April 24, 2025 • 33 mins
This week on Retail Intel, host Brian Sheehan connects with Mike LaRue, Angry Chickz Franchisee, for an in-depth conversation about what makes Angry Chickz a standout brand. 🐓💥
Discover their insights on balancing perfection vs. revenue. Explore the unique philosophy behind their partnerships. Learn about their franchise development strategy and growth goals.
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Episode Transcript
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Brian Sheehan (00:05):
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, Brian Sheehan,and I am thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of commercial
property investment.
Today I'm excited to welcomeMike LaRue, Vice President of
(00:26):
Franchise Development at AngryChicks, to the show.
Mike has a remarkable story ofdriving growth and innovation in
the fast, casual diningindustry, leveraging his
extensive experience to expandAngry Chicks into a thriving
franchise.
Angry Chicks is known for itsbold flavors and unique approach
to Nashville hot chicken,creating a memorable dining
(00:48):
experience for all.
I'm eager to learn more abouthis journey and the story behind
Angry Chicks.
It's so fascinating with yourbackground and how deeply
involved you are with AngryChicks, and you were starting to
talk about the franchisedevelopment side versus being a
(01:10):
franchisee and how that'sdifferent.
Mike LaRue (01:13):
Yeah, you know, being on the franchisor end you
know you're at least I've alwaysfrom my own perspective it's
like, okay, you know what's themost amount of support that we
can provide to put franchisingin the best position to be
successful.
Where do you guys need help?
Where do we need to be?
What can we do?
How can we make this happen?
How can we obviously make thissuccessful?
Obviously, when you're dealingwith construction timelines,
(01:37):
it's fine.
I just did a video of thisyesterday and it's like how many
times have you gone through aproject and you actually nailed
your construction schedule?
Brian Sheehan (01:47):
And it rarely happens 100% of the time right.
Mike LaRue (01:50):
Yeah, and we ran into a situation to where it's
like, I mean, the restaurantlooks like it's almost ready,
but I guess the utility companyin Houston is dealing with some
lawsuits from that huge energyblackout that they had last year
and their staffing is a littleless dealing with some lawsuits
from that huge energy uhblackout that they had last year
and, um, their staffing is alittle, a little less and so it
typically takes two to threedays to install a gas meter.
(02:11):
It's now taken two weeks, butyou don't find that out until
the city provides authorizationto the utility company to come
out actually install the meter.
And, uh, you know, we'refinding this out like last
minute.
It's like crap.
We have, you know, grandopening dates and I said from
like an anxiety standpoint, justdifferent being on the
franchisee and as well becausenow in before, obviously you
(02:33):
have.
Yeah, it's like this is, this isyour role, this is your job,
it's your reputation, you wantto.
You know you want to providethe best service that you can
and you want the franchisee tofeel like, hey, this is your
franchisor, it's a great partner, and obviously that leads to
stronger and longer term growthwhen your capital is now
invested.
(02:53):
And you know it's like if youstop, that clock starts ticking
on rent.
And then obviously you knowfrom day one it's like you want
to get that return on investmentkicking as soon as possible.
And there's always it's likeyou want to get that return on
investment kicking as soon aspossible.
And there's always a philosophythere it's like do we get open
to start driving revenue or doyou wait until it's all perfect?
(03:15):
And it's never all going to beperfect.
But there is an element of youwant to do it right and you want
to be able to provide the bestcustomer and guest experience.
You know, obviously, especiallyin a market, that people don't
know who you are, and so youwant to be able to provide that
great first experience.
And so with the position I'm in,it's very unique because I mean
(03:36):
, I'm super grateful to have theopportunity and even you know
our founder was was okay with me.
You know, partnering with thefranchisee, I'm fully confident
in my partner.
I mean he's by far probably oneof the best.
Actually I think he's probablythe best operator at least I've
ever seen in almost 19 yearsI've been doing this.
So I have no doubt thatobviously it's going to be a
success, but being on thefranchise or end and you have to
(04:01):
take a bipartisan role on theway things are done, because,
yes, I'm a franchisee but youcan't be one-sided on.
It's like you're coaching yourkid.
It's like you almost want to befarther on your kid because you
don't want people saying, ohwell, you're the coach, your
kid's going to play no matterwhat, and so challenging is not
the right word.
It's been.
I mean, it's been fun and it'sjust been a different experience
(04:23):
that I've obviously never havegone through before.
But yeah, I'm not sure how manyopenings I've ever been a part
of.
I mean, just, it's a lot.
Brian Sheehan (04:30):
It's so rare to have to get to see both sides of
it.
I guess and in some ways I'm ahear that more because what
could better prepare you to helpdevelop the franchise than to
have that experience as afranchisee yourself?
Mike LaRue (04:50):
Yeah, it's so true because, at the end of the day,
I mean especially in franchising.
I mean I've been doing thislong enough to where there's a
stigma in franchising and it'syou're either selling.
You're selling something to aperson who's got a heartbeat and
can cut a check, or you knowyou're selling something to a
person who's got a heartbeat andcan cut a check, or you know
you're selling something that,um, may not be, or the actuality
(05:12):
may not be what.
Everything's a period,obviously, I think with
franchising, I think brands alot of times go on hike and
you're, you know, going out andyou're selling territories, and
but to be able to, have aconversation with an operator
and just saying, yeah, I'mbasically putting my money where
my mouth is.
It's not just hey, I'm trying to, we're not just trying to sell
(05:33):
a territory and I even hateusing the word sales because
it's more recruiting.
We're trying to find the bestpartner who's going to fit our
culture and is going to fit ourgoal and vision.
Going to fit, you know, our,our goal and vision to develop
this brand, you know, across theU?
S and obviously across theglobe.
And so being able to say andget the questions like hey, like
(05:53):
, like, so our location is thefirst gray shelf that we're
building in angry chicks andeverything else, everything up
to this point has been secondgen and so you know you got a
new franchisee.
Then we're looking for realestate.
It's like, hey, what are youguys looking at?
And obviously we probably underbudgeted a little bit, but it's
(06:13):
okay.
I mean we're, we're in linewith where any you know fast,
casual, you know restaurantshould be anyways.
But to be able to share that,you know, with the franchisee
and not necessarily have afranchisee be the Guinea pig,
it's like, almost I'm kind ofthe guinea pig.
It speaks volumes in regards tothat.
You know kind of building thattrust you know with, with your
franchisee partners, as you, youknow, as we go through this
process.
Brian Sheehan (06:32):
You have a ton of incredible experience in this
business and I'm curious,thinking back, what drew you to
Angry Chicks, both from thefranchise development
perspective and then what madeyou think, hey, maybe you know
I'm interested in taking thisjourney as a franchisee yeah,
yeah, of course.
Mike LaRue (06:51):
well, it's funny.
I had no intention to get intofranchising and um and you'll.
This is kind of funny, not a?
I had a good friend of mine.
Troy hooper is the ceo of uhpepper.
He didn't even know thisbecause I was having a
conversation with him.
I've actually never worked in arestaurant.
I think in our industry you gotguys who are in operations and
(07:15):
it's just in their blood.
I mean, that's where they live,that's where they play, that's
where they love to be.
I just never wound up havingthat opportunity.
I first got into the industryon the franchise sales end by
chance when Monstercom was outand there was an opportunity and
it sounded exciting and justfell in love with the industry
and it's funny.
It's like I feel like peopleget like once you're in the
(07:36):
restaurant industry, you'renever living If you do.
You go to the brokerage sideand you want to be the broker
and you're still doing food andbeverage, but you're just in a
different capacity.
So when I first started it wasmore on the franchise sales side
.
I was in that role for aboutseven years and came across
Simon's signing video how GreatLeaders Inspire Action, and that
(07:59):
was super inspiring and justkind of got me thinking how can
we do this differently?
I started the consultingadvisory firm with a buddy of
mine and we wound up partnering.
He was the gc, builds hundredsof restaurants, you know, across
the country.
