As Inspire Brands faced the fast clip challenges triggered by the coronavirus pandemic, CEO Paul Brown said the restaurant company was able to adjust by learning from each brand’s maverick qualities.
Buffalo Wild Wings learned curbside pickup from Sonic Drive-In. Jimmy’s John’s, which does its own in-house delivery, is dipping its toe into third-party delivery marketplaces after seeing how the other Inspire brands leverage those relationships. When supplies were short early on during the pandemic, Arby’s and Sonic turn to Buffalo Wild Wings’ supply chain because the casual dining operator was no longer serving dine-in customers.
“We’re very focused on building best in class capabilities that can support across all the brands, whether that be data and analytics and technology driven capabilities, or supply-chain operations services,” Brown said during a Restaurants Rise powered by MUFSO keynote address held Tuesday, Oct. 20.
Inspire Brands, which Brown co-founded less than three years ago, makes that commitment to franchisees. Inspire Brands is not just a holding company or a franchisor, he said.
“We are going to think and act like an owner because we actually do own restaurants alongside our franchisees,” Brown said during a fireside chat sponsored by Kiosk Manufacturer Association. “‘We are one family of brands.”
Moderated by NRN Senior Editor Ron Ruggless, Brown talked about building a portfolio of brands (Arby’s, Buffalo Wild Wings, Sonic Drive-In, Rusty Taco and Jimmy John’s) that sparks innovation.
Here are key takeaways from the conversation, where the topics ranged from transparency in leadership to the future of ghost kitchens.
Pandemic validates company purpose, maverick goals
Brown echoed the thoughts of industry leaders who have said that the pandemic accelerated pre-existing conditions in the industry. For Inspire, that has been especially true as each brand has invested heavily in upgrading its digital footprint including expanding loyalty programs.
In the third quarter 2020, digital sales at Inspire Brands represented 17% of total system sales, up from 10% last year, Brown said.
Sonic is doing two and half times the amount of sales through its order ahead platform, Brown said.
Digital transactions at Buffalo Wild Wings represented 30% of Q3 sales compared to 16% prior to COVID-19.
While much of that boost was forced by the closure of dine-in operations early on during the pandemic, some of these off-premise trends are sticking.
“As we are reopening [BWW] dining rooms, we are seeing that digital sales hold fairly well,” Brown said.
Loyalty members are also on the rise: Jimmy John's has gone from 1 million members a year ago to 6 million. Buffalo Wild Wings has gone from 10 million to 12 million.
Betting on small format stores
In May, during the peak of the pandemic, Buffalo Wild Wings opened a small format store called Buffalo Wild Wings GO. The 1,800-square foot concept features a walk-up counter, digital menu boards and limited seating.
To maintain the brand’s maverick culture, the restaurant is outfitted with televisions for customers to watch programming while they wait for their food.
Brown said the concept, planned prior to the pandemic, is “going extremely well.”
Sales are surpassing expectations. Going forward, Inspire Brands plans to make the footprint smaller, ranging in size from 1,200 square feet to 1,400 square feet. The focus will be on carryout and delivery.
The concept allows the casual dining brand to enter suburban markets with lower rents -- markets that a traditional Buffalo Wild Wings wouldn't necessarily enter.
“It is in no way cannibalistic to the Buffalo Wild Wings trade areas,” Brown said.
Because it is highly complementary, Inspire is seeing tons of interest from franchisees.
“We're looking at this potentially being 100-to-150 plus unit annual growth concept over the next couple of years,” he said.
Ghost kitchens: Fad or here to stay?
When asked what he thought about brands that use their restaurants as dark kitchens to create virtual delivery only brands, Brown was not quite ready to jump on the ghost kitchen bandwagon.
“I think the jury's still out on that,” he said.
Still, he said he could see the benefit of using dark kitchens or ghost kitchen facilities to enter new markets because it saves on the “cost of real estate.”
As for his brands? “We believe that true multi-brand companies like ours that own and operate all the concepts, we'll be able to more efficiently share back of house and kitchen equipment, etc. because we are the same operator across all those concepts,” he said. “So, we do think there's some opportunities for us.”
Register for MUFSO 2020 here, running virtual events from Oct. 1-29, Tuesdays and Thursdays at noon to 4:30 pm EST.
Title sponsors for MUFSO include the Coca-Cola Company, PepsiCo Foodservice and Johnsonville Foodservice.
Contact Nancy Luna at [email protected]
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