Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:13):
Welcome to Chopping It Up. I'm your host, Mike Hallen,
the senior Restaurant and Food Service Analyst at Bloomberg Intelligence.
Our research and that abi's five hundred analysts around the
globe can be found exclusively on the Bloomberg terminal. If
you enjoy the pod, do me a solid and please
give us a five star review on Apple or Spotify.
(00:34):
Today we're joined by Lance Chenari, the president and CEO
of Golden Corral. The fifty three year old brand is
primarily franchised with three hundred and sixty restaurants in thirty
eight states and Puerto Rico. Welcome to the pod.
Speaker 2 (00:47):
Lance, Hey, thank you so much. Mike. Good to see
you again.
Speaker 1 (00:50):
Yeah, man, I've been looking forward to this since we
first met you know whatever it was last month. So
let's get into it.
Speaker 2 (00:58):
Man.
Speaker 1 (00:58):
According to your LinkedIn profile, you've been with Golden Corral
for twenty five years. Loyalty like that. Wait, what do
we got?
Speaker 2 (01:07):
Actually? Actually forty years?
Speaker 1 (01:09):
Forty years, dude, That's that's incredible. I love seeing that.
Loyalty like that is so uncommon today. What initially drew
you to the brand and what's kept you there? And
you have to update your LinkedIn profile.
Speaker 2 (01:24):
Fair enough, fair enough. I'm a little bit a little
behind on that. But you know, the thing about Golden
kraw what initially grew me to it was the opportunity
to grow with the company that value people first. And
that was true forty years ago, it's true fifty years
ago when our brand got started in nineteen seventy three.
(01:47):
It is still true today. And our beliefs and values
have stood the test of time and they are what
really helped us make decisions. So it was one of
those things that there were always other opportunities that came
along in the last forty years, and some very lucrative things,
but I never felt like it was something that was
(02:08):
better than what I had at Golden Corral. And when
you don't want to leave to go to something better,
why would you ever change. So that's what's kept me
here for forty years. And then you know, in all honestly,
it becomes family to you, this this group of people
who call it the GC family, And it's very much
the case that the way that we operate, the way
(02:31):
that we coexist as an organization is the GC family.
And and you know, we have ninety nine percent retention
in the Golden Karl support team, and which is almost
unheard of. But that's because no one ever leaves. We
hire incredibly great people. We take a long time in
(02:52):
making sure resource the very best of the troll but
once they join us, there's not a better opportunity out there,
so they don't leave. So we're very fortunate in that regard.
Speaker 1 (03:04):
And that really came across the first time we spoke,
and that's why I wanted to get you here. Man.
That's that's fantastic. So let's go back to the pandemic. Man,
it was especially rough on buffets. CNBC in the Journal
incorrectly predicted the company's demise. Would they underestimate about Golden Corral?
Speaker 2 (03:23):
Yeah, you know, you're so right in that media as
a whole really said the buffet segment is dead and gone,
and we were being the largest, we were singled out,
and there's probably forty different articles written about us, and
multiple television financial shows that just said, Golvin Kraal, they're
dead and they're gone. You know, we that was what
(03:44):
they believed. That's not what we believed. And we really
thought that after all the outside advice we got and
all the reasons being told to us that we'd never
make it. What we finally decided was they don't understand
our culture that I don't understand and our people. And
it wasn't just false hope. It wasn't you know, don't
(04:06):
worry about what they say. We're going to win in
any way, you know, rah rah, Or that wasn't the case.
We had real time data that we said, you know,
this is the relationships that we built over the last
forty seven years at that point that we really believe
we're going to come back to pay us off in
(04:26):
a great way. And fortunately we were right. They underestimated
our people, they underestimated our culture, and they greatly underestimated
the good will that we had built not only with
our supplier community, but with our banks, with our landlords,
with our franchisease, and within our own self. We had
so much trust among each other that we lived each
(04:49):
other in the eye and we said, can we do this?
Are we going to be able to prevail or we're
going to be a sustainable restaurant company on the other
side of this, And we all we're shaking our head
in the same direction, and we said, all right, well,
let's get to work. We rolled our sleeves up twenty
four to seven for you know, a year there. That
first year of COVID was twenty four seven days and
(05:12):
and uh literally twenty four to seven when I say
we'd start a zoom call at that time, we'd started
on say a Tuesday, and literally three days later we'd
in the call. If you had to get off and
sleep for a few minutes or or take a quick
shower or whatever. But we had so much to do
during those time periods that it was around the plot
(05:35):
work and uh, but it paid off in a huge way.
