WEBVTT 1 00:00:00.120 --> 00:00:02.520 All right, We're back here on another episode of the 2 00:00:02.560 --> 00:00:04.719 Restaurant Report, and today is going to be a fun 3 00:00:04.719 --> 00:00:06.799 one because I've got Michael Halen with my great friends 4 00:00:06.839 --> 00:00:09.519 over here at Bloomberg coming in as one of the 5 00:00:09.519 --> 00:00:11.759 top analysts in the industry. Michael, how are you. 6 00:00:12.640 --> 00:00:14.240 I'm doing well. How are you, Paul? 7 00:00:14.599 --> 00:00:16.960 It's been good. I think a lot's happening in the 8 00:00:17.000 --> 00:00:20.839 space right now, more so Newswise, which we're going to 9 00:00:20.879 --> 00:00:22.839 be covering some stuff on Starbucks. We're going to hit 10 00:00:22.839 --> 00:00:26.920 shakeshack today, talk about the healthy category and also take 11 00:00:26.960 --> 00:00:30.280 a look at where money is going in the space. 12 00:00:30.359 --> 00:00:42.280 So everybody stick around, we'll be right back. All right, 13 00:00:42.320 --> 00:00:45.159 I'm back here with Michael coming in from Bloemberg Intelligence. 14 00:00:45.280 --> 00:00:47.719 Is it intelligence or do you guys have a different 15 00:00:47.759 --> 00:00:50.159 category with all the analysts we talked to some of 16 00:00:50.159 --> 00:00:52.079 the other guys and it's Bloomberg Intelligence. 17 00:00:52.679 --> 00:00:54.200 Yeah, that's what we call the department. 18 00:00:54.240 --> 00:01:00.280 But that's our research department, Compasses, equities, corporates, you name. 19 00:01:00.320 --> 00:01:01.840 It's all into that umbrella. 20 00:01:01.920 --> 00:01:04.439 So when you look at Michael, you're covering the space 21 00:01:04.519 --> 00:01:06.760 right now. Talk to me, first of all, what is 22 00:01:06.799 --> 00:01:10.560 your beat? Are you covering all publicly traded where they're 23 00:01:10.640 --> 00:01:14.920 going in terms of trends, cycles, how their revenues are doing. 24 00:01:15.040 --> 00:01:16.560 Give me kind of the one to one. 25 00:01:17.359 --> 00:01:22.120 Yeah, we cover seventeen of the largest publicly traded restaurant companies, 26 00:01:22.239 --> 00:01:26.640 US Foods and Cisco, and we're analyzing those companies individually, 27 00:01:27.519 --> 00:01:29.920 trying to project out earnings over the next couple of years, 28 00:01:29.959 --> 00:01:33.400 and writing research on how we think their business is 29 00:01:33.439 --> 00:01:36.840 going to go moving forward. And then you know, we 30 00:01:36.879 --> 00:01:39.359 also do a good bit of industry level research, so 31 00:01:39.400 --> 00:01:43.480 we talk a lot about trends and sales and margins 32 00:01:43.560 --> 00:01:45.079 and all that kind of stuff. 33 00:01:45.879 --> 00:01:47.879 Well, we got to talk about AI because this is 34 00:01:47.920 --> 00:01:51.319 something that we're seeing a lot of integration into major brands, 35 00:01:51.319 --> 00:01:55.680 including the supply chain as well, and the potential future 36 00:01:55.719 --> 00:01:59.079 here for the restaurant industry. When you're on the street 37 00:01:59.200 --> 00:02:01.359 right now, is is this a big deal in the 38 00:02:01.400 --> 00:02:05.920 restaurant industry yet or is it still kind of arms 39 00:02:06.040 --> 00:02:08.520 length of people trying to discover what's going on. 40 00:02:09.719 --> 00:02:12.000 You know, I don't think it's a big deal just 41 00:02:12.199 --> 00:02:15.000 yet because I don't think we've seen all the benefits. 42 00:02:15.039 --> 00:02:18.400 We've seen some benefits, I believe, you know, there's been 43 00:02:18.400 --> 00:02:20.639 a lot of work on big data, which is I 44 00:02:20.639 --> 00:02:23.599 guess was AI before it was called AI, right, And 45 00:02:23.639 --> 00:02:25.520 there was a lot of initiatives in terms of. 46 00:02:27.120 --> 00:02:29.080 Theoretical versus actual. 