And so we figured and just kindof by chance, we started,
started helping brands kind ofget set up.
I found that a lot offranchisees you know, when it
(08:23):
comes down to their capex andtheir initial investment you
know there's a lot offranchisees when it comes down
to their CapEx and their initialinvestment there's a lot of
mistakes on the front endbecause if you don't know how to
evaluate a GC bid or if you'renot getting multiple bids you
don't know if you could begetting screwed big time and you
wouldn't even know it.
So my partner built, actually,the second Hallgeist location
here in Southern California.
Our body put together a groupand they were developing
(08:44):
Southern California and thatkind of led us into creating an
onboarding process for theHallgeist and they were actually
a client for up until thepandemic kind of middle of COVID
and 2020, my wife and I had ababy and I was like what do I
want to do when I grow up?
And I always thought it wouldbe cool to work specifically for
(09:07):
a brand, not necessarily be onthe consulting end or, you know,
obviously on the franchisedevelopment end, but actually
work with a brand.
And I took a role with JimmyRamen Bar and that was super fun
.
I never had any experience inthe full service.
I had incredible concepts,incredible food, incredible food
, so had a good run.
There wasn't looking to leave.
This is actually where I'm at.
(09:27):
My current partner, jim lang.
He's actually their number onefranchisee and, uh, you just got
to know and see how he doesthings, how he runs his
operations, how he treats hispeople.
He takes care of his peopleprobably more than 99 of the
operators I've ever seen.
And when I got presented withthis opportunity with Angry
(09:47):
Chicks I always laughed becauseI wasn't really looking.
But I got plucked, no punintended.
And it's interesting toobecause I was curious.
I'm very familiar with Dave'sHot Chicken.
So my former business partneractually built it was either
their second and third brick andmortar or their first and
second brick and mortar, so itwas very pretty to how they
(10:10):
started that story, obviouslythe incredible amount of success
that they had.
I wasn't sure if it was a fad, Ithink over the years my best
relationships I built withfranchisees and it's funny
because a lot of those guys I'venever even done anything with
before and so I didn't want toget a part of something that I
(10:30):
knew was going to die out inthree to four years.
I didn't want to be a part ofsomething that I knew that was
going to sell in four or five orsix years.
But I was intrigued and did myresearch on national hot chicken
and I actually found thatthere's certain types of chili
peppers that when you ingest itit actually releases dopamine
and endorphins.
And so I'm like, okay, thisisn't going to go anywhere, this
is going to be around, butagain, you know I wanted to
(10:52):
figure out.
Okay, you know Dave's HotChicken is obviously the leader,
everyone knows the brand.
How was this?
You know, how does this matchup?
And obviously Dave's has.
You know they exploded.
You know I mean probablyfastest growing brand in history
and obviously now the current,you know they're talking a
billion number of.
You know a billion dollar exitand I mean to do that in less
(11:15):
than 10 years is insane.
So I want to figure out how isthis going to differentiate?
How is this going to compete,differentiate?
I was just going to compete.
It doesn't necessarily have tocompete because usually I think
any category there's going to beanywhere between three and four
guys that really stick aroundthat can scale across North
America.
So I kept doing my duediligence, fell in love with the
product better than anythingelse that I had actually tried
(11:38):
up to that point.
But what really got me was thestory of our founder.
You know just the American dream, just it's very humble
beginnings and really got intothis because he just loved hot
chicken, he had never tried itbefore and you know he was the
type of guy that when he was akid his friends would dare to
(11:59):
eat like a jar of jalapenos andhe would do it, no problem.
And so he just loved the tasteprofile and so that's what he
was interested in in just that,that type of hot chicken and
opened a restaurant, didn't goso well and had to close it, and
it was like kind of came to thefork in the road.
Do I go home with my tailbetween my legs Because everyone
(12:20):
told me I was going to fail, ordo I try and do something with
this hot chicken thing?
And at the time this wasprobably early 2018.
So Dave's had just startedfranchising and obviously they
were exploding, and so he openedin Hollywood in November of 18.
And when I tell the story, thisis like my favorite part.
(12:40):
So first 10 days didn't go thatgreat.
And he's like, okay, well, Iguess this is not going to work.
Well, they show up one morningand there's a bunch of people
outside and there's an AT&Tstore that's right next door to
the space and he thought therewas some big iPhone promotion.
Well, they opened the door tothe restaurant.
Everyone starts walking in, andhe still didn't have any idea
(13:01):
what people were doing andthey're like, oh, we're here to
eat.
And that was the beginning.
And he just talked about hisstory, about how him and his
wife had a two-year-old in thebassinet in the back.
They couldn't afford ababysitter and so they would be
crying and they'd be servingcustomers and at the register
and going back to get the babyand coming back, and it was just
(13:22):
total chaos.
And then it obviously continuedto go.
Well, he opened a secondlocation and then he thought,
okay, well, maybe we can scalethis.
Where do we go next?
Maybe we can scale this, whendo we go next?
And he went to Bakersfield orFresno, for, I believe, a third
location, because that's wherehe had family and that's when it
really kind of dawned on him ofwhat this could be.
(13:43):
You know, sold out of chicken,like at 2 or 3 pm.
But his strategy was maybe wego into these B markets that you
would typically, you know, notyour big DMAs, like around the
LAs or the Bay Area or San Diego, or you know Houston's and
Dallas, the Fresno's, theBakersfields, stockton, modesto,
tracy, and he's like, if I cango to these markets first, then
(14:06):
we'll be the brand that everyonewill have to be, and that was a
strategy.
So I absolutely love the story.
I started to hear about numbersthey were doing, I think, up
until we opened Salinas.
I think the record they didclose to I think it was 790,000
in the first 30 days in anopening Wow, that and so that
(14:31):
got me intrigued and the onething that kind of helped me
kind of make the decision wasnumber one if I ever had the
opportunity to become afranchise, could that be a
possibility?
And it was a yes.
And then I asked the questionif a Brinks truck drives up to
your house and it's stacked withbricks, you know, would you
(14:52):
sell?
And it was funny because atfirst I said what's your exit
strategy?
And I don't think he knew I wasasking.
And then, finally, goingthrough that, he said you know,
if my kids don't ever want totake over the business, then I
would probably sell.
And his kids are five and sevenand so he's going to be around
for a while.
And so, yeah, it's been.
It's been amazing and just supergrateful that I made the move
(15:14):
and kept my business partnerintrigued about, uh, about angry
chicks, and then signed on todo Houston and San Antonio and
ultimately the goal will be allof Texas and then had the
opportunity to actually link up,and now our partners in uh in
the development.
So it's been fun.
You know I've I've never, inalmost 19 years I've been doing
this, I've never had as much fun.
(15:35):
I've never been as excited tobe a part of a brand, regardless
of whether or not I'm afranchisee.
Just from the perspective oflike, I really do believe we're
building something special andmy goal with prospective
franchisees is, when they gothrough this process and after
they meet with our team, Isincerely want them to feel like
this is different.
(15:55):
This is different than anythingwe've ever seen or experienced
or you know, kind of met withbefore.
And so far I think we're Ireally do feel and believe we're
hitting that mark.
We've turned down groups thatI've never thought would ever
turn down.
We turned down a 40-unitoperator a few months ago and
never would have thought in amillion years that I would have
done that.
But we're a very culture-drivenorganization and if you don't
(16:19):
run your organization puttingyour people first and that is
culture-driven it's just notright or wrong.
It's just not really a fit forwhat we're looking for and we're
very fortunate to not be in aposition where we have to sell
franchises.
Yes, that's a part of ourgrowth model.
But we are very aggressive andbullish on our corporate growth
and this is actually kind offunny.
(16:40):
So when I was interviewing forthe role, david, our founder
asked he's like well, are youokay if we don't franchise in
California?
And I laughed.
I said well, there's a lot ofpeople who are trying to open
restaurants outside ofCalifornia now, not actually in
California.
So if you can make theeconomics work here, then I
think people will be prettyexcited to develop outside the
state.
