Gregg Majewski CEO of Craveworthy Brands

0:00What's your favorite fast, casual, or quick service restaurant these days? Is it Raising Canes or Texas Roadhouse or Kura? Those are some of my favorites. Today, I speak with Craveworthy Brands CEO, Greg Majewski, about how this industry works and what makes them successful. Greg started in the industry as an intern at Jimmy John's. Ultimately, as an executive there, grew that brand by 10x through a period of massive scale. And his company today, Craveworthy Brands, is a restaurant platform that scales these concepts. Really interesting conversation.

0:36Hi, Greg. How are you? Good to see you. I'm good, John. How are you? Thank you for having me on your podcast. Thanks for joining. This is a few episodes in a row where I'm talking to expert in an industry that I'm fascinated about, but I don't know that much about. The last few episodes have been the fitness industry and the television industry. We're today going to talk about growth in the restaurant industry, fast casual space. What's something about this space that people outside of the industry might be surprised is an indicator of success? Indicator of success isn't always necessary what you see when you drive by.

1:13So more times than not, I hear from people, oh my god, I went in and it was so busy during that peak time that they go in. That doesn't tell you the whole story of what a restaurant is or what a restaurant group is about. The story is usually a lot bigger than just that peak period that they come in if they're successful or not. And that's usually the biggest misconception. And then when stuff closes, you're like, man, I was always in there. It always had so many people. There's a lot more to it. It's no different than any other business. You need to be busy all the time. Yeah. Or there's, there's overhead and there are other costs whenever you're open, when the lights are on that you need to deal with.

1:47You began your executive career, had early executive at Jimmy John's through a time of rapid growth. And I'd like to kind of talk about that. I think when I was looking, you started a few years after I had my first Jimmy John's sandwich in Evanston, Illinois. I was picking it up and eating it in my college dorm room. So when you started it, I read there were 30 or so stores. You grew it to 300. Why did you think it was the right time as CEO to really focus on rapid growth? And what was sort of the riskiest or most uncertain part of that time? When I joined the company, I started as an intern and Jimmy John, there actually is a Jimmy John, went out and had an incredible product and a vision that we needed to sort of march to.

2:34Product was great. We were doing something that nobody else was doing, which was delivering something besides pizza or Chinese food. And we knew that we could catch lightning in a bottle because we were so different than everything else. We could own a segment. It wasn't about sandwiches as much as it was the fact that we offered another delivered product to our consumer that wasn't typical during that time. And that was what we built on and why we knew we could go. It was just unique. It didn't matter if it could have been delivering burgers if they delivered back then. We tried something nobody else was doing besides Chinese and pizza.

3:07I remember, and it's still part of the advertising today, that the delivery is really fast. Freaky fast. Yeah, freaky fast. Is that something that you just sort of realized an aha moment? Was it deliberate? I mean, it's just, it's always been that way. It was 100 % deliberate. I mean, because we had no cook time and we could make a sandwich in 15 seconds, we wanted sandwiches out the door and in our consumer's hands in under 10 minutes. So you can sort of say Domino's had the 30 minute delivery. Remember when they were doing that and pushing that? We wanted it to be just someone's hand in 10 minutes so we could become normal in their lives.

3:44so they could go ahead and order for lunch. Oh my God, I forgot. I didn't bring my lunch, but I'm starving. What can I get? Oh, I can get a Jimmy John's. I'll be here in 10 minutes. And that was sort of what we built our reputation and how we built the stores to success. We focused on that element. Getting deliveries out the door in under five minutes and to our consumer in 10 minutes was always our goal. So you had that. And then at the top of the show, we were talking about reasons why a business might not be successful, might not have a lot of deliveries or sales during downtimes. One of the things I know that you did after you were an intern at Jimmy John's is you restructured operations of the various stores and franchises.

4:25What are the key things about making individual locations in the restaurant industry more efficient? The principles that I had at Jimmy John's and the principles that were installed on me there were you had to be hospital clean. You had to have incredible service. Your product had to be good. Those are all givens. You know, a restaurant has to have those things. People usually get one out of three and think they're doing OK. But the fourth then is you got to provide hospitality or something different that they can't get anywhere else. And so those are sort of the four structures and pillars that we always put into all of my restaurants, including what we're doing today, is that we have to be different.