47 00:02:28.719 --> 00:02:37.120 Food programs as well as labor programs and sales projecting algorithms, right, 48 00:02:37.120 --> 00:02:39.919 and those are being improved by AI machine learning right now. 49 00:02:39.960 --> 00:02:43.360 And so that's the benefit i'd say we're seeing right 50 00:02:43.400 --> 00:02:47.280 now moving forward, though we expect much bigger benefits. You know, 51 00:02:48.479 --> 00:02:52.319 one that's probably really close to benefiting a company at 52 00:02:52.360 --> 00:02:56.960 Chipotle's HR program, right, because that's going to free up 53 00:02:57.000 --> 00:03:00.719 the managers to do a lot less interviewing, It's gonna 54 00:03:00.919 --> 00:03:02.520 it's going to free up a lot more of their 55 00:03:02.599 --> 00:03:06.120 time to touch the guests and make sure that the 56 00:03:06.159 --> 00:03:09.199 restaurants are running smoothly and and and focus on their 57 00:03:09.280 --> 00:03:13.360 day to day, which they personally they'd rather be focused on, right. 58 00:03:13.439 --> 00:03:16.599 And so that that's one that that should help Chipotle 59 00:03:16.719 --> 00:03:19.400 pretty soon. And then you know, we have stuff that's 60 00:03:19.520 --> 00:03:22.759 you know, still quite expensive and more down the line, 61 00:03:22.800 --> 00:03:27.520 but has you know definitely are are very interesting, right. 62 00:03:27.560 --> 00:03:31.439 And so sticking with Chipotle because they're on the bleeding edge, 63 00:03:31.639 --> 00:03:34.680 you know, they have the second make line, the automated 64 00:03:34.800 --> 00:03:38.319 second make line that's underneath the counter for to go orders, 65 00:03:38.400 --> 00:03:41.639 and uh, they're testing that and in quite a quite 66 00:03:41.680 --> 00:03:46.960 a few stores. You know, they tried the automated chip fryers. 67 00:03:47.039 --> 00:03:49.479 Those those didn't seem to work out as well. But 68 00:03:49.520 --> 00:03:55.199 the autocado the machine that cuts course appeals avocados for 69 00:03:55.280 --> 00:03:57.759 the guacamole, seems to be working pretty well. That's also 70 00:03:57.840 --> 00:04:00.960 being tested in a lot of stores. You know, places 71 00:04:00.960 --> 00:04:04.960 like Jack in the Box. They have these AI fryars 72 00:04:05.039 --> 00:04:07.919 and these automated drink machines that they're working on. But 73 00:04:08.000 --> 00:04:11.120 right now, all that technology is pretty expensive, right and 74 00:04:11.159 --> 00:04:15.280 so you know, as that technology costs decline and as 75 00:04:15.439 --> 00:04:18.560 minimum wages continue to rise, eventually they'll be an ROI 76 00:04:18.720 --> 00:04:21.319 on those things and they'll be more ubiquitous in the 77 00:04:21.319 --> 00:04:23.399 restaurant industry, but not so much right now. 78 00:04:23.639 --> 00:04:25.680 Well, okay, so you mentioned Chippotle. We got to go 79 00:04:25.720 --> 00:04:28.680 there for a second because obviously briannkel he jumps over 80 00:04:28.759 --> 00:04:30.639 to Starbucks. We'll talk about that in a second. But 81 00:04:31.600 --> 00:04:34.680 boat Rice got about right taking over the lead there 82 00:04:34.920 --> 00:04:36.839 looks like it's going to be a you know, a 83 00:04:36.879 --> 00:04:39.920 permanent position. What do you think about the management team 84 00:04:40.000 --> 00:04:43.360 right now, are you consistent with most of what the 85 00:04:43.399 --> 00:04:45.480 industry is saying is that this is a good cycle 86 00:04:45.600 --> 00:04:48.959 for Chipotle's team to kind of lead through this next phase. 87 00:04:50.439 --> 00:04:51.160 Yeah, I think so. 88 00:04:51.480 --> 00:04:54.680 You know, we we thought Scott boat right was the 89 00:04:54.759 --> 00:04:56.680 right man for the job. We were happy to see 90 00:04:56.720 --> 00:05:00.480 that he got the full time tag. They they dropped 91 00:05:00.480 --> 00:05:03.879 the interim tag on them, and you know, we we 92 00:05:03.959 --> 00:05:05.959 think that was the right move. They also, you know, 93 00:05:06.120 --> 00:05:09.839 last year they kind of quietly gave senior management team 94 00:05:10.160 --> 00:05:14.279 members pretty big raises and extended their contracts. And you know, 95 00:05:14.279 --> 00:05:16.040 I think part of that was fear that Brian Nicchol 96 00:05:16.079 --> 00:05:21.480 could try to poach them poach yeah, right, And so yeah, 97 00:05:21.879 --> 00:05:23.560 Brian Nichol seems to be a popular guy. 98 00:05:23.600 --> 00:05:25.040 A lot of people want to go work with him. 99 00:05:25.519 --> 00:05:31.279 So so yeah, by keeping that senior management team uh intact, 100 00:05:31.319 --> 00:05:33.319 I think was one hundred percent the right move. When 101 00:05:33.360 --> 00:05:35.879 you have a company that's going, you know, doing so 102 00:05:36.079 --> 00:05:39.360 well and outperforming for so long, you don't want to 103 00:05:39.439 --> 00:05:42.639 upset the apple cart, right, and so yeah. 104 00:05:42.480 --> 00:05:44.040 We think we think it was it was the right 105 00:05:44.199 --> 00:05:44.800 to keeping. 