QSR June 2022

THOUGHT LEADERSHIP FOR 25 YEARS

JUNE 2022 / NO. 292

®

35 YOUNG LEADERS to WATCH

MEET THE MOST RESILIENT GROUP OF INNOVATORS YET.

P.24

Building on his father’s legacy has become J.R. Galardi’s personal mission at Wienerschnitzel.

Plus

Full-service Brands Flip the Switch P. 16 Breakfast Bounces Back P. 7 Can Tipping

Solve Labor Woes? P. 61

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DEPARTMENTS June QSR / LIMITED-SERVICE, UNLIMITED POSSIBILITIES

TABLE OF CON T E N T S J UN E

2 0 2 2 # 2 9 2

FEATURES

N E W S

14 CLIMATE RESPONSIBILITY Seamless Sustainability

A low-effort, high-impact initiative allows operators to sit back and save the planet. BY RACHEL PITTMAN

I N S I G H T 7 FRESH IDEAS

The Breakfast Bounce Back A category crushed by the pandemic is finding new legs. BY AMANDA BALTAZAR 12 ONES TO WATCH Joe & the Juice Playing in two beverage segments is providing

20 2 2

24 / INTRODUCING THE NEXT GENERATION OF INDUSTRY

massive runway for growth. BY BEN COLEY 61 OUTSIDE INSIGHTS Can Tipping

Solve Labor Woes There’s a lot more to this movement in quick service today than flipping the iPad around. BY JUSTIN ROBERTS 64 START TO FINISH Matt Ensero The CEO of Wing it On! opened the first outpost of his fast casual on a budget of just $40,000.

LEADERS, INCLUDING WENDY’S KRISTIN TORMEY (BOTTOM LEFT), CHIPOTLE’S CANDICE BECK (TOP LEFT), AND WIENERSCHNITZEL’S J.R. GALARDI.

CHIPOTLE, WENDY’S, GALARDI GROUP

16 The Great Migration BYDANIEL P. SMITH Full-service restaurants continue pushing their way into the quick- service world. And it’s no great mystery why.

24 35 Young Leaders to Watch BY QSR STAFF

In the end, the pandemic might have created the most resilient group of innovators the restaurant industry has seen.

2 BRANDED CONTENT

4 EDITOR’S LETTER

63 ADVERTISER INDEX

ON THE COVER Wienerschnitzel CEO J.R. Galardi is carrying on the family business. PHOTOGRAPHY: GALARDI GROUP

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BRANDED CONTENT

E D I TOR I AL EDITORIAL DIRECTOR, FOOD NEWS MEDIA: Danny Klein danny@qsrmagazine.com MANAGING EDITOR, FOOD NEWS MEDIA: Nicole Duncan nicole@qsrmagazine.com DIRECTOR OF CUSTOM CONTENT: Peggy Carouthers peggy@qsrmagazine.com CUSTOM CONTENT ASSOCIATE EDITOR: Charlie Pogacar charlie@qsrmagazine.com CUSTOM CONTENT ASSOCIATE EDITOR: Kara Phelps kara@qsrmagazine.com CONTENT EDITOR: Ben Coley ben@qsrmagazine.com STAFF WRITER: Trevor Griner Trevor@qsrmagazine.com ART & PRODUCTION ART DIRECTOR: Tory Bartelt tory@qsrmagazine.com ONLINE ART DIRECTOR: Kathryn “Rosie” Rosenbrock rosie@qsrmagazine.com ADVERTISING 800.662.4834 NATIONAL SALES DIRECTOR // EXTENSION 126 : Eugene Drezner eugene@foodnewsmedia.com NATIONAL SALES MANAGER // EXTENSION 149 : Edward Richards edward@foodnewsmedia.com NATIONAL SALES MANAGER // EXTENSION 141 : Amber Dobsovic amber@foodnewsmedia.com NATIONAL SALES MANAGER // EXTENSION 148 : John Krueger john@foodnewsmedia.com CIRCULATION WWW.QSRMAGAZINE.COM/SUBSCRIBE CIRCULATION COORDINATOR: N. Weber circasst@qsrmagazine.com ADMINISTRATION GROUP PUBLISHER, FOOD NEWS MEDIA: Greg Sanders greg@foodnewsmedia.com PRESIDENT: SALES SUPPORT // EXTENSION 124 : Tracy Doubts tracy@foodnewsmedia.com GRAPHIC DESIGNER: Erica Naftolowitz erica@qsrmagazine.com PRODUCTION MANAGER: Mitch Avery mitch@qsrmagazine.com

IN THIS ISSUE BRAND STORIES FROM QSR

10 What Operators Need to Know About Takeout and Delivery in 2022 Off-premises food quality is more important than ever. SPONSORED BY McCAIN FOODS

McCAIN

SmartChain / p. 41

ON THE SAFE SIDE / HERE’S HOW RESTAURANT SECURITY IS ADAPTING TO INDUSTRY CHANGES. 42 Safety First Customer and employee safety 52 A New World

JUNE 2022

VENDOR RESOURCES / TRENDS / NEW PRODUCTS

of Security Tech How can operators use new technology to gain insights into their businesses? 56 Key Players Here are the biggest names in the world of restaurant security and cash management.

ON THE SAFE SIDE Here’s how restaurant security is adapting to industry changes. BY KARA PHELPS

®

and security have taken the spotlight more than ever. 46 Tackling the Hidden Costs of Cash Handling Should cash management challenges be considered “business as usual?”

Security P42 Cash Handling P48 New Technology P52 Key Players P56

SOLINK CORPORATION

SPONSORED SECTION | JUNE 2022

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ONLINE SEE THESE STORIES AT QSRMAGAZINE.COM/SPONSORED

Webb C. Howell MANAGER, IT SERVICES: Jason Purdy ACCOUNTING ASSOCIATE: Carole Ogan

FRANCHISING

SANITIZATION Employees Hate the Red Bucket Process. Here’s a More Hygienic Solution Restaurants can more effectively control cross contamination while saving on labor. SPONSORED BY GOJO INDUSTRIES, INC.

