Agility and openness to new ideas remain hallmarks for growth in emerging restaurant brands, panelists at this week’s CREATE Road Show in Atlanta told audience members.
“Arrogance and ignorance are not part of your plan,” Maria Rivera, CEO of Sandy Springs, Ga.-based eight-unit Smalls Sliders, told the more than 60 attendees at the July 10 CREATE Road Show, which was sponsored by Popmenu and included the George Restaurant Association, at Chido & Padre’s location in Atlanta.
Joining Rivera as panelists were Lauren Fernandez, CEO and founder of the Atlanta-based investment company Full Course, and Chris Hadermann, founding partner of Atlanta-based Southern Proper Hospitality, which owns concepts like Chido & Padre’s, the Southern Gentleman Gastropub, Gypsy Kitchen, the Blind Pig, Tin Lizzy’s, Ocean & Acre, The Big Ketch Saltwater Grill and Milton’s. The panel was moderated by Sam Oches, editor in chief of Nation’s Restaurant News.
“I would say any large brand that does things well is very agile,” said Rivera, who joined Smalls Sliders in December from Krispy Kreme.
“You have to stay very entrepreneurial and very open to other peoples’ feedback if you're going to go and do a growth brand,” Rivera said. “You cannot come in and bring all your toolkit and think that that's going to be the perfect formula to make this work. You have to surround yourself with amazing talent. You have to make sure that you're connecting with peers and that you are actually being probably the most open you've ever been.
“It's an exercise in vulnerability, to be very frank,” she told the group.
Fernandez, whose Full Course is an investor, incubator and accelerator for fast-casual and packaged-goods brands, said the past year has been a challenge for restaurant investors because of rising interest rates.
“In the last let's call it 10 months or so a lot of private-equity firms have pulled back investing because if they don't have a bank to lend to them to leverage their investment they're not going to go in with 100% of their own cash or 100% equity,” she said. “A lot of the larger deals are literally just sitting on the table with investment banks waiting for the market to correct and it will happen.”
Emerging brands looking for investors can turn to angel or friends-and-family investors, Fernandez added, but also vendors, suppliers and former operators can invest.
“It doesn't have to be a big PE or venture capital play,” she said. “There's plenty of money still out there waiting to play, but you have got to know where it is. And my suggestion is pull in folks who are aligned with your mission and who get the industry don't even bother with anyone else.”
Investors increasingly look at how brands are approach technology in their operations, Fernandez said.
Hadermann, who has eight concepts in the Southern Proper portfolio, said his company is working on adopting a new loyalty program that will work in the multi-unit company.
“We’re trying to be a lot more intentional about that through creative content, different types of specialized curated events for our loyalty members,” he said. “We're just trying to create a lot of additional value to become part of our loyalty program.” The company is also seeking solutions that are easier — or “less clunky” — for customer sign-ups.
Fernandez add that, as an investor, her team looks “at all technology” in a brand. “Is it elegant? Is it efficient? And is it effective?” she asked.
“That's our first line of defense and then as a secondary consideration we make it multidisciplinary so we cannot approve any technology for use in our company or for our invested partners unless the entire team signs off on it — the entire executive team,” Fernandez said. “So tech does not live with marketing. It doesn't live with tech. It actually lives with our CFO. And the reason for that is it keeps everybody from going to spend money on tech that doesn't speak to each other and that doesn't work toward our principles of management and investment.”
The CREATE Road Show was part of Nation’s Restaurant News’ CREATE: The Future of Foodservice programming that includes live and virtual educational and networking sessions culminating this year in a three-day experience in Palm Springs, Calif., Oct. 1-3.
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