106 00:05:44.600 --> 00:05:47.160 A guy the ship on the rails. Well, the good 107 00:05:47.199 --> 00:05:49.959 thing there if you look at Chipotle, they've continued to 108 00:05:50.000 --> 00:05:52.720 experiment with new stuff, and I think that, to your point, 109 00:05:53.480 --> 00:05:56.680 is what they've done with some of their AI automation 110 00:05:56.879 --> 00:05:59.600 with HR. We just saw that story last week we 111 00:05:59.720 --> 00:06:02.240 report on it. But the interesting thing to me is 112 00:06:02.279 --> 00:06:06.839 that usually showcases that the brand has an appetite for 113 00:06:07.319 --> 00:06:09.720 some things like that that can be very you know, 114 00:06:09.879 --> 00:06:13.279 forward thinking. So good stuff for Chipotle. I think in general, 115 00:06:13.360 --> 00:06:15.399 they're probably one of the leaders out there in the market. 116 00:06:15.480 --> 00:06:18.720 Let's jump over to Starbucks for a second. I'll bring 117 00:06:18.839 --> 00:06:22.439 up the story Starbucks laid off eleven hundred corporate workers. Now, 118 00:06:22.519 --> 00:06:26.040 of course, this is Brian Nickel, the CEO, and this 119 00:06:26.199 --> 00:06:30.160 is six point nine percent of the non retail staff. 120 00:06:30.839 --> 00:06:35.160 That's a significant number there. So first of all, why 121 00:06:35.160 --> 00:06:39.439 did he do it? And does this change anything on 122 00:06:39.480 --> 00:06:41.600 the Starbucks forefront? What's your opinion? 123 00:06:43.839 --> 00:06:47.079 No, this is pretty unexpected from where I sit. You know, 124 00:06:47.160 --> 00:06:50.759 when when Brian Nichol took the job, he took over 125 00:06:50.839 --> 00:06:54.439 for a management team that struggled mightily, tried a lot 126 00:06:54.439 --> 00:06:58.519 of different tactics, didn't have a lot of discipline, you know, 127 00:06:58.560 --> 00:07:00.800 And one of the things that we right off the 128 00:07:00.839 --> 00:07:02.879 bat was that he was going to bring in accountability, 129 00:07:03.399 --> 00:07:07.399 a culture of accountability and transparency, right and if for 130 00:07:07.519 --> 00:07:10.519 people that weren't pulling their weight, you know, they should 131 00:07:10.600 --> 00:07:14.000 be worried. And he started with the senior management team. There, 132 00:07:14.120 --> 00:07:16.360 there was some changes right away at the top of 133 00:07:16.399 --> 00:07:19.759 the organization, and now it's making it, you know, down 134 00:07:19.800 --> 00:07:22.800 a little bit further into the other members of the 135 00:07:22.800 --> 00:07:25.800 corporate staff. But listen, this is a team that's been 136 00:07:25.879 --> 00:07:30.560 underperforming for quite some time, right, and so you know, 137 00:07:30.720 --> 00:07:35.319 these big organizations, it's easy for employees to get lost, right. 138 00:07:35.399 --> 00:07:38.199 And you know, you were joking around before we started this, 139 00:07:38.319 --> 00:07:40.720 but you know, you know, maybe they were influenced by 140 00:07:40.759 --> 00:07:44.079 the Dosee team try to run the operations a little 141 00:07:44.079 --> 00:07:49.199 bit more industry, right, And you know, I think I think, 142 00:07:49.319 --> 00:07:52.360 you know, he he wants change, He wants his people 143 00:07:52.399 --> 00:07:55.240 in there, like any good CEO does, especially with one 144 00:07:55.800 --> 00:07:57.839 like him, with his track record, he'll be able to 145 00:07:57.920 --> 00:08:00.639 attract employees, uh easily. 