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QDOBA

Is QDOBA on the Verge of a Massive Breakthrough? The Mexican fast-casual brand is targeting 2,000 units. SPONSORED BY QDOBA

Sponsored content in this magazine is provided by the represented company for a fee. Such content is written to be informational and non-promotional. Comments welcomed. Direct to sponsoredcontent@foodnewsmedia.com

FOOD NEWS MEDIA PROPERTIES

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make a big difference. We re excited to have Tropical Smoothie Cafe in our portfolio.

ROGER WAGNER Multi-Unit Franchise Owner

*As of December 26, 2021, there were 1,038 franchised Restaurants and 1 company-owned Restaurant. Of the 1,038 franchised Restaurants, 906 were franchised Restaurants that had been open for at least 12 months as of December 26, 2021. Of the 906 Restaurants, 29 Restaurants were excluded since they were non-traditional locations. Of the 877 Restaurants, 109 were excluded since they were not open for at least 357 days in 2021. Of the 768 Restaurants referenced in the above table, all reported sufficient financial performance information to be included in this financial performance representation.*$840,662 Systemwide Average Net Revenues. Based on calendar year 2020 and includes 555 Cafes that were open for at least 12 months as of 12/27/2020. Excludes non-traditional locations and Cafes that were not open for at least 350 days in 2020. This information appears in Item 19 of our Franchise Disclosure Document. Your results may differ. There is no assurance that you will do as well. This information is not intended as an offer to sell or the solicitation of an offer to buy a franchise. It is for information purposes only. The offering is by prospectus only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota (File No. F-4953), New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington and Wisconsin. If you are a resident of or want to locate a franchise in one of these states, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state. New York State Disclaimer: This advertisement is not an offering. An offering can only be made by prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. CALIFORNIA DISCLAIMER: THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING. Tropical Smoothie Cafe, LLC, 1117 Perimeter Center West, Suite W200, Atlanta, GA 30338. ©2022 Tropical Smoothie Cafe, LLC.

EDITOR’S LETTER

Living a Legacy Carrying on the

T his year marks the first edition of our Young Leaders where I’m too old to make the list. Welcome to life, I suppose. Our cover subject, J.R. Galardi, is 33 and the CEO of Galardi Group (owner of Wienerschnitzel). I actually scanned through our archives to see when we last wrote about J.R. It was March 2018, and his beard was just starting to fill out. “It took me 33 years to grow this,” he told me recently. “I’m pretty proud of it at this point.” I can relate to trying to look older to seem older, which likely won’t last forever. But really, it was the part about his path into the business that I connected with. J.R. wasn’t considering running the fam ily business. He worked fries, cash regis ter, did janitorial work, and overall found ways to busy himself during summers from 13 on. But as soon as he got to col lege, J.R. began interning as a franchise business consultant. His dad, John, who founded the brand in 1961, wanted him to chase his own interests. J.R. worked as an assistant hedge fund manager and eventually ran a concert promotion busi ness. He returned to Wienerschnitzel when John fell ill with pancreatic cancer. John passed away in 2013. While you can say life forced J.R.’s hand, it wasn’t on obligatory terms. He realized the gravity of what his father built and wanted to protect it. “From that point on, I made it not only my goal, but my responsibility, to work in as many dif ferent departments and facets of our busi ness as possible so that one day I would be a well-rounded, dynamic leader that my father would be proud of,” he says. More on that on page 24. One afternoon when I was 18, my father sat on a recliner reading the New

York Daily News . He started reciting parts of a Mike Lupica article, saying, “I bet you could do this someday.” Truthfully, I was asking myself what I could do a lot those years. I even considered becom ing a zookeeper. Instead, I applied to a few journalism programs and started on that track. Why? Because he thought I could. As he’d tell me later in life when I was hired to write about restaurants, “when somebody believes you’ll be good at something, don’t tell them otherwise.” My father passed away last March. Over the years, I ran into newspaper lifers and journalist fanatics; people who worked on school papers as teenagers and craved the rush like energy pills. But me, I just wanted to reward my father’s confidence. Like J.R., I think the legacies we’re chas ing aren’t so much about living up to something as they’re personal guideposts. And I think that’s worth embracing. “Not a lot of people have the opportunities that I had, and I didn’t ever want to be one to squander an opportunity,” J.R. said three years ago. I feel similarly. I thank my father for seeing my future as only he could, and often did. He read my articles and followed along when nobody else came close to caring. Having him say, “I told you so,” is the highest bar I could strive for.

family business is a personal mission worth embracing.

Danny Klein, Editorial Director

DANNY@QSRMAGAZINE.COM QSR MAGAZINE

ROSIE ROSENBROCK

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˪˪˪ʡ˕˜˗˩˜˧˔ʡ˔˜

ˊ˛ˬ ˜˦ ˧˛˘ ʿ˔˥˚˘˦˧ ʹ˥˔ˡ˖˛˜˦˘ ʶˢ˦˧ ˧˛˘ ʿ˘˔˦˧ ʾˡˢ˪ˡʲ ʵ˜˗ˉ˜˧˔ ˔˟˟ˢ˪˦ ˢ˪ˡ˘˥˦ ˧ˢ ˚˘˧ ˖ˢˡ˦˧˥˨˖˧˜ˢˡ ˖ˢ˦˧˦ ˙ˢ˥ ˔ˡˬ ˟ˢ˖˔˧˜ˢˡʟ ˠ˔˥˞˘˧ʟ ˖ˢˡ˗˜˧˜ˢˡ ˔ˡ˗ ˦˖˘ˡ˔˥˜ˢ ˜ˡ ˥˘˔˟ʠ˧˜ˠ˘ ˪˜˧˛˜ˡ ˠ˜ˡ˨˧˘˦ʡ

ʺ˘ˡ˘˥˔˧˘ ˅ˢˬ˔˟˧˜˘˦ ʧ ˀˢˡ˧˛˦ ʹ˔˦˧˘˥

˂ˣ˘ˡ ˆ˧ˢ˥˘˦ ʤʤʬ ʷ˔ˬ˦ ʸ˔˥˟˜˘˥

ʼˡ˖˥˘˔˦˘ ʹʷʷ˦ ˕ˬ ʦʣʘ

| BREAKFAST | fresh ideas The Breakfast Bounce Back A category crushed by the

pandemic is finding new legs. BY AMANDA BALTAZAR

Tacodeli’s Veggie Nut Chorizo has been a hit with guests.

