Honeygrow, a 13-unit fast-casual concept, has closed on a $20 million series D round to further expand the concept, the company announced Thursday.
Philadelphia-based Honeygrow intends to use the new financing, led by Miller Investments of Philadelphia, to expand in the Mid-Atlantic region and beyond as well as in consumer-facing technology, said Justin Rosenberg, Honeygrow founder and CEO, in an interview Wednesday.
“We’ll have 15 restaurants by the end of the year,” Rosenberg said. “We just opened in Baltimore last week, and we’ll open a second Baltimore location and a second metro D.C. location by the end of the year..”
Another Honeygrow location is under construction in downtown Brooklyn, he said, adding that “we’ll be backfilling some of the markets.”
Honeygrow, which first opened in 2012, focuses on seasonal ingredients in its stir-fry and salad menu options, all sourced as locally as possible. Customers order by touch-screen kiosk to build their meals. A “honeybar” lets customers build a sweet treat with various fruits, toppings and house-made whipped cream.
Miller Investments has been involved in earlier funding rounds for the Honeygrow concept, including $25 million in financing in June 2015. Rosenberg said the Honeygrow had raised $52 million since the first restaurant opened in 2012.
Scott Miller of Miller Investments said in a statement: “We go beyond investing in companies, we partner with those few that are passionately committed to building businesses that are the best in their field.” Other Miller restaurant investments include Lorton, Va.-based Five Guys Burgers & Fries and Philadelphia-based Jake’s Sandwich Board.
Rosenberg, in Wednesday’s interview, said, “For me, it’s about taking the money and putting it back into the business to grow it. I have no plans to franchise.”
The additional funding will help the company build its executive team for multi-unit development, he said, as well as invest in its proprietary kiosk ordering technology to enhance the guest experience.
“We also want to leverage our loyalty program, which we are developing with the kiosks,” he said. “We’ll be launching an app next year.”
Typical Honeygrow units in dense urban areas cover 2,000 to 2,100 square feet with 20 to 35 seats, and those in suburban markets are 2,500 to 2,700 square feet with from 35 to 60 seats inside.
The company is also introducing some new design-oriented technology, including nostalgic split-flap signage, similar to that found in older train stations. The split-flap devices are now in four Honeygrow units to assist in alerting customers when their orders are ready, and Rosenberg said the devices will be rolled out to the rest of the system as well as new restaurants.
“We teamed up with a local company that was able to design a split-flap for our stores,” he said. “Now, when your order is ready you push the button and the split-flap updates. It solves a business problem for us over calling out the numbers when the orders are ready. Instead of us calling it out now, this will display the number.
“I hate digital menu boards,” he added. “We used to have it, and it’s just not who we are.”
The company is also working on a new employee training system, Rosenberg said.
Honeygrow was named a Nation’s Restaurant News Hot Concept honoree earlier this year.
Contact Ron Ruggless at [email protected]
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