And right now we have six lease, five or six leases signed by
(17:04):
another half dozen that are inthe works, all between
California and Arizona.
And so our corporate growth isvery aggressive, our franchise
growth.
I think it'll probably beanother 24, 36 months for the
franchise growth We'll start tooutpace corporate.
But we're not sitting tight on.
Hey, all right, let's justfocus on franchising Our founder
(17:25):
, david.
He loves operating.
He loves owning and operatingthe restaurants.
Brian Sheehan (17:30):
For anyone that's not familiar with Angry Chicks,
and you've touched on a lot ofdifferent elements of it that
help make it unique, but how doyou explain it to people?
Mike LaRue (17:38):
The simple one is have you ever been to Dave's Hot
Chicken?
Pretty much the same thingSimple menu.
We do actually have more of anemphasis on our bowl, which is
mac and cheese and the tendersin the middle and then fries in
the bottom.
That's actually a fan favorite,I think, from the typical
consumer.
And this is one in the middleand then fries in the bottom.
That's actually a fan favorite,but I think from the typical
consumer and this is one of theincredible things that Dave's
Hot Chicken did A lot of peopleare still unfamiliar with
(18:01):
Nashville Hot Chicken.
Like when people see Nashvillethey see Angry Chick's Nashville
Hot Chicken.
It's like, oh cool, next timeI'm in Nashville I'll have to
try you guys out.
It's like we're not fromNashville.
So from a consumer awarenessperspective, there's a lot of
people are still unfamiliar withwhat Nashville hot chicken is.
And Dave's really did anincredible job and obviously it
(18:23):
took a lot of risk in going intoyou know, obviously new markets
.
So when we talk about what isit?
It's just it's just like Dave'svery similar.
There's a bit, I mean, andthere's there's some like Dave's
Very similar and there's somedifferences.
Brian Sheehan (18:36):
Well, and to your point though, mike what's the
difference between Nashville hotchicken and any other chicken
tender?
I honestly wouldn't know how toexplain it to somebody.
Mike LaRue (18:46):
So it's really just the spice.
Yeah, it's the spice profile.
That would be the best way Ican explain it.
What's pretty similar in mostmenus is you'll have, like we
have, like our country, which islike there's no spice at all,
it's just a tender, and then wehave medium, then we have mild,
so we have mild and then medium,and then we have hot, ex-hot
and angry hot.
(19:06):
Then the angry hot is where,like, people actually have to
sign a waiver because it's likeCarolina Reaper, like it's
actually it's pretty.
I can't go above medium and soyou know, some people's palates
can take it, but Is it a dry rubor is it a?
Brian Sheehan (19:22):
it's a wet barbecue sauce or it can be
either.
Mike LaRue (19:25):
So great question.
So we actually have.
I wouldn't necessarily call ita dry rub, but it's just, it's
different, I guess rubs kind ofput together, that's, we have a
process that helps bind it tothe tender.
A lot of brands who are tryingto do Nashville hot well, I
don't say trying who are doingNashville hot chicken, or a lot
(19:46):
of concepts that have Nashvillehot chicken on the menu.
It's more of a sauce versus anactual.
You know, we take our tender,we dip it in the secret stuff.
You know we season it, thenit's ready to go.
But like, if you look at that,like the Hattie Bees and the
Princes, like you know theoriginal, as far as I know, it's
not a sauce, it's more of a rub.
Brian Sheehan (20:05):
I think there's a lot of folks that listen to
this podcast who maybe have asingle location restaurant,
maybe they have a couple oflocations.
They want to grow and expand.
They're not really sure how, ormaybe they dip their toe into
it and weren't successful withit.
What are some of the challengesthat you know, given your
background?
Probably, walking into thisposition, you knew a lot of what
(20:25):
you were going to be dealingwith.
But how do you think aboutgrowing from a few locations to
20, 50, 100.
What were some of the keychallenges that you have to
overcome, or that you did haveto overcome, in getting that
goal?
Mike LaRue (20:39):
Yeah, it's like the proverbial questions like how do
you scale?
I know it's gonna work.
I would say one of the biggestthings and it's funny I can say
I'll specifically talk about ourfounder.
He just started opening.
Maybe just not knowing and justnot having that experience,
he'd just go.
But I mean, at one point he hadsay it was like 16 locations,
(21:00):
400 employees, he was HR,finance and operations and he
thought that was normal, that'sa way to do it and it was ready
to implode.
But he had enough foresight andenough humility to reach out
and ask for help and really kindof built that infrastructure
that you're going to need to,kind of, you know, obviously
carry and grow and sustain thattype of operation.
(21:23):
But I would say one of thebiggest things brands miss or
don't have.
When they have, let's say youknow, and usually when I'm
explaining it, it's just likehey, you have three to four
locations in the market, you'resuccessful.
Now you want to grow.
You got people who are sendingyou emails saying, hey, I'm in
this market, I love thefranchise.
Are you franchising?
(21:44):
Well, supply chain, generallyspeaking, when you're talking to
, when you're a local guy,you're talking to like a local
Cisco rep.
You're talking to local USfoods rep, whatever it might be,
just talking to like a localCisco rep.
You're talking to local USfoods rep, whatever it might be.
Just because you're talkingwith Cisco doesn't mean that's a
supply chain strategy, becausefrom a scalability standpoint,
(22:07):
you're almost selling your brandand the growth prospect of your
brand to Cisco as much asyou're selling to any type of
franchisee or customer.
So, when it comes down to likeyour mix and your menu, having a
good understanding of howthat's going to translate 1500
or like 2000 miles away is huge.
I mean, because who's thosewho've been doing this for a
long time?
How many situations where youknow pogs are great in one
(22:28):
market and you open up 1500miles away and all of a sudden
your food costs are 12 pointshigher and no one knows what
happened?
Well, when you start to mix infreight, you start to mix in
shipping, because you don't havethe volume to get in the
distribution center of that callit cisco or warehouse, whatever
.
There's obviously costs that arethat are incurred and that's a
(22:49):
huge thing that a lot of brandsdon't miss and so and so it's
funny, one of the attractivethings that I saw with Angry
Chick is actually a good friendof mine.
He's now he's our head ofsupply chain.
I saw him in a video.
I'm like, hey.
I'm like, are you working withAngry Chick?
He's like, yeah, I'm actuallybuilding.
And it helps with prospectivefranchisees too, because one of
the first questions that they'regoing to know they're in a
(23:11):
market that's not in Californiais are your COGS, what's your
supply chain strategy?
And right now we're acting asif we had 250 locations and so
any market that we go into, wehave a pretty good idea of what
that impact is going to be onCOGS, just based off of the
strategy that we have.
Cisco's our distributor, sofood costs is the biggest thing.
(23:33):
One thing that is interesting alot of brands will start
franchising pretty quickly.
They have been in between oneto five locations, one of the
things that David did.
Theoretically speaking, thelocation that we're opening next
month in Houston is really likethe first.
We have one franchise location,but it was our founder's best
buddy back in the day.
He's like hey, man, if you everfranchise, you're going to be
(23:54):
our first guy, and he honoredhis word, which is cool, and the
restaurant's great.
It's doing well.
So when we opened Houston,we're already going to have 28
locations.
Well, when you go from 15 to 10,your GNA is different.
When you go from 10 to 15, 15to 20, your GNA is going to
change and a lot of brands won'ttake that into account and
you're really not going to knowlike if you only have one to
(24:16):
four or five, six locations andyou haven't been involved in
scaling a brand that's 10 to 15,20, 25, 30, you're never going
to really know what that GNAimpact is going to be.
And obviously there's a lot ofa balance there to you know how
do you maintain, you knowconsistency with, with
operations and how you treatyour guests and the overall
(24:37):
guest experience, if you don'thave the ability to have
oversight on those locations.
And so understanding what thatG&A looks like and how you grow
is big.
And so I think if someone whohas four or five locations, if
you do decide to open in anothermarket, don't open 1,500 miles
(24:58):
away.
