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BJ’s CEO on Simplification, Store Development · Choppin’ It Up by Bloomberg Intelligence

0:00
Speaker 1: Welcome to Chopping It Up. I'm your host, Mike Hallen,
0:02
Speaker 1: the senior Restaurant food Service Analyst at Bloomberg Intelligence. Our
0:06
Speaker 1: research and that of bi's five hundred analysts around the
0:09
Speaker 1: globe can be found exclusively on the Bloomberg terminal. If
0:12
Speaker 1: you enjoy the pod, please hook me up and give
0:15
Speaker 1: us a five star review on Apple or Spotify. Today
0:18
Speaker 1: I'm joined by Lyle Tick, CEO of BJ's Restaurants.
0:21
Speaker 2: Welcome to the pod. Lyle, thank you very much. Excited
0:24
Speaker 2: to be here.
0:25
Speaker 1: Yeah, man, so I haven't yet been to a BJ's
0:30
Speaker 1: but Zuki. Yeah, the pazuki looks fantastic, however, especially you
0:35
Speaker 1: had that recent butterfinger lt O. Man, that thing looked like, Yes.
0:39
Speaker 2: Yeah, man, they are. They are a phenomenon and they
0:42
Speaker 2: are cravable. I was actually yesterday at won By my
0:46
Speaker 2: house with my kids. We just came out with a
0:49
Speaker 2: cookie monster pazuki with blue ice cream, and my kids
0:53
Speaker 2: were dining to go get it. So yesterday we had
0:55
Speaker 2: a little mid afternoon snack.
0:58
Speaker 1: Very nice, I think, you know. And we were talking
1:02
Speaker 1: before we started recording. You're from New York, I'm here
1:05
Speaker 1: in New Jersey. I think there's one in Is there
1:08
Speaker 1: one in Bergen County?
1:09
Speaker 2: Maybe there's a name and you wet there's Valley Stream,
1:13
Speaker 2: there's Teeterborough, there's a there's a handful around.
1:16
Speaker 1: Yeah, all right, call yeah, So that's the one I'm
1:18
Speaker 1: going to have to get to. So your career didn't
1:20
Speaker 1: start in the restaurant industry.
1:22
Speaker 2: What drew you to it? Uh? Well, actually, restaurant industry
1:25
Speaker 2: goes back to my childhood. So when I was really
1:30
Speaker 2: at my father passed when I was young, when I
1:31
Speaker 2: was twelve, but the a couple of years before he passed,
1:36
Speaker 2: he became a partner with the ottam and Elli brothers
1:40
Speaker 2: who still had butcher shops in New York, and back
1:43
Speaker 2: in the day they had little Italian cafes and they
1:47
Speaker 2: had a steakhouse. And when I was really young, I
1:50
Speaker 2: was doing kind of prep work in the kitchens and
1:52
Speaker 2: just around the restaurants. And then you know, through college,
1:57
Speaker 2: I've done every job you could do in a restaurant.
1:59
Speaker 2: So restaurants and food and beverage, you know, were in
2:03
Speaker 2: my blood. Spent part of my professional career at Bacardi.
2:07
Speaker 2: So that kind of community of food and drink has
2:10
Speaker 2: always been there and now when I had an opportunity
2:13
Speaker 2: to go to Inspire Brands and work with Buffalo Wild Wings,
2:19
Speaker 2: that kind of brought me into it from a professional
2:22
Speaker 2: career point of view directly and haven't looked back since.
2:26
Speaker 1: Yeah, well the people are the best man. When I
2:28
Speaker 1: was younger, do I am I remembering correctly? Were there
2:31
Speaker 1: Automanelli's commercials?
2:33
Speaker 2: I don't believe so. I mean, there was a butcher
2:35
Speaker 2: shop on eighty second in York. There was a steakhouse
2:38
Speaker 2: right connected to it, and then over time they started
2:41
Speaker 2: to open up these like small Italian cafes, and I
2:44
Speaker 2: think they're back down to just the butcher shop. I think.
2:47
Speaker 2: I'm not sure the Upper East Side won't exist anymore.
2:49
Speaker 2: There's one in Soho now. But yeah, it was a
2:52
Speaker 2: good old school Italian butcher shop.
