October 19, 2023 • 29 mins
Honeygrow keeps G&A tight and is profitable on a net income basis, founder and CEO Justin Rosenberg tells Bloomberg Intelligence. In this episode of the Choppin’ It Up podcast, Rosenberg sits down with BI’s senior restaurant and foodservice analyst Michael Halen to discuss the emerging chain’s strong unit economics and commitment to growing profitably. He also comments on Honeygrow’s development plans, stiff competition for real estate and his reluctance to raise menu prices amid higher gas costs and other pressures facing US consumers.
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Episode Transcript
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Speaker 1 (00:20):
Welcome to Chopping It Up. I'm your host, Mike Hallon,
the senior restaurant and food service analyst at Bloomberg Intelligence.
Today we're joined by Justin Rosenberg, founder and CEO of
Honey Grow.
Speaker 2 (00:29):
It's up.
Speaker 1 (00:30):
That's up, man, Thanks for doing this, Thanks for having me.
Let's just hop right in. Man, you weren't always a
restaurant tour I was not. Tell us a little bit
about that.
Speaker 2 (00:38):
Yeah, I was, you know, from here. Always great to
be back in my hometown, New York, even though my
Phillies had on go. Phil's been in Philly for twenty years,
which is a wild wild thought for me. But born
and raised Long Islands, and I went to Penn State undergrad.
Met a girl got me to Philly. Now she's my
wife and mom of our three kids. And it was
(00:59):
in finance in the beginning, and you know it just
didn't love working in my cubicle. But it was great
in many different ways, and did it for five years.
But my passion's always been food and the idea of
scaling something and building a business. Had some health challenges
in my mid twenties. I waited a lot more in
a bad way and went to the doctor, and you know,
(01:20):
they're like, hey, you got really high blood sugar and
high cholesterol and scared me. I just had a first kid. Verbatim,
He's like, do you want to see her walk down
the aisle one day? And scared me enough to say
yes and get my life in order. Went vegan for
about two years, but I was making salads for lunch,
stir fry for dinner at the company I worked for,
company called PRET It's a real estate investment trust. I
(01:41):
would get the access for all the sales for all
these different tenets. So like Chick fil A was doing
insane numbers, right, I think there's like eight five today.
But I would just people in a way, like why
are these concepts doing so well? Why is the Apple
store doing four thousand a square foot? What can I
do to really create a great brand? You know, what
are they doing that other brands are not doing? So
I really wanted to create something that's not been done.
(02:03):
I think there's so many bowl concepts out there, and
this is like, you know, I'm part of that twenty
tens boom. I didn't want to do you know, burgers,
Mexican salad, it's all been done and you know, honey
grop eighty five percent stir fries. So we're not a
solid concept per se. And that was kind of it.
Just got after it and rode a business plan and
a lot in between. But that was the beginning, your
(02:24):
brave soul.
Speaker 1 (02:25):
Did you know how difficult the restaurant business is going
to be?
Speaker 2 (02:29):
No, I had no idea. I mean I worked for
a buddy of mine on the weekends in DC in
a kitchen and busted. My ass was just quiet, nobody
knew who I was and just cooked and learned and
got beat up in the kitchen. But I mean, any
scaling a business career, you gotta be nuts man like,
like you have to do. Something's wrong with us entrepreneurs,
so like do what we do and withstand what we do.
But like it's also just in our DNA and it's
(02:51):
it's been fun.
Speaker 1 (02:52):
Yeah, and it's cool. It's interesting that you know health
struggles and being overweight. Yeah, you know, because I just
know you as being in shape.
Speaker 2 (02:58):
You want to see a picture. Yeah, I wish we
had the cameras in here every phoner.
Speaker 1 (03:01):
Yeah for the listeners. Justin beat me up in jiujitsu
class weeks ago.
Speaker 2 (03:05):
And we should we should talk about that, dude. This
was me on jiu jitsu on awesome.
Speaker 1 (03:10):
Yeah, he chained with a bunch of savages in Philly,
their monsters.
Speaker 2 (03:13):
All right, So this is a picture of me. Got
married in the two thousands, So this is I think
it was my twenty two or twenty three. Here that's
my now wife.
Speaker 1 (03:22):
Dude, that doesn't even look like you.
Speaker 2 (03:23):
I don't even know what she said. Yes, I genuinely
don't know. Why what are you thinking? This guy's gross?
But uh, I got some funny pictures. I can share
it with you too. I'll shaw after this.
Speaker 1 (03:35):
I have a funny license where I was like, it
was like, you know, I was going through a tough
time in my marriage and I was really overweight, and
he was around Christmas when I got you know, I
had put on some weight after Thanksgiving and Christmas. I
was probably like two forty. Right now I'm like two fifteen,
and uh, you know, I look like a totally different person.
But it was so funny, Like get handing my ID
(03:55):
to people, they would look at the IDA, look at me,
look at the ID, look at me, and I'd be
like it was just rough. Cri SMIs you know, family
to be you know, stuff like that.
Speaker 2 (04:03):
Well, you know it's the holidays. Dude, you you're but
you're two fifteen. Let's talk about jiu jitsu real quick,
because you're very well distributed to fifteen. You know, for
all Mike's listeners out there. He actually, to his credit,
drove in from Jersey to Philadelphia, central Jersey, not like
you know, over the bridge, but central Jersey and then
like doesn't know anyone in this this school that I
(04:24):
go to Balance Studio. Shout out to my crew there.
You know who you are and you and after it, man,
like you like you really you trained stuff, but like
not the ju jitsu side. Yeah, and you're formidable like
you were like you had like like strong legs, like
I couldn't get certain like moves on you, and you
know you held your own. Dude. I was saying before,
like I just kept checking on you. I'm like down
(04:46):
the hall like the matt like getting my butt kicked
and like keep an eye on you. And you were
like you're getting after it. So you should be proud.
That's cool.
Speaker 1 (04:53):
Thanks, man, It's fun. What I love about it. And
MMA two is like it's such a humbling experience. Man,
it is such a humbling exp experience and I think
everybody needs that in life, you know what I mean.
So I agree. Yeah, it's awesome, man. It's a great
you know, stress reliever, and it's fun. It's like three
D chests, right, like using your brain and thinking and
(05:13):
trying to create traps. I'm not that good to be
able to trap anybody, but you know what I mean.
Speaker 2 (05:17):
It's three D chests and you know, not to go
too deep into current events, but for me, and you know,
I've been going through a hard time, Jewish people going
through hard time, a lot of people going through a
hard time, and it's been a chance for me to
turn my brain off and you know, Monday morning, Tuesday night,
Wednesday morning, I'm not thinking, I'm rolling and I'm just
(05:38):
with other humans. I don't care your religion, your race, gender.
People there to train and it's beautiful and awesome and
I'm very grateful for it.
Speaker 1 (05:46):
That's cool, man, That's a great gym.
Speaker 2 (05:48):
Thank you.
Speaker 1 (05:50):
All right, Cole, let's talk a little bit more about
Honey Grow for the people that aren't familiar. Can you
talk a little bit about the service model, the menu,
customer base.
Speaker 2 (06:00):
Yeah, so we're based in Philadelphia. Fast Schedule concept. We
do freshly made to order stir fry salads, honey bar,
which is take some fruit, there's all some honey on
top of it. It's actually five percent of our sales.
It's like a little snack. That's pretty cool. Everything's made
to order order on a Kiosk, which is basically an app.
And we have thirty six locations. So we're you know,
(06:20):
Boston here in New York and Brooklyn, Hoboken, Jersey, Delaware,
Baltimore area, DC, Metro Pittsburgh. Forgetting something which isn't good,
but we will be at forty restaurants. But in this year,
and thank god, things have been pretty good. It wasn't
always good though, Nope, it was good bad.
Speaker 1 (06:38):
Good about the the bad part a little bit because
I think I think listeners could learn a lot about it.
And you've always been super open a bad which I
think is really cool.