Make sure that you can getthere in a reasonable amount of
time to maintain some of thatcontrol.
Brian Sheehan (25:05):
Let me ask you a few questions about growth and
thinking about the future.
Five years out, where do yousee Angry Chicks?
Where do you want it to?
Mike LaRue (25:13):
be.
We're going to continue ourcorporate growth.
You know, right now we'rekeeping California and Arizona
corporate.
We actually just recentlydetermined, or we just recently
decided, to keep Arizonacorporate.
So we're not franchising inCalifornia and Arizona.
We might actually hold off onlike two kind of maybe some
Midwestern markets for forfuture corporate growth.
(25:34):
So our corporate growthstrategy is going to be anywhere
between, I would say, 8 to 12 ayear and that's going to mean,
as far as I know, that's goingto be consistent and that's
going to be kind of the goalContinue with franchise growth.
I'm not doing any math in myhead.
So if we were to maintain, callit, 20 to 30 locations a year,
in five years, what would thatput us?
Like 120?
(25:56):
I don't know, I don't have acalculator.
Brian Sheehan (26:00):
How do you think about the markets where you're
targeting for franchise growthversus corporate markets?
I mean, obviously Californiabased.
You know California well and toyour point.
If you can be successful there,why can't you be successful in
other places?
But how do you think aboutother corporate states or
territories outside of that?
Mike LaRue (26:20):
So right now the discussions we're having is
based off of experience ourleadership team has in those
markets.
Our VP of Ops spent a few yearswith Raising Cane's opening in
Missouri.
He was with another conceptdeveloping in Oklahoma.
Our VP of Marketing did a lotof development and a lot of
familiarity with Oklahoma and soit's more around being familiar
(26:42):
with these markets notnecessarily a bright, shiny
object syndrome of oh man, theseguys opened in this market,
they're doing this amount ofsales, let's go here.
It's really we want to go intomarkets that we're familiar with
from the corporate standpoint.
Brian Sheehan (26:56):
That makes sense.
Let me wrap up with a few quickreal estate related questions.
Mike LaRue (27:02):
Yeah.
Brian Sheehan (27:02):
In case we have some brokers that listen to this
.
People want to get involved.
Get engaged, maybe as afranchisee.
What's the size requirement foran Angry Chicks?
What's the sweet spot,size-wise?
Mike LaRue (27:14):
Yeah.
So as of today, we're sayingabout 2,500 square feet.
Out of the 28 locations that wehave, only two are drive-thru,
so we can be inline, we can beend cap.
I say 2,500 square feet becauseright now, on a $3 million
restaurant, we're still kind ofbursting at the seams a little
bit and so from a takeout anddelivery standpoint it's
actually over 50% of our sales.
(27:36):
So there might be some plans inthe future where we might make
the kitchen a little bigger.
We take into account for thatoff-premise business, but I
would say 2,500 to 3,000.
Salinas, california, at 2,800square feet.
We did 890,000 in the first 30days.
Brian Sheehan (27:54):
Congratulations.
That's incredible.
Mike LaRue (27:56):
Thank you.
Yeah, it's mind-blowing.
I mean, who knows what it'lllevel out at, but it's probably
going to want to be in a $5million to $6 million restaurant
out of 2,200 square feet.
In that case it's going to,like I said, we're kind of
bursting at the seams and so westill have so much upside in
actually what we can bump out offour walls and actually what we
can bump out of four walls.
I can't necessarily see thatour minimum expanding to 3,000
(28:18):
square feet.
But long answer to your shortquestion.
Brian Sheehan (28:21):
You're pushing towards it.
Yeah, who do you guys like tobe near in terms of co-tenants?
Who are you looking for whenyou're out looking at real
estate?
Yeah, so we actually use.
Mike LaRue (28:30):
So we use Placer as not the silver bullet, but it's
a pretty darn good startingpoint, target.
So we use Placer as not thesilver bullet, but it's a pretty
darn good starting point,target.
So we start looking at a market.
We'll look at Targets, we'lllook at Raising Cane's Dave's
Hot Chicken, obviouslyChick-fil-A, and then, based off
of their guest traffic and howthey relate to you know, if
(28:51):
they're like in the north of the80th percentile with their
counterparts in the state thatwe're looking at, then we know
that we're kind of in a goodstarting point.
Brian Sheehan (29:00):
It sounds like you don't need a drive-through.
You're looking for end caps.
You can go inline.
Are there any other demographicrequirements?
Who's your core customer?
Mike LaRue (29:11):
Yeah, so good question.
I feel like we're still kind oflearning, because it's funny,
because if you look at Dave'sHot Chicken, based on what I've
seen, we have to be inpredominantly Caucasian markets
or predominantly Hispanicmarkets, and so, as of today,
that's the mix that we see.
As far as income levels, youknow average income, you know
$65,000, $70,000 and up.
But again, we've seen someoutliers, some locations in you
(29:35):
know, like in Bakersfield, themedian income is super low and
in California, discretionaryincome is a little lower than
(30:04):
maybe some of those markets, butit's a $3.2 million restaurant.
So I feel like there's a lot ofblue ocean, if you will.
I mean, there's a lot of greenspace for us to go and new
things to learn, but it'sexciting.
Brian Sheehan (30:13):
Oh, incredibly so .
And how about this lastquestion, thinking back to the
markets that you were originallyexpanding in in the future, and
to your point, there's a lot ofopportunity out there.
How do you balance thesecondary, tertiary market?
You know that well, you knowyou do well there.
(30:33):
I would think there's lesscompetition.
But talk a little bit aboutfrom a strategy perspective.
Was it again kind of like if wecan do well in that kind of a
market, we could do well in abigger market?
Or was there some other thinggoing on there?
Mike LaRue (30:48):
I wouldn't necessarily call it a strategy.
You know, with David, again,he's just, he's brilliant when
it comes down to just.
He's got an incredible paletteand he knows that if he likes
something he knows that peoplewill like it.
But he knows kind of what thosemarkets and what those areas
look like.
But even still to this day,we're just more on what some of
(31:10):
these locations are doing from avolume standpoint in areas that
I would have never gone intowith other brands that I'm a
part of, and so I think theavailability of real estate
really dictated that growth andthat strategy wasn't necessarily
hey, this is specifically whatwe're looking for.
It was, for example, so therewas what 50 or some Rubios that
(31:33):
just went dark in Californialast year.
We've taken probably half adozen of those and not
necessarily specific of hey wewere.
You know we were looking forthis market.
It was just the, theopportunity kind of steered.
Brian Sheehan (31:45):
What that, uh, what that growth looked like
yeah, good locations, goodsecond gen restaurant spaces
right yeah, second gen is alwaysgreat if, especially if the
hood is there.
Mike LaRue (31:54):
But right now, now I think there's two ways.
We're not necessarily targetingspecific markets, we're more
interested in the operator, andthe best operators are going to
have the relationships andthey're going to know where, to
know that we're going to reallythrive in.
(32:15):
Then we might kind of hone downon finding and operating a
franchisee in that market.
But it's really franchising,that franchisee group is kind of
driving that direction.
Well, Mike, this has been I'mnot sure if that answered your
question at all.
Brian Sheehan (32:31):
No, I'm just going to say this has been great
.
I appreciate you taking thetime.
Thank you for joining me onRetail Intel.
Yeah, I'm just going to saythis has been great.
I appreciate you taking thetime.
Thanks for joining me on RetailIntel.
Mike LaRue (32:36):
Yeah, no, this was awesome.
I appreciate it, enjoyed it.
Brian Sheehan (32:41):
Yeah, be sure to check out Angry Chicks in person
and on Instagram at AngryChicks.
Whether you're an aspiring realestate mogul, a seasoned pro or
simply curious about the placeswhere we shop, dine, play and
work, this podcast is your allaccess pass to the world of
commercial real estate.
Connect with me on LinkedIn Ifyou're interested in being a
part of the Retail Intel podcast.