2:54
Speaker 1: Yeah, the name's definitely ringing a bell. So what attracted
2:58
Speaker 1: you to BJS?
2:59
Speaker 2: Yeah, you know, it's funny. When I was at b Dubs,
3:02
Speaker 2: BJ's actually wasn't hugely on my radar, so I wasn't
3:05
Speaker 2: wildly familiar with it until the board reached out and
3:09
Speaker 2: I started to visit BJS, and I felt like going
3:13
Speaker 2: into BJS that this was a concept that had all
3:16
Speaker 2: the ingredients to be really successful and be a better alternative,
3:21
Speaker 2: you know, in its category. It has facilities that in
3:25
Speaker 2: general are differentiating. You know, you come in, you have
3:28
Speaker 2: the high ceilings, the bar, the energy, it's got really
3:35
Speaker 2: good quality food. It's got a nice selection that allows
3:40
Speaker 2: kind of broad occasionality. And one of the things I
3:43
Speaker 2: found most fascinating when I walked into a BJS was
3:46
Speaker 2: if you look around at BJ's, you will see everything
3:49
Speaker 2: from like a high school baseball team to a happy hour,
3:56
Speaker 2: to a girls group hanging out, to your parents having dinner,
4:01
Speaker 2: to families hanging out. I mean, it is this incredible
4:05
Speaker 2: cross section of people that somehow coexists, right, and it's
4:10
Speaker 2: all good whether you're having happy hour at the bar,
4:12
Speaker 2: you're a family having dinner. And I found that to
4:16
Speaker 2: be really fascinating and compelling because I feel like there's
4:19
Speaker 2: not that many spaces and places that can do that,
4:25
Speaker 2: particularly these days, and I found it really cool that
4:28
Speaker 2: BJ's was able to do that. So on the products side,
4:31
Speaker 2: I was like, Wow, there's a lot of things to
4:33
Speaker 2: work with here. And then on the board side, we
4:36
Speaker 2: had a board who has a big ambition for what
4:39
Speaker 2: the next chapter of BJ's can be and how we
4:44
Speaker 2: can realize the full potential of the brand, And that
4:46
Speaker 2: was very exciting to me to have kind of the
4:49
Speaker 2: ingredients to work with and a board that was very ambitious,
4:52
Speaker 2: and so it's been a great partnership since. Cool.
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Speaker 1: Can you talk a little bit about the company's culture
5:00
Speaker 1: and how you aim to influence it?
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Speaker 2: Yeah, I mean one of the really cool things about
5:04
Speaker 2: BJS is you got a lot of people here who
5:08
Speaker 2: have been on the Bjay's journey for a long time.
5:11
Speaker 2: So if I look at you know, everybody from you know,
5:14
Speaker 2: my chief operating officer who has been here twenty plus years,
5:17
Speaker 2: to his vPOS, to the doos, even in my GM levels, like,
5:22
Speaker 2: you got a lot of people who have been here
5:23
Speaker 2: for a long time. And what underpins that is a
5:28
Speaker 2: real care for BJS and an energy for BJS and
5:31
Speaker 2: a desire for BJS to be successful. And so you
5:35
Speaker 2: got people in this business that you know, are in
5:39
Speaker 2: it for their career and are in it to make
5:42
Speaker 2: BJS great and care about the brand and care about
5:44
Speaker 2: each other. And that foundation is kind of, you know,
5:48
Speaker 2: the most amazing thing to be able to build from,
5:51
Speaker 2: because you can't you can't just create that right that exists.
5:55
Speaker 2: And then you know, I think coming in it was
5:59
Speaker 2: about making sure that we were really clear on what
6:02
Speaker 2: we were doing and why. And so we did a
6:05
Speaker 2: lot of strategy work together right on brand positioning and
6:08
Speaker 2: all that stuff, understanding where we had opportunities to better
6:12
Speaker 2: understanding where we did really well. And that work was
6:15
Speaker 2: done purposely, cross functionally and down a few levels so
6:19
Speaker 2: that everyone in the company is no more than a
6:22
Speaker 2: couple of degrees of separation away from somebody who was
6:25
Speaker 2: in the room defining the strategy and having real ownership
6:29
Speaker 2: and skin in it, right, And so you know that
6:33
Speaker 2: for me, gets everybody aligned and rown in the same direction.