Speaker 2 (06:48):
Yeah. Look, I I have nothing to hide. I don't
really care. It's like, you know, if we're going to
be a publicly traded company one day, I don't know,
like you're not. The numbers are the numbers at the
end of the day. And I think the numbers will
always speak for themselves, kind of like actions speak more
than words, and that's my philosophy. And you know, the
challenges we had was we raised a lot of money,
We had the pressure to grow. We opened up a
(07:09):
bunch of new markets. I had a second concept that
really was more of a business solution than like a
passion project. Honeygro is like from my heart and soul
in DNA. Minigro was like, hey, like the cost to
build a honey grow in twenty sixteen or fifteen was
too much. Let's do this smaller version that we don't
need to vent and have a simpler line, and we'll
do that urban and the honey grow suburban, so instead
(07:32):
of doing like one to six and I think, you know,
we're all drinking the kool aid. I think this thing was
going to be a successful as quickly as honey grow.
And the food was great, and it did great until
two thirty here in Manhattan, and then all of a sudden,
you know, it's the city. But yeah, a lot of
mistakes made, so you know, paid crazy rents, you know,
just not really mastering that model. I think there was
(07:54):
a lot of confusion. I think the best models are
the simplest ones, and you can explain, like we sell
seraphices and selves as we do. Minigro is like, well,
it's noodles, it's bowls, it's salads. Food was great, but
I think it was very difficult to really conceptualize and explain.
So that was aside. And then with Honey Grow, you know,
were really quick and we took on some rents that
were pretty crazy and you know, seven new markets in
(08:14):
one year, and plus we had a brand new corporate team.
So it was just like the textbook of what to
never do. And you know, look, it was a really hard,
scary time five six years ago. And I think I've
told the story, but I remember, you know, looking up
my wife and I went to Miami to get away
for a weekend, and my wife's on the phone with
the kids, not really knowing everything going on in my
(08:35):
life because I didn't want to like share all this,
but we're running out of cash, and my our CFO
at the time, my partner, David, was like, you know,
we should really be considering bankruptcy together some of these leases,
and you know, my wife's looking at the ocean like smiling,
and I'm like I'm like, we're not doing that. We
have we're going to create a plan, let's do it.
And you know, I knew, and unfortunately, my investors have
been very supportive and been very good and that way,
(08:58):
a lot of people would have said, this doesn't work.
I got our good luck. They put more cash in
and let us execute our plan, and we did and
then something so by twenty nineteen we were really on
our way, and there's COVID. But by the middle of COVID,
we're actually doing okay, thank god. And then the last
three and a half years, you've been really good. We
opened thirteen restaurants producing low twenties and ebada and we've
(09:21):
been profitable from a like everyone's talking about ebada, like
ajustity whatever, like yeah, we have a lot of that,
thank god, but now we actually make money, so we
have a net income basis. We've been profitable too. So
one of my goals has been, you know, there's been
a lot of companies that have gone public and iPod
it's super inspirational and it's great, but I you know,
(09:42):
I like to keep my gena tight, a little different
from some of these other guys that they do what
they need to do. And that's fine. But I'm a
firm believer after going through what I've been through with
cash and everything else. Like, run the business type. We're
not a tech company or a restaurant company. Our jobs
to make people happy, s have really good food, do
it over and over and over and over again. We're
not perfect, but you know it's not I'm not creating
(10:02):
time travel here. Yeah, I'm not like, you know, creating
portals in space. It's like the restaurant business.
Speaker 1 (10:08):
Yeah, it's a simple business, but it's hard. Yeah right,
but yeah, no, that that's great. I think there's a
lot of great lessons in there because a lot of
chains now are trying to shrink the size of the
box because it's expensive to open a new store, construsting
construction costs are up. You know, we haven't seen that
kind of break in the cost of real estate that
(10:28):
a lot of people have been expecting with interest rates
being higher and stuff like that. So you're seeing a
lot of chains making that move.
Speaker 2 (10:33):
Yep, yep. Absolutely, We've been flexible in the real estate.
So two thousand square feet will take some reason twenty
five hundred square feet, but we'll take two thousand if
we can make it work, and then we'll take three thousand.
We can make it work. But you know, we're all
competing for the same twenty five hundred square foot pad site,
redcap space, and the challenge is there's not enough of
(10:55):
that coming out of COVID and there's there's a lot
of big box but there's not a lot of that.
And the issue then becomes everyone's growing and they have cash.
And I hear this from everybody. It's like it's just
everyone's competing for the same real estate, driving up rents
and you're getting less from landlords. So for example, we
I turned out of space recently because of recently iPod
(11:19):
company was willing to pay a crazy rent and I'm like,
this is in Pennsylvania, in a suburb of PA and
I'm like affiliate. I'm like, go for it. I mean,
that's a mistake I made six seven years ago, and
that's fine. Like, if they can do it and afford it,
go for it. You know, I know the AUVs and
they can make it work. Cool, We're going to be
(11:40):
disciplined and it's it's good, but it's not great. We
move on and that's just how it has to pay well.
Speaker 1 (11:45):
It's good they're private and you can do that right
because you know, once you get that equity money, you know,
the Wall Street's pressuring you to open more stores and
you've got to hit those bogies or where the evaluation
multiple gets dinged and you're on you're on that hamster wheel,
you know you are.
Speaker 2 (12:02):
And I think internally we're really disciplined group, but we're
also aggressive. You know, we grew this year. We'll have
nine new restaurants into base of thirty one, so you know,
next year we're looking to do twelve to thirteen more.
So we're not you know, we're certainly aggressive in the market,
but you know we're not going to be twenty next year.
Speaker 1 (12:19):
It's just not possible. Yeah, it's no way. Yeah. And
I guess what's the biggest hurdle is it? Is it
finding good managers?
Speaker 2 (12:27):
Always? Always like finding a good GM is always the
most key thing you need to successfully run a business.
And I you know, recently said on a separate podcast,
and it's true, and it's like, you know, this is quoting,
it's like Jocko from you know, Extreame Ownership. But it's
a great line. It's very true. There's no bad teams.
(12:49):
There's only about leaders. And if you have a really
good leader, they can remove the low performers on the team,
build up your top performers and really like push where
you need to go. Whereas if you have a bad leader,
like things are going to happen that you don't want. So,
you know, one of the key things we've been doing
is pushing an elite GM program, which is very similar
to the restaurant tour program from Chipotle, but it's very effective.
(13:12):
And when you create these cultures of folks that are
like all star teams led by really great gms, the
food taste better, you know, the experience is better, the
vibe is better, the music is the right volume, like
everything kind of clicks. The hospitalities there and it becomes
a really great experience. And then the P and L
is also really strong, not just the sales, but things
are managed tight. So it's that balance of like culture
(13:33):
and vibe and business results is really key. But it
starts with the GM.
Speaker 1 (13:36):
Cool. Yeah. Black Box Intelligence has done some work on
that and they talk about how that's like the biggest
correlation with a successful restaurants having a great no question, Yeah, cool,
it's financing, tighten up, tightening up.
Speaker 2 (13:50):
We're not looking for financing, so we've been pretty lucky.
We recently extended or got more in a line and
the terms are pretty favorable. But I hear other things,
so yeah, I.
Speaker 1 (14:02):
Know franchisees you know who don't have the scale, Yeah,
or especially getting squeezed a little bit right now. Yeah, yeah.
Can you talk a little bit about your mix of
in restaurants sales versus to go and kind of what
the pandemic did and how it changed your business.
Speaker 2 (14:18):
For sure, we were eight percent delivery pre pandemic. We
are today sticky it around thirty three, thirty four percent
like high a pandemic almost fifty percent kind of stable.
Speaker 1 (14:29):
Your food travels well, thank god.
Speaker 2 (14:31):
Yeah, Like it's it's literally like you know you've had
like it's freshly made noodles. It's great, by the way,
thank you, the noodles of the same duel as David
Chang is gonna get more food. But it's like a
high quality good product. We're very proud of that. And uh,
it travels well. And during the pandemic, a lot of
folks discovered us and it helped us stay alive and
(14:53):
ultimately thrive, so it was good.