I'll never ever be able to repay the team, which
is all still intact today, for the incredible effort that
they put in. And uh, you know, and it did
something to our team that galbamized our team. You know,
we've we've been through it. We've been through a cyber attack,
(05:57):
We've been through you know, times like now you get
the government shut down and promodities out of control and
red meat and an all time high. It's like, hey,
keep calm and carry on. We can handle this, just
like we've handled everything else. So it gave us a
sense of confidence, not false confidence. It gave us a
sense of real confidence that we're going to be able
(06:18):
to prevail no matter what headwinds or we're facing.
Speaker 1 (06:21):
Yah, kudos to you and the team. Is a scary time.
Had to be especially scary for you and everyone at
Golden Corral with everyone talking about how buffets were done.
You know they were wrong about that. They were wrong
about ghost kitchens being the next big thing too, man,
So good job sticking sticking with it. Man. Do you
(06:44):
remember the particular moment when you were like, you and
the team are like, yeah, we're gonna make it.
Speaker 2 (06:48):
You know. I think when we did that round table
meeting that we said, look, we're getting advice that we
need to claim bankruptcy. We're getting advice that we need
to let somebody ill handled our release liability. We're getting
advice that we need to stiff landlords and walk away
from some suppliers and some obligations that we had. When
(07:09):
we sat around that table and we said, that's not us,
that's not who we are. We need to do this
the right way. Our founder, James Maynard, is always about,
no matter what, at the end of the day, just
to do the right thing. And if you can do
the right thing, consistently over a long period of time,
it will always end up working out. It may not
(07:30):
work out the way you think, but at the end
of the day, things will work out. And so we've
had things not go our way. We had some things
that we wish you had gone differently, but at the
end of the day, we were so pleased with the
way that the response was from all of those communities.
And I think that when the franchisees really started saying, Okay,
(07:52):
we're going to believe you, We're going to stay in,
We're not failing, and really started rolling up their sleeves
as well, I said, all right, we're gonna We're gonna
make this. We're going to make it. Then we we
had to have some things to our way. We had
we have a saying a thousand things had to go
right and a thousand things weren't right. And thank goodness
(08:13):
God loves a buffaith because we were definitely blessed during
that time, there's no doubt, but we ended up on
the other side of it. I think we made the
decision that we wanted to not only survive, but we
took it as an opportunity to how can we rebuild
our company into a more sustainable, better position than what
(08:36):
we ever have. So we wanted to learn every weakness
that we had during COVID that was exploded. We wanted
to understand that fully and then try to put plans
together to combat those in the future and in the
event that something like this ever happened again. We wanted
to understand where every weakness was throughout the field, what
(08:56):
the consumer sentiment was, Why did people why were they
so nervous about Blefet's nationwide. What are the things that
triggered in their mind. We took all of that stuff
to heart and we said, I first things first, we've
got to survive. We got to sure up our cash.
We've got to make sure our balance sheets strong enough
to do to what we think we can do. And
(09:17):
then we had to make a lot of strategic moves.
We had to bet early that our franchisease were going
to be our growth mechanism going forward. So we didn't
take royalties for almost a year, and because we said,
you know what, We're going to do everything we can
to make sure our franchisees are healthy and are ready
to grow again. And the second thing is we said
(09:38):
we're going to own value early on, this was in
twenty twenty and twenty twenty one, we said, as a brand,
we have a good value equation, but we need to
own value. We need to absolutely own it in family dining.
And as we get further into the conversation, I'll tell
you some of the metrics we absolutely own value now
(09:58):
in family domming. And that's not our opinion, that's the
consumer sentiment opinion. So those couple of decisions made all
the difference in the world for us. And when you
combine that with us improving on every one of those weaknesses,
if you will, those opportunities that existed for our brand
and for the buffet segment as a whole, it gave
us the strength that we needed to be able to
(10:22):
not only survive COVID, but ultimately end up driving twenty two,
twenty three, twenty four record years for Golden Keral And
it's just it's been a phenomenal renaissance of our brand
in so many different ways.