6:36
Speaker 2: And then it's about you know, driving down accountability and
6:41
Speaker 2: making sure that people are clear on what we're doing,
6:43
Speaker 2: why we're doing it, and we're holding each other accountable
6:46
Speaker 2: for it, and having fun along the way. And of course,
6:49
Speaker 2: you know, as the business improves, that last part gets
6:53
Speaker 2: a lot easier.
6:54
Speaker 1: Yeah, hey man, Transparency, accountability, and fun and those are
6:58
Speaker 1: three very important to an organization, you know, something that
7:04
Speaker 1: all organizations can use.
7:05
Speaker 2: For sure.
7:07
Speaker 1: Talk to me a little bit about the simplification efforts
7:10
Speaker 1: that you've spearheaded.
7:11
Speaker 2: Yeah, I mean at a high level, right, there's kind
7:15
Speaker 2: of two questions I ask everybody to think about, maybe
7:19
Speaker 2: a little bit oversimplified, but is what we're doing going
7:22
Speaker 2: to make things better or easier for a team member
7:25
Speaker 2: and or better and easier for a guest. Because I
7:27
Speaker 2: think if we can keep those two things central, and
7:32
Speaker 2: what we're doing is true to that, there's a virtuous
7:35
Speaker 2: circle in that because it's generally going to make people
7:39
Speaker 2: more happy and return more, but it's also generally going
7:42
Speaker 2: to make you more efficient, right, And so part of
7:45
Speaker 2: what we did along the way at the beginning, when
7:48
Speaker 2: we were just dissecting the business, for example, is we
7:52
Speaker 2: were looking at you know, our gross to neet and
7:54
Speaker 2: we were looking at our comps, and we saw that
7:58
Speaker 2: our comp food and beverage was pretty high and that
8:02
Speaker 2: a full third of those were rung in wrong and
8:05
Speaker 2: prepared wrong. Well, I can tell you that not one
8:08
Speaker 2: of my team members is coming in trying to wring
8:11
Speaker 2: something in a prepared wrong. She got asked yourself, why
8:15
Speaker 2: is that happening? Right? And you go and you talk
8:17
Speaker 2: to the team members, you spend time at the managers,
8:19
Speaker 2: and you understand that the way they're having to enter
8:24
Speaker 2: things in are potentially making things difficult. The way things
8:27
Speaker 2: are showing up and being sequenced on the KDS is
8:31
Speaker 2: making things difficult for a cook. And so one of
8:34
Speaker 2: the things we've done is gone through a series of
8:37
Speaker 2: kind of simplifications just understanding Margarita. Simplifications like how all
8:43
Speaker 2: the modifiers were coming in reduced Margarita's by like twenty percent.
8:48
Speaker 2: You know, burgers like eighty percent of our modifications, or
8:51
Speaker 2: four types of cheese. Yet there's like seventy modifications that
8:54
Speaker 2: somebody has to delve into to find, you know, the
8:57
Speaker 2: top couple. So how do we raise those up? You know,
9:01
Speaker 2: we talked to our cooks and the way checks were
9:04
Speaker 2: showing up on the KDS and being organized and sequenced
9:08
Speaker 2: weren't helping them keep tracks. So stuff was going in
9:11
Speaker 2: the window and waiting for something else right, And so
9:14
Speaker 2: it's a lot of those kind of little things, you know,
9:17
Speaker 2: that we find ourselves today with comp food and beverage
9:20
Speaker 2: down double digits. Now, the reason for me that's important is,
9:24
Speaker 2: I mean there's the commercial side of it, which is
9:27
Speaker 2: that flows obviously straight through to profit, but the bigger
9:31
Speaker 2: thing is it's one less uncomfortable conversation with a guest.