Send a message tonationalaccounts at
(33:04):
phillipsedisoncom.
If you want to hear more aboutnew and expanding brands like
Angry Chicks, keep tuning intoRetail Intel and please
subscribe, follow, like andrepost.
Talk to you next time.
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, Brian Sheehan,and I am thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of commercial
property investment.
Today I'm excited to welcomeMike LaRue, Vice President of
(00:26):
Franchise Development at AngryChicks, to the show.
Mike has a remarkable story ofdriving growth and innovation in
the fast, casual diningindustry, leveraging his
extensive experience to expandAngry Chicks into a thriving
franchise.
Angry Chicks is known for itsbold flavors and unique approach
to Nashville hot chicken,creating a memorable dining
(00:48):
experience for all.
I'm eager to learn more abouthis journey and the story behind
Angry Chicks.
It's so fascinating with yourbackground and how deeply
involved you are with AngryChicks, and you were starting to
talk about the franchisedevelopment side versus being a
(01:10):
franchisee and how that'sdifferent.
Mike LaRue (01:13):
Yeah, you know, being on the franchisor end you
know you're at least I've alwaysfrom my own perspective it's
like, okay, you know what's themost amount of support that we
can provide to put franchisingin the best position to be
successful.
Where do you guys need help?
Where do we need to be?
What can we do?
How can we make this happen?
How can we obviously make thissuccessful?
Obviously, when you're dealingwith construction timelines,
(01:37):
it's fine.
I just did a video of thisyesterday and it's like how many
times have you gone through aproject and you actually nailed
your construction schedule?
Brian Sheehan (01:47):
And it rarely happens 100% of the time right.
Mike LaRue (01:50):
Yeah, and we ran into a situation to where it's
like, I mean, the restaurantlooks like it's almost ready,
but I guess the utility companyin Houston is dealing with some
lawsuits from that huge energyblackout that they had last year
and their staffing is a littleless dealing with some lawsuits
from that huge energy uhblackout that they had last year
and, um, their staffing is alittle, a little less and so it
typically takes two to threedays to install a gas meter.
(02:11):
It's now taken two weeks, butyou don't find that out until
the city provides authorizationto the utility company to come
out actually install the meter.
And, uh, you know, we'refinding this out like last
minute.
It's like crap.
We have, you know, grandopening dates and I said from
like an anxiety standpoint, justdifferent being on the
franchisee and as well becausenow in before, obviously you
(02:33):
have.
Yeah, it's like this is, this isyour role, this is your job,
it's your reputation, you wantto.
You know you want to providethe best service that you can
and you want the franchisee tofeel like, hey, this is your
franchisor, it's a great partner, and obviously that leads to
stronger and longer term growthwhen your capital is now
invested.
(02:53):
And you know it's like if youstop, that clock starts ticking
on rent.
And then obviously you knowfrom day one it's like you want
to get that return on investmentkicking as soon as possible.
And there's always it's likeyou want to get that return on
investment kicking as soon aspossible.
And there's always a philosophythere it's like do we get open
to start driving revenue or doyou wait until it's all perfect?
(03:15):
And it's never all going to beperfect.
But there is an element of youwant to do it right and you want
to be able to provide the bestcustomer and guest experience.
You know, obviously, especiallyin a market, that people don't
know who you are, and so youwant to be able to provide that
great first experience.
And so with the position I'm in,it's very unique because I mean
(03:36):
, I'm super grateful to have theopportunity and even you know
our founder was was okay with me.
You know, partnering with thefranchisee, I'm fully confident
in my partner.
I mean he's by far probably oneof the best.
Actually I think he's probablythe best operator at least I've
ever seen in almost 19 yearsI've been doing this.
So I have no doubt thatobviously it's going to be a
success, but being on thefranchise or end and you have to
(04:01):
take a bipartisan role on theway things are done, because,
yes, I'm a franchisee but youcan't be one-sided on.
It's like you're coaching yourkid.
It's like you almost want to befarther on your kid because you
don't want people saying, ohwell, you're the coach, your
kid's going to play no matterwhat, and so challenging is not
the right word.
It's been.
I mean, it's been fun and it'sjust been a different experience
(04:23):
that I've obviously never havegone through before.
But yeah, I'm not sure how manyopenings I've ever been a part
of.
I mean, just, it's a lot.
Brian Sheehan (04:30):
It's so rare to have to get to see both sides of
it.
I guess and in some ways I'm ahear that more because what
could better prepare you to helpdevelop the franchise than to
have that experience as afranchisee yourself?
Mike LaRue (04:50):
Yeah, it's so true because, at the end of the day,
I mean especially in franchising.
I mean I've been doing thislong enough to where there's a
stigma in franchising and it'syou're either selling.
You're selling something to aperson who's got a heartbeat and
can cut a check, or you knowyou're selling something to a
person who's got a heartbeat andcan cut a check, or you know
you're selling something that,um, may not be, or the actuality
(05:12):
may not be what.
Everything's a period,obviously, I think with
franchising, I think brands alot of times go on hike and
you're, you know, going out andyou're selling territories, and
but to be able to, have aconversation with an operator
and just saying, yeah, I'mbasically putting my money where
my mouth is.
It's not just hey, I'm trying to, we're not just trying to sell
(05:33):
a territory and I even hateusing the word sales because
it's more recruiting.
We're trying to find the bestpartner who's going to fit our
culture and is going to fit ourgoal and vision.
Going to fit, you know, our,our goal and vision to develop
this brand, you know, across theU?
S and obviously across theglobe.
And so being able to say andget the questions like hey, like
(05:53):
, like, so our location is thefirst gray shelf that we're
building in angry chicks andeverything else, everything up
to this point has been secondgen and so you know you got a
new franchisee.
Then we're looking for realestate.
It's like, hey, what are youguys looking at?
And obviously we probably underbudgeted a little bit, but it's
(06:13):
okay.
I mean we're, we're in linewith where any you know fast,
casual, you know restaurantshould be anyways.
But to be able to share that,you know, with the franchisee
and not necessarily have afranchisee be the Guinea pig,
it's like, almost I'm kind ofthe guinea pig.
It speaks volumes in regards tothat.
You know kind of building thattrust you know with, with your
franchisee partners, as you, youknow, as we go through this
process.
Brian Sheehan (06:32):
You have a ton of incredible experience in this
business and I'm curious,thinking back, what drew you to
Angry Chicks, both from thefranchise development
perspective and then what madeyou think, hey, maybe you know
I'm interested in taking thisjourney as a franchisee yeah,
yeah, of course.
Mike LaRue (06:51):
well, it's funny.
I had no intention to get intofranchising and um and you'll.
This is kind of funny, not a?
I had a good friend of mine.
Troy hooper is the ceo of uhpepper.
He didn't even know thisbecause I was having a
conversation with him.
I've actually never worked in arestaurant.
I think in our industry you gotguys who are in operations and
(07:15):
it's just in their blood.
I mean, that's where they live,that's where they play, that's
where they love to be.
I just never wound up havingthat opportunity.
I first got into the industryon the franchise sales end by
chance when Monstercom was outand there was an opportunity and
it sounded exciting and justfell in love with the industry
and it's funny.
It's like I feel like peopleget like once you're in the
(07:36):
restaurant industry, you'renever living If you do.
You go to the brokerage sideand you want to be the broker
and you're still doing food andbeverage, but you're just in a
different capacity.
So when I first started it wasmore on the franchise sales side
.
I was in that role for aboutseven years and came across
Simon's signing video how GreatLeaders Inspire Action, and that
(07:59):
was super inspiring and justkind of got me thinking how can
we do this differently?
I started the consultingadvisory firm with a buddy of
mine and we wound up partnering.
He was the gc, builds hundredsof restaurants, you know, across
the country.
And so we figured and just kindof by chance, we started,
started helping brands kind ofget set up.