146 00:08:00.720 --> 00:08:03.079 So yeah, no surprise from where we said. 147 00:08:03.519 --> 00:08:06.160 Well, listen, we've seen the industry blue and brands let 148 00:08:06.240 --> 00:08:10.680 go seventeen percent of their support center workforce just last week. 149 00:08:11.160 --> 00:08:13.959 Denny's also said earlier in the month that it had 150 00:08:14.040 --> 00:08:18.439 undertaken some corporate layoffs. Then we saw Dine Brands terminated 151 00:08:18.439 --> 00:08:21.959 about nine percent of its corporate workforce. So this seems 152 00:08:22.000 --> 00:08:25.959 to be a consistent theme that's going throughout the industry. 153 00:08:26.000 --> 00:08:29.079 Do you think we're going to see more throughout twenty 154 00:08:29.120 --> 00:08:29.680 twenty five? 155 00:08:31.360 --> 00:08:34.720 Well, I would say what the common thread between those 156 00:08:34.720 --> 00:08:38.080 four companies has been seam source of sales underperformed. It's 157 00:08:38.120 --> 00:08:41.639 pretty vast underperformance last year, right, And so you know 158 00:08:41.679 --> 00:08:44.039 when you have chains that were putting up negative seam 159 00:08:44.080 --> 00:08:47.840 source sales, you know the revenue bas is shrinking. You know, 160 00:08:48.840 --> 00:08:53.080 this is not uncommon, right, And so I don't think so. 161 00:08:53.279 --> 00:08:55.639 I think I've heard. I think we've heard most of 162 00:08:55.679 --> 00:08:58.720 the announcements this year, because if you're going to do this, 163 00:08:58.840 --> 00:09:00.720 you want to do it earlier in the year so 164 00:09:00.759 --> 00:09:05.720 you get that benefit, you know, sooner, right in terms 165 00:09:05.720 --> 00:09:08.440 of lower SG and A. So I think we've heard 166 00:09:08.440 --> 00:09:10.799 most of the announcements for this year. I don't think 167 00:09:10.879 --> 00:09:13.799 that the companies that are performing really well are looking 168 00:09:13.799 --> 00:09:17.080 to cut headcount at the moment, right. It's the companies 169 00:09:17.080 --> 00:09:19.240 that had a really rough twenty twenty four that are 170 00:09:19.240 --> 00:09:19.840 looking to do this. 171 00:09:20.360 --> 00:09:22.799 Yeah, I want to bring up a story. You mentioned 172 00:09:22.799 --> 00:09:25.799 same store sales, and of course when you bring up 173 00:09:25.840 --> 00:09:29.559 that terminology, you cannot go without mentioning this right here, 174 00:09:29.600 --> 00:09:33.000 which is Chili's thirty one point four percent same store 175 00:09:33.039 --> 00:09:38.240 sales increase in Q two. What in the world was 176 00:09:38.279 --> 00:09:40.600 going on here at Chili's that would cause this kind 177 00:09:40.639 --> 00:09:42.879 of thing? Have you seen anything in terms of your 178 00:09:42.919 --> 00:09:46.279 research that has indicated this kind of growth for Chili's. 179 00:09:47.559 --> 00:09:49.759 Well, we didn't protect thirty percent. I'll tell you that 180 00:09:50.399 --> 00:09:54.480 nobody has, I mean the most. And I didn't know 181 00:09:54.519 --> 00:09:56.639 we were going to talk about this. Did you just notice 182 00:09:56.679 --> 00:09:56.960 my head? 183 00:09:57.039 --> 00:09:58.399 I just sell that, so I say, I got to 184 00:09:58.399 --> 00:10:03.759 bring it up. So yeah, I mean it's been incredible. 185 00:10:03.799 --> 00:10:06.600 I mean forever it's been the Dominoes turnaround, right like 186 00:10:06.600 --> 00:10:09.480 our pizza stinks, We're sorry, will make it better. And 187 00:10:09.559 --> 00:10:11.519 you know they did like a ten percent, and now 188 00:10:11.720 --> 00:10:14.159 Chile's now is compon thirty percent over a six and 189 00:10:14.200 --> 00:10:15.720 a half last year, which. 190 00:10:15.559 --> 00:10:18.639 Is crazy, something I've never seen. 191 00:10:18.759 --> 00:10:22.679 I don't know if it's ever happened for a mature, 192 00:10:22.879 --> 00:10:25.759 established brand of this size that's been around this long. 193 00:10:26.360 --> 00:10:30.720 Absolutely incredible. Kevin Hawkman and his team has done a 194 00:10:30.720 --> 00:10:35.120 phenomenal job. And it's a similar playbook. Uh you know 195 00:10:35.159 --> 00:10:38.679 that Brian Nicols is looking to execute in Starbucks. Right, 196 00:10:38.720 --> 00:10:41.399 It's like nail the operations, right. They right off the bat, 197 00:10:41.399 --> 00:10:46.279 they simplified the menu, right. They actually took discounts away, 198 00:10:46.919 --> 00:10:50.480 you know, because because constant discounting is basically just telling 199 00:10:50.519 --> 00:10:54.240 your your customers that the fluid rights on the menu, yep, right, 200 00:10:54.279 --> 00:10:56.879 And so they removed the discounts, which you know was 201 00:10:56.919 --> 00:10:59.320 a bold move to do last year in the midst 202 00:10:59.320 --> 00:11:01.159 of a you know, restaurant. 