Episode Transcript
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Speaker (00:02):
This is the Restaurant
Technology Guides podcast,
helping you run your restaurantbetter.
Hey everyone.
Welcome back to the RestaurantTechnology Guys podcast.
I'm Jeremy.
Julian, the Chief RevenueOfficer of CBS North Star.
And as always, I wanna thank youguys for tuning in.
(00:24):
I know you got lots of choiceswhen it comes to hanging out on
the internet and podcast.
So thank you guys for spendingtime with us today.
Today you're in for a treat.
Uh, if you love the fast casual,uh, and innovations that are
happening.
In the fast casual environmenttoday, we are joined by Jason
Morgan, the CEO of OriginalChopShop.
Jason's got a greatentrepreneurial story where he
(00:46):
talks a ton about how thingscame to be at ChopShop and what
he's doing to continue to makethe world a better place in his
restaurants.
His journey is a fascinating onefrom starting out in accounting
to helping Zoe's, uh, kitchen gopublic to now leading a really
unique.
Brand that has better for youdining.
(01:07):
If you have not been to shop,shop, I would highly encourage
you.
There's one close to the househere in Dallas and I love it.
So grab your headphones, maybego order a protein bowl if
there's one local to you, andlet's get into the episode.
Jeremy Julian (01:21):
Welcome back to
the Restaurant Technology Guys
podcast.
I thank everyone out there forjoining us, as I like to say
each and every time.
I know you guys have got lots ofchoices, so thanks for hanging
out today.
We are joined by a restaurateurentrepreneur.
I'll let, Jason talk a littlebit about kind of his
background, but it's a, aninteresting deal and he has the
privilege of running.
A brand that, I have an affinityfor.
He and I got a chance before Ihit the, the record button.
(01:42):
But Jason, before we jump intokind of what you guys are doing
at an original ChopShop, whydon't you give a, give our
listeners a little bit ofbackground.
Who is Jason?
Where did Jason come from?
How did he get into therestaurant space and what have
you been up to the last numberof years?
'cause you've got, a prettydiverse background that I'm
really excited for our listenersto hear about.
Jason Morgan (01:57):
Okay.
Very good.
thanks for having me today.
First of all, my background haspretty much been hospitality my
whole career.
I finished a business MBAprogram at Vanderbilt, long time
ago.
Thought I wanted to be anaccountant.
I did that for about a year anda half and realized I didn't
wanna be an accountant.
and then just took those skillsand, ultimately started in
hospitality and casino business,and then transitioned to hotels
(02:20):
and then did a couple of smallstartups at on paper, should
have worked but didn't work.
And, and then ended up with aphone call in 2008 from, the
Elliot Group, for a CFO positionat Zoe's Kitchen.
And, I think I was so unhappy inthe job that I was in that I
would've taken any job at thatpoint.
And we, I interviewed for thejob was a dark horse candidate,
actually was the, I think thesecond choice for the job.
(02:42):
And, and luckily ended up withthe job.
And so moved my family fromNashville to Birmingham where
Zoe's was located at the time.
Started, at store 20.
we were, I was a first externalemployee to the brand after
private equity bought thebusiness.
And, was the CFO from for thenext eight years.
Grew it from 20 to 150 and thentook it public in 2014.
(03:03):
And then about a year and a halflater as I was like, let's just
really wanting to do somethingdifferent.
it was in the number two seatand really wanted to be in the
number one seat and it wasn'tgonna happen for me there.
And everyone was telling me thatI needed to, I needed to go be
A-A-C-O-O somewhere or apresident operator.
I just, and I was like, I don'tknow if I need to do that.
I think I could hire people thatcan do that.
(03:23):
I've got the rest of the stretchstrategic piece down and a
playbook from Zoe's.
And so I got very lucky and, inmy networking, I found, a
connection to original ChopShopand and he and I formed a,
basically a fund fundlesssponsor.
And we raised the money andbought original ChopShop at
three units in 2016.
Jeremy Julian (03:42):
Very cool.
And, the part that for me is sointriguing is Zoey's was such a
unique brand that obviously youguys got it to a place that it
grew so rapidly because it wasso different.
when Zoey's came out, like therewas not a whole lot out there,
and it really kava, I think youguys paved the way for a kava to
be able to go really hit that,hit that demographic and hit
what.
What it is that you guys weredoing, and I'm sure you guys had
(04:03):
a lot of lessons and that kindof growth over that period of
time was probably a fun ride.
And then having to go throughall the paperwork to take'em
public also was, was probablynot something that, that you
would enjoy doing again, but itwas probably a huge learning
experience for you.
Jason Morgan (04:15):
Yeah, that was
great.
And I'll tell you the, one ofthe things I like about
ChopShop.
Because it's got a lot ofsimilarities with Zoe's in that
there's no one doing exactlywhat we're doing in the fast
casual space.
