In this episode, David Bloom, Chief Development and Operating Officer at Capriotti’s and Wing Zone, talks about the importance of aligning company values, operationalizing for scale and growth, and making sure your brand maintains a human connection when adopting new technology.
Welcome back to Elevating Brick and Mortar. The podcast about how operations and facilities drive brand performance.
On today’s episode, we talk with David Bloom, Chief Development and Operating Officer at Capriotti’s and Wing Zone. Since 1976, Capriotti’s Sandwich Shop has built a name for itself by offering fanatically delicious sandwiches made with high-quality ingredients that have inspired customers and franchisees alike. And Wing Zone is one of the nation's fastest-growing takeout/delivery chains — known for its award-winning flavors of fresh, cooked-to-order chicken wings, tenders and fries. David’s background includes a long track record of strategically accelerating sustainable brand expansion and operational performance in a wide variety of industries on a global basis.
David’s early career in the franchise industry began as a multi-unit franchisee and as SVP of Brand Expansion for Quiznos, growing it from a small regional brand to opening over 5,000 locations in 28 countries.
In this episode, David talks about the importance of aligning on company values, operationalizing for scale and growth, and making sure your brand maintains a human connection when adopting new technology.
Guest Bio:
David Bloom serves as the chief operating and development officer for Capriotti’s Subs and Wing Zone, both high growth franchise brands based in Las Vegas, Nevada. David’s background includes a long track record of strategically accelerating sustainable brand expansion and operational performance in a wide variety of industries on a global basis.
David’s early career in the franchise industry began as a multi-unit franchisee and as SVP of Brand Expansion for Quiznos, growing it from a small regional brand to opening over 5,000 locations in 28 countries. Subsequent senior roles included the rapid growth of numerous enterprises, including Clockwork Home Services with system wide revenues in excess of $2.5 billion, Bridge International Academies based in Nairobi, Kenya, the fastest growing education company in the developing world, Famous Brands International with approximately 900 franchised locations in over 30 countries and as President of Office Evolution, a high growth franchise in the shared work space sector.
In his current role as chief development and operating officer for Capriotti’s Sandwich Shop and Wing Zone, David is responsible for all aspects of franchise development, training and support and company owned operations.
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Guest Quote
“So there's the physical space, coordinated with the, I'll call it the human resources side of the business and integrating those along with all the technologies that may be tracking people when they walk in the door and starting to connect with them and, you know, provide all the loyalty programs and pay access to payment and menu ordering. So it's sort of this confluence or integration of physical space, human resources and technology, and making sure it all works in a way that's seamless.” - David Bloom
Time Stamps
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**(02:11) - David’s Journey
**(05:24) - Building a franchise
**(13:53) - Leading with core values
**(24:15) - The importance of the physical location
**(34:30) - Post-Covid technology adoption
**(43:58) - Advice to those in facilities
Sponsor:
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Rest easy knowing your locations are:
ServiceChannel partners with more than 500 leading brands globally to provide visibility across operations, the flexibility to grow and adapt to consumer expectations, and accelerated performance from their asset fleet and service providers. Get to know us at Servicechannel.com
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Links
Narrator : Welcome to Elevating Brick and Mortar, a podcast about how operations and facilities drive brand performance. On today's episode, we talk with David Bloom, Chief Development and Operating Officer at Capriotti's and Wing Zone. Since 1976, Capriotti's Sandwich Shop has built a name for itself by offering fanatically delicious sandwiches.
Made with high quality ingredients that have inspired customers and franchises alike. And Wing Zone is one of the nation's fastest growing takeout delivery chains known for its award-winning flavors of fresh cook to order chicken wings, tenders, and fries. David's background includes a long track record of strategically accelerating sustainable brand expansion, an operational performance in a wide variety of industries on a global basis.
David's early career in the franchise industry began as a multi-unit franchisee and as SVP of brand expansion for Quiznos, growing it from a small regional brand to opening over 5,000 locations in 28 countries. In this episode, David talks about the importance of aligning on company values, operationalizing for scale and growth.