B efore 2020, breakfast paced along at a healthy clip. It was growing 15 percent and, generally, quicker than other segments, according to The NPD Group. In no short part, quick-service brands fueled the movement as the “breakfast wars” crowded, with Wendy’s imminent entry representing one of the year’s biggest headlines. Per research from Coca-Cola, two main tenets of evolution were at work: One, it had begun to shift from an early morning ritual into an all-day affair; and two, flavor profiles were reflecting broader trends. Namely, a greater demand for spicy ingredients,

global flavors, and vegan or vegetarian dishes. And while all of this evolved, innovation laid runway. Delivery, menu expansion, subscriptions, and breakfast LTOs all became common levers for operators. However, breakfast, alongside late-night, were the two sharp est struck dayparts from COVID’s disruption. New at-home habits emerged as employers moved to remote work, cutting off coffee and breakfast commuters. Morning family meals became the norm as schools went virtual. Comfort food at breakfast also solidified as quick fixes, like toaster waffles, were no longer essential on the

TACODELI

www.qsrmagazine.com | QSR | JUNE 2022

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| BREAKFAST | fresh ideas

way out the door. In terms of recovery, in the three months ending November 2021, according to NPD, online and physical visits to restaurants for breakfast increased by 11 percent, compared to a 10 percent decline in the same period a year ago. So that’s roughly how long it took for breakfast traffic to reach the same level as September through November in 2019. And like broader trends, curbside, grab-and-go, digital apps, personalization, loyalty, and meal kits, helped the category rebound. Brands like Dunkin’ and Starbucks saw the daypart shift later into the day, but new rituals were rituals nonetheless. Takeout breakfast, in particular, came into its own. Tacodeli, which reduced its menu during COVID due to labor, says it’s ramping back up, and breakfast constitutes close to 50 percent of business today, down slightly from 55 percent pre-pan demic. It’s rolled two popular add-ins for its build-your-own dishes back in: The Veggie Nut Chorizo, which “is a hit with the vegetar ian and vegan crowd and even some meat eaters,” says Roberto Espinosa, Tacodeli’s co-founder and owner, who points out that it “hits the demographic demanding the no-meat options.” The build-your-own option is a customer favorite, and accounts for about 30 percent of Tacodeli’s breakfast sales. The three-ingre dient BYO is the most popular choice, with a starting price of $3.25, though customers can add more for an upcharge. Tacodeli also reintroduced Barbacoa Madruguera, a taco with braised beef cheek and scrambled eggs, and the Akaushi Picadillo & Egg taco (Akaushi ground beef, scrambled eggs, jack cheese glaze, salsa de arbol, and cilantro), both of which were perform ing well at other dayparts. “As more of the workforce returns to the office, people will spend more time commuting and will opt for breakfast on-the go,” Espinosa says. “We’ve seen breakfast steadily increase from July 2021 and after six months of continued growth we decided to reinvest in the daypart that was always our bread and butter. We have also invested in technology to improve our customers’ experience; bringing on Olo and Thanx to offer seamless online ordering and curbside pickup.” Plant-based importance The flavor trends are back, too. The Works Café, a chain of nine locations headquartered in Keene, New Hampshire, recently launched a vegan breakfast burrito. It features organic tofu and locally smoked tempeh, turmeric, roasted onions, roasted red peppers, baby spinach, and avocado, grilled in a GMO-free locally produced tortilla. “More and more folks seem to be asking about plant-based and vegan options, and find it difficult to find such items on menus,” CEO and founder Richard French says. If this goes well, he’ll explore more vegan menu items. “Vegan is a small segment but a growing segment,” he says. It’s reflected in the concept’s organic ancient grains power bowls. The Autumn Harvest vegan option “has moved way up in popularity, which says something,” French says. Other bowls include smoked salmon and bacon avocado. Key to The Works’ food and the company’s overall philosophy is food sourced well, and taking care of the planet. Offering sea

sonal food is “super tricky,” French says, since “it requires local producers and has been difficult for us to have consistency among our cafes, spread out over five states.” However, he does work with two regional produce distrib utors. It works best, he says with root vegetables as they store well and have a long season, and local hot house tomatoes. He’s now in early conversations to source local, hydroponically grown greens year-round. Mirroring full-service During the pandemic, off-premises dining took off at full-service chain Another Broken Egg. To-go breakfast wasn’t just a quick serve occasion any longer. The Orlando, Florida-based brand found it could offer its entire menu. Takeout and delivery business grew from 2 percent of sales and settled two years later at 15 per cent. At the same time, says president and CEO Paul Macaluso, who previously worked at Focus Brands and as CEO of Krys tal, dining in-house increased as regulations loosened. But since all of the concept’s business occurs between 7 a.m. and 2 p.m., offering takeout “has been a way to break through those seat ing capacity issues. Our kitchens can handle more business with third-party delivery.” So it’s no surprise Another Broken Egg is seeing record unit vol umes, and overall sales up 21 percent last year compared to 2019. “People missed socializing, life, and comfort and that’s what our café provides,” Macaluso says. LTOs are also helping keep business strong. The company is offering 16 seasonal LTOs a year, and recently launched citrus honey and fig pancakes, with a citrus fig compote, fresh strawber ries, eggs, bacon, and sausage; and a sausage and fennel omelette. “The LTOs drive business,” Macaluso says. “We have a chef driven menu that’s pretty elevated, but we try to take it up a notch with the LTOs. Some customers come every week and maybe want to try something new. This helps keep it fresh.” And Scramblers, which has 29 stores in Ohio and Michigan, also observed an off-premises boom—from 3–4 percent of sales pre-virus to as high as 30 percent. As life recalibrated, the figure is closer to 18.5 percent. With dining rooms at capacity, this is addi tional revenue for the Toledo, Ohio-based company. “Breakfast is having a very strong comeback,” says Shain Burek, president. Scramblers’ entire menu is available for delivery, and these off-premises orders appeal largely to a younger audience. “A younger generation has embraced this and will sacrifice quality of product and even price for the convenience of not hav ing to take off their slippers,” Burek says. In fact, he adds, “we’re seeing a price insensitivity right now. If they can get a product they haven’t had in a while they’re happy to pay a premium for that.” This growth to younger consumers has worked well for Scram blers, he adds, because his target market is slightly older, people in their 40s, so younger customers expand his audience. And he’s steered clear of LTOs—until now—“because when we reopened the dining rooms, the people who came in wanted the flavors they had pre-COVID.” q