There are people that do bowlsand there are people that do
salads, and there are peoplethat do, juices or shakes and
everyone's really moved in thelast several years to more of a
singularly focused menu categorywhere they focus on one thing.
(04:38):
It's a very small, limited menu,and we've done something very
different.
We've got probably one of thebiggest menus in the fast casual
space.
Over 50 items.
it looks very difficult.
It's, it is more difficult thansome concepts, but, but it's a
lot of scoop and serve once youget the sub prepped for,
pre-lunch.
I'm very thankful a lot oftimes, or most days where, Zoe's
(04:59):
was unique.
ChopShop is unique.
I don't know if I could run abrand that wasn't unique, like
if I was in the hot chickenspace or the salad space or the
burger space or the pizza space.
I just don't think I'd have thesame drive and the same
motivation to go do this everyday.
Because I think it's just a lotmore difficult and it's rare,
like it's rare in the restaurantspace that you could say, I've
(05:19):
got something that's differentand, but this is very different.
Jeremy Julian (05:23):
and it's super
unique and that's part of I'd
love for you.
For those that haven't been toan original ChopShop, I got the
privilege that there's three ofthem, where I frequent, and so
you and I talked a little bitbefore I hit the record button.
It is one of those things that,that quite honestly for me,
there's so many unique thingsabout your guys' menu.
I don't know that I've had thesame item.
Twice there, I think about itand then I get there and I want
(05:44):
something, and then I'm like,wow, but that looks so different
and I'm gonna try it.
And it's always, it always endsup hitting the spot from the
perspective of the execution andthe flavor profiles and really
just even even the deliverytimeline.
So talk us through what isoriginal ChopShop for the, all
of the listeners out there thathaven't been to one.
Jason Morgan (05:59):
so I'll start at
the very beginning.
husband and wife founded theconcept back.
almost 11 years ago.
and the story they tell is thatthey were tired of eating OT
every day and they wantedsomething that, that fit their
lifestyle and was a little bitbetter for you.
And so they developed ChopShop.
They built a menu based on whatthey like to eat.
And so we, we've taken that menuand we've adjusted it over the
years, but essentially about 40%of what we sell are protein
(06:21):
bowl.
and, it's not walked the line,so it's not Cava or Chipotle or
Sweet Green.
we're taking the order at thecounter, bringing the food to
the table.
but it's also highlycustomizable in terms of you
could take anything out of thebowl or add anything to the bowl
that you want.
It just happens in the back inthe kitchen that you can't see
it and it can't point to it.
about 15% of the mix is salads.
About 15% of the mix issandwiches.
(06:42):
but really the unique part ofthe brand is we have a big
beverage component and a bigsnack component.
So we do fresh squeeze juices,we do acai bowls, we do protein
shakes, we do parfaits.
That makes up about 15% of thebusiness as well.
and then we just recently rolledout breakfast all day, and so
that's another 10% of thebusiness.
Plus we have, the remainderscatering.
the menu is so diverse that youcan come for different
(07:05):
occasions.
So you can come after a workoutfor a juicer shake.
You can have a business lunch,you can take it home for your
family for dinner.
And because the menu is sodifferentiated, you can come
multiple times a week.
So we, our most frequent guestsare coming a lot, whereas I
would argue some of the otherbowl concepts, the flavor
profiles pretty much the same.
And you might go once everythree or four weeks at ChopShop,
(07:27):
you can come multiple weeks,multiple times in a week and
have a very differentexperience.
Jeremy Julian (07:31):
and that's the
part that I find it, most unique
about it Jason, is that you guysexecute, a, his, Mexican type
concept or somewhere Tex-Mex,you've got Asian, flavors,
you've got Mediterranean flavorsall in the same concept.
And so I guess I'd love for youto talk our listeners through
how do you even come up withthose things, I guess first and
foremost.
And then how do you guysexecute?
Because again.
(07:51):
Profile, the proteins are the,are probably the same.
It's chicken thighs or it'schicken breasts.
It's, it's shrimp, it's beef,but the marinades, the sauces,
it blows me away every time I gothere.
And it's so diverse.
And there's very few brands,like you said, that have been
able to execute at a high leveland keep the quality, keep the
timeliness, all of that, inthere.
And so I'd love for you to talkthrough even how do you guys
come up with that and reallywhat have you guys put in place
(08:12):
to be able to continue toexecute?
Jason Morgan (08:14):
Yep.
So lots to unpack there.
so we're, first of all, we'remaking everything in the shop.
So all the sauces, all thedressings.
I think at this point, everysingle thing that goes on a bowl
or a salad from a dressing saucestandpoint is made in the store
every day.
And so that, that keeps thequality, keeps the freshness of
what we're doing.
what we bought the concept, itwas much more an Asian focus.