Speaker 1 (14:55):
Cool. Do you have any plans to franchise in the future.
Speaker 2 (15:00):
No, I mean, look, we talk about it at the
board level, but right now the focus is the growth
plan and just executing that.
Speaker 1 (15:06):
Yeah. Well, I mean you have impressive unit economic uni economics,
so it doesn't seems like there's any real reason too
at this point until you go international, right, you got
to grab that international partner and let them run with it.
Speaker 2 (15:17):
One day.
Speaker 1 (15:17):
Yeah, how our staffing levels better?
Speaker 2 (15:22):
Yeah, twenty end of twenty one, beginning of twenty two
was horrible. I remember just like walking in too the
restaurants and just seeing like there were days we couldn't
even open because we couldn't staff. People just were not
showing up. So many no shows on interviews are happening.
I mean, it was a really, really, really stressful time.
And kudos to the team at Honey Growth for getting
through it, in particularly the ops team, who are badasses
(15:46):
and shout outs to all you guys and girls. You
know who you are. But it was hard, you know,
they did a great job.
Speaker 1 (15:53):
Yeah, all right, good, Yeah, that's what we've been hearing.
Things are definitely getting better. Still, some a little bit
of issues at late night. But even that's that's getting
a little bit easier to staff right now. Yeah, you
guys have always seemed to be ahead of the game
on technology. I uh, the Kiosks, you were early on those,
(16:14):
the virtual reality training. Yeah, I love that kind I
love that. So it was fun, Yeah, really really cool.
You can find it on YouTube. Uh, you know for
the listeners. Is there anything else that you're you know,
focused on right now technology wise?
Speaker 2 (16:29):
Yeah, I mean, look, the the Kiosks, it's essentially an
app where one hundred percent digital. As an organization, it's
either you know, you're ordering on the app, you're ordering
the mobile website. I'm sorry, on the Hunter website, you're
ordering on a Kiosk. We're ordering third parties. So we're
you know, that's just the way it is. Not intentionally
wanting that. Actually, I'm not going to sit here in
(16:49):
SA a tech genius.
Speaker 1 (16:50):
I'm not.
Speaker 2 (16:51):
I just knew that if you wanted a salad and
I wanted to stir fry, the best way to do it.
It's also assume that most people don't want to create
their own food, which is the number one thing was
create on Stuver a chicken excuse me. I knew that
that would be the cleanest, best way to do it
and also make it beautiful in the process. So yeah,
I launched that in twenty twelve. And now yeah, we
(17:14):
have the app with it, which is great, and everything
gets funneled into the same loyalty system, so you can
actually get loyalty rewards on the Kiosk and on the app,
which really helps strive frequency in a really cool way,
which I know our competitors can't do. Yeah. And then
for the future, like you know, everyone's talking about automation,
We've we've been looking at some stuff and maybe test
some stuff on it. But honestly, like we run like
(17:38):
good numbers and not to sound cliche, but like it
like annoys me a lot when everyone tries to get
very techy and like, you know, we're gonna get rid
of people. Like there have been concepts I've seen that
have really tried this in the past, say four or
five years, and it doesn't feel good. Yeah, and the
food's not as good and there's something missing from that.
Speaker 1 (17:56):
It's almost like it's sterile, I guess is the word.
It's like, yeah, it's it doesn't feels like you're in
like a hospital or something that in at a restaurant, it.
Speaker 2 (18:03):
Feels like you're in the hospital. I mean, look, the
kiosks don't save us labor at all, Like people think,
oh well, yeah, I mean you can make the argument
during peak lunch that there's four chios, but I also
make the argument that you could go on your app too,
So it really isn't saving on labor. And if anything,
we have a person on the floor as an ambassador,
table touching, cleaning tables and et cetera. So you know, look,
I don't I'm a firm believer in finding really great
(18:24):
quality folks and we need good folks because we're opening
more restaurants and a benefit of working at honeygro Is. Look,
if you're a team member and you want to be
GM good like, well, we'll train you. That's part of
the Elite GM program. Uh so yeah, I mean we're
not down that automation path yet. We're checking some stuff out.
If we can make the lives with the team easier, great,
But you know, I never want to be that sterile
(18:44):
concept that's banking on tech.
Speaker 1 (18:47):
Well, it's great that you have the employees touching the
tables because a lot of your fast casual competitors aren't
doing that.
Speaker 2 (18:52):
Yeah, and by the way, we don't beat a thousand.
There's sometimes I'm walking in there, I'm like, where's that
the ambassador. So it's been a massive push of mine.
And again, like I just mentioned this bell to say
it again a previous podcast, but Ivan Orkan, who is
incredible Roman chef Ivan Ramen. I'm sure you know him.
I was on a panel with him recently and he
had he had an amazing line that I've been just
(19:14):
I've been just pushing home to my team and when
I'm in the restaurant, especially with the team members and
the gms, it's like, guys like you will never go
back to a restaurant where the food is incredible but
the service sucks. You're just not gonna you will not
go back, Like, I don't know, maybe you will.
Speaker 1 (19:31):
I don't. There's a great uh tapist place near me
at home, and there's I had a bad experience with
the service one time, and the food is phenomenal, but
I never went back.
Speaker 2 (19:40):
Yeah, it's you know, quoting. You know, everyone in my
generation read Danny Meyer's book, right, And I'm paraphrasing, but
it's like, you know, one of the first things that
happens when you're born, if anything, is you're being held.
So it's like a Nate and you want to be
taken care of him. That's part of the restaurant experience.
So look, it's if the food, you know, it's the
best word for this. Diversely, I guess, you know, contrapositive
(20:02):
of that. Conversely, that was what I was thinking of
Branda tired. If you're in a situation and the food
is good and the service is incredible, you will go back.
And like, we're not a Michelin Star restaurant at all.
We're not. We don't want to be. But we do
our thing and if the service can be really great,
we know we can get folks to come back. That'll
be the biggest driver of frequency. That will be the
(20:24):
biggest driver of you know, people talking about us and
marketing and you know that's the restaurant business.
Speaker 1 (20:30):
Yeah, you know, I guess that is that something that
you're doing too, is like trying to hire for emotional intelligence.
Oh for sure, Danny.
Speaker 2 (20:39):
Talks about right absolutely, And again we don't bat a thousand.
We recently opened a restaurant. I don't want to say
which one, but it's that was great. But an opening
day there was an ambassador who should not have been ambassador.
And I'm like, you know, what are we failing on
here to, you know, like to not recognize that? Yeah,
(21:00):
And I realized a lot of our team, you know, leaders,
be it in the restaurants or you know, DMS or whoever.
You know, some folks may not realize the importance of
that characteristic, right, It's not just a person cleaning tables.
And today, you know, I'll give a shout out to
our DMS or legendary group you know who you are.
They're all over it now. It's like, you want to
find people who were going to care, yeah, and self
(21:24):
motivated people who are willing to be coached and care.
We don't want a janitor on the floor just like
quietly cleaning things up. That's that's not hospitality. Like you
want them to be like, hey, how's your stuffry? Looks
really good?
Speaker 1 (21:37):
Cool?
Speaker 2 (21:37):
Thank you, I get you anything else. Let me refill
that for you real quick. You're like, I'm coming back.
Speaker 1 (21:41):
Yeah.
Speaker 2 (21:42):
So it's those things are critical.
Speaker 1 (21:44):
So is it hard to like, is it hard to
figure out who's going to be the next good manager.
And you know, do you find a lot of employees
maybe that don't want to be a manager, that are
very happy at you know, working the register or whatever
it may be.
Speaker 2 (21:57):
Yeah, that that was a really that last to last point.