9:35
Speaker 2: It's a quicker table turn, it's one less uncomfortable situation
9:40
Speaker 2: for a team member, right, And so there's kind of
9:42
Speaker 2: a virtuous circle to it. And so it's things like
9:46
Speaker 2: that where you know, we talk to our team members,
9:48
Speaker 2: they're like, look, everybody's coming into the restaurant today, you know,
9:51
Speaker 2: young people, and they're not they're not a wallet. They
9:54
Speaker 2: want a tap to pay, And we had kind of
9:57
Speaker 2: inconvenient tap to pay solutions. You kind of had to
9:59
Speaker 2: go to take out or had to go to the
10:02
Speaker 2: bar to tap to pay, right, And so now we're
10:05
Speaker 2: looking at how we integrating that into the kind of
10:08
Speaker 2: digital checkout at the table. We started just last year
10:12
Speaker 2: we didn't have Apple Pay. We integrated Apple Pay, and
10:14
Speaker 2: usage of Apple Pay has gone up. So, you know,
10:16
Speaker 2: it's a lot of little things that come from listening
10:19
Speaker 2: to the people that are operating the business every day.
10:23
Speaker 2: And then there's the broader like menu work, right, and
10:28
Speaker 2: that menu work happens over time, but like there's a
10:32
Speaker 2: lot of day to day stuff you can do to
10:34
Speaker 2: make things easier for guests and team members.
10:37
Speaker 1: Yeah, and listen to all those little things add up
10:39
Speaker 1: to big things.
10:39
Speaker 2: So that's right.
10:41
Speaker 1: I think it's a great place to focus. I know
10:45
Speaker 1: it's still early on, but how are customers reacting to
10:48
Speaker 1: the pizza refresh.
10:49
Speaker 2: So as far as we can tell, really well, right,
10:52
Speaker 2: So we like what we're seeing in MPs. We like
10:55
Speaker 2: what we're seeing an incident s which is up almost
10:58
Speaker 2: double digits, you know, check and margin is what we
11:01
Speaker 2: thought it would be. So it's operating a lot like
11:03
Speaker 2: it did in the test restaurants. So all of that
11:06
Speaker 2: is really really good, you know. I think in our
11:08
Speaker 2: business full service, when you think about like the amount
11:11
Speaker 2: of frequency you had per year, so it's you know,
11:14
Speaker 2: a couple of times a year on average, and you
11:16
Speaker 2: get up to four plus for loyalty. But it's not
11:19
Speaker 2: like QSR. So to ultimately definitively say that we're driving
11:24
Speaker 2: more frequency off of it, we would I'd want a
11:28
Speaker 2: little longer to say that, you know, and I take
11:30
Speaker 2: the full eighteen months i've been here, I can definitively
11:33
Speaker 2: say that what we've done has improved frequency, But to
11:37
Speaker 2: isolate it to pizza, I'll want a little more time.
11:39
Speaker 2: But all the early indicators we're happy with.
11:42
Speaker 1: Yeah, that's fair, and can talk maybe about what you
11:45
Speaker 1: expected to do to check and then also the margin
11:49
Speaker 1: profile of the product.
11:50
Speaker 2: Yeah, I mean, look, pizza checks tend to have a
11:53
Speaker 2: slightly advantageous percentage margin to your average check, right, so
11:58
Speaker 2: as you grow those that should be help full from
12:00
Speaker 2: a cost of sales point of view. The pizza checks
12:04
Speaker 2: tend to look a lot like other checks, but they
12:07
Speaker 2: have different composition to them, right, So I'm talking about
12:10
Speaker 2: in terms of size of check, but they have a
12:12
Speaker 2: different composition to them. You see kind of more people
12:15
Speaker 2: at the table often because it's shaable. You'll see more
12:18
Speaker 2: appetizers and drinks hung off of those checks. So the
12:22
Speaker 2: composition of them is different. But you know, ultimately from
12:26
Speaker 2: a size of check per person, they look quite similar.
12:30
Speaker 1: Okay, Yeah, beer and pizza go together like peanut butter
12:33
Speaker 1: and jelly in my books.
12:34
Speaker 2: So there you go. There you go, all right? Cool?
12:37
Speaker 1: What else are you leaning into to drive sales and
12:39
Speaker 1: traffic growth here in twenty six Yeah?