(08:36):
it wasn't intended to be that.
we would consider ourself anAmerican concept, but most of
the flavor profile in the bowlswas Asian.
There was teriyaki chicken,Korean steak, a, a tival, it was
all Asian and and so in the lastfew years we've made a conscious
effort to.
to expand that profile.
and one of the things that wedid is we, asked the question to
the team was like, excuse me,who are our biggest two
(08:56):
competitors in the bowl space?
And the obvious answer isChipotle and Kava.
And so what we did was we cameup with two bowls that resemble
something that you could get ateach of those.
other competitors.
And so we have a chopped burritobowl, which is basically a
burrito bowl.
that, that looks a lot likeChipotle, but skews a little bit
more upscale in terms of theingredients.
And then we have a hot honeychicken and hummus bowl that
(09:18):
looks like something you couldwalk the line of kava and get.
And so both those bowls are,been huge wins for us as a
brand.
and, and expanded the flavorprofile.
What I'll tell you is I was apicky eater as a kid.
like I think I ate my firstsalad when I was 24 years old,
if you can believe that.
And I ate a lot more saladstoday than I ever have, but, and
so a lot of this is, I almostfeel like if I like it, then
(09:41):
almost everybody's gonna likeit.
And so we've got an outside chefthat we work with that's been
with us from the Zoe early daysof Zoe's.
He lives here in Dallas as well.
And so he's been super helpfulin Id ideating new recipes and
getting things standardized forus.
the other thing we've done tothat, that, is we've, we focused
a lot on technology early.
(10:03):
And like the first things we didwas we built technology to make
this business scalable.
And so new point of sale almostimmediately, new back office
system almost immediately.
Ideal versus actual food costingalmost immediately.
So all the recipes wereconfirmed and reconfirmed, and
so all of that goes into it aswell to be able to do things
(10:23):
consistently across, a number ofstores and a number of markets.
Jeremy Julian (10:27):
Yeah, and I tell
people all the time to be able
to execute at a high level,you've gotta have some of the
best in class tech technology tobe able to help your staff
members.
'cause you're not gettingHarvard PhDs that are coming in
to go work at original shop.
They need to be able to executeand keep the customers satisfied
as well as.
Fulfill those needs for peopleonto kind of the other,
categories.
So we talked a little bit aboutbowls.
(10:48):
You guys have got wraps, youguys have got sandwiches, you've
got salads.
Talk to me a little bit abouthow you guys skew there.
'cause again, the thing that Ilearned a long time ago, David
Overton, cheesecake Factory,CEO, he likes to talk about the
Novito rule and CheesecakeFactory is one of those places
that you can go and everybodycan eat.
I love the fact that you guyshave got sandwiches, you've got
bowls you got, so you can gowith a group of, a diverse group
(11:09):
and everybody can get somethingthat's their own.
But it doesn't all look likekava.
It doesn't all look likeChipotle.
And again, those brands haveobviously been incredibly
successful, but the fact thatyou might have a party of four
or party of six, now everybodycan get something different.
So I'd love to walk, walk ourlisteners through that.
Haven't been able to go throughsome of those other categories,
sandwiches, wraps, and such.
Jason Morgan (11:27):
so one of the
things about ChopShop just
globally.
Is that we've tried to keep themenu, approachable, and
affordable, right?
So a lot of the, a lot of the,we don't use the word healthy in
how we describe our brand.
we use the word healthful betterfor you, but a lot of the
healthy concepts tend to beweird, right?
They tend to come from New Yorkor DC or California.
(11:50):
And as they come to Dallas,people look at some of the
ingredients and they go, whatthe hell is that?
I don't know what that is.
I'm not gonna eat that.
or just, it's just,
Jeremy Julian (11:58):
Yeah.
Farrow instead of
Jason Morgan (11:59):
That's right.
That's right.
Jeremy Julian (12:00):
having
Jason Morgan (12:01):
That's exactly
right.
It's just call it what it is.
Like people want to know what itis.
And so what we've done is we've,we've been very conscious to
having ingredients and recipesthat are recognizable, and.
shocking for, not shocking, butfor us, the most recognizable
items on the menu are what sellsthe most.
So our biggest seller is theteriyaki chicken bowl.
And it's awesome, but it'sshocking how much it sells
(12:23):
compared to everything else.
Our biggest selling salad is akale Caesar.
And again, it's just it's it'snot complicated.
we're doing, made to orderscratch food and that's prepared
daily.
And people just, they, I thinkthey can taste the difference in
what they're doing.
So on the salad side, we've alsodone the same thing.
we've implemented severalupgrades on the salads, in the
last several years.
we brought in a, a Greek saladfor the first time a couple
(12:45):
years ago that rose to the top,and then,
Jeremy Julian (12:47):
is so good.
Sorry.
Jason Morgan (12:48):
yeah, that's
right.