5:03We have to take care of the guests. Our product has got to be great. We have to be clean and we have to be dependable. You know, and if you put all that in place in your restaurant, then the odds are you're going to be OK. And then if you follow that and be to that all the time, you're going to be OK. So let's think of it as another industry. And Jimmy was the one who taught me this one is you get on a plane and maybe it's bad time to have this discussion, but you get on a plane. And when you get on, you feel safe because the pilot goes through a series of checklists to make sure that everything is working right.

5:36you know and those checklists are followed verbatim every time and when there's not there's a major issue would you get on a plane knowing that they're not going to follow those systems absolutely not and i know it's an extreme but would you want to go into a restaurant where they don't follow their systems and procedures to make sure you get what you're paid for every day you shouldn't you want it to be that way all the time so we use that sort of analogy on why it was important to follow those systems and then that led to everything else and to our success because we just enforced the system.

6:06When something went wrong in the restaurant, we looked at it was, did the system fail or was it an employee issue? If it was an employee issue, you train them, you get them up to speed, you give them another chance, you guide them to success. If it was a system failure, you fix the system so it never happens again. And that's the way that we look at our restaurants and every restaurant I've been involved in since, which is a couple thousand that we follow a system verbatim day in and day out. So we make sure that we're successful. And we go back to that basic point. Did the system fail or was it an employee training issue?

6:43You mentioned your brands today, your CEO of Craveworthy Brands. What's your thesis for growth? Maybe you can tell the audience some of your brands. And then as you think about franchising, how has the franchise market changed since your early days in the industry? So Craveworthy is a restaurant platform company that we've envisioned growing the next great restaurant brands in. We take gambles and flyers on emerging restaurants that have not gotten to scale yet, and we put our playbook in to try to get them to go. We know that no matter how great anything is, we don't decide which brand hits in the American population or with the population.

7:21The consumer decides what brand is the next hit brand. Nobody in their right mind would have said raising canes would have been the success that it is. It was chicken tenders, fries, and a piece of toast and a side of coleslaw. Nothing major about it. There's nothing in there that would have said it's going to be the next$11 billion company. But it was because he was consistent. He had speed and he offered something that everybody enjoyed. But the consumer picked it. We feel the same way. Let's have our brands let the consumer pick. So our brands run the gamut of being ethnic foods from Genghis Grill and Seagree Indian Barbecue and Taim and Tsum Tsum to more traditional fare where we're dirty dough cookies and Kinnaman's cinnamon rolls and crafted burgers and Budlong Southern chicken, you know, and Fresh Brothers.

8:06We have a gamut of everything to us. It doesn't matter the brand or the food. It matters that we can put that playbook in place, which leads to franchising. Well, because we're a system oriented company, franchising to me hasn't changed much from the beginning to the end. Franchisees want to buy a system that they can replicate with ease as long as they follow the book. And if you provide them the tools and the guides and the books, great franchisees follow them, you know, put them into place, believe in them, march to those orders, care where a trash can goes, cares where the slicer is set up because they've all bought into that system.

8:42Bad franchisees are the ones that, oh my God, my store is not making it, but aren't doing everything that they're supposed to be doing to make it work. They're not following the system. Now, franchising is not a hundred percent. You're going to be your money back. Franchises fail, just like any other restaurant. Bad location, bad operator, all those things can lead to the downfall of it. Nine out of 10 times, if you start franchising, it comes down to a franchise issue, not following the system or a bad location on why they don't make it. So Greg, in an industry that's hospitality first, I'm curious what you think about a few recent innovations that I've experienced.

9:19I was with my son. I ate at Texas Roadhouse. I don't know if you've eaten there before. And they, in my opinion, do a great job. They're very friendly. But I noticed that I paid for the bill on my own at the table. I never had to talk to a server to ask for the bill. There's a console where I just pay and leave. What's your opinion on that? I mean, we'll take a bigger approach on it. I think tech and restaurant is one of the most important developments in the last five years. The restaurant industry was non-tech forward forever. We didn't get the new tech advancements. We didn't have the innovations.