Speaker 1 (10:37):
Yeah, I mean, and you're up to an impressive four
point seven million AUV. Can you talk a little bit
more about the data and the operating metrics that you're
looking so closely at and that has helped you achieve
those record results.
Speaker 2 (10:50):
Yeah, no, absolutely, oauvs are thirty percent higher than where
they were pre COVID, thirty percent higher than where they
were pre COVID. Our meal count average per unit, it's
the same that it was pre COVID. So yes, we
lost a ton of meals in twenty twenty. We were closed,
I mean, it wasn't an opportunity to serve, so we
(11:13):
were closed on twenty twenty one. We still weren't reopened
everywhere as far as buffets, we're concerned. We were trying
all these different you know models until municipalities or health
departments would allow us to finally start serving. So it
was mid twenty twenty one before we finally got every
restaurant back to the buffet format. So we were down
(11:34):
on meals during you know, a love those times. We've
regained all of that, all that momentum that we lost
during that rough period, and we're back to meal counts
that we had in twenty nineteen on an average unit
volume store. So so we're we're really excited about that.
We're you know, I'm not going to say this year
(11:56):
is we're down a little bit in meal count, but
We're not anicked about it because we know we look
at it on a two year span and we had
such phenomenal growth and twenty two three, twenty four being
down just a little bit this year, we're still ahead
of where we were two or three years ago. So
I still feel really great about our trajectory. I feel
(12:16):
great about where the financials are. Our gross margin in
our restaurants this year twenty five, despite the commodities, despite
the rising labor costs, our gross margin is the highest
it's ever been in our fifty two and a half
year at history. So our franchisees are are in a
(12:37):
great position. And this is what's really cool, Mike, is
that we we made that decision to own value. So
we're in a position now where we were parody with
Family Dining on a ticket average basis, we're now three
dollars and twenty three cents below Family Dining.
Speaker 1 (12:56):
Wow.
Speaker 2 (12:57):
The way we did that is we focused on every
area of the P and L so that we ran
the best possible food costs, the best possible labor, the
most efficient productivity that we could run, and we even
got into our controllable costs with our franchisees. Things like you,
chilly management, pay for goods, management, insurance management, whatever it was,
(13:19):
that we could save a dollar and not take anything
away from our guests, not cut quality, but save a
dollar in any way that we possibly could so that
we didn't have to take it on the top and
pass it on to our customer. And with time and
time again we were able to do that through the
last four years. We would have gone up two percent
and ticket this year and you know what the industry's doing.
(13:41):
Our ticket average at dinner is only up two percent
this year. So that's why we're winning on the price side.
But we'd also don't define value just in price. As
we were talking earlier, I really believe that you have
to define value on a much broader scope than just frights.
You have to give the guests something that exceeds their
(14:03):
expectations when they walk through the front door. You better
be the cleanest restaurant they've ever walked in. You better
have out with the top service and hospitality, and you
better make sure that you're in irrelevant facility that's clean
and well maintained, and that the guest feels comfortable in.
Those are almost table stakes today. So when a guest
(14:24):
is considering value. They're thinking about more than just Christ.
They're thinking about where can I go that I today's
hard earned dollars. My money is hard to come by,
So if I'm going to give it to gold in Corral,
I'm better be able to trust them to deliver an
experience that meets or exceeds my expectations every single time.
(14:47):
And that's not on the guests. That's on us. We
better make sure that we understand what their expectations were.
We better be listening very closely to those customers and
what they want, what they need, and deliver all of
that plus a little bit more. And so that's the
way that we think about how we deliver value. It's
(15:08):
not just price, it's across the whole equation of the
guest experience.
Speaker 1 (15:13):
Yeah, what you get for what you pay. We've seen
Casual Dining focus pretty strongly on operations since having a
tough twenty twenty four, and they've bounced back a little
bit this year. So it's good to see some of
the chains we cover getting back to basics. What operational
(15:34):
improvements are you currently working on now?
