 2: motivated people who are willing to be coached and care.
• 21:28
  Speaker 2: We don't want a janitor on the floor just like
• 21:31
  Speaker 2: quietly cleaning things up. That's that's not hospitality. Like you
• 21:34
  Speaker 2: want them to be like, hey, how's your stuffry? Looks
• 21:36
  Speaker 2: really good?
• 21:37
  Speaker 1: Cool?
• 21:37
  Speaker 2: Thank you, I get you anything else. Let me refill
• 21:39
  Speaker 2: that for you real quick. You're like, I'm coming back.
• 21:41
  Speaker 1: Yeah.
• 21:42
  Speaker 2: So it's those things are critical.
• 21:44
  Speaker 1: So is it hard to like, is it hard to
• 21:46
  Speaker 1: figure out who's going to be the next good manager.
• 21:49
  Speaker 1: And you know, do you find a lot of employees
• 21:53
  Speaker 1: maybe that don't want to be a manager, that are
• 21:54
  Speaker 1: very happy at you know, working the register or whatever
• 21:57
  Speaker 1: it may be.
• 21:57
  Speaker 2: Yeah, that that was a really that last to last point.
• 22:00
  Speaker 2: That was a good lesson I learned early on. So
• 22:02
  Speaker 2: when I was running the restaurants, the people who would
• 22:06
  Speaker 2: be great, like prep people, per se and I always had
• 22:09
  Speaker 2: the best attitudes and we're willing to help, and like
• 22:12
  Speaker 2: they didn't necessarily make the best managers. And I learned that,
• 22:15
  Speaker 2: you know, good eleven years ago. It was like, why
• 22:18
  Speaker 2: wouldn't you. They just want to work, They want to
• 22:20
  Speaker 2: put their head down, they want to like hang with
• 22:22
  Speaker 2: their friends, and they want to just do their thing.
• 22:26
  Speaker 2: It is hard. It is hard to find good folks
• 22:28
  Speaker 2: who want to move up. I mean often they're just
• 22:30
  Speaker 2: like I want, I want it. And that's you know,
• 22:32
  Speaker 2: for me, the first sign like great, show me that
• 22:34
  Speaker 2: you want it, and let's see if you have the
• 22:36
  Speaker 2: skill set. And you know, being a leader and one
• 22:39
  Speaker 2: of the hardest things for me because again like I
• 22:41
  Speaker 2: created from scratch and I ran the restaurants, is going
• 22:45
  Speaker 2: from door to leading. It was a conversation I recently
• 22:48
  Speaker 2: had with my COO about somebody else. But like, you
• 22:52
  Speaker 2: got to be leading, and leading means developing people, Like
• 22:55
  Speaker 2: you got to spend your time. It's easier for me
• 22:57
  Speaker 2: to just go in there sometimes and do stuff right,
• 22:59
  Speaker 2: whatever the thing is, But it's better for me to
• 23:02
  Speaker 2: build that person to do that. And that's really what
• 23:05
  Speaker 2: I think separates managers and leaders, and that's something that's
• 23:07
  Speaker 2: become a huge focus of mine.
• 23:09
  Speaker 1: That's cool, man. I wish I spent more time working
• 23:12
  Speaker 1: in restaurants. I did a little bit of time as
• 23:14
  Speaker 1: a short order cook. Was like usually it was not easy.
• 23:17
  Speaker 1: Usually in emergency situations too. For my friend at the
• 23:20
  Speaker 1: town pool. I was a lifeguard in the Cedar Grove,
• 23:23
  Speaker 1: New Jersey, and yeah, my friend ran the snack bar,
• 23:27
  Speaker 1: and so if he was in a jam he couldn't
• 23:29
  Speaker 1: work and the cooks called out sick, I would take
• 23:32
  Speaker 1: the day because I could always find another lifeguard that
• 23:34
  Speaker 1: wanted to work, and I'd work as a short order cook.
• 23:37
  Speaker 1: But I you know, I did it. You know, I
• 23:39
  Speaker 1: don't know, five ten times I wish I wish I
• 23:41
  Speaker 1: had more actual restaurant experience.
• 23:43
  Speaker 2: Now that I cover restaurants, what were you cooking?
• 23:48
  Speaker 1: Oh man, it was what do we do? We did
• 23:51
  Speaker 1: a lot of tail ham eg and cheese sandwiches in
• 23:54
  Speaker 1: New Jersey, right, we did a lot of those grilled chicken,
• 24:00
  Speaker 1: some fried chicken, French fries. You know, you get a
• 24:02
  Speaker 1: few fryers there, and yeah, it.
• 24:05
  Speaker 2: Was hard work.
• 24:05
  Speaker 1: Man.