9:54We didn't have any of that. The big innovation was a POS system. That was really the last great thing. Yeah, loyalty program and that. But that was the last major change. what tech is allowing us to do is to remove pain points for the consumer and the staff. And if that pain point is something that's removing it from the level of service and provides a better experience for our guests, then we should be all in on certain tech. And so what the industry has found is that we've had consumers tell us waiting for the check is one of the most annoying things that can happen because the server gets busy.

10:29You've already finished. They're onto something else. They forget. They don't come back. They don't give you change. Now it's eliminating that problem because if you're ready to go, you go on your time. So to that, that's great tech because it is a plus for you. It's a plus for them. It's a plus for the restaurant. It allows the server to go on to the next thing. But if you don't want to use it, you can still get a check. You know, you don't have to use it. It just speeds up your service. That's the type of tech that's important. Tech that takes out hospitality so you never have to talk to somebody and you remove the hospitality component.

11:01That's not tech I'm for. The restaurant industry is different because we provide our guests an experience. They come in not just for the food, but because of an experience. You can make anything we make cheaper in your home. It's just fact. You can. Even fine dining, you can make it cheaper at home. You come in because you want something special. You want that level of hospitality. You want to be taken care of. It doesn't matter if it's Burger King or a five-star Michelin star restaurant somewhere, you need to be taken care of. You pay for that level of service and that hospitality. And that's something that I fight with the industry on continually.

11:38Don't take too much out that we're not doing what makes us different because then why are they going to come in? Yeah. Another example of tech in the restaurant that I experienced recently was at the conveyor belt sushi chain called Kura. That one's sort of cool. Yeah. Yeah. Yeah. Yeah, a robot brought the drinks and the conveyor belt brings the stuff. There's still, you know, humans, people making the food and all that. But I thought that was a pretty cool thing as well. I was curious, or I had a question planned, I guess, which was, are there certain markets in the United States you think about testing new concepts?

12:14Because I heard, I don't know if this is true, that McDonald's tests new food or whatever in Columbus. How do you think about testing, updating your playbook? Let's say for one of your brands, you realize there's a system issue, you want to update it. How do you get voice of the customer? How do you prototype? How do you test? We roll out the test, depending on the size of the chain, we roll it out everywhere and we back it or we pick one or two markets to go in on. And Columbus is one of those markets that we test in just like everybody else, because it's not because Ohio has any highs or lows or different.

12:47their level of taste is very basic in that they don't like real, real spicy. They don't like real this. They're just like neutral. And it's the best sort of melting pot of population demographics that is around that you can sort of play this in. So everybody goes into that market because you can get a bigger blueprint of what you're doing. Now, none of those stores are huge home run stores because there's not the population of New York or LA or Chicago, but you can get a great basic point of what you're testing works. And if it's liked there, it's usually liked everywhere. That's really interesting.

13:22And is there a place for the types, let's say fast, casual space that are sort of tastemakers? Meaning, you mentioned Raisin Cane's caught lightning in a bottle, or maybe one of your concepts, your testing, you recognize, is there a certain place where it's like, oh, if Miami or New York, if they like it, then it's probably going to go crazy? It's usually Midwest. I mean, if anywhere in the Midwest, you can become a success. You pretty much carry across the country. You don't see restaurants coming from coast to coast very often and growing because, oh, it's a New York brand or, oh, it's an LA brand.

13:59It's hard to get it because one, they charge a hell of a lot more money for their product than what you do in the Midwest. So you can never duplicate their sales anywhere else because you can't charge that. And so usually the brands that tend to get that big push on franchising or have those growth mechanisms usually are Midwest brands. And Midwest to Texas, I would include in that, you know, the Great Plains of the US is sort of where the brands have come from. As you're spinning up new concepts, you're thinking about the, you know, the restaurants that are on your platform. How much are you considering delivery and pickup revenue?

14:34And How are the current economics and partnerships with the Uber Eats of the world going? They're a necessary evil. And if you go all in on them, you can make a lot of money on them. What COVID has allowed and what COVID brought in is that people have changed the way they eat. Now you're starting to see the teenagers of today coming back into restaurants because they don't want to eat the way their brothers and sister do and have to go and watch Netflix. You know, they want the social and the experience again. But for that generation, delivery is all they know. It's how they socialize. And that's not going away.