I found that a lot offranchisees you know, when it
(08:23):
comes down to their capex andtheir initial investment you
know there's a lot offranchisees when it comes down
to their CapEx and their initialinvestment there's a lot of
mistakes on the front endbecause if you don't know how to
evaluate a GC bid or if you'renot getting multiple bids you
don't know if you could begetting screwed big time and you
wouldn't even know it.
So my partner built, actually,the second Hallgeist location
here in Southern California.
Our body put together a groupand they were developing
(08:44):
Southern California and thatkind of led us into creating an
onboarding process for theHallgeist and they were actually
a client for up until thepandemic kind of middle of COVID
and 2020, my wife and I had ababy and I was like what do I
want to do when I grow up?
And I always thought it wouldbe cool to work specifically for
(09:07):
a brand, not necessarily be onthe consulting end or, you know,
obviously on the franchisedevelopment end, but actually
work with a brand.
And I took a role with JimmyRamen Bar and that was super fun
.
I never had any experience inthe full service.
I had incredible concepts,incredible food, incredible food
, so had a good run.
There wasn't looking to leave.
This is actually where I'm at.
(09:27):
My current partner, jim lang.
He's actually their number onefranchisee and, uh, you just got
to know and see how he doesthings, how he runs his
operations, how he treats hispeople.
He takes care of his peopleprobably more than 99 of the
operators I've ever seen.
And when I got presented withthis opportunity with Angry
(09:47):
Chicks I always laughed becauseI wasn't really looking.
But I got plucked, no punintended.
And it's interesting toobecause I was curious.
I'm very familiar with Dave'sHot Chicken.
So my former business partneractually built it was either
their second and third brick andmortar or their first and
second brick and mortar, so itwas very pretty to how they
(10:10):
started that story, obviouslythe incredible amount of success
that they had.
I wasn't sure if it was a fad, Ithink over the years my best
relationships I built withfranchisees and it's funny
because a lot of those guys I'venever even done anything with
before and so I didn't want toget a part of something that I
(10:30):
knew was going to die out inthree to four years.
I didn't want to be a part ofsomething that I knew that was
going to sell in four or five orsix years.
But I was intrigued and did myresearch on national hot chicken
and I actually found thatthere's certain types of chili
peppers that when you ingest itit actually releases dopamine
and endorphins.
And so I'm like, okay, thisisn't going to go anywhere, this
is going to be around, butagain, you know I wanted to
(10:52):
figure out.
Okay, you know Dave's HotChicken is obviously the leader,
everyone knows the brand.
How was this?
You know, how does this matchup?
And obviously Dave's has.
You know they exploded.
You know I mean probablyfastest growing brand in history
and obviously now the current,you know they're talking a
billion number of.
You know a billion dollar exitand I mean to do that in less
(11:15):
than 10 years is insane.
So I want to figure out how isthis going to differentiate?
How is this going to compete,differentiate?
I was just going to compete.
It doesn't necessarily have tocompete because usually I think
any category there's going to beanywhere between three and four
guys that really stick aroundthat can scale across North
America.
So I kept doing my duediligence, fell in love with the
product better than anythingelse that I had actually tried
(11:38):
up to that point.
But what really got me was thestory of our founder.
You know just the American dream, just it's very humble
beginnings and really got intothis because he just loved hot
chicken, he had never tried itbefore and you know he was the
type of guy that when he was akid his friends would dare to
(11:59):
eat like a jar of jalapenos andhe would do it, no problem.
And so he just loved the tasteprofile and so that's what he
was interested in in just that,that type of hot chicken and
opened a restaurant, didn't goso well and had to close it, and
it was like kind of came to thefork in the road.
Do I go home with my tailbetween my legs Because everyone
(12:20):
told me I was going to fail, ordo I try and do something with
this hot chicken thing?
And at the time this wasprobably early 2018.
So Dave's had just startedfranchising and obviously they
were exploding, and so he openedin Hollywood in November of 18.
And when I tell the story, thisis like my favorite part.
(12:40):
So first 10 days didn't go thatgreat.
And he's like, okay, well, Iguess this is not going to work.
Well, they show up one morningand there's a bunch of people
outside and there's an AT&Tstore that's right next door to
the space and he thought therewas some big iPhone promotion.
Well, they opened the door tothe restaurant.
Everyone starts walking in, andhe still didn't have any idea
(13:01):
what people were doing andthey're like, oh, we're here to
eat.
And that was the beginning.
And he just talked about hisstory, about how him and his
wife had a two-year-old in thebassinet in the back.
They couldn't afford ababysitter and so they would be
crying and they'd be servingcustomers and at the register
and going back to get the babyand coming back, and it was just
(13:22):
total chaos.
And then it obviously continuedto go.
Well, he opened a secondlocation and then he thought,
okay, well, maybe we can scalethis.
Where do we go next?
Maybe we can scale this, whendo we go next?
And he went to Bakersfield orFresno, for, I believe, a third
location, because that's wherehe had family and that's when it
really kind of dawned on him ofwhat this could be.
(13:43):
You know, sold out of chicken,like at 2 or 3 pm.
But his strategy was maybe wego into these B markets that you
would typically, you know, notyour big DMAs, like around the
LAs or the Bay Area or San Diego, or you know Houston's and
Dallas, the Fresno's, theBakersfields, stockton, modesto,
tracy, and he's like, if I cango to these markets first, then
(14:06):
we'll be the brand that everyonewill have to be, and that was a
strategy.
So I absolutely love the story.
I started to hear about numbersthey were doing, I think, up
until we opened Salinas.
I think the record they didclose to I think it was 790,000
in the first 30 days in anopening Wow, that and so that
(14:31):
got me intrigued and the onething that kind of helped me
kind of make the decision wasnumber one if I ever had the
opportunity to become afranchise, could that be a
possibility?
And it was a yes.
And then I asked the questionif a Brinks truck drives up to
your house and it's stacked withbricks, you know, would you
(14:52):
sell?
And it was funny because atfirst I said what's your exit
strategy?
And I don't think he knew I wasasking.
And then, finally, goingthrough that, he said you know,
if my kids don't ever want totake over the business, then I
would probably sell.
And his kids are five and sevenand so he's going to be around
for a while.
And so, yeah, it's been.
It's been amazing and just supergrateful that I made the move
(15:14):
and kept my business partnerintrigued about, uh, about angry
chicks, and then signed on todo Houston and San Antonio and
ultimately the goal will be allof Texas and then had the
opportunity to actually link up,and now our partners in uh in
the development.
So it's been fun.
You know I've I've never, inalmost 19 years I've been doing
this, I've never had as much fun.
(15:35):
I've never been as excited tobe a part of a brand, regardless
of whether or not I'm afranchisee.
Just from the perspective oflike, I really do believe we're
building something special andmy goal with prospective
franchisees is, when they gothrough this process and after
they meet with our team, Isincerely want them to feel like
this is different.
(15:55):
This is different than anythingwe've ever seen or experienced
or you know, kind of met withbefore.
And so far I think we're Ireally do feel and believe we're
hitting that mark.
We've turned down groups thatI've never thought would ever
turn down.
We turned down a 40-unitoperator a few months ago and
never would have thought in amillion years that I would have
done that.
But we're a very culture-drivenorganization and if you don't
(16:19):
run your organization puttingyour people first and that is
culture-driven it's just notright or wrong.
It's just not really a fit forwhat we're looking for and we're
very fortunate to not be in aposition where we have to sell
franchises.
Yes, that's a part of ourgrowth model.
But we are very aggressive andbullish on our corporate growth
and this is actually kind offunny.
(16:40):
So when I was interviewing forthe role, david, our founder
asked he's like well, are youokay if we don't franchise in
California?
And I laughed.
I said well, there's a lot ofpeople who are trying to open
restaurants outside ofCalifornia now, not actually in
California.
So if you can make theeconomics work here, then I
think people will be prettyexcited to develop outside the
state.
And right now we have six lease, five or six leases signed by
(17:04):
another half dozen that are inthe works, all between
California and Arizona.
And so our corporate growth isvery aggressive, our franchise
growth.