Amanda Baltazar is a regular contributor to Food News Media and is based in Washington.

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SPONSORED BY McCAIN FOODS

What Operators Need to Know About Takeout and Delivery in 2022 Off-premise food quality is more important than ever. / BY KARA PHELPS

that food consumed off-premise has the same quality customers enjoy in the dining room. Datassential has found that 92 percent of consumers expect food delivered to them to be prepared with the same level of care as when they dine in-person—but with persistent labor shortages, that can be difficult. What defines a great takeout or delivery experience for custom ers? It’s simple. “When you order takeout or delivery, you want to get food that is actually hot, the right texture, and with the same flavors you’re accustomed to when you eat on-premise,” says Chef Mark Slutzsky, director of culinary for North America at McCain Foods. If customers receive food that doesn’t meet their expectations, it’s easy to post a bad review. ReviewTrackers recently found that more than 63 percent of consumers read reviews on Google before deciding to visit a business, followed by about 45 percent who look at Yelp. Restaurants need to nail takeout and delivery every time. To help achieve that, operators can take a deep dive into packaging and consider options that might hold temperature better, save labor, or be more environmentally friendly. Slutzsky also recommends getting creative with sauces and topical applications in trending fla vors to build excitement around takeout and delivery. Products like McCain SureCrisp™ fries can help ensure a fresh-out-of-the-fryer taste that are delicious anywhere. Lefty’s Cheesesteak, a Detroit-area franchise, used to see a lot

T he state of takeout and delivery today looks very different than it did before COVID-19. In a survey by Datassential, 62 percent of restau rant operators’ revenue came from off-premise sales in November 2021. When compared to pre-COVID figures of 42 percent, it becomes clear just how dramati cally the landscape has changed in a short time. Many operators—and consumers—have come to rely on takeout and delivery. The same Datassential survey found that 38 percent of operators believe their business wouldn’t even be viable today without off premise sales. (Only 15 percent said this pre-COVID.)

of complaints about their fries not holding up during transport. “I listen to my customers,” says Sam Berry, owner and founder. “So I tried about 30 different types of fries to find some thing better, and McCain SureCrisp™ fries blew all of them away. They’re very flavorful, they hold temperature, and they’re very consistent. We got great feedback—people started to ask if we changed our fries, and that was it. We had to bring them in immediately. I don’t know if there’s a better fry out there.” SureCrisp™ fries are part of McCain’s Good

“When you order takeout, you want to get food that is actually hot, the right texture, and with the same flavors you’re accustomed to.”

Likewise, consumers are choosing to order out in record numbers— nearly 40 percent of all consumers said they get food delivery at least weekly. Takeout and delivery revenue streams are critical now, but they come with operational challenges. One of the biggest is ensuring

to Go line of products crafted to deliver delicious anywhere. “Con sistency is key,” Slutzsky says. “If you use products that work well for both on- and off-premise, you don’t have to worry about a lot of the quality issues that come with takeout and delivery. Especially with labor challenges today, you need products you can count on.” Z

To learn more, visit mccainusafoodservice.com.

McCAIN FOODS

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DEPARTMENT ONES TO WATCH

Joe & the Juice Playing in two beverage segments is providing massive runway for growth. BY BEN COLEY

the demand for the juice, coffee, and sand wiches are pretty similar from market to market, and the [menu] mix that we see, it is also quite similar from market to mar ket. What we have seen is that our products are as well perceived on the West Coast as in London.” Consumer demand for Joe & the Juice’s products has been on the rise, to the point sales are “significantly above,” pre-pan demic numbers, Nørøxe says. The CEO attributes multiple factors. For one, the brand leverages a modernized app tailored to consumers’ preferences, with a loyalty program in which guests can earn points and unlock tiers. Nørøxe also believes increased awareness of health and wellness amid the spread of COVID thrust his brand into the spotlight. That is likely to keep growing, per research from The National Restaurant Association. In the organization’s 2022 State of the Indus try report, chefs across the industry listed immunity-boosting snacks and immunity boosting/functional ingredients among their top 10 culinary trends for this year. “One that we really put a lot of focus on early in the pandemic was the health and wellness pillar,” Nørøxe says. “We don’t want to be religious about the health aspects of our products, but we want to offer you healthy and good-for-you alternatives to other players on the street.” Joe & the Juice, founded 20 years ago by Kaspar Basse, oversees more than 300 locations across North America, Europe, Australia, and Asia, including roughly 65 stores in the U.S. The plan is to double to 600 units by 2025, with 200 more in Europe and 100 domestically. Stores range from 850 to 2,150 square feet, and typically work best in central busi ness districts that have access to affluent customer bases. Nørøxe explains Joe & the Juice is able to operate CONTINUED ON PAGE 62

lineup of creatively named juices—Iron Man (apples, strawberries, kiwi, ice), Hell of a Nerve (elderflower, banana, strawber ries), and Pick Me Up (apple, strawberries, banana, ice). The beauty of it, CEO Thomas Nørøxe says, is Joe & the Juice sees no cannibaliza tion between the two products. To him, juice makes up the DNA of the brand, but coffee attracts the frequency and daily routine. Those are the first points of contact for fresh customers. Once guests are drawn in, their attention heads toward portable sandwiches and breakfast bowls fit for an accelerating digital age. “Going into a new market, it does take some time to really gain the trust from the guests,” Nørøxe says. “But when we have been there for some time, we really see that

FOUNDER: Kaspar Basse HEADQUARTERS: Copenhagen, Denmark YEAR STARTED: 2002 ANNUAL SALES: $170 million (2021) TOTAL UNITS: 311 globally; 64 in the U.S.