12:42
Speaker 2: I mean, you know, when I look at the work
12:44
Speaker 2: we've done and I think about it, it's not you know,
12:47
Speaker 2: I'm a big believer, it's not any one thing that
12:50
Speaker 2: we've done, right, Like, for me, it starts with addressing
12:55
Speaker 2: what we called the table stakes operations and improving the
12:59
Speaker 2: basics of operating great restaurants and making people feel good
13:03
Speaker 2: and seeing those NPS scores increase and seeing our team
13:07
Speaker 2: member retention increase, which has a straight correlation to sales
13:11
Speaker 2: and profit of restaurants. And then you kind of build
13:14
Speaker 2: on top of that the value layer with the Pazuki
13:16
Speaker 2: meal deal. And then at the end of last year,
13:19
Speaker 2: we just got into some of those kind of product
13:21
Speaker 2: and experience growth drivers as we got into seasonal pazukis
13:24
Speaker 2: and pizza. So you know, really what I see us
13:27
Speaker 2: doing is continuing to build off of those foundations as
13:31
Speaker 2: we go forward. So you'll continue to see us lean
13:33
Speaker 2: into how we can improve operation and guest experience. You'll
13:36
Speaker 2: continue to see us lean into the seasonal pazukis, and
13:39
Speaker 2: we'll start moving beyond the pizza category into other categories
13:44
Speaker 2: of the menu as we continue to look for opportunities
13:47
Speaker 2: to refresh and simplify where appropriate while protecting the turf coverage,
13:52
Speaker 2: which is critical to those occasions that we talked about
13:55
Speaker 2: at the beginning.
13:56
Speaker 1: Okay, great, and you know, the stock has basically been
14:00
Speaker 1: had money for a couple of years now, since twenty
14:03
Speaker 1: three looking into the results. You know, I don't cover BJS,
14:08
Speaker 1: but you know, i'd have to imagine margins are a
14:11
Speaker 1: pretty big issue there. So outside of driving traffic, outside
14:16
Speaker 1: of selling more pizzas which are very margin friendly, are
14:20
Speaker 1: what's in your plans to help expand margins this year?
14:22
Speaker 2: Yeah? Look, if you look at us, you know last year,
14:26
Speaker 2: I mean we expanded margin last year over one hundred
14:29
Speaker 2: basis points, right, I mean we I think we're on
14:32
Speaker 2: a good trajectory. We have more sales coming into the
14:35
Speaker 2: business and more profit dollars coming out of the business
14:38
Speaker 2: than ever before. And you know, ultimately I take profit
14:41
Speaker 2: dollars to the bank. We see again headroom off of
14:48
Speaker 2: the things that we've been doing. So I mean obviously
14:51
Speaker 2: sales and traffic. Right, if you don't have sales and traffic,
14:53
Speaker 2: you know, that's a key to the leverage all of
14:56
Speaker 2: the simplification work that we've been doing, and focus on
14:59
Speaker 2: operating BET restaurants that has headroom, like we haven't rung
15:03
Speaker 2: the towel dry on those things. And then as we
15:07
Speaker 2: continue to look ahead a little further out, we're starting
15:10
Speaker 2: to get into how we can leverage technology more effectively
15:13
Speaker 2: to help us be more efficient and effective. So you
15:16
Speaker 2: may have heard me talk a little bit about the
15:18
Speaker 2: activity based labor model, which is based off of AI forecasting.
15:22
Speaker 2: That's at about thirty percent of our restaurants right now.
15:26
Speaker 2: The real KPIs for that for me are about guess satisfaction, Right,
15:31
Speaker 2: do I have the right people in the right place
15:32
Speaker 2: at the right time to drive a better experience? And
15:36
Speaker 2: you know, I'm seeing encouraging results across those with the
15:38
Speaker 2: biggest one in pace, which is where I'd want to
15:41
Speaker 2: see it. It does suggest we can save a few
15:44
Speaker 2: hours collectively, it says we need more hours in our
15:48
Speaker 2: peak times and less hours and kind of the shoulders
15:51
Speaker 2: and beyond. So we see expanding that over the course
15:54
Speaker 2: of the year. And then you start to think about
15:56
Speaker 2: the other use cases. Right, So, coming off of labor scheduling,
16:00
Speaker 2: once that's embedded, you start to think about how can
16:03
Speaker 2: great forecasting help you with prep which helps again with
16:06
Speaker 2: waste and cost of sales, and how does that then
16:09
Speaker 2: help you order? So I see this as kind of
16:12
Speaker 2: a multi year project on helping to tune kind of
16:17
Speaker 2: the engine of the business more effectively inefficient.