I think it'll probably beanother 24, 36 months for the
franchise growth We'll start tooutpace corporate.
But we're not sitting tight on.
Hey, all right, let's justfocus on franchising Our founder
(17:25):
, david.
He loves operating.
He loves owning and operatingthe restaurants.
Brian Sheehan (17:30):
For anyone that's not familiar with Angry Chicks,
and you've touched on a lot ofdifferent elements of it that
help make it unique, but how doyou explain it to people?
Mike LaRue (17:38):
The simple one is have you ever been to Dave's Hot
Chicken?
Pretty much the same thingSimple menu.
We do actually have more of anemphasis on our bowl, which is
mac and cheese and the tendersin the middle and then fries in
the bottom.
That's actually a fan favorite,I think, from the typical
consumer.
And this is one in the middleand then fries in the bottom.
That's actually a fan favorite,but I think from the typical
consumer and this is one of theincredible things that Dave's
Hot Chicken did A lot of peopleare still unfamiliar with
(18:01):
Nashville Hot Chicken.
Like when people see Nashvillethey see Angry Chick's Nashville
Hot Chicken.
It's like, oh cool, next timeI'm in Nashville I'll have to
try you guys out.
It's like we're not fromNashville.
So from a consumer awarenessperspective, there's a lot of
people are still unfamiliar withwhat Nashville hot chicken is.
And Dave's really did anincredible job and obviously it
(18:23):
took a lot of risk in going intoyou know, obviously new markets
.
So when we talk about what isit?
It's just it's just like Dave'svery similar.
There's a bit, I mean, andthere's there's some like Dave's
Very similar and there's somedifferences.
Brian Sheehan (18:36):
Well, and to your point though, mike what's the
difference between Nashville hotchicken and any other chicken
tender?
I honestly wouldn't know how toexplain it to somebody.
Mike LaRue (18:46):
So it's really just the spice.
Yeah, it's the spice profile.
That would be the best way Ican explain it.
What's pretty similar in mostmenus is you'll have, like we
have, like our country, which islike there's no spice at all,
it's just a tender, and then wehave medium, then we have mild,
so we have mild and then medium,and then we have hot, ex-hot
and angry hot.
(19:06):
Then the angry hot is where,like, people actually have to
sign a waiver because it's likeCarolina Reaper, like it's
actually it's pretty.
I can't go above medium and soyou know, some people's palates
can take it, but Is it a dry rubor is it a?
Brian Sheehan (19:22):
it's a wet barbecue sauce or it can be
either.
Mike LaRue (19:25):
So great question.
So we actually have.
I wouldn't necessarily call ita dry rub, but it's just, it's
different, I guess rubs kind ofput together, that's, we have a
process that helps bind it tothe tender.
A lot of brands who are tryingto do Nashville hot well, I
don't say trying who are doingNashville hot chicken, or a lot
(19:46):
of concepts that have Nashvillehot chicken on the menu.
It's more of a sauce versus anactual.
You know, we take our tender,we dip it in the secret stuff.
You know we season it, thenit's ready to go.
But like, if you look at that,like the Hattie Bees and the
Princes, like you know theoriginal, as far as I know, it's
not a sauce, it's more of a rub.
Brian Sheehan (20:05):
I think there's a lot of folks that listen to
this podcast who maybe have asingle location restaurant,
maybe they have a couple oflocations.
They want to grow and expand.
They're not really sure how, ormaybe they dip their toe into
it and weren't successful withit.
What are some of the challengesthat you know, given your
background?
Probably, walking into thisposition, you knew a lot of what
(20:25):
you were going to be dealingwith.
But how do you think aboutgrowing from a few locations to
20, 50, 100.
What were some of the keychallenges that you have to
overcome, or that you did haveto overcome, in getting that
goal?
Mike LaRue (20:39):
Yeah, it's like the proverbial questions like how do
you scale?
I know it's gonna work.
I would say one of the biggestthings and it's funny I can say
I'll specifically talk about ourfounder.
He just started opening.
Maybe just not knowing and justnot having that experience,
he'd just go.
But I mean, at one point he hadsay it was like 16 locations,
(21:00):
400 employees, he was HR,finance and operations and he
thought that was normal, that'sa way to do it and it was ready
to implode.
But he had enough foresight andenough humility to reach out
and ask for help and really kindof built that infrastructure
that you're going to need to,kind of, you know, obviously
carry and grow and sustain thattype of operation.
(21:23):
But I would say one of thebiggest things brands miss or
don't have.
When they have, let's say youknow, and usually when I'm
explaining it, it's just likehey, you have three to four
locations in the market, you'resuccessful.
Now you want to grow.
You got people who are sendingyou emails saying, hey, I'm in
this market, I love thefranchise.
Are you franchising?
(21:44):
Well, supply chain, generallyspeaking, when you're talking to
, when you're a local guy,you're talking to like a local
Cisco rep.
You're talking to local USfoods rep, whatever it might be,
just talking to like a localCisco rep.
You're talking to local USfoods rep, whatever it might be.
Just because you're talkingwith Cisco doesn't mean that's a
supply chain strategy, becausefrom a scalability standpoint,
(22:07):
you're almost selling your brandand the growth prospect of your
brand to Cisco as much asyou're selling to any type of
franchisee or customer.
So, when it comes down to likeyour mix and your menu, having a
good understanding of howthat's going to translate 1500
or like 2000 miles away is huge.
I mean, because who's thosewho've been doing this for a
long time?
How many situations where youknow pogs are great in one
(22:28):
market and you open up 1500miles away and all of a sudden
your food costs are 12 pointshigher and no one knows what
happened?
Well, when you start to mix infreight, you start to mix in
shipping, because you don't havethe volume to get in the
distribution center of that callit cisco or warehouse, whatever
.
There's obviously costs that arethat are incurred and that's a
(22:49):
huge thing that a lot of brandsdon't miss and so and so it's
funny, one of the attractivethings that I saw with Angry
Chick is actually a good friendof mine.
He's now he's our head ofsupply chain.
I saw him in a video.
I'm like, hey.
I'm like, are you working withAngry Chick?
He's like, yeah, I'm actuallybuilding.
And it helps with prospectivefranchisees too, because one of
the first questions that they'regoing to know they're in a
(23:11):
market that's not in Californiais are your COGS, what's your
supply chain strategy?
And right now we're acting asif we had 250 locations and so
any market that we go into, wehave a pretty good idea of what
that impact is going to be onCOGS, just based off of the
strategy that we have.
Cisco's our distributor, sofood costs is the biggest thing.
(23:33):
One thing that is interesting alot of brands will start
franchising pretty quickly.
They have been in between oneto five locations, one of the
things that David did.
Theoretically speaking, thelocation that we're opening next
month in Houston is really likethe first.
We have one franchise location,but it was our founder's best
buddy back in the day.
He's like hey, man, if you everfranchise, you're going to be
(23:54):
our first guy, and he honoredhis word, which is cool, and the
restaurant's great.
It's doing well.
So when we opened Houston,we're already going to have 28
locations.
Well, when you go from 15 to 10,your GNA is different.
When you go from 10 to 15, 15to 20, your GNA is going to
change and a lot of brands won'ttake that into account and
you're really not going to knowlike if you only have one to
(24:16):
four or five, six locations andyou haven't been involved in
scaling a brand that's 10 to 15,20, 25, 30, you're never going
to really know what that GNAimpact is going to be.
And obviously there's a lot ofa balance there to you know how
do you maintain, you knowconsistency with, with
operations and how you treatyour guests and the overall
(24:37):
guest experience, if you don'thave the ability to have
oversight on those locations.
And so understanding what thatG&A looks like and how you grow
is big.
And so I think if someone whohas four or five locations, if
you do decide to open in anothermarket, don't open 1,500 miles
(24:58):
away.
Make sure that you can getthere in a reasonable amount of
time to maintain some of thatcontrol.
Brian Sheehan (25:05):
Let me ask you a few questions about growth and
thinking about the future.
Five years out, where do yousee Angry Chicks?