THE GLOBAL COFFEE BEANS MARKET IS PROJECTED to reach $42.5 billion by 2025, according to Grand View Research. And the fruit and vegetable juice segment is expected to be roughly $229 billion by 2030. The predictions are nothing but good news for global concept Joe & the Juice, the rare fast casual that manages to play in both beverage segments, from its drip coffee, ice latte, and grey macchiato to its

JOE & THE JUICE (2)

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DEPARTMENT CLIMATE RESPONSIBILITY

Seamless Sustainability A low-effort, high-impact initiative allows operators to sit back and save the planet. BY RACHEL PITTMAN

thinking about how they can make a good choice within the current system.” It goes without saying that sustainability is worth the industry’s attention. The environ mental impact of the food industry is massive; according to Zero Foodprint’s website, the food system contributes close to half of greenhouse gas emissions around the world. And many consumers are interested in ways that foodser vice can lessen its footprint. In 2021, Statista reported that a hefty 81 percent of Americans would like more food options that protect the environment, and 65 percent of Americans are willing to pay more at a sustainable restaurant. Ingredients are largely responsible for the industry’s carbon footprint, which is why, ini tially, Myint and Leibowitz founded Zero Foodprint—in tandem with The Perennial, a concept that championed regenerative agri culture—with the purpose of convincing chefs and restaurants to shift to ingredients grown via regenerative methods. But this approach required considerable logistical planning and effort on the part of involved concepts. In 2020, Zero Foodprint partnered with the California Department of Food and Agriculture and the

Wesburger, a San Francisco-based chain, is also paying mind to its global impact.

P ainless onboarding, seamless operations, significant results— ideally, operators looking to lessen their environmental footprints need sustainability programs that meet all three of these criteria. As the cofounder of San Francisco’s cult dining destination Mission Chinese Food, restaurateur Anthony Myint has ample experience with restaurant operations, and thus, was uniquely equipped to build a sustainability initiative that would fit operators’ needs. In 2015, Myint and his wife and business part ner, Karen Leibowitz, founded Zero Foodprint, a nonprofit that supports regenerative agriculture. Straightforward and effective, Zero Foodprint leverages a 1 percent consumer upcharge on food and beverage purchases to provide grants for farmers looking to invest in eco-friendly farming practices. “Needless to say, with chefs and restaurants, everyone’s kind of overwhelmed and looking a couple of hours ahead, maybe a cou ple of weeks ahead, but definitely not 20 years ahead,” Myint says. “People try to do their best and take care of their customers and the planet, but most people aren’t thinking, ‘Oh, let’s try to change the whole food system, let’s change how food is grown.’ People are

California Air Resources Board to develop its current approach. “... What if, instead of buying the good stuff, you had a way where cool chefs, but also maybe even McDonald’s, were just send ing a couple of cents per purchase—let’s say 1 percent of sales—to help a rancher change half of his growth,” Myint says of the pro gram’s new approach. “It wouldn’t be predicated on logistics and trying to have small-scale processing and McDonald’s franchisees buying from that small butcher shop.” Since its pivot to the 1 percent upcharge model in 2020, Zero Foodprint has awarded over half a million dollars to more than 30 farms to invest in improving agricultural approaches. Myint reports that the new iteration of Zero Foodprint has democratized the program, making it more accessible for quick-service and fast casual concepts as well as fine dining. Now, Zero Foodprint’s model is particularly suited to the fast paced reality of quick-service operators. Rather than doing the legwork of building relationships with sustainable farmers and suppliers or re-allocating funds to support the purchase of more sustainably-grown ingredients, operators charge CONTINUED ON PAGE 62

WESBURGER

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SERVICE MODELS

The great Migration / BY DANIEL P. SMITH ADOBE STOCK / JOSHUA RESNICK 16 JUNE 2022 | QSR | www.qsrmagazine.com

Full-service restaurants continue pushing their way into the quick service world. And it’s no great mystery why.

Full-service restaurants are getting their “quick service” on like never before. ¶ Though not necessarily a new story in the ever-evolving restaurant industry—to be certain, full-ser vice heavyweights like Chicago-based Lettuce Entertain You Enterprises and acclaimed chefs such as Rick Bayless have marched into the limited-service world before—sit-down restaurants migrating into the quick-service environment is becoming a more common place tale these days. ¶ While a competitive industry has long forced restaurants of all stripes to be creative, the pandemic demanded it, especially as COVID-19 shuttered dining rooms and paralyzed many full-service operations.