Speaker 2 (15:36):
I think it's a great question, because, as I said earlier,
there are some of those weaknesses that were glaring, if
you will, I want to guess we're thinking about buffet dining,
and they tended to center around commonness. That was an
achilles heel for the buffet segment. And when you think
about commonness in a buffet setting, the reason it's always
(15:58):
a problem for us is that people are constantly up
and moving around our restaurant with plates full of food.
We feed families, little kids are running around with plates,
and they're spilling things all the time. So inherently of
a face segment has a cleanliness achilles heel that has
hung out. You know what, that's not the guests problem,
(16:20):
that's our problem. So it was up to us to
fix that. And we said, you know, during COVID in particular,
we went through the extremes of making sure that people
felt safe dining in our restaurants, that they felt safe
from a food safety and sanitation. So we had all
these extremes that we were going through, and we said,
(16:42):
you know what, the guest is reacting so positively to this.
We've got to make this permanent. We've got to do
things that are over the top, overtly telling our guests
that this is a sanitary environment. It's a clean environment
that you're going to love when you're dining with us,
because we're not going to have any of those negative
marks when it comes to your you know, old time
(17:05):
thinking of what buffets were. And so we're working on
all these fundliness initiatives and then one day I was
I was actually on a site visit and I stopped
in a BUCkies that was next to this site that
we were going to look at. Perfect teams from the store,
and I went in and they had the signage up about,
you know, the cleanest restrooms in the world, and you know,
(17:27):
they are so proud of that. I walked in and
I looked at their restrooms and they are. They're phenomenal.
They do a fantastic job on that. And I came
back to our team and I said, you know what,
that just puts a hay little effect around the entire
operation at BUCkies. Why can't we be known for the
cleanest restaurant bathrooms and the entire industry? And so we
(17:51):
put an initiative together. Our bathroom scores have gone through
the roof. They're way above industry average now, and we
measured that particular metric it's something that we think we're
never going to stop working on this. It's something that
we think puts a halo around the clembingness scores in
our restaurants, but our clumbing the scores typically we're ten
(18:15):
points behind family dining. We now leave family dining. According
to black SMG Technomics data. The restaurant clumbing the scores
have gone up exponentially over the last few years. And
we're not done. We've got work to do. We still,
you know, have our bottom twenty percent that we've got
(18:38):
a laser focus in on those restaurants that aren't at
the same levels the rest of them are, and so
we've got great room for this to even get stronger
and stronger. But we eventually will be known for the
cleanest restaurants in the entire restaurant industry.
Speaker 1 (18:53):
Yeah, hearkens back to the Howard Johnson's days.
Speaker 2 (18:56):
Man, that's absolutely I love it.
Speaker 1 (18:59):
Yeah, yeah, I love it. And it's so smart too
to focus on it, because I will never forget those videos.
I think it was on like the Nightly News or
something during the pandemic when they were showing how germs
can spread at a buffet.
Speaker 2 (19:15):
Absolutely, that was so difficult for us because and that's
what really put us behind the curve is because all
those videos and the cruise ships and the Vegas buffets
and the science was wrong. It wasn't shared surfaces, it
was airborne behind COVID, but it didn't matter. The damage
(19:36):
was done, and our guest mind, it was like, what
are you going to do to make it safe for
me to dine in a buffet again? So we've had
to go over the top. And it's okay because the
whole perception of Golden Kral our consumer centiment has gone
through the root. Our net promoter SCOR is up eighteen points,
eighteen points. The folks that do our measurements for I
(20:01):
asked them to go back and recheck because they told
me that we've never seen this kind of an increase.
And so when we said, you know what, go back
and rerun the numbers. Make sure that before we start,
you know, really getting excited about this, make sure that
we really understand that these numbers are correct. And it
had to do with us maintaining variety, maintaining quality, and
(20:27):
this massive improvement and the commonness perceptions of our restaurant.
And then we tied all of that around with value.
The consumer's opinion of Golden Corral has just launched this
renaissance of our brand over the last four years. That
it's just I think I've told you before, we feel
like we kind of captured lightning in a bottle and
(20:48):
we don't want to take the lid off, So we're
figuring out everything we can do to maintain that type
of momentum.
Speaker 1 (20:55):
I love it. I love it. So there's been some
concern around those coveted gen Y and gen Z consumers. Uh,
you know, Chipotle was talking about how, you know, some
of that anecdotal stuff that's out there that they're they're
having a tough time finding jobs. But our friends at
our mess and restaurant inside Monitor as well have data
(21:18):
is showing that you know, they've they're ready, they're ready
to keep spending. So you know, how are you doing?