203 00:11:00.759 --> 00:11:02.720 Recession, casual dining sector. 204 00:11:03.360 --> 00:11:10.320 Yeah, yeah, one hund so and and shrinking the menu 205 00:11:10.480 --> 00:11:15.559 and bringing backbusters and putting more labor into the stores, 206 00:11:16.840 --> 00:11:20.799 getting that experience, right, nailing that experience, and then from 207 00:11:20.799 --> 00:11:23.200 there really pressing the gas on the marketing side. And 208 00:11:23.200 --> 00:11:26.039 their their marketing team is the best in the business. 209 00:11:26.120 --> 00:11:29.639 I mean, they're absolutely crushing it on social media, through TikTok, 210 00:11:30.879 --> 00:11:35.679 through their TV advertising. They have ads ads, you know, 211 00:11:35.720 --> 00:11:39.440 taking shots at QSR and and and the high prices 212 00:11:39.440 --> 00:11:40.200 that qs are. 213 00:11:40.240 --> 00:11:42.639 They're doing really well right on TikTok. 214 00:11:43.200 --> 00:11:45.519 You know, they're changing the menu based based on some 215 00:11:45.639 --> 00:11:48.879 of the things that they're their customers are doing on 216 00:11:49.240 --> 00:11:50.600 TikTok and they're paying attention. 217 00:11:51.240 --> 00:11:52.440 It's very reactive. 218 00:11:53.120 --> 00:11:57.720 Yeah, very reactive. Brand, somewhat nimble, seems to be somewhat nimble. 219 00:11:58.000 --> 00:12:00.080 Do you think this is all leadership driven or do 220 00:12:00.120 --> 00:12:03.799 you feel like maybe there is a new wave of 221 00:12:03.960 --> 00:12:06.960 talent starting to make their way into these brands right 222 00:12:07.000 --> 00:12:09.080 now and we're starting to see the results of this. 223 00:12:10.120 --> 00:12:12.159 Well. Good leaders bring good talent with them. 224 00:12:12.240 --> 00:12:16.600 Kevin Hockman brought in George Felix and Jesse Johnson and 225 00:12:17.960 --> 00:12:19.919 many of the people he had worked with in the 226 00:12:19.960 --> 00:12:21.519 past at Young Brands and. 227 00:12:24.720 --> 00:12:25.639 Taco Bell as well. 228 00:12:25.679 --> 00:12:29.879 So no, he's brought some great talent in there with him, 229 00:12:30.120 --> 00:12:32.360 and this is a brand that people used to love 230 00:12:32.919 --> 00:12:35.320 exactly right, And I think that's what you know. I 231 00:12:35.360 --> 00:12:36.919 got a chance to sit down with Kevin a couple 232 00:12:36.879 --> 00:12:39.080 of weeks ago, and he said he was like, this 233 00:12:39.279 --> 00:12:41.320 was a great brand once apon of time, you know, 234 00:12:41.320 --> 00:12:43.039 and I just saw that there was a lot of 235 00:12:43.039 --> 00:12:45.679 potential here. And I told him I loved your brand 236 00:12:45.720 --> 00:12:48.120 twenty years ago, and then about ten years ago, my 237 00:12:48.200 --> 00:12:50.879 son loved your brand when he was little and he'd 238 00:12:50.879 --> 00:12:52.639 always want to go there. And I was like, oh, man, 239 00:12:52.679 --> 00:12:56.480 I don't know to chilies, you know, but it's changed 240 00:12:56.559 --> 00:12:59.120 over the last three years. They've leaned pretty hard into 241 00:12:59.159 --> 00:13:03.120 the stuff that's made Chilies great, you know, the differentiation, 242 00:13:03.320 --> 00:13:07.559 the different menu than the other casual dining competitors, really 243 00:13:07.639 --> 00:13:13.559 leaning more into that Southwestern cuisine. And yeah, man, it's 244 00:13:13.559 --> 00:13:16.159 been an incredible, incredible result. 