QSR September 2022

ACQU I S I T IONS

If you take a higher-level view, RBI’s footprint sits near 29,747 restaurants, and roughly 18,000 operate outside the U.S. As of November, it had more than 500 outposts in China (1,620 ) , Brazil (928 ), Spain (897 ), Russia ( 792), Germany ( 744), and the U.K. (538); and more than 400 in Mexico (450), Australia (443), South Korea (425) , and France (416). Firehouse has zero restaurants in any of those spots. There are 52 international Firehouses, if you count Puerto Rico. And to toss an even more alluring point forward, outside of Spain, where there are only 50, a sandwich chain not named Firehouse touts at least 384 locations in every one. Australia (1,221) , the U.K. (2,211) , and Brazil (1,641) feature significant bases. The U.S. picture isn’t one to gloss over, either. Subway has retracted by 3,651 stores since 2019. The broad, year-end 2021 domestic sandwich field: Subway, 21,147 locations; Arby’s, 3,409; Jimmy John’s, 2,657; Jersey Mike’s, 2,100; Panera, 2,080; Fire house, 1,044; McAlister’s 505. “You have this underlying mechanism and culture of growth that then will carry over into our brand,” Fox says. “If I’m a potential franchisee, I’m just thinking about the horsepower and the level of experience that’s behind that. … I’ve been in the industry for many years and I’m fairly well known, but if you think about the ownership of Firehouse, it’s not per se. So it really changes the dynamic quite a bit, I think, for any poten tial franchisee looking to invest.” In February, Firehouse added a new member to its C-suite for the first time in 11 years (the position sat vacant since 2009 when Fox was promoted to CEO) . Mike Hancock, a 6-foot-7 former defensive end who played in the CFL with the Toronto Argonauts, joined as chief operating officer. The nine-year RBI vet held the same post at Tim Hortons. Before, he clocked five years at Burger King directing operations across North Amer ica, Southern Europe, Turkey, and Africa. The move wasn’t a cryptic one—it was a signal sender. “That just adds great firepower to an already great team,” Fox says. “He’s been operating in an arena where we aspire to go,” he adds of Tim Hortons. “So that real-world experience is of incredible value. And again, I’ve been in the industry for 48 years, but I haven’t operated at a level with a 5,000-unit brand.” BRINGING FIREHOUSE ON Since close, Cil says RBI worked to integrate and elevate Fire house. On the back-end, it’s connected the chain to RBI’s infrastructure—accounting, IT, and financial systems. RBI has more than 200 engineers working through tech. The company created an in-house stack, including loyalty programs and a CRM engine. It’s also invested in white-label delivery alongside aggregator partnerships and continues to update menuboards to dynamic digital formats across the sys tem, with an added focus on suggestive sell capabilities. Firehouse already had a mobile app complete with order and pay and loyalty capabilities, as well as more than 3.5 million members. In 2021, 2 to 2.5X more dollars came via off-prem ises channels than pre-COVID-19. That October, 14 percent of sales owed to delivery alone. Rewards grew at a clip of 50,000

users per month and reached 10 percent of Firehouse’s total transactions. “It’s so energizing when you know you’ve got these great, great assets that consumers love,” Fox says. “And know it’s more like fine tuning, with the technical side of the business to really unleash it.” Cil says the more important integration piece, perhaps, is the “business standpoint mindset.” With Fox now in the fold, RBI has a team of four presi dents running each brand. They meet once a week and chat about performance and perspectives. Cil calls it a “sharing of best practices” that’s gone both ways since Firehouse arrived. It extends fromHQ analytics to site selection to format inno vation and franchise recruitment. Yet it rests on economics, Cil says. “There’s no gaming that,” he notes. “You’ve got to have strong revenues, strong prof itability, a good return on invest ment for a franchisee to invest and grow. And we think we have a great case here, and Mike and Don and the rest of the team will help accelerate that in years to come.” One element Cil believes RBI can learn from Firehouse is its Public Safety Foundation. The program awarded $69 million over the years to “hometown heroes” and benefitted 5,700-plus organizations. Recently, RBI hosted its first Firehouse Public Safety Foundation event after it donated 17 automatic external def ibrillators—good for $25,000—to the West Miami Police Department. The chief, major, and newly appointed mayor showed up. A speaker shared how a previously donated def i brillator saved a life in the last year. “That’s pretty tangible,” Cil says. “And very direct and super powerful message for all of us. And for our team as well.” At Tim Hortons, more than $27 million ( cad ) was raised in 2021 and early 2022 for the chain’s “Foundation Camps” and other initiatives. Burger King has provided nearly $55 million in scholarships to high school seniors and corporate and fran chisee employees since 2002. The Popeyes foundation donated over $1.2 million to Support No Kid Hungry as of March. So it’s yet another synergy RBI wants to build on, Cil says. RETURNING TO GROWTH Cil adds RBI isn’t in a hurry to open Firehouse units just because it can. “What we’re doing now is taking time to do the research, to understand what consumers expect from the sandwich cat egory in these markets that we think have the potential for growth,” Cil says. “We’re doing research on product; on taste; on naming conventions for products. We’re thinking about what types of formats; how does technology f it in; what’s the right price and menu architecture to consider; and format innovation.” Just like its expansion prospects in general, Firehouse has ample room to maneuver here, too. Through the f irst four weeks of the pandemic, Firehouse’s sales plunged 45 percent, year-over-year. The Monday of COVID’s “off icial” landing (March 16 ) , it stopped collecting royalties. A day later, Fire house did the same for ad fees. In fact, it would be months before the brand asked operators for either, and even then, it came as deferred payments.

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SEPTEMBER 2022 | QSR | www.qsrmagazine.com