What do you with those cohorts? What are you seeing
out of them right now?
Speaker 2 (21:29):
Yeah, you know, I think it's up to us to
go find where they are right now, and we're doing
that partially tough marketing. We're we're taking different avenues than
we historically have ever taken. You know, we're on electronic
media TV, if you will, about thirty weeks a year. Historically,
(21:52):
we've never got deep into social media, geopens and digital
avertising off premas, all those areas that those particular generational
groups are really that's where they reside, that's how they
think about the business. And so when we're trying to
(22:12):
grow across all generational genres, it's really important to us
to make sure that we're very intentional about reaching out
to different age groups. So if it's social media, if
it's a particular demographic, we reach out specifically to Hispanics
(22:34):
who have drawn back a lot in the restaurant dining
right now. We built a big business with the Latino group,
and with all the immigration issues, ice issues going on
right now, they've drawn back and it has affected our business.
The restaurants that are heavily Hispanic more than thirty percent
(22:58):
in their trade area, those russants are down six to
one versus the rest of our system. If you've separated
out the group, we're up in the remainder of the system.
The restaurants that are in the heaviest manitaries are actually
down right now, but we don't use that as an excuse.
We're going and finding ways to talk to that group.
We're making sure that it's not dubbed commercials, that it's bilingual,
(23:22):
you know, people that are actually speaking in their language.
We advertise on shows that are important to them. So
we're being very intentional about all the different groups that
we're going to and that we want in our restaurants.
Our tagline is We're the only one for everyone. So
if you think about it, every generational group, every demographic
(23:47):
can find something that they love at Golden Frau. We
have one hundred and sixty items out every day, most
of them made from scratch. We have regional minimes options
across the country. Almost everyone can find that something. If
you want to eat healthy, if you want to indulge,
if you want to do a do an all approaching diet,
knock yourself out at Golden Crowd because we can do it.
(24:09):
We can do it. We can please every single one
of those. So I think when these groups are are
looking for what fits their diet, we can accommodate what
fits their pocketbook. And if they're out of work, hey
we're better to go. You're still going to dine out.
Those customers are still dining now, maybe not as freequil late.
(24:33):
Maybe they're not spending as much as they were, but
when they do dine out, they're going to go places
they trust and where everyone can find something that they
like and that fits us perfectly.
Speaker 1 (24:43):
Yeah, I know you've you've got some interesting ways to
deal with inflation, right because it's a buffet and people
can pick whatever they want. Can you talk about some
of the things that you've been doing to help manage
food costs?
Speaker 2 (24:55):
Yeah, No, it's an important part for us because you know,
food cost is obviously our single biggest line at them
in our restaurants and being in the all you go
to eat format. So what we can't do, first of
all is take away the expensive stuff because that's part
of the value equation. Right. So we still have the
(25:17):
same shrimp on the bar that we've always had, We
still are serving Redney, we still have all Ethneatus fresh
handcut serlin stakes every day. It's all still part of
our menu. But what we can do that Knox two
Birds out Look on Stone is, first of all, we
can continue to serve those things and make sure they're
(25:40):
front and center, but we can add additional things that
are very feeling to guess and even though they're expensive,
if they're less than five dollars and fifty cents, sirline,
it's still a win for us. So we're getting ready
to add these big, beautiful Argentine shrimp under our bar.
We've got a promotion coming up. We're getting ready to
(26:02):
introduce lobster. It's a small lad on to the buffet,
but it's such a value play and it's going to
be less expensive than what any competition out there can do.
So it adds value, it exceeds guests to expectations. But
it also helps us with food costs when we can
(26:23):
do those kind of things, and so we call them mitigators.
We add mitigators to our bar. So you would typically think,
well that food cost is high, the buffet needs to
draw back and pull a few proteins off of the bar.
We're just the opposite. We want to add proteins to
the bar because if we can have them take a
little less stay and a little more of something else
(26:46):
that they still love, and that may be something that
even exceeds their expectations, like these beautiful shuniper add a
finance lobster tail for an unbelievable price that I can't
this cloase yet, but we're we're working on and all
of those things help us run one really great food
(27:07):
cost numbers and that like I said, our gross margin
is not the problem. Our gross margin is the highest
it's ever been and it's not just through price. So
we really are life in our position right now.