And then this week we actually,a week ago we rolled out a, we
replaced, we had an Americansalad.
That sort of looked like a cob,but wasn't really a cob.
it had a couple of one skewitems in it.
They were like, maybe we coulddo something better here.
And so we put in a, a, we callit, we're calling it Scottsdale
cob, and so it's got a cilantrolime dressing, and then it's
(13:09):
boiled egg, a sliced boiled eggthat we're making in store as
well.
And again, like if you look at alot of our competitors, they, no
one has a sliced boiled egg ontheir salad.
So you almost have to go tocasual dining to see that.
And that salad in the first weekhas gone to number one in the
pix for salads.
just right off the bat, justit's, it is crazy how accepting
(13:29):
everybody was.
And now I've got another proteinoption that I can add to salads
and to bowls and to, toeverything else.
In January, we actually took 18items off the menu.
which you might, you probably,because I menu's still so large,
you probably wouldn't have everknown.
we'd done that.
Jeremy Julian (13:44):
again, almost
every item that you've talked
about, I'm like, oh yeah, Iremember having that tie, that
tie bowl?
I'm going through it, so sorry.
I'll let you keep
Jason Morgan (13:51):
No, that's good.
so we've done, we've justcontinually tried to upgrade
through, just alterations ofwhat we were serving and we
consistently try to make thingsbetter.
And so a couple of things, I'llget examples of that is that,
we've always had sweet potatohash as like a base item for our
bowls.
and we probably got morecomplaints about that than
anything else in, in the basis.
(14:11):
And it turns out that they just,we were cutting them too small,
so we started cutting thembigger and people love that
more.
in
Jeremy Julian (14:19):
Are you using any
tech to get that feedback?
Jason Morgan (14:21):
we are,
Jeremy Julian (14:22):
so many brands
that don't get that and I'd love
if you guys are using tech to,to get that.
I would encourage everybody tomake sure that they've got a
feedback tool.
'cause it's huge regardless ofwhat tool you use.
Having some feedback tool.
Do you guys use something?
Jason Morgan (14:33):
We do, we, we use
Ovation.
Jeremy Julian (14:35):
Love Zack.
Love that
Jason Morgan (14:36):
yep.
So Ovation has been a big winfor us.
We do about 54% of our businessdigitally.
and about half of that comesdirect to us through our app and
our website, which is a giganticnumber compared to most brands.
And so we're sending a two clicksurvey through Ovation to the,
to that subset of people andresponding to everybody.
And so it, it really takes whatwould've been no chance to
(14:58):
recover or no chance to interactwith the guests.
And allows us to interact witheverybody that's, interacting
with us.
And so that's been a big plus.
And then we're responding toeverything through Google
Reviews, to Yelp reviews, toUber Eats, DoorDash through
Moos.
and it's very similar platform.
but responding through that aswell.
So we have really good feedbackof, of what people like, what
(15:18):
people don't like.
Jeremy Julian (15:19):
Yeah, and it
allows you guys to pivot, which
I guess leads me down that path.
You talked about the hard boiledegg for the salad.
Talk to me a little bit aboutbreakfast.
I've never had breakfast there,so I'd love Is that something
brand new that you guys went allday breakfast or have you guys
always had breakfast and I justalways been lunch or dinner, for
me as a consumer.
But have you guys always donethat and why did you guys decide
to move to all day breakfast?
I know a lot of people like, youknow what, we might as well open
(15:40):
for breakfast'cause we're hereprepping sauces and any, stuff
anyways, so you might as welladd another day part and give
people a healthy option to meetcoffee, drinks.
You talked about your beverage,program being so successful.
I'd love to hear the insightbehind that.
Jason Morgan (15:51):
So if I was
starting the brand today, I
probably wouldn't be open forbreakfast.
but when we all ran, they wereopen for breakfast and the
locations that they had, theydid a pretty decent breakfast
business.
Breakfast menu was huge.
Probably 10 plus items.
On top of that, you had juicesand shakes and usables and all
this other stuff that you get toget for breakfast.
as we started expanding, we sawbreakfast was still pretty
(16:12):
strong in, in what I would callurban locations and urban, not
New York urban, but DallasUrban, like around SMU and Park
Cities or, in Lakewood.
you still saw people coming forthat, those early hours in the
suburbs.
We didn't see hardly anybusiness between seven and nine.
And so we've adjusted some ofour hours to, to be more
conducive to when the businessis coming in.
but what we did in January isthat we took those 10 items,
(16:35):
sorry, we took those 10 itemsand we, we narrowed it down to
four items.
And one of the items is a buildyour own breakfast bowl where
you get to choose a couple ofbases.
You get to choose a couple ofmix ins.
You choose an egg preparation,and, and it's actually a lower
price point.
the price starts out at$9,instead of 1150 for the other
bowls.