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SERVICE MODELS

Hooters to Hoots Wings DEBUT: February 2017 in Cicero, Illinois

the real validator. As consumers hun gered for value, convenience, and variety, Hoots delivered with naked, breaded, roasted, smoked, and bone less wings as well as 15 different sauces and rubs. “With what we experienced with demand and interest, it’s clear this model fits the bill,” Melilli says. WHAT’S NEXT: Hoots will end 2022 with 15–18 stores in operation and Melilli touts nearly 100 more in the development pipeline. He also cites ghost kitchen and interna tional possibilities as well. “We’ve got runway here to build out and bring more online,” Melilli says. P.F. Chang’s China Bistro to P.F. Chang’s To Go DEBUT: February 2020 in Chicago MOTIVATING FACTORS: Seeing rising appetite for carryout at its bistro locations, P.F. Chang’s leadership began working on a to-go concept in 2018. A quick-service concept, leaders reasoned, would position P.F. Chang’s to build a presence in areas in which it lacked current activity while enabling it to add to markets with already thriv ing bistro locations. “We theorized that people wanted P.F. Chang’s more often, so we tried to figure out how to get it to them,” says Candice Barnett, vice

Though table-service brands like Buffalo Wild Wings and IHOP had quick-service-ori ented formats in motion before the pandemic overturned daily life, COVID threw accelerant on those plans while intensifying the conversa tions many other full-service restaurant leaders were having about diving into counter-service waters. With off-premises occasions like carryout, delivery, and drive-thru orders swelling amid the pandemic, full-service operations saw more promise than ever in the quick-service category, not to mention a shot at survival by taking their brand equity downstream. But even as pan demic restrictions eased, full-service dining rooms reopened, and consumers expressed a greater willingness to dine out, the appeal of the more straightforward, less labor-intensive quick-service model remains strong for full-ser vice brands. Nearly two years after announcing plans for a fast-casual concept, Flip’d by IHOP debuted in Lawrence, Kansas, last September. Over recent months, additional Flip’d restaurants have opened in New York City, Cincinnati, and Silver Spring, Maryland. Meanwhile, Buffalo Wild Wings, which opened its first Buffalo Wild Wings GO unit in May 2020 outside Atlanta, is touting plans for 100 GO restaurants by the close of 2022, while Steak ‘n Shake is convert ing its 500-plus restaurants into quick-service formats, leaning heavily into digital ordering, self-service kiosks, and drive-thru operations to do so. But it’s not just the mighty national full-service chains pushing their way into the quick-service ranks. Independent restaurateurs and restaurant groups are also making the trek. In December 2020, the Duggan family, which had been serving old-school Italian-American fare at Original Joe’s in California’s Bay Area for more than eight decades, launched Little Original Joe’s in San Francisco’s West Portal neighborhood. The quick-service-styled eatery pairs pizza, pasta, and parmigiana dishes with a marketplace featuring ready-to-cook favor ites from Original Joe’s. And earlier this year, the husband-and-wife team of Joe and Katy Kindred, who found full service success near Charlotte with Kindred and Hello, Sailor, opened a donut-peddling, chicken-slinging fast casual called milkbread in Davidson, North Carolina. QSR talked with five full-service restaurant companies about their moves into the quick service world: ,

MOTIVATING FACTORS: Hooters leadership noticed a healthy rise in off-premises orders as early as 2010, including some Hooters restau rants collecting as much as 20 percent of their sales from carryout. “We saw the appetite for this and went after it,” says Sal Melilli, CEO of HOA Brands, Hooters’ parent company. “We like to be user-friendly to help our guests and cre ating Hoots leaned into their demands.” 5,000–7,000-square-foot spaces of the typical Hooters restaurant. Hoots res taurants also drop the TV packages, world-famous Hooters girls, and full alcohol service found in traditional establishments. Hoots does, however, embrace the top-selling menu items of its full-service sibling, namely wings, shrimp, a chicken sandwich, and ten ders. Menu boards feature bundles and catering packages as well. EARLY RETURNS: Before the pandemic, Melilli saw con sistent positive returns at Hoots across several states, which offered proof of concept. The pandemic, though, was COMPARE AND CONTRAST: Hoots units cover 1,300–1,800 square feet, a far cry from the

HOOTS WINGS SAYS IT HAS NEARLY 100 STORES IN DEVELOPMENT.

HOOTS WINGS

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SERVICE MODELS

says. “When you open the funnel and bring your brand to more people and in different categories, you create new opportunities to gain customers for franchisees and the brand.” COMPARE AND CONTRAST: From the Turkey O’Toole to Oh, Baby Back Ribs, On The Fly customers can order many of the same core—and trademarked—menu items available at a traditional Bennigan’s. While the typical full-service Bennigan’s sits in a free-standing, 5,200-square-foot restaurant with a full bar and patio, Mangiamele says the company’s quick serve is a “completely adaptable con cept,” whether that means drive-thru service, nontraditional venues like air ports and arenas, or bar seating with beer and wine. “We will collaborate with our franchisees to make the unit eco nomics work,” he says. EARLY RETURNS: “Very pleased,” Mangiamele says, add ing that positive initial results weren’t surprising given the strong connections many have to the Bennigan’s brand. “My belief is that nostalgia never goes out of style.” The Fly restaurants are in the current development pipeline, and Mangiamele sees significant potential for growth. He notes opportunities with ghost kitchens, second-generation restaurant spaces, and internationally in locales such as Iraq, Turkey, and Central America. “There’s a lot of upside opportunity for us now and we’re all about taking advan tage of it,” Mangiamele says. Famous Dave’s to Famous Dave’s Quick ‘Que DEBUT: August 2021 in Las Vegas MOTIVATING FACTORS: With barbecue ready to be served on demand after hours of preparation, Famous Dave’s can execute fast ticket times to provide guests the food and convenience they crave. “The evolution of convenience makes it a necessity,” WHAT’S NEXT: More than a dozen Bennigan’s On

as the bistro locations, but we’re able to build a lot more of them because of the pricing structure and markets we can get into,” Barnett says.