16:20
Speaker 1: All right, Great, is your new unit prototype ready for primetime?
16:24
Speaker 2: Well, yeah, I'm super excited about the design and I'm
16:26
Speaker 2: super excited about the way we've we've constructed it. Because
16:31
Speaker 2: we've constructed it as I feel like we're really clear
16:34
Speaker 2: on what are kind of our brand anchors and standards
16:38
Speaker 2: and how we want to BJ's to look and feel,
16:41
Speaker 2: and we've been really conscious about saying, can we apply
16:44
Speaker 2: that kind of flexibly to different formats, different sizes, different
16:50
Speaker 2: shapes to open up our ability to do everything from
16:54
Speaker 2: you know, a traditional ground up prototype, you know, to
16:57
Speaker 2: a conversion to potentially unit that isn't as big as
17:01
Speaker 2: a traditional BJS but still has all the same feeling
17:05
Speaker 2: if the market is appropriate for that. So, you know,
17:08
Speaker 2: our first two will be in market at the end
17:11
Speaker 2: of this year. But really excited about obviously what I've
17:13
Speaker 2: seen on paper and what we're working with in architects
17:16
Speaker 2: and what we're seeing. But you know that proof will
17:19
Speaker 2: be in market towards the end of this year and
17:21
Speaker 2: then continuing to be piloted and kind of tweaked and
17:27
Speaker 2: refined into twenty twenty seven.
17:29
Speaker 1: Great, and do you have any targeted unit economics that
17:32
Speaker 1: you're willing to share.
17:34
Speaker 2: I don't think I have talked about that publicly outside
17:38
Speaker 2: of the fact that you know, as we're thinking about
17:40
Speaker 2: kind of our IRR right, we obviously want that to
17:45
Speaker 2: outpace our cost of capital, and so you know, we're
17:49
Speaker 2: targeting mid to upper teams as we get into market
17:52
Speaker 2: and continue to improve that.
17:54
Speaker 1: Fair enough, what's the alcohol mix and have you seen
17:58
Speaker 1: any change? You know, a lot of your competitors obviously
18:03
Speaker 1: are moving into mocktails and things of that nature. So
18:07
Speaker 1: if you could just talk about, you know, where the
18:09
Speaker 1: mix is now and I guess maybe where it's come
18:11
Speaker 1: from in the last couple of years.
18:13
Speaker 2: Yeah, I mean it's a fascinating you know, part of
18:17
Speaker 2: the business and just generally in society, how the idea
18:22
Speaker 2: of social drinking has evolved and what people are drinking
18:25
Speaker 2: when they hang out, and that's evolving off and on premise.
18:29
Speaker 2: From our business, we have seen a bit of contraction
18:34
Speaker 2: there when we look at our mix. Our mix is
18:37
Speaker 2: in like the mid teens when you take beer, alcohol
18:41
Speaker 2: and wine together. I think the interesting part about it,
18:44
Speaker 2: that's sales mix, right. The interesting part about it is
18:47
Speaker 2: when you look at the amount of checks that it's
18:50
Speaker 2: attached to is you get check mix, right, and we
18:52
Speaker 2: have alcoholic beverages attached to a little over fifty percent
18:56
Speaker 2: of our checks. So what that tells me, right, is
18:59
Speaker 2: that the you know, alcoholic beverage is still critical and
19:04
Speaker 2: it's a critical component to that social kind of splurge
19:07
Speaker 2: occasion that we've positioned ourselves in now. The components of
19:12
Speaker 2: the table if it's a group of four maybe in
19:14
Speaker 2: the past where three people are having a drink, maybe
19:17
Speaker 2: two people are having an alcoholic drink, and two people
19:20
Speaker 2: are having a non out. Maybe somebody's having less than
19:23
Speaker 2: they used to have. So you know, this dynamic of
19:27
Speaker 2: how total beverage grows is really what we're thinking about, right,
19:31
Speaker 2: How do we drive total beverage versus kind of just
19:34
Speaker 2: thinking about ALC and NA beverage is two separate things.