And, it's pretty good value forthat.
And we
Jeremy Julian (16:55):
I don't know.
I think I might be ordering acheat, cheat day burrito'cause
that thing looks pretty
Jason Morgan (16:59):
Yep.
and the cheap, the cheat day.
The cheat day wrap has alwaysbeen a big winner.
And, the BRE was a big winner.
That's something we broughtafter we bought the business.
And then the avocados host wasalways something that was sold
to too.
So providing that all day, we'veseen quite a bit of people will
order those four items duringthe, during the lunch hour,
during the dinner hour, even.
Jeremy Julian (17:17):
I love that.
I love that.
Jason, I'd love to understandyour guys' growth.
'cause I think you guys startedhere in DFW, or in this metro
area.
You guys have grown here.
You guys have grown, in Texas istraditionally does a pretty good
job when you travel outside ofkind of the DFW Metro down in
Houston or Austin or some of theother places, San Antonio.
but you guys are in multiplestates and now growing, growing
(17:38):
even into kind of the Arizonamarket.
I'd love to get yourunderstanding, why Georgia, why
Phoenix?
help me understand, how did youget there?
Because I know, just from yoursin my conversation, everything's
corporately owned.
So it's gotta be hard to createconsistency across, such a
divergent, swath of stores indifferent states and stuff.
Jason Morgan (17:55):
Yeah.
great.
So I'm gonna give you a statfirst that, that I always pride
myself on finding informationout there and taking information
and turning into strategy,right?
So here's something that, that Icame across in the last couple
of months.
we were at the Movers andShakers event in Chicago a
couple months ago.
We were lucky enough to beincluded.
We were number 13 on the list ofthe hundred, movers, shakers in
(18:16):
the VA guys world.
And as I started looking at thelist, and I've looked at the
lists before and I've seen thesame pattern.
I was like, wow.
Like none of these groups arecompany owned models.
Everybody's a franchise model.
So of the top 15 or 12 werefranchise models, and there were
three concepts that were listedthat were company owned models.
It was Chipotle, it was UrbanCafe outta California, and it
(18:38):
was us.
So it led me to start diggingaround okay, who actually is
doing what we're doing acrossthe country?
And I put it out to LinkedIn andasked people for feedback and
did some research.
And what I found was there'sonly if you have these criteria,
less than 40 units, fast casual,a hundred percent company owned
in three states or more.
(19:00):
Okay.
So those are the four criteriayou would think there'd be
dozens of companies that meetthat, that criteria across the
country.
There's only 10.
There's 10, which is just mindblowing to me that there's only
10.
And if you take that 10 and youfurther, segregate it down.
Four of the 10 are shrinking.
So they've tried to grow andthey're not growing anymore.
(19:20):
That leaves six, two of the, twoof the remaining six are really
small.
There's a six unit pizza conceptout of Ohio, a seven unit taco
concept outta California.
and they may grow, but they'renot gonna grow very fast.
that leaves you four, two of theraining four are vegan concepts,
which in my opinion, don't havea whole lot of.
White space to grow.
They can grow in big cities, butthey can't come to Dallas and
(19:41):
build 15 of them like, like wecould.
so that leaves two, it leaves usand Hattie Bees as the only two
concepts that sort of meet thatcriteria.
And because there's been noinvestment in the small emerging
company owned models sinceCOVID, I don't think anybody's
going to show up all of a suddenand get to 50 units.
So it's my belief that we're theonly concept in the country.
(20:03):
That has the chance to get fromwhat we're at 26 units today to
50 units by three years fromnow.
and if we can do that, thenwe're gonna be a shiny penny
that, that is gonna be the onlyone out there, that's performed
and, is investible at thatpoint.
that's, I'm gonna start withthat.
So that's the footprint of whatwe want to do.
So the business started inArizona.
(20:25):
The first three stores were inArizona.
We bought the brand in 2016.
And at Zoey's we used a hub andspoke model.
the strategy of Zoey's was verydifferent in the early days.
the founder of Zoey's franchisedthe brand out to seven different
states.
There were seven states with 20locations.
There were two here, two there,two everywhere.
when he sold it to privateequity, he bought all the
franchises back.
(20:45):
So when I started, we were allspread across the country.
We had no, no more than I thinktwo in any main market outside
of Birmingham.
And so we basically filled inthose markets over time.
that was the strategy there, butit was a hub and spoke model
from that.
So you went from Dallas toHouston, to San Antonio, to
Austin, so forth, so on.
So our strategy's been verysimilar.
(21:06):
we started in Phoenix.
The plan was let's build outPhoenix the best we can, and
while we're building outPhoenix, we're gonna build out
Dallas.
Dallas was very similar from ademographic psychographic
standpoint, and it is, we alllived here.