president of off-premises dining at P.F. Chang’s. COMPARE AND CONTRAST: While eliminating the most complex items, To Go locations embrace the same recipes and scratch-made cooking methods as bistro locations, includ ing dishes like Chang’s Spicy Shrimp and Kung Pao Chicken. In all, the To Go menu represents about half of the bis tro menu. “Our food is our food and we maintain integrity there,” Barnett says. Most space at the 2,000–2,500-square foot To Go loca tions is devoted to the kitchen, and while the first P.F. Chang’s To Go restaurant in Chicago offered no seating, all new locations now include limited indoor dining. The company is also retrofitting its current To Go fleet to include seating as well. EARLY RETURNS: Barnett says P.F. Chang’s To Go perfor mance is “getting better all the time.” She reports favorable returns in sub urban markets as well as an uptick in urban markets, where the office reopen ings have spurred lunch and catering orders. WHAT’S NEXT: Barnett says P.F. Chang’s will near 30 To Go eateries by year’s end. “These res taurants are not making as much money

Bennigan’s to Bennigan’s On The Fly

DEBUT: January 2021 in Coralville, Iowa

MOTIVATING FACTORS: For Paul Mangiamele, chairman and CEO of Legendary Restaurant Brands, Bennigan’s parent company, launching the Bennigan’s On The Fly concept is about offering more diverse franchising opportunities, leveraging the treasured Bennigan’s brand, and corralling a new demographic. “This game is all about market share capture,” Mangiamele

P.F. CHANG’S TO GO COULD NEAR 30 EATERIES BY YEAR’S END.

BENNIGAN’S ON THE FLY, P.F. CHANG’S TO GO

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SERVICE MODELS

feet, the Westfield café covers but 2,700 square feet, a more compact size that positions Friendly’s Café to enter dif ferent markets. The new restaurant’s menu pairs beloved Friendly’s classics like SuperMelts and ice cream sun daes with new options like Tater Kegs, the $100,000 Cobb Salad, and a Dori to’s Cool Ranch ChoppedCheese Burger. Guests order at the counter or via a QR code at the table before staff delivers food to the table. “This new concept is very exciting because it shows how we are growing and enhancing the Friend ly’s brand, while also maintaining key staples that make the brand what it is,” Erlich says. EARLY RETURNS: In advance of its early 2022 opening, Erlich heard mixed opinions about how the café concept would be received. Within the café’s first week, however, he says the company had received “a lot of positive feedback from customers.”

FAMOUS DAVE’S IS PILOTING A VARIETY OF MODELS, INCLUDING A DRIVE-THRU.

while traditional full-service restaurant development will continue, albeit with restaurants carrying a reduced foot print, Crivello says Famous Dave’s has current and prospective franchise part ners eager to build a Quick ‘Que.

Famous Dave’s CEO Jeff Crivello says. The smaller footprints, compelling real estate opportunities, and simplified operations of the quick-service envi ronment certainly appealed to company leadership as well. COMPARE AND CONTRAST: While the Quick ‘Que menu resembles that of Famous Dave’s full-service res taurants, the company eliminated steps of service to ensure a faster, more con venient experience. “People want less human contact, at a faster pace, and on demand,” Crivello says. EARLY RETURNS: Quick ‘Que has captured quick success, Crivello says, as customers appreciate the ability to get Famous Dave’s hearty barbeque via delivery, dine-in, carryout, or the drive-thru, where Famous Dave’s boasts ticket times on par with other quick-service concepts. “We know the demand is there,” Crivello says. WHAT’S NEXT: Crivello calls the Quick ‘Que model Famous Dave’s primary growth vehicle moving forward. Soon after opening in Las Vegas last August, additional Quick ‘Que locations opened in Coon Rap ids, Minnesota, and South Salt Lake, Utah, a nod to Famous Dave’s national plans for the nascent concept. And

Friendly’s to Friendly’s Café DEBUT: February 2022 in Westfield, Massachusetts

MOTIVATING FACTORS: Friendly’s CEO and president Craig Erlich says current times call for a model like Friendly’s Cafe to com plement the company’s traditional full-service restaurants. The café con cept enables Friendly’s to serve guests in a new way while empowering the company to explore innovations in menu and technology. “[Quick-service] and fast-casual concepts are leading the way during a time when customers pri oritize convenience and flexibility in their dining experience without having to compromise quality, service, or tradi tion,” Erlich says. COMPARE AND CONTRAST: Whereas the traditional Friendly’s res taurant averages about 3,800-square

WHAT’S NEXT: Friendly’s leadership intends to open additional Friendly’s Café restaurants, but it will first monitor results of the Westfield location. “As with any new concept, we want to gain feedback on what is working and what’s not and fine tune along the way,” Erlich says. q

Daniel P. Smith is a regular contributor to Food News Media and is based in Chicago.

FAMOUS DAVE’S QUICK ‘QUE, FRIENDLY’S (2)

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YOUNG LEADERS

IN THE END, THE PANDEMIC MIGHT HAVE CREATED THE MOST RESILIENT GROUP OF INNOVATORS THE RESTAURANT INDUSTRY HAS SEEN.

/ BY QSR STAFF

35 YOUNG LEADERS TO WATCH

When it came to restaurant leadership, the pandemic didn’t leave room for learning curves. Innovation arrived too fast, pivots too frequent, and plainly, the switch to survival mode tossed executives of all ages and resumes into the fray. But the end result was hardly a setback. In fact, the trials of the past two-plus years spurred creativity at levels unseen. And that extends up and down the corporate ladder. ¶ In this year’s collection of the quick-service indus try’s most exciting young executives, founders, and franchise leaders, a common theme was resiliency. These 35 visionaries responded to the crisis with ideas and strategies that will last well beyond it. ,

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J.R. Galardi President and CEO GALARDI GROUP AGE: 33