245 00:13:16.279 --> 00:13:16.480 Yeah. 246 00:13:16.519 --> 00:13:19.039 I think they also because this is something that my 247 00:13:19.120 --> 00:13:21.639 wife brought up not too long I said, Honey, we 248 00:13:21.679 --> 00:13:23.279 got to go to a Chili's. It was after I 249 00:13:23.360 --> 00:13:26.519 saw these numbers. I haven't been to one in at 250 00:13:26.639 --> 00:13:29.279 least three years, and I went in for the first 251 00:13:29.279 --> 00:13:31.759 time in a long time. And first of all, the 252 00:13:31.799 --> 00:13:35.960 one thing I noticed, more so than anything, was their 253 00:13:35.960 --> 00:13:39.879 customer service had really elevated, and the greet was better, 254 00:13:40.399 --> 00:13:43.759 the service speed was better, the check back was better. 255 00:13:44.240 --> 00:13:47.600 They made sure all the entrees were right, and they 256 00:13:47.720 --> 00:13:50.279 then they asked if we liked them, and I was like, Okay, 257 00:13:50.320 --> 00:13:53.519 this is a different kind of experience at a casual 258 00:13:53.559 --> 00:13:56.440 dining restaurant, so I kind of see maybe this has 259 00:13:56.480 --> 00:13:59.159 started to seep down into their operations. Which is cool 260 00:13:59.440 --> 00:14:02.080 to see a brand like Chili's which is obviously. I mean, 261 00:14:02.080 --> 00:14:04.159 this is kind of these kind of numbers and performance 262 00:14:04.200 --> 00:14:05.480 pretty amazing. 263 00:14:05.720 --> 00:14:07.759 There's just a lot of low hanging through right like 264 00:14:07.919 --> 00:14:11.159 that the operations twenty years ago, this was Chili's right 265 00:14:11.200 --> 00:14:13.639 and now they're exactly getting back getting back to that, 266 00:14:13.679 --> 00:14:14.679 which is great to see. 267 00:14:14.919 --> 00:14:17.039 This episode is brought to you in part by Gusto, 268 00:14:17.200 --> 00:14:21.200 the number one rated HR platform for payroll, benefits and more. 269 00:14:21.840 --> 00:14:25.279 With Gusto's easy to use platform, you can empower your 270 00:14:25.320 --> 00:14:27.639 people and push your business forward. 271 00:14:28.200 --> 00:14:29.320 Over four hundred. 272 00:14:29.039 --> 00:14:33.399 Thousand businesses choose Gusto every day. And let's get into it, guys. 273 00:14:33.480 --> 00:14:35.600 There's a couple of things you can do with Gusto 274 00:14:35.679 --> 00:14:38.440 that you should check out. Some of the solutions that 275 00:14:38.480 --> 00:14:41.799 you're just absolutely going to want to know about is 276 00:14:41.879 --> 00:14:45.360 of course, their business type, new businesses and startups. You 277 00:14:45.360 --> 00:14:48.399 guys are welcome coming in small businesses. Maybe you have 278 00:14:48.440 --> 00:14:50.720 a mid sized business that needs an all in one 279 00:14:50.799 --> 00:14:54.759 payroll and benefit program as well as HR all of 280 00:14:54.759 --> 00:14:57.519 this scaling. The cool thing about this is it's an 281 00:14:57.559 --> 00:15:01.320 all in one platform. They can also select and punch 282 00:15:01.399 --> 00:15:04.840 in right to your accountants. So check it out. You've 283 00:15:04.840 --> 00:15:08.600 got a Gusto Pro platform You can become a partner 284 00:15:08.639 --> 00:15:10.399 with them if you're an accountant, so if you have 285 00:15:10.440 --> 00:15:13.559 a CPA already, this is the place for you. And 286 00:15:13.639 --> 00:15:16.559 of course the best thing is pricing. The thing about 287 00:15:16.840 --> 00:15:21.519 Gusto is flexible plans and features, honest pricing, no hidden fees. 288 00:15:22.120 --> 00:15:24.240 This is the plan that we use, which is the 289 00:15:24.279 --> 00:15:28.000 Plus plan sixty bucks a month. Guys, you cannot go wrong. 290 00:15:28.080 --> 00:15:30.240 It's about nine bucks a person, so you guys can 291 00:15:30.279 --> 00:15:34.320 definitely afford it. Get in there and choose Gusto with 292 00:15:34.399 --> 00:15:41.039 a full suite of tax services, HR services, time tracking, scheduling, expenses, reimbursements. 293 00:15:41.639 --> 00:15:43.960 You get the picture. Gusto is the place for you. 294 00:15:44.240 --> 00:15:46.759 Check it all out. Just go over to gusto dot 295 00:15:46.759 --> 00:15:50.879 com use our link down below to get started. See 296 00:15:50.919 --> 00:15:54.320 you there. We got to hit on Shakeshack. They're opening 297 00:15:54.360 --> 00:15:57.120 up their kitchen innovation lab. This is coming up in 298 00:15:57.240 --> 00:16:01.279 Atlanta this year, so it's going to test whip meant layout. 