That was a good lesson I learned early on. So
when I was running the restaurants, the people who would
be great, like prep people, per se and I always had
the best attitudes and we're willing to help, and like
they didn't necessarily make the best managers. And I learned that,
you know, good eleven years ago. It was like, why
(22:18):
wouldn't you. They just want to work, They want to
put their head down, they want to like hang with
their friends, and they want to just do their thing.
It is hard. It is hard to find good folks
who want to move up. I mean often they're just
like I want, I want it. And that's you know,
for me, the first sign like great, show me that
you want it, and let's see if you have the
skill set. And you know, being a leader and one
(22:39):
of the hardest things for me because again like I
created from scratch and I ran the restaurants, is going
from door to leading. It was a conversation I recently
had with my COO about somebody else. But like, you
got to be leading, and leading means developing people, Like
you got to spend your time. It's easier for me
to just go in there sometimes and do stuff right,
whatever the thing is, But it's better for me to
(23:02):
build that person to do that. And that's really what
I think separates managers and leaders, and that's something that's
become a huge focus of mine.
Speaker 1 (23:09):
That's cool, man. I wish I spent more time working
in restaurants. I did a little bit of time as
a short order cook. Was like usually it was not easy.
Usually in emergency situations too. For my friend at the
town pool. I was a lifeguard in the Cedar Grove,
New Jersey, and yeah, my friend ran the snack bar,
and so if he was in a jam he couldn't
work and the cooks called out sick, I would take
(23:32):
the day because I could always find another lifeguard that
wanted to work, and I'd work as a short order cook.
But I you know, I did it. You know, I
don't know, five ten times I wish I wish I
had more actual restaurant experience.
Speaker 2 (23:43):
Now that I cover restaurants, what were you cooking?
Speaker 1 (23:48):
Oh man, it was what do we do? We did
a lot of tail ham eg and cheese sandwiches in
New Jersey, right, we did a lot of those grilled chicken,
some fried chicken, French fries. You know, you get a
few fryers there, and yeah, it.
Speaker 2 (24:05):
Was hard work.
Speaker 1 (24:05):
Man.
Speaker 2 (24:06):
For sure, tickets are coming up, doesn't matter where you're cooking.
It's painful. I know what that feeling.
Speaker 1 (24:11):
Yeah, it was like if I got a ticket, I
was just heating up some pizza. It was like a relief.
It was nice.
Speaker 2 (24:16):
The pizza is like that's easy. Yeah you uh, anyone
in the restaurant, we all have PTSD from that that
printer noise. There was a great episode. I mentioned it
on some Instagram posts, but it was like, I'm sure
you watched The Bear.
Speaker 1 (24:28):
I haven't.
Speaker 2 (24:28):
I heard it's great, dude, you gotta watch it.
Speaker 1 (24:30):
Check it out.
Speaker 2 (24:30):
My wife and I love that show. Yeah, that's it's
one episode where they put on third party delivery and
just like the tickets heap coming. It's just like it's
a painful episode.
Speaker 1 (24:40):
Like your PTSD starts kicking in for sure, tablet hell
and all that kind of stuff. Man, crazy crazy times
for sure. All right, Cole, how's how's uh? What are
you seeing from the consumer?
Speaker 2 (24:56):
Yeah, so we're not seeing folks trade down yet. We're
pretty study on our average check still, which has been
great comping. Our transactions are up still as well, So
very happy with where we're at. September was a bit
of a flatter month for us, I think for a
lot of folks as well, and just kind of trying
to figure out why October has been really good. But
(25:20):
you know, for the past really almost four years, twenty
twenty one, twenty two, twenty three, like it's always been
like this crystal ball. I don't know. And I think
we're a good group that we act accordingly and make
changes as necessary. We're all over it pricing. You know,
we've raised prices since twenty twenty by twelve percent. We
(25:42):
did the math. Our peers has to be well biled
behind Piers, right, Yeah, our peer group, I.
Speaker 1 (25:49):
Mean a lot of your peers Rows increased their prices
twelve percent last.
Speaker 2 (25:52):
Year, right, so I think the peer group was like
at least fifteen to seventeen percent based on the math
that we've done. And uh, listen, as an entrepreneur, I
hate raising prices like it's easy. It's an easy short
term win, and sometimes it makes sense, and we have
to deal with inflation. Yeah, but I worry, and you
and I had this conversation I don't know, like almost
a year ago at this point, about all the death
(26:13):
that's out there, student loans, geopolitical stuff happening, oil prices,
et cetera. And you know, I worry about folks not
having the ability to go out and spend as much money, obviously,
and I think a lot of other people still think otherwise.
And I'm on the other side of that. And you know, look,
(26:34):
every time gas prices go up, we see drop, sales drop.
I mean, I remember last year when gas prices went
up in the summertime. We're just our comp went from
like here to here. We're like, okay, it's not like
things just change at honeygro overnight. So I don't know,
a lot of people live on budgets, man. You know,
for sure, my mentor taught me that. He's like, you know,
people in Middle America look very different than people on
the coast.
Speaker 1 (26:54):
You know, He's like, gasoline price goes up fifty cents,
that's a discretionary money. That they probably to spent that
they can't now.
Speaker 2 (27:01):
Right absolutely. I mean, you know you're gonna buy a
stirfry for you know, thirteen bucks and a drink for
two bucks and tax versus, Hey, that might get you
three gallons of guests. So yeah, you know, it's it's
tough and everybody's back on the roads. Man, My commute's
brutal recently. It's it sucks.
Speaker 1 (27:20):
You're coming from Jersey's Yeah, all the way down to
I'm North Jersey down to Princeton. It's a hike, man,
it's a hike. But I got a good gig, man,
so I can't complain.
Speaker 2 (27:30):
You know, this is the nicest office I've ever seen Bloomberg.
Speaker 1 (27:33):
Yeah, free snacks here, We're we're in New York. This
is actually the first podcast is podcast number twenty six
is the first one I've done in person.
Speaker 2 (27:40):
Oh nice?
Speaker 1 (27:40):
Yeah, this is cool, Like, isn't it? It is really cool.
I'm gonna have to do more of these, but should
but yeah, so yeah, we got the free snacks, free coffees,
whatever you need. There's definitely an ROI on all that stuff.
Speaker 2 (27:51):
I was doing the math I was waiting for there.
It was like thinking about what I'm paying rent in
Center City, Philadelphia are four thousand square foot. We make
it happen though.
Speaker 1 (28:00):
Yeah, this place is nice. If you haven't been here,
it looks like a spaceship when you first come up
onto the sixth floor.
Speaker 2 (28:04):
It's ridiculous. The free snack thing was crazy for me.
I'm like, oh my god, like that's crazy.
Speaker 1 (28:09):
You know, listen, that's not free right, Like I'm not
going across the street and taking time away from my desk.
So there's there's an r I on it.
Speaker 2 (28:16):
There's maths.
Speaker 1 (28:16):
Yeah, for sure, justin that was awesome man, thank you
for doing this.
Speaker 2 (28:20):
My god, my pleasure.
Speaker 1 (28:21):
Man. Where can the audience go to find out more
about Honey Girl find their local, you know, the closest store.
Speaker 2 (28:26):
Yeah, honeygro dot com locations app has everything on there
as well. Social media Instagram, honey Grow, Facebook, honey Grow.
And we'll be opening up in a few more markets.
So we're in Pittsburgh, We're opening a new one coming
up in Roeville. We're opening up in tom Serve, New
Jersey later this year, Brumaul, Pennsylvania. And we are also
(28:47):
going to be doing there's one I forgetting that's not good.
There's a fourth one in there. Brandon tired.
Speaker 1 (28:52):
So yeah, listen, it's Friday. It's late on Friday.
Speaker 2 (28:55):
Alexandria, Virginia, I forget you guys. Yeah, that's a good one.
So very excited in that next year. Just continue to push.
Speaker 1 (29:02):
Awesome, man, it's a great story. I love following it. Sure,
I gotta get back into the gym so you can
beat me up again.
Speaker 2 (29:08):
I didn't really beat you up.
