Why Is Scaling the Best Move?

Thank you. And we likewise have Clinton Anderson, the CEO of Fourth, who will be moderating the conversation with Jason. So Jason, how about I let you offer the audience some information about your background and you can also tell them a little bit about Chop Shop. And after that I'll let you take it from there, Clinton.

Thanks Christina. My name is Jason Morgan, CEO of Original Chop Shop. I have actually been doing this for about 9 years now. We purchased the brand in 2016three unitsand I've grown it to 26. Prior to this, I've spent most of my career in hospitality in some shape or type. After a brief stint of attempting to be an accountant for about a year and a half, I transitioned into casino property and operated in corporate financing.

I was the first staff member there after personal equity bought the company. Assisted grow that from 20 to 150 areas, took it public in 2014, and then left about a year and a half after going public to do this at Chop Shop. My hope is that we can reproduce the success we had at Zos, and we're off to an actually good start.

We're at the counter, we bring the food to the table. The key to the program is we have a beverage component as well with fresh-squeezed juices and protein shakes.

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A little more complicated than some of the walk-the-line principles that are out there, but we think we have actually got something pretty unique. We're going to add another shop this year and at least 4 shops next year. So we will be 31 or so shops by the end of next year.

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I've been in this function for about 6 years. 4th, as many of you understand, is a leading company of software services to the dining establishment and hospitality industry. Our goal is to help our clients be successful in driving profitability and being efficientmanaging labor, handling inventory, and basically providing them with tools they require to deliver their vision.

It's unusual to have business that are precious and growing rapidly, that can duplicate that success every year. Jason, among the reasons I was so fired up to have you join our session is the success at Zos was fantastic. I have actually just met a handful of brands where there was such a strong consumer affinity for the brand.

When you talk to customers about Chop Shop, they love the location. And to be able to take what is a fairly complicated principle in terms of providing an excellent experience for the consumer, and be able to grow that from a few stores to now north of 30 shops next yearit's incredible.

We're going to discuss how to scale a dining establishment organization. Every restaurateur I ever speak with has dreams of taking one store, 2 shops, five stores, and turning it into something much biggerexpanding throughout the city, across the state, into multiple states, and ultimately national, even international reach. However it's challenging, specifically in today's environment.

Labor is difficult. Stock costs remain high. It's not a simple time to drive profitability and growth at the very same time. We're thankful to have you here today, Jason, because we're going to dig into that topic. The questions are going to be actually around: how do you grow a company? How do you scale it and make it effective? How do you duplicate early success? And from there, after we talk about your experience and the lessons you've found out, we 'd like to then say: well, look, how could technology assist? How can you utilize technology as a multiplier to reproduce early success to far-reaching success? Second, beyond innovation, how do you scale terrific groups? And finally, AI.

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The very first concern I have for you, Jasonlook, you have actually done this twice now in the restaurant market. What are some of the lessons you've found out? What has your experience been in terms of what it takes to actually drive success in broadening dining establishments? Inform me a little about your path, what you experienced along the way, and perhaps some of the harder lessons you found out.

We talked a little bit before we started about LinkedIn, and I have actually got a post teed up to follow this next week about what the playbook is likepoint by pointfor growing a company. To me, among the essential things, and I feel extremely lucky, is that both brand names I have actually been involved with are distinct.

And there's nothing exactly like Chop Store in terms of what we're finishing with a large, diverse menu. Many brand names today are really singularly focused in terms of what they're offering from a food product. I feel like we began at a benefit with both brand names by having something distinct that filled a specific niche nobody else was doing.

A lot of it starts with the brand. Does your brand have something unique that no one else is doing?

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The 2nd thingI originated from a finance background, so a great deal of my knowings are more financing and data-driven versus a lot of early startup restaurateurs who are imaginative types. They like the food, they constructed the menu, they built the brand name. I most likely couldn't do that from scratch. But if you offered me something that has all those components in location, I can take it from there and put the playbook in place.

They do not understand their breakeven sales. They do not comprehend how margin improves as sales increase. I've seen so lots of business where the numbers simply do not work.

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If you don't have those two things, you shouldn't be developing stores. Yeah, maybe both? Since as I hear your description, you've highlighted three things: execution, brand distinction, and monetary viability. You have actually got to begin with execution. If you don't have an operating design that works, broadening it simply increases problems.

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Second, you need an engaging brand name or unique concept that resonates with consumers. And another crucial lesson is about entering new markets.

When we broadened to Dallas, I expected brand-new stores to do 5070% of Phoenix sales in the very first year. Too lots of operators assume brand-new markets will open at full volume day one.