And making sure your brand maintains a human connection when adopting new technology. But first, a word from our sponsor. Want to rest easy knowing your brick and mortar locations are offering the best possible guest experience. Partner with Service Channel for peak facilities performance. Check out service channel.com today to learn more.
Now, here's your host, industry and FM technology, thought leader and Chief business development officer at Service Channel, Sid Shetty, along with our guest, David Bloom.
Sid: Hello everyone. Welcome to the show. Thank you for joining us. I am here today with David Bloom, Chief Development and Chief operating officer of Capriotti's and Wings Zone.
David, welcome. Thank you for being here.
David: Oh, thanks Sid. I appreciate you having me on.
Sid: Thank you. So David, you seem to have had a pretty phenomenal career, not only in the hospitality industry, but also in private equity and the startup world that pretty much took you around the globe. Can you share your journey with us?
David: So I grew up in New York. I was born in Manhattan and then went to university in Las Vegas, U N L V. And that really kicked things off, I guess. And just in a nutshell, I've really gravitated towards finding and taking on. what I considered, at least for me personally, to be the biggest challenges and opportunities with the most responsibility that I could possibly find at any even time, which generally means that I've pretty much been over my head or 99% of the time.
Completely overestimated my experience and capabilities, but it has enabled me to work for and with some of the best people and certainly the hospitality industry, restaurant industry, but in other verticals, you know, home services and education. And I think to date, I've worked in 33 countries globally.
And that's really, I guess for me, it's more about the journey than it is about the destination. And I've just really enjoyed and appreciated that opportunity to. Work with and force so many just incredible people and learn from them and then hopefully take those learnings and apply them and continue to challenge myself and do new things.
That's
Sid: great. So you started in the hospitality industry and then you changed verticals and then you came back. What made you come back?
David: Well, I was living in Kenya, an interesting fact, and so I worked for a company called Bridge International Academies. Okay. Today Bridge is I think, one of the fastest growing educational companies in the developing world, and it was funded by Gates and Zuckerberg and Omidyar and Pearson and all the big private equities, right?
It was kinda like working for Steve Jobs. I was. Always by far the dumbest guy in the room. But my background in scaling, knowing how to scale brands yeah. Is what they were looking for cuz they were looking to grow. And so we were opening schools and buying the land, building schools, standing them up and there is no really playbook.
And so I think that was a real education for me is how doing business in that type of environment.
Sid: Gotcha. So you've seen a lot of things. You've worked in a variety of different. Areas and GOs and stress levels. Any lessons that you've learned through all those experiences that you'd say today you applied in the restaurant or in the hospitality industry?
It's a cakewalk for you.
David: The brands and businesses, they eventually go away and if you talk to a 20 or 30 year old person today and say, Hey, what do you know about S Steak and Allen Bennigan's? They know nothing about it and they don't care. So the business itself, the company is probably gonna be irrelevant at some point in their.
Relatively short future, but what you learn and the relationships that you make along the way, the reputation you build along the way, and the growth that occurs, hopefully personally for you, that you can apply to all parts of your life, both professional and family. That's really what counts. And so right to me, who you work with.
Is a lot more important than what you do. And so that's the takeaway I have and that's
Sid: great. Tell me about Capriotti'si and Wings Zone. Capriotti'si is the original brand that was founded by your company and then you acquired Wing Zone. Can you explain why Wing Zone, like what was attractive about that business? I've been here
David: for about six years and actually again, what drew me here was cuz I had been involved with the startup of Quiznos.
Back from 18 stores to when the company sold, it was at 5,000 stores in 28 countries. So I had a background in Wow, how to scale brands and had been part of the team that did that and was a large multi franchisee and area developer. And then worked on the corporate side as well. And so what drew me here to Capis was the ability to do that.
But again, it was really more about the people than it was the brand. I love caps, I love the. had a great story. I thought we had a lot of legs, but it was really the team, the senior management team, the board, the investors. I really, I knew some of them really well from past lives and just thought that would be a great opportunity to be with that kind of team and do some really cool things together over the long haul.
and that. So that was the vision going into Capotes, yes, we're gonna stand up this company and it's gonna be great, but it's really the opportunity to be part of a team that can do that again and again. And so about three or four years into the CAPS experience, we started realizing, okay, Capotes is off to the races.