Speaker 1 (29:09):
You're good shoves in survival mode, you know. A big
thanks to the audience for tuning in. If you liked
the episode, please share with your friends and colleagues. Check
back in a couple of weeks. I'll be discussing the
labor market with Vivian Wang, the founder and CEO of
Landing
Welcome to Chopping It Up. I'm your host, Mike Hallon,
the senior restaurant and food service analyst at Bloomberg Intelligence.
Today we're joined by Justin Rosenberg, founder and CEO of
Honey Grow.
Speaker 2 (00:29):
It's up.
Speaker 1 (00:30):
That's up, man, Thanks for doing this, Thanks for having me.
Let's just hop right in. Man, you weren't always a
restaurant tour I was not. Tell us a little bit
about that.
Speaker 2 (00:38):
Yeah, I was, you know, from here. Always great to
be back in my hometown, New York, even though my
Phillies had on go. Phil's been in Philly for twenty years,
which is a wild wild thought for me. But born
and raised Long Islands, and I went to Penn State undergrad.
Met a girl got me to Philly. Now she's my
wife and mom of our three kids. And it was
(00:59):
in finance in the beginning, and you know it just
didn't love working in my cubicle. But it was great
in many different ways, and did it for five years.
But my passion's always been food and the idea of
scaling something and building a business. Had some health challenges
in my mid twenties. I waited a lot more in
a bad way and went to the doctor, and you know,
(01:20):
they're like, hey, you got really high blood sugar and
high cholesterol and scared me. I just had a first kid. Verbatim,
He's like, do you want to see her walk down
the aisle one day? And scared me enough to say
yes and get my life in order. Went vegan for
about two years, but I was making salads for lunch,
stir fry for dinner at the company I worked for,
company called PRET It's a real estate investment trust. I
(01:41):
would get the access for all the sales for all
these different tenets. So like Chick fil A was doing
insane numbers, right, I think there's like eight five today.
But I would just people in a way, like why
are these concepts doing so well? Why is the Apple
store doing four thousand a square foot? What can I
do to really create a great brand? You know, what
are they doing that other brands are not doing? So
I really wanted to create something that's not been done.
(02:03):
I think there's so many bowl concepts out there, and
this is like, you know, I'm part of that twenty
tens boom. I didn't want to do you know, burgers,
Mexican salad, it's all been done and you know, honey
grop eighty five percent stir fries. So we're not a
solid concept per se. And that was kind of it.
Just got after it and rode a business plan and
a lot in between. But that was the beginning, your
(02:24):
brave soul.
Speaker 1 (02:25):
Did you know how difficult the restaurant business is going
to be?
Speaker 2 (02:29):
No, I had no idea. I mean I worked for
a buddy of mine on the weekends in DC in
a kitchen and busted. My ass was just quiet, nobody
knew who I was and just cooked and learned and
got beat up in the kitchen. But I mean, any
scaling a business career, you gotta be nuts man like,
like you have to do. Something's wrong with us entrepreneurs,
so like do what we do and withstand what we do.
But like it's also just in our DNA and it's
(02:51):
it's been fun.
Speaker 1 (02:52):
Yeah, and it's cool. It's interesting that you know health
struggles and being overweight. Yeah, you know, because I just
know you as being in shape.
Speaker 2 (02:58):
You want to see a picture. Yeah, I wish we
had the cameras in here every phoner.
Speaker 1 (03:01):
Yeah for the listeners. Justin beat me up in jiujitsu
class weeks ago.
Speaker 2 (03:05):
And we should we should talk about that, dude. This
was me on jiu jitsu on awesome.
Speaker 1 (03:10):
Yeah, he chained with a bunch of savages in Philly,
their monsters.
Speaker 2 (03:13):
All right, So this is a picture of me. Got
married in the two thousands, So this is I think
it was my twenty two or twenty three. Here that's
my now wife.
Speaker 1 (03:22):
Dude, that doesn't even look like you.
Speaker 2 (03:23):
I don't even know what she said. Yes, I genuinely
don't know. Why what are you thinking? This guy's gross?
But uh, I got some funny pictures. I can share
it with you too. I'll shaw after this.
Speaker 1 (03:35):
I have a funny license where I was like, it
was like, you know, I was going through a tough
time in my marriage and I was really overweight, and
he was around Christmas when I got you know, I
had put on some weight after Thanksgiving and Christmas. I
was probably like two forty. Right now I'm like two fifteen,
and uh, you know, I look like a totally different person.
But it was so funny, Like get handing my ID
(03:55):
to people, they would look at the IDA, look at me,
look at the ID, look at me, and I'd be
like it was just rough. Cri SMIs you know, family
to be you know, stuff like that.
Speaker 2 (04:03):
Well, you know it's the holidays. Dude, you you're but
you're two fifteen. Let's talk about jiu jitsu real quick,
because you're very well distributed to fifteen. You know, for
all Mike's listeners out there. He actually, to his credit,
drove in from Jersey to Philadelphia, central Jersey, not like
you know, over the bridge, but central Jersey and then
like doesn't know anyone in this this school that I
(04:24):
go to Balance Studio. Shout out to my crew there.
You know who you are and you and after it, man,
like you like you really you trained stuff, but like
not the ju jitsu side. Yeah, and you're formidable like
you were like you had like like strong legs, like
I couldn't get certain like moves on you, and you
know you held your own. Dude. I was saying before,
like I just kept checking on you. I'm like down
(04:46):
the hall like the matt like getting my butt kicked
and like keep an eye on you. And you were
like you're getting after it. So you should be proud.
That's cool.
Speaker 1 (04:53):
Thanks, man, It's fun. What I love about it. And
MMA two is like it's such a humbling experience. Man,
it is such a humbling exp experience and I think
everybody needs that in life, you know what I mean.
So I agree. Yeah, it's awesome, man. It's a great
you know, stress reliever, and it's fun. It's like three
D chests, right, like using your brain and thinking and
(05:13):
trying to create traps. I'm not that good to be
able to trap anybody, but you know what I mean.
Speaker 2 (05:17):
It's three D chests and you know, not to go
too deep into current events, but for me, and you know,
I've been going through a hard time, Jewish people going
through hard time, a lot of people going through a
hard time, and it's been a chance for me to
turn my brain off and you know, Monday morning, Tuesday night,
Wednesday morning, I'm not thinking, I'm rolling and I'm just
(05:38):
with other humans. I don't care your religion, your race, gender.
People there to train and it's beautiful and awesome and
I'm very grateful for it.
Speaker 1 (05:46):
That's cool, man, That's a great gym.
Speaker 2 (05:48):
Thank you.
Speaker 1 (05:50):
All right, Cole, let's talk a little bit more about
Honey Grow for the people that aren't familiar. Can you
talk a little bit about the service model, the menu,
customer base.
Speaker 2 (06:00):
Yeah, so we're based in Philadelphia. Fast Schedule concept. We
do freshly made to order stir fry salads, honey bar,
which is take some fruit, there's all some honey on
top of it. It's actually five percent of our sales.
It's like a little snack. That's pretty cool. Everything's made
to order order on a Kiosk, which is basically an app.
And we have thirty six locations. So we're you know,
(06:20):
Boston here in New York and Brooklyn, Hoboken, Jersey, Delaware,
Baltimore area, DC, Metro Pittsburgh. Forgetting something which isn't good,
but we will be at forty restaurants. But in this year,
and thank god, things have been pretty good. It wasn't
always good though, Nope, it was good bad.
Speaker 1 (06:38):
Good about the the bad part a little bit because
I think I think listeners could learn a lot about it.
And you've always been super open a bad which I
think is really cool.