19:38
Speaker 2: We're trying to think about it as social drinking and
19:41
Speaker 2: how do we enable that.
19:42
Speaker 1: Yeah, it's really interesting man, the impact of the younger
19:46
Speaker 1: generations and GLP ones. And if you told me five
19:49
Speaker 1: years ago that Texas Roadhouse was going to start selling mocktails,
19:53
Speaker 1: I would have looked at you funny, you know.
19:55
Speaker 2: Yeah, yeah, I mean we're all looking at it these days.
19:59
Speaker 2: And you know we have we have mocktails, we have
20:01
Speaker 2: na beverages. You know, it's interesting to see what translates
20:06
Speaker 2: from off to on, you know what I mean. Like
20:09
Speaker 2: for years in the alcohol industry, right, like hard seltzers
20:14
Speaker 2: were driving all of the growth in off premise, those
20:17
Speaker 2: never effectively translated into on premise, right. So you know,
20:21
Speaker 2: as you continue to experiment and kind of test and learn,
20:26
Speaker 2: what of those trends translate and what are people looking
20:29
Speaker 2: for in an on premise social experience?
20:32
Speaker 1: For sure? How confident are you in the company site
20:36
Speaker 1: selection process?
20:37
Speaker 2: I feel really good about it. I mean what we
20:39
Speaker 2: did when we came in obviously we paused, you know,
20:43
Speaker 2: unit growth for a minute, and we kind of did
20:45
Speaker 2: two pieces of work. The first piece of work was
20:49
Speaker 2: in analysis on our remodels, and we were looking at
20:51
Speaker 2: our remodel program and said, are we comfortable that we're
20:54
Speaker 2: clear on what makes a difference in our remodels And
20:58
Speaker 2: we felt comfortable that, and as you've seen, we've leaned
21:01
Speaker 2: into the remodel program and we feel good about that.
21:05
Speaker 2: On the back end of that, what we did is
21:07
Speaker 2: we said, okay, let's look at our new unit growth
21:11
Speaker 2: and our nros and say how do we feel about
21:14
Speaker 2: that and where we're putting them, and getting confident with
21:18
Speaker 2: that as we go back to build pipeline. And to
21:21
Speaker 2: be honest, I think the biggest thing for us is,
21:25
Speaker 2: in my opinion, about geographical selection, right. I think the
21:30
Speaker 2: company had spent a fair bit of time in recent
21:34
Speaker 2: years greenfield, and I think it was in the process
21:38
Speaker 2: of saying, Okay, BJ's works everywhere. Well, I think we're
21:41
Speaker 2: clear BJS can work everywhere, and so now what I'm
21:45
Speaker 2: looking at is how do I fill in where we
21:50
Speaker 2: have units? So in a market where I'm between clubs,
21:54
Speaker 2: I can get Sorry, I'm meaning like I only have
21:56
Speaker 2: a couple of units and I can't get real multi
22:00
Speaker 2: unit management leverage on that. I can't get supply chain
22:03
Speaker 2: leverage on that. If I'm building pipeline of management, am
22:06
Speaker 2: I getting somebody to move to a totally green field place?
22:10
Speaker 2: Or can I build within the market? And there's an
22:12
Speaker 2: alchemedical awareness and consideration. So I want to build out
22:16
Speaker 2: because we have a lot of markets where we have
22:19
Speaker 2: two or three where we can build out. And then
22:22
Speaker 2: I think, as we showed last year, we open one
22:24
Speaker 2: in Arizona where we've got. It's a you know, a
22:27
Speaker 2: market where I would say we're relatively mature. We open
22:30
Speaker 2: one in California south of Sacramento. I think it was
22:34
Speaker 2: the end of the year before another mature market. Like
22:38
Speaker 2: I don't really have any markets where I'm fully penetrated,
22:42
Speaker 2: and so I want to build out and then get
22:44
Speaker 2: to those markets by building out for concentric circles. I
22:48
Speaker 2: don't need to go green Field unnaturally. If you will,
22:52
Speaker 2: yeah for sure.
22:53
Speaker 1: Have you gone public with any of the markets that
22:57
Speaker 1: you're really excited about?