• 24:06
  Speaker 2: For sure, tickets are coming up, doesn't matter where you're cooking.
• 24:09
  Speaker 2: It's painful. I know what that feeling.
• 24:11
  Speaker 1: Yeah, it was like if I got a ticket, I
• 24:13
  Speaker 1: was just heating up some pizza. It was like a relief.
• 24:15
  Speaker 1: It was nice.
• 24:16
  Speaker 2: The pizza is like that's easy. Yeah you uh, anyone
• 24:18
  Speaker 2: in the restaurant, we all have PTSD from that that
• 24:21
  Speaker 2: printer noise. There was a great episode. I mentioned it
• 24:24
  Speaker 2: on some Instagram posts, but it was like, I'm sure
• 24:27
  Speaker 2: you watched The Bear.
• 24:28
  Speaker 1: I haven't.
• 24:28
  Speaker 2: I heard it's great, dude, you gotta watch it.
• 24:30
  Speaker 1: Check it out.
• 24:30
  Speaker 2: My wife and I love that show. Yeah, that's it's
• 24:33
  Speaker 2: one episode where they put on third party delivery and
• 24:35
  Speaker 2: just like the tickets heap coming. It's just like it's
• 24:38
  Speaker 2: a painful episode.
• 24:40
  Speaker 1: Like your PTSD starts kicking in for sure, tablet hell
• 24:46
  Speaker 1: and all that kind of stuff. Man, crazy crazy times
• 24:50
  Speaker 1: for sure. All right, Cole, how's how's uh? What are
• 24:54
  Speaker 1: you seeing from the consumer?
• 24:56
  Speaker 2: Yeah, so we're not seeing folks trade down yet. We're
• 25:00
  Speaker 2: pretty study on our average check still, which has been
• 25:02
  Speaker 2: great comping. Our transactions are up still as well, So
• 25:08
  Speaker 2: very happy with where we're at. September was a bit
• 25:11
  Speaker 2: of a flatter month for us, I think for a
• 25:13
  Speaker 2: lot of folks as well, and just kind of trying
• 25:15
  Speaker 2: to figure out why October has been really good. But
• 25:20
  Speaker 2: you know, for the past really almost four years, twenty
• 25:23
  Speaker 2: twenty one, twenty two, twenty three, like it's always been
• 25:27
  Speaker 2: like this crystal ball. I don't know. And I think
• 25:30
  Speaker 2: we're a good group that we act accordingly and make
• 25:32
  Speaker 2: changes as necessary. We're all over it pricing. You know,
• 25:38
  Speaker 2: we've raised prices since twenty twenty by twelve percent. We
• 25:42
  Speaker 2: did the math. Our peers has to be well biled
• 25:45
  Speaker 2: behind Piers, right, Yeah, our peer group, I.
• 25:49
  Speaker 1: Mean a lot of your peers Rows increased their prices
• 25:51
  Speaker 1: twelve percent last.
• 25:52
  Speaker 2: Year, right, so I think the peer group was like
• 25:54
  Speaker 2: at least fifteen to seventeen percent based on the math
• 25:57
  Speaker 2: that we've done. And uh, listen, as an entrepreneur, I
• 26:01
  Speaker 2: hate raising prices like it's easy. It's an easy short
• 26:04
  Speaker 2: term win, and sometimes it makes sense, and we have
• 26:06
  Speaker 2: to deal with inflation. Yeah, but I worry, and you
• 26:09
  Speaker 2: and I had this conversation I don't know, like almost
• 26:11
  Speaker 2: a year ago at this point, about all the death
• 26:13
  Speaker 2: that's out there, student loans, geopolitical stuff happening, oil prices,
• 26:19
  Speaker 2: et cetera. And you know, I worry about folks not
• 26:24
  Speaker 2: having the ability to go out and spend as much money, obviously,
• 26:27
  Speaker 2: and I think a lot of other people still think otherwise.
• 26:30
  Speaker 2: And I'm on the other side of that. And you know, look,
• 26:34
  Speaker 2: every time gas prices go up, we see drop, sales drop.
• 26:37
  Speaker 2: I mean, I remember last year when gas prices went
• 26:39
  Speaker 2: up in the summertime. We're just our comp went from
• 26:41
  Speaker 2: like here to here. We're like, okay, it's not like
• 26:44
  Speaker 2: things just change at honeygro overnight. So I don't know,
• 26:46
  Speaker 2: a lot of people live on budgets, man. You know,
• 26:48
  Speaker 2: for sure, my mentor taught me that. He's like, you know,
• 26:50
  Speaker 2: people in Middle America look very different than people on
• 26:53
  Speaker 2: the coast.
• 26:54
  Speaker 1: You know, He's like, gasoline price goes up fifty cents,
• 26:57
  Speaker 1: that's a discretionary money. That they probably to spent that
• 27:00
  Speaker 1: they can't now.
