Restaurant Founders Share Success Strategies at RFDC
Stacy Brown, founder of Chicken Salad Chick, aims to open 40 locations a year going forward.
When asked to describe the worst or most difficult time for his company, Freshii founder Matthew Corrin referenced a Richard Branson quote about the thin line dividing success and failure “and businesses that are undercapitalized are going to find themselves on the wrong side of that line,” said Corrin.
Launching Freshii, the Toronto-based fast casual restaurant concept focused on health and wellness, was “scrappy and at times quite painful,” Corrin continued as he noted his parents gave him the 250,000 Canadian dollars to start the company in 2005. “But now we maximize every dollar we spend,” and Corrin has kept a strong equity stake as the founder, something not everyone can do as they take on private equity investments.
Freshii is now just shy of 300 locations, more than 40 of those in Chicago, where the company has its U.S. headquarters. Franchising has helped the brand grow as well, noted Corrin, and because that model is asset-light by nature, not as much capital is needed.
Corrin was joined on stage by Mendocino Farms’ Mario Del Pero and Chicken Salad Chick’s Stacy Brown November 15 for a founders forum at the Restaurant Finance & Development Conference, presented by sister publication the Restaurant Finance Monitor at the Bellagio in Las Vegas.
Del Pero said his company has benefited not only from the capital investments from firms such as GrowthPoint Partners and Catterton Partners, but also the operational advice and input. People such as Nick Marsh, the former CEO of Cosi who went on to found GrowthPoint Partners, have shared their knowledge and provided constructive planning to help Mendocino expand.
Del Pero said he’s perhaps most proud of being able to grow Mendocino’s AUVs to $3.2 million and that even in the face of pressure to add more locations (their 14th just opened) they’ve “stuck to their filters to not water down the brand essence.”
With 63 restaurants now open, Stacy Brown, meanwhile, has found that yes, “chicken salad is more than enough to build a brand on.” Her Auburn, Alabama-based Chicken Salad Chick serves a product that’s crave-able, she said, and “grows organically through our concentric circles.” By the time they’re ready to go to the next circle, people “are already demanding that we be there.”
A 2015 private equity investment from Eagle Merchant Partners was the right fit the company, Brown said, and after previously partnering with someone based solely on financial need, they were careful to find a group that was the right cultural fit.
“They respect what’s been built, they’re not with us to change things but to help us grow.”
With a plan to open 40 restaurants a year going forward, Brown said the company makeup will be 80 percent franchised, and with AUVs nearing $1.2 million it’s an attractive opportunity.