23:02
Speaker 2: I don't think I've talked publicly about it. Although next year,
23:06
Speaker 2: as we look at at the two that are opening,
23:08
Speaker 2: one will be a good example of a market where
23:12
Speaker 2: we have a couple and we think filling in is
23:15
Speaker 2: going to be there's gonna be an alchemy to that.
23:17
Speaker 2: And the other is going to be in a legacy
23:20
Speaker 2: market where we feel like we continue to have headroom
23:23
Speaker 2: and you know, we can get out to a super
23:25
Speaker 2: strong start and drive that.
23:28
Speaker 1: You know, yeah for sure. And what's you know, I
23:31
Speaker 1: know this is a couple of years out, but you know,
23:34
Speaker 1: what's the right and net unit growth target for BJSON?
23:37
Speaker 2: You know, the way I look at it is. You know,
23:41
Speaker 2: if we are a couple this year, you know, a
23:44
Speaker 2: few more in twenty twenty seven, and I see us
23:47
Speaker 2: getting up to kind of double digit not percentage, but
23:51
Speaker 2: units as we go forward. And then as we continue
23:54
Speaker 2: to gain confidence in it, we will you know, be
23:58
Speaker 2: putting the pedal down for But as I see the
24:01
Speaker 2: next kind of couple a few years trajectory, that's that's
24:06
Speaker 2: how I see it playing out.
24:07
Speaker 1: All right, good stuff. And as I mentioned earlier, I
24:10
Speaker 1: still haven't been to BJ's yet. What should I order?
24:13
Speaker 2: Oh? Man, well, let's let's maybe we start backwards, going
24:18
Speaker 2: up right, You're gonna have to get a pazuki. Uh
24:21
Speaker 2: that is that is kind of a non negotiable. And uh,
24:25
Speaker 2: if I was you, I bring a group so you
24:27
Speaker 2: could explore some of the pazukis. And and that's what
24:30
Speaker 2: BJ's is about anyway. You know, if I'm starting out
24:34
Speaker 2: the meals, so my son is obsessed with the potstickers,
24:37
Speaker 2: I think we have some of the best wings in
24:39
Speaker 2: the game, So you know, I would get after the wings.
24:42
Speaker 2: And right now we have these buffalo chicken sliders that
24:46
Speaker 2: just launched as an lto that are awesome, And so
24:50
Speaker 2: you know, i'd probably get after those, and then as
24:53
Speaker 2: I'm going into the entrees, you know, I think we
24:56
Speaker 2: have great burgers. You got a great chicken sandwich. Surprisingly,
25:01
Speaker 2: maybe we have a awesome salmon. It's a beautiful fresh product.
25:07
Speaker 2: It goes through the pizza oven so it's cooked perfectly
25:10
Speaker 2: every single time, So you know, in awesome salmon, that's
25:15
Speaker 2: kind of a go to for me when I go
25:18
Speaker 2: in there.
25:18
Speaker 1: Well, dude, I love your passion for the menu. Now,
25:21
Speaker 1: I think I have even a better idea about why
25:24
Speaker 1: you joined BJ's.
25:26
Speaker 2: The Mike's Hot Honey lto pizza that's out right now.
25:29
Speaker 2: It's like Pepperoni and Mike's Hot Honey. It is. It's
25:34
Speaker 2: a very cravable slice of pizza.
25:36
Speaker 1: Yeah, I actually that looks fantastic and hot honey and
25:40
Speaker 1: pepperonia is right on my alley. So awesome, man.
25:43
Speaker 2: Yeah, I love your passion, dude, I love I love it.
25:46
Speaker 1: I'm looking forward to a following the story And thanks
25:48
Speaker 1: for doing this.
25:49
Speaker 2: Yeah, maybe I'll meet you at a BJ's when I'm
25:51
Speaker 2: when I'm in New York.
25:53
Speaker 1: Now you're talking, man. I also want to thank the
25:55
Speaker 1: audience for tuning in. If you'd like To find your
25:58
Speaker 1: nearest BJ's, go to BJ's Restaurants dot com. If you
26:01
Speaker 1: liked our discussion, please share with your friends and colleagues,
26:04
Speaker 1: and check back soon for another interview on chopping it up.