So my entire team came fromZoe's kitchen.
and so my, almost my entiresenior team, a lot of people in
the stores, regional managers, Alot of folks here from Zoe's and
(21:28):
so it's rare that you get tolive in the second market that
you open.
And so that, that was a, a bigplus there because, you could
make sure you'd be in the storesevery day.
You could make sure the cultureis what you wanted to be and you
could really control the growth.
So our plan was to build twomarkets, Dows and Phoenix, and
scale them up enough that wehave enough EBITDA to be able to
go and open the third market inthe fourth market.
(21:51):
And so we chose the third marketof Houston.
Partly because it was close toDallas, partly because we owned
a second brand called BellaGreen at the time.
We've sold that in 2022.
and we felt like we knew theHouston market really well, and
we could make good smart choicesthere.
Houston was also a good marketfor Zoey's and so that all
checked all boxes.
So we got a couple stores openthere.
we opened our third store latelast year in, in my view, you
(22:13):
need four to six stores in amarket before you really have
some traction and some brandawareness.
And because of capitalconstraints, we're, we don't
have four to six stores.
We have three.
And so we've, we've been making,making positive strides in that
market.
I think now we're 10 outta thelast 11 periods EBITDA positive
in Houston.
And so we've made it past thehard part and now it's just a
matter of can we get.
(22:34):
Store number four is gonna opennext year, and then can we get
five and six And, we believeHouston will start to look like
Dallas in terms of AUVs.
Once that happens, Atlanta's theexact same copycat story of
Houston.
We opened two very quickly, tookforever to open the third.
We don't have the fourth planbecause of capital constraints.
And so we're, at this pointwe're not quite in as good a
position as we're in Houston,but we're three of the last five
(22:56):
periods EBITDA positive, andwe're making enough sales in
Atlanta to be positive.
We've had some operationalchallenges here and there.
but we will be positive there.
So in the next year and a half,all the thing, all the stores we
open will be, in the existingmarkets.
And so we'll start filling thosein and then, assuming that some
point there's new capital inthis business, we then would
look at, spoke to Dallas orspoke to Atlanta.
(23:19):
So whether it be Austin or SanAntonio, or Charlotte or
Jacksonville, Florida orNashville.
that's how we would think aboutit.
So we believe that we've got ateam and tech stack and systems
and all in place to be able toopen six to eight stores a year,
starting next year if we had themoney to do it, and then we
could stair step that growth,going forward.
(23:40):
interesting enough, when it wasat Zoe's, I tell people I didn't
realize how good we did that.
Like we, we were like, and maybeit was just my naivety with just
not being in the restaurantbusiness, but.
the private equity group boughtthat business and they, in 2007,
they put a little bit more moneyon the balance sheet in 2009,
and then they never put anotherdollar in.
(24:01):
Like we just, we grew it throughcash flow.
We grew it through the buildingto leverage that cash
Jeremy Julian (24:05):
operating
profits.
That's incredible.
Jason Morgan (24:06):
It was incredible.
And so you look at brands likeSweetgreen who have been picking
on online quite a bit thesedays, but if you look at them
and they lost$600 million in thelast 14 years and they've had to
just keep raising money andraising money to.
To fund that operating loss.
we've done it just the opposite.
We've been EBITDA positive everyyear we've run this business,
and the goal is to, once you getpast that certain point where
(24:27):
it's self-funding, I don't thinkwe need a whole bunch of money
to make future growth happen.
I.
Jeremy Julian (24:32):
Yeah.
and I, I'd love to go back realquick, Jason, to talk about your
idea, because I think, I'vewatched too many brands put a
single outlet.
In a single location or maybetwo Houston's ginormous as far
as a physical market.
So even if they're in the samepart of town, getting to that,
getting to that place whereyou've got at least, at least
four, if not six or eight or 10in a market, ends up being one
of those things that, that,moves the needle quite a bit for
(24:54):
people because now it'srecognizable.
And as I said to you.
I know there's one close to myhouse.
I know there's one close to myoffice, and I know there's one
close to where my daughter playssoftball.
So it's if I'm looking and Ilook on my app or I, going to do
something, it's oh, I rememberthe last time I had food there.
That was really good.
I should go check it out.
And when you don't see it often,it makes it harder to, harder to
(25:15):
drive into that, to that area.
And so I want.
Listeners to hear that saysyou've gotta get some
penetration.
'cause you get economies toscale as a business, but then
also the consumer recognition ofwhat your brand is.
You guys.
Sounds like you guys did thatquite well at at Zoey's.
Jason Morgan (25:29):
I'll give you
another stat that, that sort of
shocks people.
I'm a hundred percent certainI'm right in terms of what I'm
about to tell you, but when Itell people, they look at me
like I've got three heads, I'veseen it enough to know that I'm
right.
And so when you open a store ina new market, you're likely to
do 50 to 70% of sales of whatyour average brand volume is.