Speaker 2 (06:48):
Yeah. Look, I I have nothing to hide. I don't
really care. It's like, you know, if we're going to
be a publicly traded company one day, I don't know,
like you're not. The numbers are the numbers at the
end of the day. And I think the numbers will
always speak for themselves, kind of like actions speak more
than words, and that's my philosophy. And you know, the
challenges we had was we raised a lot of money,
We had the pressure to grow. We opened up a
(07:09):
bunch of new markets. I had a second concept that
really was more of a business solution than like a
passion project. Honeygro is like from my heart and soul
in DNA. Minigro was like, hey, like the cost to
build a honey grow in twenty sixteen or fifteen was
too much. Let's do this smaller version that we don't
need to vent and have a simpler line, and we'll
do that urban and the honey grow suburban, so instead
(07:32):
of doing like one to six and I think, you know,
we're all drinking the kool aid. I think this thing was
going to be a successful as quickly as honey grow.
And the food was great, and it did great until
two thirty here in Manhattan, and then all of a sudden,
you know, it's the city. But yeah, a lot of
mistakes made, so you know, paid crazy rents, you know,
just not really mastering that model. I think there was
(07:54):
a lot of confusion. I think the best models are
the simplest ones, and you can explain, like we sell
seraphices and selves as we do. Minigro is like, well,
it's noodles, it's bowls, it's salads. Food was great, but
I think it was very difficult to really conceptualize and explain.
So that was aside. And then with Honey Grow, you know,
were really quick and we took on some rents that
were pretty crazy and you know, seven new markets in
(08:14):
one year, and plus we had a brand new corporate team.
So it was just like the textbook of what to
never do. And you know, look, it was a really hard,
scary time five six years ago. And I think I've
told the story, but I remember, you know, looking up
my wife and I went to Miami to get away
for a weekend, and my wife's on the phone with
the kids, not really knowing everything going on in my
(08:35):
life because I didn't want to like share all this,
but we're running out of cash, and my our CFO
at the time, my partner, David, was like, you know,
we should really be considering bankruptcy together some of these leases,
and you know, my wife's looking at the ocean like smiling,
and I'm like I'm like, we're not doing that. We
have we're going to create a plan, let's do it.
And you know, I knew, and unfortunately, my investors have
been very supportive and been very good and that way,
(08:58):
a lot of people would have said, this doesn't work.
I got our good luck. They put more cash in
and let us execute our plan, and we did and
then something so by twenty nineteen we were really on
our way, and there's COVID. But by the middle of COVID,
we're actually doing okay, thank god. And then the last
three and a half years, you've been really good. We
opened thirteen restaurants producing low twenties and ebada and we've
(09:21):
been profitable from a like everyone's talking about ebada, like
ajustity whatever, like yeah, we have a lot of that,
thank god, but now we actually make money, so we
have a net income basis. We've been profitable too. So
one of my goals has been, you know, there's been
a lot of companies that have gone public and iPod
it's super inspirational and it's great, but I you know,
(09:42):
I like to keep my gena tight, a little different
from some of these other guys that they do what
they need to do. And that's fine. But I'm a
firm believer after going through what I've been through with
cash and everything else. Like, run the business type. We're
not a tech company or a restaurant company. Our jobs
to make people happy, s have really good food, do
it over and over and over and over again. We're
not perfect, but you know it's not I'm not creating
(10:02):
time travel here. Yeah, I'm not like, you know, creating
portals in space. It's like the restaurant business.
Speaker 1 (10:08):
Yeah, it's a simple business, but it's hard. Yeah right,
but yeah, no, that that's great. I think there's a
lot of great lessons in there because a lot of
chains now are trying to shrink the size of the
box because it's expensive to open a new store, construsting
construction costs are up. You know, we haven't seen that
kind of break in the cost of real estate that
(10:28):
a lot of people have been expecting with interest rates
being higher and stuff like that. So you're seeing a
lot of chains making that move.
Speaker 2 (10:33):
Yep, yep. Absolutely, We've been flexible in the real estate.
So two thousand square feet will take some reason twenty
five hundred square feet, but we'll take two thousand if
we can make it work, and then we'll take three thousand.
We can make it work. But you know, we're all
competing for the same twenty five hundred square foot pad site,
redcap space, and the challenge is there's not enough of
(10:55):
that coming out of COVID and there's there's a lot
of big box but there's not a lot of that.
And the issue then becomes everyone's growing and they have cash.
And I hear this from everybody. It's like it's just
everyone's competing for the same real estate, driving up rents
and you're getting less from landlords. So for example, we
I turned out of space recently because of recently iPod
(11:19):
company was willing to pay a crazy rent and I'm like,
this is in Pennsylvania, in a suburb of PA and
I'm like affiliate. I'm like, go for it. I mean,
that's a mistake I made six seven years ago, and
that's fine. Like, if they can do it and afford it,
go for it. You know, I know the AUVs and
they can make it work. Cool, We're going to be
(11:40):
disciplined and it's it's good, but it's not great. We
move on and that's just how it has to pay well.
Speaker 1 (11:45):
It's good they're private and you can do that right
because you know, once you get that equity money, you know,
the Wall Street's pressuring you to open more stores and
you've got to hit those bogies or where the evaluation
multiple gets dinged and you're on you're on that hamster wheel,
you know you are.
Speaker 2 (12:02):
And I think internally we're really disciplined group, but we're
also aggressive. You know, we grew this year. We'll have
nine new restaurants into base of thirty one, so you know,
next year we're looking to do twelve to thirteen more.
So we're not you know, we're certainly aggressive in the market,
but you know we're not going to be twenty next year.
Speaker 1 (12:19):
It's just not possible. Yeah, it's no way. Yeah. And
I guess what's the biggest hurdle is it? Is it
finding good managers?
Speaker 2 (12:27):
Always? Always like finding a good GM is always the
most key thing you need to successfully run a business.
And I you know, recently said on a separate podcast,
and it's true, and it's like, you know, this is quoting,
it's like Jocko from you know, Extreame Ownership. But it's
a great line. It's very true. There's no bad teams.
(12:49):
There's only about leaders. And if you have a really
good leader, they can remove the low performers on the team,
build up your top performers and really like push where
you need to go. Whereas if you have a bad leader,
like things are going to happen that you don't want. So,
you know, one of the key things we've been doing
is pushing an elite GM program, which is very similar
to the restaurant tour program from Chipotle, but it's very effective.
(13:12):
And when you create these cultures of folks that are
like all star teams led by really great gms, the
food taste better, you know, the experience is better, the
vibe is better, the music is the right volume, like
everything kind of clicks. The hospitalities there and it becomes
a really great experience. And then the P and L
is also really strong, not just the sales, but things
are managed tight. So it's that balance of like culture
(13:33):
and vibe and business results is really key. But it
starts with the GM.
Speaker 1 (13:36):
Cool. Yeah. Black Box Intelligence has done some work on
that and they talk about how that's like the biggest
correlation with a successful restaurants having a great no question, Yeah, cool,
it's financing, tighten up, tightening up.
Speaker 2 (13:50):
We're not looking for financing, so we've been pretty lucky.
We recently extended or got more in a line and
the terms are pretty favorable. But I hear other things,
so yeah, I.
Speaker 1 (14:02):
Know franchisees you know who don't have the scale, Yeah,
or especially getting squeezed a little bit right now. Yeah, yeah.
Can you talk a little bit about your mix of
in restaurants sales versus to go and kind of what
the pandemic did and how it changed your business.
Speaker 2 (14:18):
For sure, we were eight percent delivery pre pandemic. We
are today sticky it around thirty three, thirty four percent
like high a pandemic almost fifty percent kind of stable.
Speaker 1 (14:29):
Your food travels well, thank god.
Speaker 2 (14:31):
Yeah, Like it's it's literally like you know you've had
like it's freshly made noodles. It's great, by the way,
thank you, the noodles of the same duel as David
Chang is gonna get more food. But it's like a
high quality good product. We're very proud of that. And uh,
it travels well. And during the pandemic, a lot of
folks discovered us and it helped us stay alive and
(14:53):
ultimately thrive, so it was good.
Speaker 1 (14:55):
Cool. Do you have any plans to franchise in the future.