Speaker 1 (27:21):
It's very cool and Golden Corral has long been a
supporter of active military veterans and their families, and I
know that's something you're very proud of. What are some
of the ways that chain gives back to this community.
Speaker 2 (27:33):
Well, it's always been part of our belief and value
system to support the communities that we operate in and
to give back. We believe that it's not a bad word.
Profit is not a bad word. We want to make
great profit, but what we do with that profit is
really important to us, and that's given back to the
communities that we operate in into our country as a whole.
(27:55):
So we've chosen we want to absolutely be umber one
place when the military of the United States thinks about
who supports us, and so from that standpoint, we have
three major campaigns a year. In the spring, we have
our own camp out Camp Corral, and we've sent over
(28:17):
thirty thousand kids to camp over the last fifteen years.
This is our fifteenth year anniversary of Camp Corral and
we're the founding sponsor of that camp and we've got
some tremendous partners, the largest being dav that partners with
us in this. But today we raised about twenty million
dollars to send these kids to camp, and it's something
(28:39):
that we feel like is ours. You know, we were
great supporters before of several different national non profit organizations
that do wonderful work, and we still think they're fantastic,
but it wasn't something that our franchisees, that our ownership at,
our people within the support center could really say, you
(29:02):
know what, that's something that's ours. And so that's where
Camp Corral was evolved from and we're excited about it.
We send about free to thirty five hundred kids a
summer to camp twenty two camps across the country. It's
just phenomenal, phenomenal camp and it makes such a difference
in these kids' lives. We've been able to partner with
some great universities, most recently PUMPS that is doing research
(29:27):
on the effect that has on these kids long term
and the change in their lives is phenomenal. So it's
great from the standpoint the kids have a week of
a lifetime, but it's even better because it changes the
trajectory of their life and that's what's really meaningful. Then
in the summer, we partner with Project Hitting Waters and
(29:47):
it's something that my daughter serves as a trustee on
their board. I'm on their advisory council called the Founder Circle,
and their primary mission is working with recently disabled their
or fallen are not falling, but recently disabled, active or
retired military. It started at Walter Reed. Now it's nationwide
(30:10):
and it worked does some fantastic work in preventing veteran suicide.
And it's done through fly fishing, which I'm a flyfisher one,
so it is a natural fit. But we're really excited
about the future of that. This is our first year
to partner nationally with them, and we're looking forward to
that long relationship going forward. And then in the fall,
(30:33):
we work with the dav And through our Military Appreciation
Night and we've been doing This is our twenty fifth
anniversary of doing this. We've served almost seven million free
meals to veterans. We've raised over twenty million dollars for
the dav and so it's just an incredible three from
(30:54):
approach almost all year long, we've got something going for
the military. In that get, we raised over forty million dollars,
fed millions of free meals, and we've changed the lives
of military children then. So we're very honored to do
that work. We feel like it's our responsibility to do
that work. Without our minimum moment of the military, we
(31:17):
wouldn't have the country to operate in, so we owe
everything we had to them.
Speaker 1 (31:22):
That's awesome, man. So you have any fly fishing trips
lined up or what I do.
Speaker 2 (31:27):
We're already working on a trip lined up for the
Green River in Utah through the Flaming Gorge area, and
it's it's gorgeous. It's hard to fly fish there because
it's such beautiful country, but it's one of my favorite
places in the country to fish. And but I mean,
they can go to the mountains of North Carolina and
be happy. I mean, I'll just love flatfish, so it
(31:48):
makes it a lot of fun.
Speaker 1 (31:49):
I've only been once in Sun Valley and it was
an abbreviated session, but it was awesome.
Speaker 2 (31:55):
Yeah, I fished Sun Valley before. It's it's great to
the fish at their smaller streams that not the big
rivers like you see in Wyoming or Montana or even
in Utah. But it's still beautiful and it's fun to fish.
Speaker 1 (32:11):
Yeah, for sure, Lance here the man. Thanks for doing this. Hey,
thanks so much, and thanks for the audience for tuning in.
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