(25:50):
and look, there are people thatdon't, there are people that
buck that trend, that have bigmarketing budgets and hype and
stuff, but 99% of brands will do50 to 70% in that first year,
maybe two years, maybe threeyears maybe until you get four
to six stores open.
And so what happens to people isthat, they don't expect that to
happen.
They, the model doesn't produceany cashflow at 70%, or less.
(26:13):
And they get a couple of storesopen in these new markets and
then they can't open anymorebecause they,
Jeremy Julian (26:18):
you mean most
recently, we're recording this
in August of 2025.
Portillo's is having a similarproblem.
I love the brand.
I had lunch there this week, butit's one of those things that
they grew so fast expecting, ifI build it, they will come.
People need to learn about it.
You get your diehards, that willcome, but then it tails off and
they're seeing that, here inTexas.
they admitted in their latest,quarterly earnings that they
grew too fast and didn't marketenough.
Jason Morgan (26:40):
And so the other
thing that happens is because
look, if you go back over thelast 15 years and you look at
the Nation's restaurant news.
Like hot concepts every year,every single person, I'm gonna
double the brand in the nextthree years.
I'm gonna go from 10 units to 60units.
It's not, it's every singleperson.
And you look at
Jeremy Julian (26:57):
for every time
people
Jason Morgan (26:58):
and no one does
it.
And the reason no one does it isbecause it's super expensive to
be able to go out.
if I wanted to build six storesin Houston, that's$8 million.
I don't have enough EBITDA orenough levers to go build$8
million.
I've gotta get someone to giveme$8 million to take that risk.
and if they don't, if I assumethat I'm gonna build the first
(27:20):
two stores, they're gonna beprofitable and they're gonna be
my average volume and that'sgonna reduce cash flow and I've
signed four or five leases, tocome behind them.
I wake up one day when I'm doing50 to 70% the first year, and I
can't afford the next fourstores.
And then the whole business isbroken,
Jeremy Julian (27:34):
Yeah, and you
can't afford the debt payment
for the$8 million that youraised.
I've watched it happen again.
I've been in this business for30 years.
There's a brand that I lovecalled Kroo that was outta
California, and they grew sofast in Southern California.
Once they got a little bit.
growth capital and they grew inso many markets.
I was early days of Ruby, I wasback in California too.
Do the, did the same thing.
They got into too many marketsand then they got too many dogs
(27:56):
and I ended up bringing themdown.
And so I love that you guys arefocusing on let's create some
penetration in certain marketsso that we can build a brand and
then go out from there and, soI'm gonna pivot real quick,
Jason,'cause we're getting closeto time.
if somebody comes into ChopShop,give me two or three items that
are your guys' signature items.
What's your favorite?
How do you modify your favoriteitem?
But what are let's start withjust, I'm a brand new consumer.
(28:18):
I see an original ChopShop inthe place that I'm looking to
go.
What are one or two things thatyou're like, you know what, they
have this, they're gonna comeback and they're gonna enjoy our
food.
What are those two or threeitems that, that you would
suggest and then, throw in whatdo you do?
Because almost every restauranttour modifies the crap out of
the standard stuff that's on themenu.
Jason Morgan (28:34):
Alright, so if you
come in for the first time, I'm
gonna steer you towards aprotein bowl.
And if you don't want a proteinbowl, I'm gonna steer you
towards a salad.
and so on the protein bowl side,I'm gonna put the Terri chicken
bowl in front of you.
Probably do roasted veggies andjasmine rice.
that's probably the mostfavorite combination right now,
and I think you'll have a prettygood meal there.
it comes with, avocado, slicedavocado.
It also comes with, it's gotsesame seeds.
(28:55):
it's got some Brussels sproutsas a topping to that.
So it's a good option.
If you're gonna choose a salad,I'm gonna push you towards the
grish.
Or actually, I might push youtowards a new cob because it's
pretty phenomenal.
and people have, I have reallygravitated to that so far.
and then, I, from a juicestandpoint, if you want to, you
wanna spend a little bit moremoney and juice, I'm probably
gonna recommend a fruitierjuice.
It's called Slim Squeeze.
(29:16):
and so we put you to that.
for me, I've been, I've beenreally ordering something that's
strange lately.
And so my daughter turned meonto it.
she calls it the trio.
And we're, we're probably gonnamarket it as the trio some at
some point next year.
And so I order a kid's teriyakibowl.
I'll order a protein shake.
I've been getting the, Jack, bband j, which is strawberry
(29:37):
banana, a peanut butter and acookie.
And I end up with this likevariation of different things,
all small portions.
and it works out to be about 14,$15 all in.
and it's, it gets me a littletaste of everything.
And so I've been eating likethat lately.
Jeremy Julian (29:53):
I love it.
Yeah.