• 27:01
  Speaker 2: Right absolutely. I mean, you know you're gonna buy a
• 27:03
  Speaker 2: stirfry for you know, thirteen bucks and a drink for
• 27:06
  Speaker 2: two bucks and tax versus, Hey, that might get you
• 27:11
  Speaker 2: three gallons of guests. So yeah, you know, it's it's
• 27:14
  Speaker 2: tough and everybody's back on the roads. Man, My commute's
• 27:17
  Speaker 2: brutal recently. It's it sucks.
• 27:20
  Speaker 1: You're coming from Jersey's Yeah, all the way down to
• 27:23
  Speaker 1: I'm North Jersey down to Princeton. It's a hike, man,
• 27:26
  Speaker 1: it's a hike. But I got a good gig, man,
• 27:29
  Speaker 1: so I can't complain.
• 27:30
  Speaker 2: You know, this is the nicest office I've ever seen Bloomberg.
• 27:33
  Speaker 1: Yeah, free snacks here, We're we're in New York. This
• 27:36
  Speaker 1: is actually the first podcast is podcast number twenty six
• 27:38
  Speaker 1: is the first one I've done in person.
• 27:40
  Speaker 2: Oh nice?
• 27:40
  Speaker 1: Yeah, this is cool, Like, isn't it? It is really cool.
• 27:43
  Speaker 1: I'm gonna have to do more of these, but should
• 27:45
  Speaker 1: but yeah, so yeah, we got the free snacks, free coffees,
• 27:48
  Speaker 1: whatever you need. There's definitely an ROI on all that stuff.
• 27:51
  Speaker 2: I was doing the math I was waiting for there.
• 27:53
  Speaker 2: It was like thinking about what I'm paying rent in
• 27:54
  Speaker 2: Center City, Philadelphia are four thousand square foot. We make
• 27:59
  Speaker 2: it happen though.
• 28:00
  Speaker 1: Yeah, this place is nice. If you haven't been here,
• 28:01
  Speaker 1: it looks like a spaceship when you first come up
• 28:03
  Speaker 1: onto the sixth floor.
• 28:04
  Speaker 2: It's ridiculous. The free snack thing was crazy for me.
• 28:07
  Speaker 2: I'm like, oh my god, like that's crazy.
• 28:09
  Speaker 1: You know, listen, that's not free right, Like I'm not
• 28:11
  Speaker 1: going across the street and taking time away from my desk.
• 28:14
  Speaker 1: So there's there's an r I on it.
• 28:16
  Speaker 2: There's maths.
• 28:16
  Speaker 1: Yeah, for sure, justin that was awesome man, thank you
• 28:20
  Speaker 1: for doing this.
• 28:20
  Speaker 2: My god, my pleasure.
• 28:21
  Speaker 1: Man. Where can the audience go to find out more
• 28:23
  Speaker 1: about Honey Girl find their local, you know, the closest store.
• 28:26
  Speaker 2: Yeah, honeygro dot com locations app has everything on there
• 28:31
  Speaker 2: as well. Social media Instagram, honey Grow, Facebook, honey Grow.
• 28:36
  Speaker 2: And we'll be opening up in a few more markets.
• 28:38
  Speaker 2: So we're in Pittsburgh, We're opening a new one coming
• 28:39
  Speaker 2: up in Roeville. We're opening up in tom Serve, New
• 28:42
  Speaker 2: Jersey later this year, Brumaul, Pennsylvania. And we are also
• 28:47
  Speaker 2: going to be doing there's one I forgetting that's not good.
• 28:50
  Speaker 2: There's a fourth one in there. Brandon tired.
• 28:52
  Speaker 1: So yeah, listen, it's Friday. It's late on Friday.
• 28:55
  Speaker 2: Alexandria, Virginia, I forget you guys. Yeah, that's a good one.
• 28:59
  Speaker 2: So very excited in that next year. Just continue to push.
• 29:02
  Speaker 1: Awesome, man, it's a great story. I love following it. Sure,
• 29:05
  Speaker 1: I gotta get back into the gym so you can
• 29:07
  Speaker 1: beat me up again.
• 29:08
  Speaker 2: I didn't really beat you up.
• 29:09
  Speaker 1: You're good shoves in survival mode, you know. A big
• 29:14
  Speaker 1: thanks to the audience for tuning in. If you liked
• 29:17
  Speaker 1: the episode, please share with your friends and colleagues. Check
• 29:19
  Speaker 1: back in a couple of weeks. I'll be discussing the
• 29:21
  Speaker 1: labor market with Vivian Wang, the founder and CEO of
• 29:24
  Speaker 1: Landing