Speaker 2 (15:00):
No, I mean, look, we talk about it at the
board level, but right now the focus is the growth
plan and just executing that.
Speaker 1 (15:06):
Yeah. Well, I mean you have impressive unit economic uni economics,
so it doesn't seems like there's any real reason too
at this point until you go international, right, you got
to grab that international partner and let them run with it.
Speaker 2 (15:17):
One day.
Speaker 1 (15:17):
Yeah, how our staffing levels better?
Speaker 2 (15:22):
Yeah, twenty end of twenty one, beginning of twenty two
was horrible. I remember just like walking in too the
restaurants and just seeing like there were days we couldn't
even open because we couldn't staff. People just were not
showing up. So many no shows on interviews are happening.
I mean, it was a really, really, really stressful time.
And kudos to the team at Honey Growth for getting
through it, in particularly the ops team, who are badasses
(15:46):
and shout outs to all you guys and girls. You
know who you are. But it was hard, you know,
they did a great job.
Speaker 1 (15:53):
Yeah, all right, good, Yeah, that's what we've been hearing.
Things are definitely getting better. Still, some a little bit
of issues at late night. But even that's that's getting
a little bit easier to staff right now. Yeah, you
guys have always seemed to be ahead of the game
on technology. I uh, the Kiosks, you were early on those,
(16:14):
the virtual reality training. Yeah, I love that kind I
love that. So it was fun, Yeah, really really cool.
You can find it on YouTube. Uh, you know for
the listeners. Is there anything else that you're you know,
focused on right now technology wise?
Speaker 2 (16:29):
Yeah, I mean, look, the the Kiosks, it's essentially an
app where one hundred percent digital. As an organization, it's
either you know, you're ordering on the app, you're ordering
the mobile website. I'm sorry, on the Hunter website, you're
ordering on a Kiosk. We're ordering third parties. So we're
you know, that's just the way it is. Not intentionally
wanting that. Actually, I'm not going to sit here in
(16:49):
SA a tech genius.
Speaker 1 (16:50):
I'm not.
Speaker 2 (16:51):
I just knew that if you wanted a salad and
I wanted to stir fry, the best way to do it.
It's also assume that most people don't want to create
their own food, which is the number one thing was
create on Stuver a chicken excuse me. I knew that
that would be the cleanest, best way to do it
and also make it beautiful in the process. So yeah,
I launched that in twenty twelve. And now yeah, we
(17:14):
have the app with it, which is great, and everything
gets funneled into the same loyalty system, so you can
actually get loyalty rewards on the Kiosk and on the app,
which really helps strive frequency in a really cool way,
which I know our competitors can't do. Yeah. And then
for the future, like you know, everyone's talking about automation,
We've we've been looking at some stuff and maybe test
some stuff on it. But honestly, like we run like
(17:38):
good numbers and not to sound cliche, but like it
like annoys me a lot when everyone tries to get
very techy and like, you know, we're gonna get rid
of people. Like there have been concepts I've seen that
have really tried this in the past, say four or
five years, and it doesn't feel good. Yeah, and the
food's not as good and there's something missing from that.
Speaker 1 (17:56):
It's almost like it's sterile, I guess is the word.
It's like, yeah, it's it doesn't feels like you're in
like a hospital or something that in at a restaurant, it.
Speaker 2 (18:03):
Feels like you're in the hospital. I mean, look, the
kiosks don't save us labor at all, Like people think,
oh well, yeah, I mean you can make the argument
during peak lunch that there's four chios, but I also
make the argument that you could go on your app too,
So it really isn't saving on labor. And if anything,
we have a person on the floor as an ambassador,
table touching, cleaning tables and et cetera. So you know, look,
I don't I'm a firm believer in finding really great
(18:24):
quality folks and we need good folks because we're opening
more restaurants and a benefit of working at honeygro Is. Look,
if you're a team member and you want to be
GM good like, well, we'll train you. That's part of
the Elite GM program. Uh so yeah, I mean we're
not down that automation path yet. We're checking some stuff out.
If we can make the lives with the team easier, great,
But you know, I never want to be that sterile
(18:44):
concept that's banking on tech.
Speaker 1 (18:47):
Well, it's great that you have the employees touching the
tables because a lot of your fast casual competitors aren't
doing that.
Speaker 2 (18:52):
Yeah, and by the way, we don't beat a thousand.
There's sometimes I'm walking in there, I'm like, where's that
the ambassador. So it's been a massive push of mine.
And again, like I just mentioned this bell to say
it again a previous podcast, but Ivan Orkan, who is
incredible Roman chef Ivan Ramen. I'm sure you know him.
I was on a panel with him recently and he
had he had an amazing line that I've been just
(19:14):
I've been just pushing home to my team and when
I'm in the restaurant, especially with the team members and
the gms, it's like, guys like you will never go
back to a restaurant where the food is incredible but
the service sucks. You're just not gonna you will not
go back, Like, I don't know, maybe you will.
Speaker 1 (19:31):
I don't. There's a great uh tapist place near me
at home, and there's I had a bad experience with
the service one time, and the food is phenomenal, but
I never went back.
Speaker 2 (19:40):
Yeah, it's you know, quoting. You know, everyone in my
generation read Danny Meyer's book, right, And I'm paraphrasing, but
it's like, you know, one of the first things that
happens when you're born, if anything, is you're being held.
So it's like a Nate and you want to be
taken care of him. That's part of the restaurant experience.
So look, it's if the food, you know, it's the
best word for this. Diversely, I guess, you know, contrapositive
(20:02):
of that. Conversely, that was what I was thinking of
Branda tired. If you're in a situation and the food
is good and the service is incredible, you will go back.
And like, we're not a Michelin Star restaurant at all.
We're not. We don't want to be. But we do
our thing and if the service can be really great,
we know we can get folks to come back. That'll
be the biggest driver of frequency. That will be the
(20:24):
biggest driver of you know, people talking about us and
marketing and you know that's the restaurant business.
Speaker 1 (20:30):
Yeah, you know, I guess that is that something that
you're doing too, is like trying to hire for emotional intelligence.
Oh for sure, Danny.
Speaker 2 (20:39):
Talks about right absolutely, And again we don't bat a thousand.
We recently opened a restaurant. I don't want to say
which one, but it's that was great. But an opening
day there was an ambassador who should not have been ambassador.
And I'm like, you know, what are we failing on
here to, you know, like to not recognize that? Yeah,
(21:00):
And I realized a lot of our team, you know, leaders,
be it in the restaurants or you know, DMS or whoever.
You know, some folks may not realize the importance of
that characteristic, right, It's not just a person cleaning tables.
And today, you know, I'll give a shout out to
our DMS or legendary group you know who you are.
They're all over it now. It's like, you want to
find people who were going to care, yeah, and self
(21:24):
motivated people who are willing to be coached and care.
We don't want a janitor on the floor just like
quietly cleaning things up. That's that's not hospitality. Like you
want them to be like, hey, how's your stuffry? Looks
really good?
Speaker 1 (21:37):
Cool?
Speaker 2 (21:37):
Thank you, I get you anything else. Let me refill
that for you real quick. You're like, I'm coming back.
Speaker 1 (21:41):
Yeah.
Speaker 2 (21:42):
So it's those things are critical.
Speaker 1 (21:44):
So is it hard to like, is it hard to
figure out who's going to be the next good manager.
And you know, do you find a lot of employees
maybe that don't want to be a manager, that are
very happy at you know, working the register or whatever
it may be.
Speaker 2 (21:57):
Yeah, that that was a really that last to last point.
That was a good lesson I learned early on. So
when I was running the restaurants, the people who would
be great, like prep people, per se and I always had
the best attitudes and we're willing to help, and like
they didn't necessarily make the best managers. And I learned that,
you know, good eleven years ago. It was like, why
(22:18):
wouldn't you. They just want to work, They want to
put their head down, they want to like hang with
their friends, and they want to just do their thing.