I think, my go-to, when I gointo the, if I just, Hey,
somebody wanna go here?
I think I get, I end up gettingthe, what is the beef bowl?
Jason Morgan (30:01):
Korean Steak Bowl.
Jeremy Julian (30:02):
Korean.
Korean, The steak bowl that,that is definitely my favorite
with the jasmine rice.
That's, I love that.
with, to your point, the veggiesis, is really awesome.
so Jason, we've talked a littlebit about where you guys are at,
where you guys are growing, howyou guys have done it.
Is there anything else that wemissed that you would want our
listeners to hear?
'cause we got lots of people outthere that are gonna have heard
the story.
They're gonna be in kind of someof these markets that, wanna
(30:22):
check things out.
So anything else that I missedas far as what you guys are up
to?
Jason Morgan (30:26):
No, I think we
covered a lot of it.
we have, I think what I've endedwith is we have a product and a
brand that is ready to grow.
like we have two high net worthfamilies that are backing the
brand.
we'd like to grow faster thanwe're growing.
we've been very unlucky in termsof, going out for additional
capital times for whether it wasCOVID or whether it was
(30:46):
inflation or whatever it was.
We've, we've just been reallyunlucky, I think.
I think we have one of the bestthings out there in fast casual.
I think the numbers support it.
the team supports it.
The, it's, it's got every boxchecked and so it's just a
matter of, can I convince.
Someone to, to invest alongsideme or the brand or the current
investors and take this to a, tothe next level.
(31:09):
And so that's what I'm lookingfor.
That's what I'm hoping for.
to be truthful, I'm a little bitbored only building two stores
this year.
We have a team of people thatwas building 25 to 30 at one
point at Zoe's.
And so we have the wherewithalto do more.
and like I said, we built allthe systems and tech to do more.
And so it's just a matter of,can we get started?
Jeremy Julian (31:27):
I love that, just
because I forgot to talk about
it, and I know it's somethingthat you guys have, have, or at
least I believe you guys have,is as off-prem.
You talked about kinda where youguys are at.
How are you guys tacklingcatering?
Are you guys, big on cateringand I know your product travels
so I'd love to just, for thosethat are doing things, looking
for a better option, I believeyou guys do some of that.
And I'd love for you to talk toour listeners a little bit about
(31:48):
that.
'cause they may be like, oh, Ihadn't considered those guys.
I've been there for the bowls,I've been there for the wraps or
the sandwiches.
But, talk to me a little bitabout your guys' catering
offering and your off-premstuff.
Jason Morgan (31:57):
So we do about six
to 8% catering across the brand.
We can do everything we docatering, everything from
protein bowl salad sandwiches tothe breakfast items.
We also cater as a bars, wherewe bring, and you can put the
toppings on it.
so it's a, it is as wide as arange as you can have from a
catering perspective.
About half our catering businesscomes from ezCater.
(32:17):
I wish it didn't.
it's, it comes at a huge fee andit comes at no markup for us of
eating the fee.
and I don't own the customer.
we've been trying differentmethodologies to win those
people back.
From a direct standpoint, it's aslow go.
but, that's, that's our goal iswe'd rather have you direct.
One thing we did do is we put ina catering loyalty program
several years ago.
(32:38):
and it's actually throughpatrons.
It's stacked on top of our mainloyalty program through Patons.
And so if you spend a thousanddollars in a quarter, we
actually give you back 10% inform of a Visa gift card.
So that's been a big win forfolks.
a lot of people give away,they'll give you 10% back in
food, right?
and like people really, I don'tthink they really want more food
because the, their boss ispaying for the food.
(33:00):
but, we're, we're giving peopleback 10%, in form of an Amazon
or Visa gift card that theycan't go spend somewhere else.
So that's been a big win for usin terms of keeping those guests
loyal.
Jeremy Julian (33:10):
Awesome.
Jason, thank you for sharing thestory.
Like I said, I'm a huge fan.
I, I love selfishly when I get achance to hang out with people
that, I enjoy their brand and goto on a regular basis.
So thank you for continuing tocreate can.
Thank you for continuing toinnovate.
I love the innovations.
You guys continue to change.
Every time I go in it's oh,that's new.
Lemme try that, lemme check thisout.
And I know you're very active aswell on LinkedIn.
We were talking a little bitabout that before I hit, go.
(33:31):
So if you guys haven't alreadychecked it, checked in with
Jason Morgan, original ChopShop,go, go follow him.
He, he writes some pretty coolstuff that, I know is getting,
getting some conversations goingfor sure in the restaurant
space.
thank you for that.
Thank you to our listeners guys.
Like I said, at the onset, Iknow you guys have got lots of
choices, so thanks for hangingout and make it a great day.
Speaker 3 (33:49):
Thanks for listening
to The Restaurant Technology
Guys podcast.
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