299 00:16:01.399 --> 00:16:03.759 So I'm kind of interested to see if they've got 300 00:16:03.799 --> 00:16:08.159 maybe a new layout planned. But also they're going to 301 00:16:08.320 --> 00:16:13.639 improve on processes and optimizations. I don't know where shakeshack 302 00:16:13.679 --> 00:16:17.039 would really I mean, because their speed is pretty good 303 00:16:17.120 --> 00:16:20.960 inside the restaurant itself. But it's good to see an 304 00:16:21.000 --> 00:16:25.000 innovation lab starting, you know, in a major brand like Shakeshak. 305 00:16:25.440 --> 00:16:28.679 Anything that you think this will do in terms of 306 00:16:28.720 --> 00:16:31.000 improving what Shakeshak is bringing to market. 307 00:16:31.559 --> 00:16:34.080 You're bringing up all of the companies we're most excited 308 00:16:34.120 --> 00:16:36.799 about this shift. So this has been this has been fun, Paul. 309 00:16:38.960 --> 00:16:42.879 So there is some low hanging fruit here as well. 310 00:16:42.919 --> 00:16:46.799 And so when Shakeshak was created, it was created by 311 00:16:46.840 --> 00:16:50.279 the Union Square Hospitality Group, and it really has a 312 00:16:50.320 --> 00:16:54.679 fine dining type set up in the sure not how 313 00:16:54.720 --> 00:16:58.480 you should be running a fast, casual, quick service burger joint. 314 00:16:58.559 --> 00:17:01.799 And so there needs to be work done on the 315 00:17:01.919 --> 00:17:05.599 kitchen layout. And what what new CEO Rob Lynch has 316 00:17:05.640 --> 00:17:09.039 talked about is he wants a line that you know, 317 00:17:09.079 --> 00:17:11.200 starts on one end of the restaurant and ends at 318 00:17:11.240 --> 00:17:13.799 at the at the drive through window, right. And so 319 00:17:13.839 --> 00:17:16.920 they want to they want to improve their speed of 320 00:17:17.039 --> 00:17:20.160 service in the in the kitchen, uh, And then that's 321 00:17:20.200 --> 00:17:22.839 going to tie in pretty closely to the drive through, right. 322 00:17:23.079 --> 00:17:25.200 Rob Lynch is a big believer in the drive through. 323 00:17:26.240 --> 00:17:29.720 But wait times have been you know, pretty poor, and 324 00:17:29.799 --> 00:17:32.119 it makes sense, right when you're making food to orders 325 00:17:32.240 --> 00:17:34.200 drive through is going to be slow, right, and so 326 00:17:35.240 --> 00:17:37.759 they're going to have to make some some changes to their. 327 00:17:37.759 --> 00:17:38.839 Drive through processes. 328 00:17:38.880 --> 00:17:40.880 But he's a big believer on it, and so although 329 00:17:40.920 --> 00:17:44.720 it hasn't been very incremental just yet, you know, he 330 00:17:44.880 --> 00:17:46.680 believes that that this is going to be a huge 331 00:17:46.839 --> 00:17:50.359 driver for this company. And you know, these are the 332 00:17:50.400 --> 00:17:53.480 two areas that that innovation kitchen is going to focus on. 333 00:17:53.559 --> 00:17:54.799 First, well, if. 334 00:17:54.640 --> 00:17:57.519 They get into a scenario where they can reduce some 335 00:17:57.599 --> 00:17:59.759 of the build out costs, because that that will open 336 00:17:59.839 --> 00:18:02.640 up maybe some real estate opportunities for them, which I 337 00:18:02.720 --> 00:18:07.079 think we'll expand maybe give some venue to expand the 338 00:18:07.119 --> 00:18:09.839 brand itself. And if you look at where they are 339 00:18:09.960 --> 00:18:13.720 right now in terms of their growth and what they 340 00:18:13.759 --> 00:18:16.240 could bring to the market. Back to your point is 341 00:18:16.880 --> 00:18:20.039 drive through seems to be one of the growing sectors 342 00:18:20.039 --> 00:18:24.160 for Shakescheck and it's a very good competitive edge for 343 00:18:24.240 --> 00:18:27.279 them if they can actually speed it up. So that 344 00:18:27.359 --> 00:18:29.720 will be a big one for Lynch if he pulls 345 00:18:29.720 --> 00:18:32.079 it off. I'm going to look at this one in 346 00:18:32.119 --> 00:18:34.039 a few months and see if it's actually had some 347 00:18:34.160 --> 00:18:37.200 kind of impact on drifting. We get new shake checks 348 00:18:37.200 --> 00:18:38.920 down here, in Florida where am we finally got one 349 00:18:38.960 --> 00:18:42.480 out very close to our studio here and with your 350 00:18:42.599 --> 00:18:46.279 drive through not too long ago, and exactly the same 351 00:18:46.319 --> 00:18:49.519 problem is that made to order you know, spends that 352 00:18:49.640 --> 00:18:52.039 drive through time up to around seven to nine minutes, 353 00:18:52.119 --> 00:18:55.759 and that is just unfortunately too long for most consumers. 