QSR September 2022

ACQU I S I T IONS

nel of trade,” slid to 75.3 percent. Meanwhile, looking at 2012–2019, catering, online ordering, third-party delivery, drive-thru, and even phone orders, all grew. Traditional ordering dropped below 40 percent of sales during COVID depths. It returned to 56 per cent by year’s close. The key here, Fox says, is Firehouse had assets in place. It only had to lay into advertising and promo tion to jumpstart awareness. RBI can help with that. “And that traff ic that we’ve picked up has been lasting,” he says. “People are continuing to use us in that off-premises experience.” Firehouse’s “Rapid Rescue,” or internal online ordering, plus third-party delivery, remains double what it was in 2019. “It has created a fundamental shift in how the consumer uses us,” Fox says. “I get so excited by the fact that RBI’s strategy was already in line with that in terms of the embracing of digital in particular. …Being able to leverage those resources, it’ll be much more impactful than if I had been left to my own devices under private ownership for the foreseeable future.” Fox says RBI’s tools will help the company antici pate further change as the sector’s recovery marches on. In particular, the deal instantly gave Firehouse a drive-thru playbook that stems from operating more than 12,000 across North America. Firehouse has nearly 70 today and they’re over indexing sales in most cases, Fox says. The sandwich industry, in general, is not rife with windows like, say burgers are, which is one reason the category rebounded slower. “The vast majority of the system is in traditional in-line units, but in every instance where the business case is strong to look for drive-thru locations we’ve leaned into that,” Fox says. As noted before, RBI spent the last 12–18 months modern izing its drive-thru f leet. Namely around digital menuboards. Those learnings are going to cascade to Firehouse. “We think there’s an opportunity there to share best prac tices and you can basically cut to the chase versus iterate, which many of us have had to do over the past five, six years,” Cil says. Adds Fox, who pushed “more Whoppers out windows than I can ever count,” in his 23 years with Burger King: “RBI can quickly make us better drive-thru operators. We are a great sandwich brand. We know how to make the best food. Do we have opportunity to learn how to serve it better?” All told, Fox says, there are clear, myriad ways to grow Fire house and generate more transactions. But it’s going to start with guest experience. What he wants to bring to the portfolio from Firehouse “is that love of Firehouse.” RBI’s value core of “building the most loved restaurant brands in the world,” is a vision Fox feels the chain fits right into. “The thing is, we just have to make more customers aware of us so even more people can love us,” he says. q

FOX (LEFT) AND CIL STILL HAVE A LOT THEY CAN TEACH EACH OTHER, THE EXECUTIVES SAY.

The goal, Fox says, was to keep cash in the wallets of fran chisees and provide them with ammo for whatever twist came next. However, what ended up happening was a return to prior year levels after only 10 weeks. Come summer, Firehouse forgave deferred royalties and surged ahead. “For us, what was very compelling was that the pandemic, and the initial stage of it, produced an environment where peo ple in increasing numbers used us in a way that was perhaps different than they considered using us before,” Fox says. But the positive spin was Firehouse had already begun to consider this. COVID didn’t invent off-premises realities as much as it provided kindling. The brand completed digital and packaging work pre-2020. In 2012, Firehouse’s dine-in business accounted for 52.4 per cent of sales (unusual for a sandwich shop, as most of its rivals were predominantly takeout, Fox notes) . During succeeding years, the contribution from dine-in began to decline. In 2014, it dropped narrowly below 50 percent. Two years later, dine-in mixed just 46.5 percent. Fast forward to 2019 and it was down to 38 percent. This was hardly a Firehouse-specific tale. From 2012–2019, fast casual showed a 5 percentage-point decline in dine-in. And more telling during the same span—a drop of 17 percentage points for a hefty collection of quick-service brands. Close to 90 percent of Firehouse’s sales in 2012 came from a customer placing an order with a cashier at the point of sale. In 2019, the share of what the chain considered its “traditional chan

Danny Klein is Food News Media’s editorial director. Contact him at danny@QSRmagazine.com .

FIREHOUSE SUBS

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SEPTEMBER 2022 | QSR | www.qsrmagazine.com