Where do you want it to?
Mike LaRue (25:13):
be.
We're going to continue ourcorporate growth.
You know, right now we'rekeeping California and Arizona
corporate.
We actually just recentlydetermined, or we just recently
decided, to keep Arizonacorporate.
So we're not franchising inCalifornia and Arizona.
We might actually hold off onlike two kind of maybe some
Midwestern markets for forfuture corporate growth.
(25:34):
So our corporate growthstrategy is going to be anywhere
between, I would say, 8 to 12 ayear and that's going to mean,
as far as I know, that's goingto be consistent and that's
going to be kind of the goalContinue with franchise growth.
I'm not doing any math in myhead.
So if we were to maintain, callit, 20 to 30 locations a year,
in five years, what would thatput us?
Like 120?
(25:56):
I don't know, I don't have acalculator.
Brian Sheehan (26:00):
How do you think about the markets where you're
targeting for franchise growthversus corporate markets?
I mean, obviously Californiabased.
You know California well and toyour point.
If you can be successful there,why can't you be successful in
other places?
But how do you think aboutother corporate states or
territories outside of that?
Mike LaRue (26:20):
So right now the discussions we're having is
based off of experience ourleadership team has in those
markets.
Our VP of Ops spent a few yearswith Raising Cane's opening in
Missouri.
He was with another conceptdeveloping in Oklahoma.
Our VP of Marketing did a lotof development and a lot of
familiarity with Oklahoma and soit's more around being familiar
(26:42):
with these markets notnecessarily a bright, shiny
object syndrome of oh man, theseguys opened in this market,
they're doing this amount ofsales, let's go here.
It's really we want to go intomarkets that we're familiar with
from the corporate standpoint.
Brian Sheehan (26:56):
That makes sense.
Let me wrap up with a few quickreal estate related questions.
Mike LaRue (27:02):
Yeah.
Brian Sheehan (27:02):
In case we have some brokers that listen to this
.
People want to get involved.
Get engaged, maybe as afranchisee.
What's the size requirement foran Angry Chicks?
What's the sweet spot,size-wise?
Mike LaRue (27:14):
Yeah.
So as of today, we're sayingabout 2,500 square feet.
Out of the 28 locations that wehave, only two are drive-thru,
so we can be inline, we can beend cap.
I say 2,500 square feet becauseright now, on a $3 million
restaurant, we're still kind ofbursting at the seams a little
bit and so from a takeout anddelivery standpoint it's
actually over 50% of our sales.
(27:36):
So there might be some plans inthe future where we might make
the kitchen a little bigger.
We take into account for thatoff-premise business, but I
would say 2,500 to 3,000.
Salinas, california, at 2,800square feet.
We did 890,000 in the first 30days.
Brian Sheehan (27:54):
Congratulations.
That's incredible.
Mike LaRue (27:56):
Thank you.
Yeah, it's mind-blowing.
I mean, who knows what it'lllevel out at, but it's probably
going to want to be in a $5million to $6 million restaurant
out of 2,200 square feet.
In that case it's going to,like I said, we're kind of
bursting at the seams and so westill have so much upside in
actually what we can bump out offour walls and actually what we
can bump out of four walls.
I can't necessarily see thatour minimum expanding to 3,000
(28:18):
square feet.
But long answer to your shortquestion.
Brian Sheehan (28:21):
You're pushing towards it.
Yeah, who do you guys like tobe near in terms of co-tenants?
Who are you looking for whenyou're out looking at real
estate?
Yeah, so we actually use.
Mike LaRue (28:30):
So we use Placer as not the silver bullet, but it's
a pretty darn good startingpoint, target.
So we use Placer as not thesilver bullet, but it's a pretty
darn good starting point,target.
So we start looking at a market.
We'll look at Targets, we'lllook at Raising Cane's Dave's
Hot Chicken, obviouslyChick-fil-A, and then, based off
of their guest traffic and howthey relate to you know, if
(28:51):
they're like in the north of the80th percentile with their
counterparts in the state thatwe're looking at, then we know
that we're kind of in a goodstarting point.
Brian Sheehan (29:00):
It sounds like you don't need a drive-through.
You're looking for end caps.
You can go inline.
Are there any other demographicrequirements?
Who's your core customer?
Mike LaRue (29:11):
Yeah, so good question.
I feel like we're still kind oflearning, because it's funny,
because if you look at Dave'sHot Chicken, based on what I've
seen, we have to be inpredominantly Caucasian markets
or predominantly Hispanicmarkets, and so, as of today,
that's the mix that we see.
As far as income levels, youknow average income, you know
$65,000, $70,000 and up.
But again, we've seen someoutliers, some locations in you
(29:35):
know, like in Bakersfield, themedian income is super low and
in California, discretionaryincome is a little lower than
(30:04):
maybe some of those markets, butit's a $3.2 million restaurant.
So I feel like there's a lot ofblue ocean, if you will.
I mean, there's a lot of greenspace for us to go and new
things to learn, but it'sexciting.
Brian Sheehan (30:13):
Oh, incredibly so .
And how about this lastquestion, thinking back to the
markets that you were originallyexpanding in in the future, and
to your point, there's a lot ofopportunity out there.
How do you balance thesecondary, tertiary market?
You know that well, you knowyou do well there.
(30:33):
I would think there's lesscompetition.
But talk a little bit aboutfrom a strategy perspective.
Was it again kind of like if wecan do well in that kind of a
market, we could do well in abigger market?
Or was there some other thinggoing on there?
Mike LaRue (30:48):
I wouldn't necessarily call it a strategy.
You know, with David, again,he's just, he's brilliant when
it comes down to just.
He's got an incredible paletteand he knows that if he likes
something he knows that peoplewill like it.
But he knows kind of what thosemarkets and what those areas
look like.
But even still to this day,we're just more on what some of
(31:10):
these locations are doing from avolume standpoint in areas that
I would have never gone intowith other brands that I'm a
part of, and so I think theavailability of real estate
really dictated that growth andthat strategy wasn't necessarily
hey, this is specifically whatwe're looking for.
It was, for example, so therewas what 50 or some Rubios that
(31:33):
just went dark in Californialast year.
We've taken probably half adozen of those and not
necessarily specific of hey wewere.
You know we were looking forthis market.
It was just the, theopportunity kind of steered.
Brian Sheehan (31:45):
What that, uh, what that growth looked like
yeah, good locations, goodsecond gen restaurant spaces
right yeah, second gen is alwaysgreat if, especially if the
hood is there.
Mike LaRue (31:54):
But right now, now I think there's two ways.
We're not necessarily targetingspecific markets, we're more
interested in the operator, andthe best operators are going to
have the relationships andthey're going to know where, to
know that we're going to reallythrive in.
(32:15):
Then we might kind of hone downon finding and operating a
franchisee in that market.
But it's really franchising,that franchisee group is kind of
driving that direction.
Well, Mike, this has been I'mnot sure if that answered your
question at all.
Brian Sheehan (32:31):
No, I'm just going to say this has been great
.
I appreciate you taking thetime.
Thank you for joining me onRetail Intel.
Yeah, I'm just going to saythis has been great.
I appreciate you taking thetime.
Thanks for joining me on RetailIntel.
Mike LaRue (32:36):
Yeah, no, this was awesome.
I appreciate it, enjoyed it.
Brian Sheehan (32:41):
Yeah, be sure to check out Angry Chicks in person
and on Instagram at AngryChicks.
Whether you're an aspiring realestate mogul, a seasoned pro or
simply curious about the placeswhere we shop, dine, play and
work, this podcast is your allaccess pass to the world of
commercial real estate.
Connect with me on LinkedIn Ifyou're interested in being a
part of the Retail Intel podcast.
Send a message tonationalaccounts at
(33:04):
phillipsedisoncom.
If you want to hear more aboutnew and expanding brands like
Angry Chicks, keep tuning intoRetail Intel and please
subscribe, follow, like andrepost.
Talk to you next time.
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