354 00:18:56.039 --> 00:18:58.559 Yeah, yeah, yeah, And it's you know, listen, the dining 355 00:18:58.599 --> 00:19:01.119 room and the drive through the they work good together 356 00:19:01.200 --> 00:19:04.799 in terms of easing pressure on one versus the other, right, 357 00:19:04.839 --> 00:19:06.400 and maybe the opposite for Shakeshack. 358 00:19:06.440 --> 00:19:09.119 So whereas us are you know, people use the dining 359 00:19:09.200 --> 00:19:11.079 room only when the drive through line is too long. 360 00:19:11.119 --> 00:19:12.720 Well maybe at Shakeshack it's the opposite. 361 00:19:12.759 --> 00:19:15.039 If the dining room's too busy, I'll use the drive 362 00:19:15.079 --> 00:19:17.720 through lean right, But they can use pressure on the 363 00:19:17.759 --> 00:19:19.599 other channel, which is nice to have. 364 00:19:21.000 --> 00:19:23.319 They've done a good job, I think with the design 365 00:19:23.599 --> 00:19:28.000 of their restaurants too. In general, most of the news stores, 366 00:19:28.039 --> 00:19:31.279 you know, they all kind of have unique footprints. I'm 367 00:19:31.359 --> 00:19:35.440 intrigued to see what Lynch comes up with because of 368 00:19:35.440 --> 00:19:39.119 his background and how he can you know, increase throughput, 369 00:19:39.920 --> 00:19:43.240 because I like this whole idea around the line really 370 00:19:43.279 --> 00:19:46.519 maximizing what drive through speed could be. But with that 371 00:19:46.519 --> 00:19:48.400 that's probably going to open up and they mentioned it 372 00:19:48.400 --> 00:19:50.079 in the article, is going to open up a lot 373 00:19:50.079 --> 00:19:52.440 of opportunity in terms of a kitchen equipment, which could 374 00:19:52.480 --> 00:19:56.279 really get intriguing if they implement some of this new 375 00:19:56.359 --> 00:19:59.039 advanced you know tech that seems to be coming in 376 00:19:59.079 --> 00:20:02.240 from the kitchen industr in terms of you know, back 377 00:20:02.279 --> 00:20:05.119 of house stuff, so a lot of low hanging back 378 00:20:05.160 --> 00:20:07.079 to your point, a lot of low hanging fruit. Let's 379 00:20:07.079 --> 00:20:11.519 get into the healthy eating category, all right, So this 380 00:20:11.599 --> 00:20:15.279 has been a category that has been winning for years, 381 00:20:15.599 --> 00:20:19.440 you know, I'd say easily the last decade protein bar 382 00:20:19.599 --> 00:20:23.359 courses talking about this. But I'm more intrigued with your 383 00:20:23.400 --> 00:20:29.000 opinion on, first of all, how and if healthy can 384 00:20:29.119 --> 00:20:33.680 truly maintain its current market position or do you feel 385 00:20:33.680 --> 00:20:35.279 like we're going to start to see a little bit 386 00:20:35.279 --> 00:20:39.200 of a shift, because if you look at shakesheck covet 387 00:20:39.240 --> 00:20:42.000 to a certain extent, I would say a little bit 388 00:20:42.039 --> 00:20:45.759 more healthy, but still very you know, very decadent in 389 00:20:45.799 --> 00:20:48.279 the sense that you really get really great food there. 390 00:20:49.079 --> 00:20:52.279 Do you think healthy as maybe run its course or 391 00:20:52.319 --> 00:20:55.000 do you feel like it's still got an opportunity. 392 00:20:54.440 --> 00:20:58.200 Here now it still has an opportunity because gen Z 393 00:20:58.359 --> 00:20:58.759 loves it. 394 00:20:59.000 --> 00:20:59.160 Right. 395 00:20:59.240 --> 00:21:02.680 Gen Z is is you know, it's a small, uh 396 00:21:03.039 --> 00:21:06.799 demographic cohort, but they are the trendsetters right now. And 397 00:21:07.279 --> 00:21:09.680 chains that are attracting large numbers of gen Z seem 398 00:21:09.720 --> 00:21:13.720 to be outperformed. They are outperforming so and they a 399 00:21:13.720 --> 00:21:16.200 lot of them want you know. 400 00:21:16.200 --> 00:21:16.920 Healthier food. 401 00:21:17.000 --> 00:21:19.759