Jollibee’s all in for Smashburger makeover, says CFO Brad Reynolds
Brad Reynolds, CFO of Smashburger, sat down with Franchise Times at the Restaurant Finance & Development Conference in November.
Photo by Joe Veen
Mass-market business rags love parroting the secrets of creative geniuses, often including world-beating pointers like waking up at 4 a.m., quashing your natural fears, making regular time for surfing and micro-dosing LSD between meetings. In reality, finding that elusive success results from building a team with diverse talents, which in the case of Smashburger means coupling founder Tom Ryan’s artistry with the acumen of its ambitious chief financial officer, Brad Reynolds.
One month before Jollibee Foods Corp. acquired the remaining 15 percent of Smashburger in December, Reynolds sat down with Franchise Times at the Restaurant Finance & Development Conference for an update on what’s happening behind the scenes as it finalizes a stem-to-stern brand makeover.
Smashburger has kept its plans close to the vest since our 2018 cover story in the June/July issue that teed up dramatic changes. During an exclusive interview, Reynolds said everything from a new logo and an ultra-modern store design are part of the package to freshen the better-burger pioneer, as well as management tweaks and closing another round of under-performing locations.
Beyond scar tissue
As Jollibee has ratcheted up its stake in Smashburger to 100 percent, Reynolds said the Philippine QSR giant is now in control of the strategic direction as he, Ryan and the rest of the management team work together to finalize the look, feel and market positioning of Smashburger’s next phase.
“We’re maximizing focus on restaurants in core markets, not being as growth led but more operationally led,” he said. Breaking free of an investor-focused mindset has included refinancing the company’s debt, “adjusting” its employee base, upgrading its franchisee support center and placing a greater focus on the in-store experience.
As a 10-year-old company that has retrenched in some U.S. markets, upgraded its menu and diversified its product offerings, while debuting innovative loyalty and delivery options, the CFO suggested Smashburger’s coming rebirth was overdue.
“We’re thinking about the brand in a different way in how it relates to the landscape that we operate,” Reynolds added. “We are essentially reinventing ourselves for a second wave of growth, and we’re doing it in a bit of a different way.”
Speaking in the wake of Panera founder Ron Shaich’s keynote address at RFDC that was all about planning for long-term success rather than short-term gains, he equated the latter strategy to a sugar high where executives are “at the mercy of your next earnings call.” That type of thinking, he added, is fully in the past as Smashburger moves forward.
As it returns to significant unit growth in the U.S. and abroad, Smashburger feels it is two years beyond a period of hard times and big changes at the company, which included growing in places where it shouldn’t have, overextending itself from a corporate support standpoint and operating in a capital-constrained environment, which took some of the shine off a brand that started as one of the burger category’s brightest stars.
“I do think we have the right scar tissue, and we’re never going to make the mistakes that we’ve made in the past ever again, so it’s the inelegant way of saying we’re really well positioned,” Reynolds said.
“We want to get our image elevated,” says Smashburger’s Brad Reynolds.
Morphing into a restaurant guy
Two years from now is when Smashburger’s biggest changes will become visible to the public. The new logo and store design aren’t yet ready for public consumption, but the company’s new emoji-style logo is far fresher than its current ovoid icon.
While the final design is not yet finished, the new restaurant exterior will be much more modern and bold with artful application of accent lights, metallic screening accents, dark charcoal bricks, greater transparency with the outside world and an arched patio canopy that should increase the appeal of open-air dining.
“We want to get our image elevated to a point that reflects high-quality food, more relevant exterior and interior for a contemporary customer,” Reynolds said. “We think we’re a little tired, a little fatigued in terms of our look and feel. We focused a lot on food, and now we need to pair that with a better image.”
Aside from bricks and mortar, the Denver-based corporate team is also contributing to Jollibee North America’s wider mission, which includes more than Smashburger—especially going forward.
“Smashburger is just one piece of a bigger picture for them, so we need to be good stewards of this brand to give them the best practices for their greater goals,” he added. Rather than the turf in and around the Philippines, Reynolds said Jollibee sees its next phase of growth in the U.S. and China.
“Their next legacy is going to be here, their next legacy is going to be in China, so we feel a really strong responsibility to help them not only with our brand presence here in the U.S. as a growth vehicle, but also to be a part of the bigger picture.”
A matter of priorities
During a recent visit to the Smashburger in my neighborhood, the broad menu remains the star, along with bright menu boards and an open kitchen design.
Other aspects leave room for improvement, including dated beige walls and bright red light fixtures. Reynolds said priorities for the new interior includes better access for customers and delivery drivers picking up online orders, more attractive seating, a “new beverage platform” and moving parts of the back-of-the-house production out of sight for customers.
As a finance guy whose job duties have expanded in his three years with the brand after six years as an investment banker, Reynolds said broadening his skillset has become an incredible personal opportunity as Smashburger’s minority partner became much more involved in the brand’s future.
“I have been allowed and have wanted to become more of a restaurant guy, an industry guy that understands our business from more of a tangible, in-restaurant perspective,” he said.
“I’ve had that opportunity because we realized we weren’t perfect and we needed to bring more people into the conversation than we used to in the past, which meant soliciting input from folks that didn’t have purely a restaurant pedigree.”