15:08So we all leaned all in on that. And now we have to lean out a little bit and go back into what our boxes look like and how services because people do want that experience. But DoorDash and Ubers of the world are now just a way for you to make money. and in all honesty it's a way to add 30 to your revenue line because you can do 30 of your business in a way that you never could before if you're good at it your example about teenagers is totally true my my son his friend were home alone last night we live in seattle uh what they do for they took a bus to wing stop ate at wing stop and then took came home when they could have easily you know just ordered in but they wanted that experience of going out and being at the restaurant Um, if, uh, if, if folks in the audience are thinking about becoming a franchise owner for the first time, or they're, they're thinking maybe that's a way that they want to build, build a business, what advice would you give them?

16:02Depending on where you're coming from in the industry. So if you've never been in the industry, as you sort of question, find a group that focuses on the training and focuses on those first time franchisees. That means you're probably not going to be able to go to the hottest restaurant groups that are out there because they're not going to, they use multi-unit. They want people with experience. Find a group that's up and coming and a system that works, that's ran by people that believe in franchising and the training mechanism. Spend a lot of time on the team that's going to teach you how to do the project.

16:35Don't over worry about what other franchise stores, sales are and all that. That all comes. But if you believe in the system that is going to be in the leadership, they're going to provide you the tools to be successful. that's where I would look at more than anything. Obviously, you don't want something that's doing$1 ,000 a week. You're not going to invest in it. That's a given. But find something you enjoy and then find a team that's really going to give you the tools to help you be successful in how you grow. Is there a franchise, let's say outside of the restaurant industry that you look at and you really admire and why?

17:09Outside of the restaurant space? in all honesty I don't follow the service or the the other ones just because it's not where I focus on obviously some of the Mr. Plumbers and that of the world are extremely popular and able to give you the tools and get you in the nice thing about the service sector is it's usually less capital required to get where you need to go and open and start your own business a restaurant is capital heavy at the start. So there's benefits to why you would go with one or the other. But I don't know enough to say that's the one that I would go and jump in on. When you think about the brands that are on your platform, is there a dish you've tried or a restaurant that you've tried that's really blown you away and you think it's going to be one of the next big things?

17:58Actually, when you look at our portfolio and how we've grown, and we haven't announced this one yet. But there is a company that we're working on bringing the over from China to the US. And we're going to be the master on that group. And I'll be frank, I've never had a broth or a noodle this good in my life. Now, will it resonate here? I don't know. But the food was so good that I wanted to jump in and I wanted to bring that here because I knew we could have success with it. The other one was the last one that really did that to me, though, was Kinnaman's, which was our cinnamon roll concept that we bought.

18:34It's up in Portland. And it was just because they took a twist from what the traditional cinnamon rolls were doing and just made it a little bit better by adding the different toppings and all that. But the base cinnamon roll was outstanding. And knowing that and knowing that you could drive that way, it left me where I could have eaten like seven of them because they were just so good. You know, But those would be the ones that I would sort of say are the last two that did it for me. Outside of my brands, there is a taco concept that is out there right now that is getting ready to gain some major traction.

19:10And not mine. I tried to get it. If they're able to get their leadership to where they need to be and grow, this will be a very, very special brand. All right. I'm interested to know what it is. Maybe I'll have to guess in five years when I see things pop up in my neighborhood. Greg, you have a podcast. Tell the audience what it is and what you talk about. So I have a podcast called Room for Seconds. It is basically telling the story of the people that are on, their leadership style, and how they've learned their lessons and what they're looking to do and why they've done it. We've had Ndamukong Su on.

19:42We've had other athletes. We've had major restaurant CEOs and non-restaurant CEOs on that sort of give back and give you the answer to the question of what mistakes did we make and what did we learn so you don't have to learn. make those same mistakes as we do. Because one of the most important things I've learned in this industry and in my career, you don't need to fight these battles by yourself. You know that there are incredible people out there that will give you advice and tell you what they did wrong or right. So you can learn from them and be better at your job quicker. In the old days, people didn't have these mediums, media ways to connect, you know, take advantage of them, listen to them.

20:23You don't you learn from other people, the better off you are in life. No question. Greg, thanks so much for joining me today. Thank you.

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