J.R. Galardi is a realist. He’s the CEO of a 350-unit restaurant chain at 33 years old, and without his last name, he probably wouldn’t have got here, he admits. But while it’s something “always in the back of people’s heads,” Galardi isn’t carrying a chip on his shoulder. “I want to do my best to make sure I run this business as it should be run,” says Galardi, whose father, John, created the chain in 1961. “Regardless of who my dad is.” Galardi’s story isn’t your standard birthright. Growing up, he didn’t expect to run the family business and was, in fact, doing the opposite. He had a concert promotion company in Denver after following his father’s advice—to pursue his own interests. Yet things shifted when John was diag nosed with pancreatic cancer. Galardi grasped the gravity of what his father, who passed away in 2013, built, starting as a single hot dog stand six-plus decades ago. Galardi didn’t want Wie nerschnitzel to “get broken up,” or for private equity to swoop in. “We’re going to continue the upward trend,” Galardi says, “and really make sure that everything my dad worked for stays in place.” Galardi has a habit of going all-in when he sets course, he says. It drives his wife crazy. And it’s what happened with Wienerschnitzel. Galardi was promoted atop the world’s larg

GALARDI GROUP

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YOUNG LEADERS

est hot dog franchise in early February. He added CEO to his president title, which he held since 2017. Galardi also stepped into his mother, Cindy Galardi Culpepper’s, role, who stayed on as executive chairman. In recent years, Galardi says she stepped back and let him learn from the front. That was nothing new. At 13, Galardi helped out at a Wie nerschnitzel in Newport Beach, California. He was a janitor, fry cook, and drive-thru win dow attendant. He even poured beer out of the store’s tap. When his father got sick, however, Galardi returned with a directive: to learn the busi ness while also earning his stripes. On day one, “nobody knew what to do with me,” Galardi recalls. They had him update pricing stickers on a menuboard that hung in the conference room. “It’s not only that I wanted the perception to be that I just didn’t take over, but also, I’ve been a big believer that you shouldn’t be able to tell people what to do if you don’t know what to do yourself,” he says. Galardi took jobs across the organization, from operations to development to marketing. He started with the latter, which proved a natural extension from Galardi’s background. Addition ally, this was during the “rise of the millennials,” and the best way to reach them, Galardi says, was to market to himself. He created a “Vision ary Department” in 2014 that amplified social media, digital, and outreach. They’d connect with events—concerts, Supercross, music fes

founder Mike Smith. The Hot Dogs for Home less Tour visited 20 cities and raised $200,000. It gave away more than 40,000 hot dogs. Another end result—seven people inked matching tat toos of a skateboarding hot dog. Galardi got one on his left arm. Interestingly, the notion of a Wienerschnit zel tattoo isn’t all that crazy, he says. Galardi has seen them often. CMO Doug Koegeboehn once even walked into the office and pulled his pant leg up to reveal Wienerschnitzel’s famed pole. “He’s like, please don’t ever fire me,” Galardi jokes. This kind of loyalty struck Galardi from the moment he rejoined the company. “People live and die by this food,” he says. And now he’s tasked with guarding it. Under Galardi’s time as president, same-store sales jumped 42 percent. Digital sales ballooned 400 percent. This past year marked the brand’s 11th consecutive run of comps growth. Wienerschnitzel’s unit expansion in recent calendars, however, has been mostly stagnant. Galardi says it’s a product of some external real ities—construction costs and the landscape being what it is—and a footprint with perhaps too many variations. He says the chain is work ing to develop a modular concept to lower costs and improve scalability. Meanwhile, Wienerschnitzel contin ues to explore technology and become more efficient. It implemented third-party deliv ery pre-pandemic and worked on packaging and streamlining off-premises. The company

JENNIFER Lewis DIRECTOR OF OPERATIONS CHRONIC TACOS AGE: 34

Jennifer Lewis graduated from college and dove into her family’s business, overseeing 10 Las Vegas McDonald’s. When Lewis’ par ents retired, she began to look for a fresh chapter and found Chronic Tacos. Lewis’ purchased her first store in 2015 in the Palms Hotel and Casino. Soon, corporate took notice. They asked her to join as fran chise support manager and assume direction of a portfolio of units. Lewis developed stra tegic plans and spearheaded a COVID response that centered on ground-level support and com munications, particularly with mandate tracking and federal aid. In 2022, after four years, Lewis was named Chronic Tacos’ direc tor of operations. “I feel the most important part in my role is build ing strong relationships with our franchisees,” she says. “Gaining their confidence is fundamental. Especially, operating in a time of uncertainty, providing franchisees with strong support helps them maintain high levels of confidence and in turn deliver on our brand promise.” Being an owner/operator established credibility quickly. “The franchisees I support have an appreciation for the fact that I can see things from their per spective,” Lewis says. “I look at myself as a liaison, providing an ,

teamed with Olo to build out its web site for mobile ordering. “I think it jumped us probably five years, at least, in the first year,” Galardi says of COVID. He also oversees 13-unit Ham burger Stand and Tastee Freeze, which Galardi Group acquired in 2003. The latter has four units, but is on the menu at nearly all Wienerschnitzels. Galardi believes both have legs to grow, especially overseas. Hamburger Stand, in particular, appears to be the company’s most viable vehicle, just given the product’s familiarity with

WIENERSCHNITZEL’S COMP SALES HAVE GROWN 11 STRAIGHT YEARS.

tivals—and meet guests by handing out product and talking about the legacy chain. The goal being to get in front of a younger demographic while remaining loyal to a core guest who has stuck around for generations. Through this, the brand brought the average age of its consumer down from 49 to 44. Galardi’s marketing role tailed into another position, which carried over into another. And he kept asking questions and figuring things out. One outlet Galardi wanted to explore was phi lanthropy. Then the company’s chief visionary officer, he ignited a program called, “Hot Dogs for Homeless,” partnering with Skate for Change

international consumers (the hot dog isn’t quite an established daypart outside of America). It incorporates Wienerschnitzel’s menu, which typically mixes about 49 percent of sales. As Wienerschnitzel’s growth unfolds, Galardi will continue to drive his father’s legacy forward. At 33, he’s a young CEO by most measures, in addition to being the founder’s son. “I think defi nitely in the beginning, when I was in my mid- and early-20s, I would show up to meetings and peo ple would think I was there to set up the projector, bring them coffee,” he says. “Now, I’ve estab lished a good relationship with vendors and franchisees.”

WIENERSCHNITZEL

CHRONIC TACOS

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