It is hard. It is hard to find good folks
who want to move up. I mean often they're just
like I want, I want it. And that's you know,
for me, the first sign like great, show me that
you want it, and let's see if you have the
skill set. And you know, being a leader and one
(22:39):
of the hardest things for me because again like I
created from scratch and I ran the restaurants, is going
from door to leading. It was a conversation I recently
had with my COO about somebody else. But like, you
got to be leading, and leading means developing people, Like
you got to spend your time. It's easier for me
to just go in there sometimes and do stuff right,
whatever the thing is, But it's better for me to
(23:02):
build that person to do that. And that's really what
I think separates managers and leaders, and that's something that's
become a huge focus of mine.
Speaker 1 (23:09):
That's cool, man. I wish I spent more time working
in restaurants. I did a little bit of time as
a short order cook. Was like usually it was not easy.
Usually in emergency situations too. For my friend at the
town pool. I was a lifeguard in the Cedar Grove,
New Jersey, and yeah, my friend ran the snack bar,
and so if he was in a jam he couldn't
work and the cooks called out sick, I would take
(23:32):
the day because I could always find another lifeguard that
wanted to work, and I'd work as a short order cook.
But I you know, I did it. You know, I
don't know, five ten times I wish I wish I
had more actual restaurant experience.
Speaker 2 (23:43):
Now that I cover restaurants, what were you cooking?
Speaker 1 (23:48):
Oh man, it was what do we do? We did
a lot of tail ham eg and cheese sandwiches in
New Jersey, right, we did a lot of those grilled chicken,
some fried chicken, French fries. You know, you get a
few fryers there, and yeah, it.
Speaker 2 (24:05):
Was hard work.
Speaker 1 (24:05):
Man.
Speaker 2 (24:06):
For sure, tickets are coming up, doesn't matter where you're cooking.
It's painful. I know what that feeling.
Speaker 1 (24:11):
Yeah, it was like if I got a ticket, I
was just heating up some pizza. It was like a relief.
It was nice.
Speaker 2 (24:16):
The pizza is like that's easy. Yeah you uh, anyone
in the restaurant, we all have PTSD from that that
printer noise. There was a great episode. I mentioned it
on some Instagram posts, but it was like, I'm sure
you watched The Bear.
Speaker 1 (24:28):
I haven't.
Speaker 2 (24:28):
I heard it's great, dude, you gotta watch it.
Speaker 1 (24:30):
Check it out.
Speaker 2 (24:30):
My wife and I love that show. Yeah, that's it's
one episode where they put on third party delivery and
just like the tickets heap coming. It's just like it's
a painful episode.
Speaker 1 (24:40):
Like your PTSD starts kicking in for sure, tablet hell
and all that kind of stuff. Man, crazy crazy times
for sure. All right, Cole, how's how's uh? What are
you seeing from the consumer?
Speaker 2 (24:56):
Yeah, so we're not seeing folks trade down yet. We're
pretty study on our average check still, which has been
great comping. Our transactions are up still as well, So
very happy with where we're at. September was a bit
of a flatter month for us, I think for a
lot of folks as well, and just kind of trying
to figure out why October has been really good. But
(25:20):
you know, for the past really almost four years, twenty
twenty one, twenty two, twenty three, like it's always been
like this crystal ball. I don't know. And I think
we're a good group that we act accordingly and make
changes as necessary. We're all over it pricing. You know,
we've raised prices since twenty twenty by twelve percent. We
(25:42):
did the math. Our peers has to be well biled
behind Piers, right, Yeah, our peer group, I.
Speaker 1 (25:49):
Mean a lot of your peers Rows increased their prices
twelve percent last.
Speaker 2 (25:52):
Year, right, so I think the peer group was like
at least fifteen to seventeen percent based on the math
that we've done. And uh, listen, as an entrepreneur, I
hate raising prices like it's easy. It's an easy short
term win, and sometimes it makes sense, and we have
to deal with inflation. Yeah, but I worry, and you
and I had this conversation I don't know, like almost
a year ago at this point, about all the death
(26:13):
that's out there, student loans, geopolitical stuff happening, oil prices,
et cetera. And you know, I worry about folks not
having the ability to go out and spend as much money, obviously,
and I think a lot of other people still think otherwise.
And I'm on the other side of that. And you know, look,
(26:34):
every time gas prices go up, we see drop, sales drop.
I mean, I remember last year when gas prices went
up in the summertime. We're just our comp went from
like here to here. We're like, okay, it's not like
things just change at honeygro overnight. So I don't know,
a lot of people live on budgets, man. You know,
for sure, my mentor taught me that. He's like, you know,
people in Middle America look very different than people on
the coast.
Speaker 1 (26:54):
You know, He's like, gasoline price goes up fifty cents,
that's a discretionary money. That they probably to spent that
they can't now.
Speaker 2 (27:01):
Right absolutely. I mean, you know you're gonna buy a
stirfry for you know, thirteen bucks and a drink for
two bucks and tax versus, Hey, that might get you
three gallons of guests. So yeah, you know, it's it's
tough and everybody's back on the roads. Man, My commute's
brutal recently. It's it sucks.
Speaker 1 (27:20):
You're coming from Jersey's Yeah, all the way down to
I'm North Jersey down to Princeton. It's a hike, man,
it's a hike. But I got a good gig, man,
so I can't complain.
Speaker 2 (27:30):
You know, this is the nicest office I've ever seen Bloomberg.
Speaker 1 (27:33):
Yeah, free snacks here, We're we're in New York. This
is actually the first podcast is podcast number twenty six
is the first one I've done in person.
Speaker 2 (27:40):
Oh nice?
Speaker 1 (27:40):
Yeah, this is cool, Like, isn't it? It is really cool.
I'm gonna have to do more of these, but should
but yeah, so yeah, we got the free snacks, free coffees,
whatever you need. There's definitely an ROI on all that stuff.
Speaker 2 (27:51):
I was doing the math I was waiting for there.
It was like thinking about what I'm paying rent in
Center City, Philadelphia are four thousand square foot. We make
it happen though.
Speaker 1 (28:00):
Yeah, this place is nice. If you haven't been here,
it looks like a spaceship when you first come up
onto the sixth floor.
Speaker 2 (28:04):
It's ridiculous. The free snack thing was crazy for me.
I'm like, oh my god, like that's crazy.
Speaker 1 (28:09):
You know, listen, that's not free right, Like I'm not
going across the street and taking time away from my desk.
So there's there's an r I on it.
Speaker 2 (28:16):
There's maths.
Speaker 1 (28:16):
Yeah, for sure, justin that was awesome man, thank you
for doing this.
Speaker 2 (28:20):
My god, my pleasure.
Speaker 1 (28:21):
Man. Where can the audience go to find out more
about Honey Girl find their local, you know, the closest store.
Speaker 2 (28:26):
Yeah, honeygro dot com locations app has everything on there
as well. Social media Instagram, honey Grow, Facebook, honey Grow.
And we'll be opening up in a few more markets.
So we're in Pittsburgh, We're opening a new one coming
up in Roeville. We're opening up in tom Serve, New
Jersey later this year, Brumaul, Pennsylvania. And we are also
(28:47):
going to be doing there's one I forgetting that's not good.
There's a fourth one in there. Brandon tired.
Speaker 1 (28:52):
So yeah, listen, it's Friday. It's late on Friday.
Speaker 2 (28:55):
Alexandria, Virginia, I forget you guys. Yeah, that's a good one.
So very excited in that next year. Just continue to push.
Speaker 1 (29:02):
Awesome, man, it's a great story. I love following it. Sure,
I gotta get back into the gym so you can
beat me up again.
Speaker 2 (29:08):
I didn't really beat you up.
Speaker 1 (29:09):
You're good shoves in survival mode, you know. A big
thanks to the audience for tuning in. If you liked
the episode, please share with your friends and colleagues. Check
back in a couple of weeks. I'll be discussing the
labor market with Vivian Wang, the founder and CEO of
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