It's going to be a national brand. We still have a lot of heavy lifting to do, but we're pretty good at this. Let's go look for other opportunities to use. Our resources and our capabilities, and we started looking for acquisitions, had one that we were pretty close to pre Covid, COVID hit. We put everything on hold like the rest of the world.
And a few months into Covid realized that Capis in particular was probably gonna be. Actually somewhat advantaged all of our time and energy investing in technology and systems ahead of the Covid curve. We already adopting all a lot of those off-premise technologies and innovations years before that.
So by the time Covid hit, we were really good at it. We didn't know how to optimize. We didn't. The only pivoting that we had to do was implementing some safety protocols, and so we were seeing double digit sales increases year over year, and continued record growth and profitability. Wing zone was actually just fit in our wheelhouse.
Number one, there was already a letter of intent to acquire Wings Zone in place when we approached them and we were able to get in through a relationship we had with the founders of the brand. We just, again, aligned with them on somewhat of a personal basis, and we tend to be a very values driven company, and there was a lot of alignment around values and it was in our wheelhouse.
Heavy off-premise, fast casual, about a 1400 square foot, 12, 1400 square foot footprint. The only difference is caps. There were a dozen other sandwich brands ahead of us in terms of becoming a national brand. Wing Zone was actually the number two with only in the QSR space with only 70 restaurants.
Wingstop obviously with 1300 restaurants. So we also were looking for something that had the ability to be in that top two or three tier sorted at an undisputed level. So we acquired it at the end of 20 nineteens, beginning of 2020, and spent the first year and a half. We brought in a company called Live Design.
They're one of the preeminent restaurant consulting groups outta Madrid and spent a year and a half just ripping the brand apart from top to bottom to position it for that long-term growth. And when we acquired the brand, there was really no future development going on. And today we've got about 175 stores in development domestically and almost another a hundred internationally on top of.
International footprint that's already there. So it's now off to the races. And candidly, we're learning as we go. We're continuing to iterate and learn and adjust like you have to do in our business nowadays. But it's really gotten a tremendous amount of momentum.
Sid: There was a lot in there and I wanna double click on so many things.
So that was great. I want to talk about the fact that there are two brands under. Your purview of responsibility, right? Like when you look at the clientele and the target audience mm-hmm. , is it a different target audience or is it a lot of overlap and just depends on the mood and the time of day or time of week?
David: So probably a little of both. I would argue that the Chipotle customer and the Starbucks customer is also probably the McDonald's and a Duncan customer, right? As we all, I think probably are. So I think there's certainly overlap, but I would say that. The niche, so to speak. The brand positioning is a little different.
Capos is certainly about a premium product. We're actually the largest restaurant buyer of whole butterball turkeys in the world. So we roast whole butterball turkeys, if you can imagine, in every restaurant overnight, every day. Well, that's a, a very different product than going getting a sliced deli meat, Turkey type product.
Our roast beef is. Literally the best roast beef you can buy. It's Snake River Farms. American Waggy Roast beef is the only roast beef. We just have products that you can't get anywhere else, and it's all positioned as a premium brand and it's all about the food and, and I think that's why we do so well, not just in our home markets, but as we're opening up across the country and now starting international growth for Capis, the fact that we have a completely different product than everybody else is really.
A differentiator and drives our business and drives the consumer, they'll drive a little further. I can countless stories of standing in stores when we open the capos in a new market and I'll just be hanging out there and people coming in, oh, I've been waiting six years for you guys to get here. People walking out the door with.
Bags of our sandwiches and our sandwiches are huge, and they're like, yeah, I just drove three hours and took orders from all my friends and I'm driving back three hours to, they're all waiting for their sandwiches. So it's right. It started as that cold following and, and we've kind of continued that, that feel.
Wig zone. The reality is everybody's buying pretty much the same wings, right? Like a wing is a wing. And I would say most of the national players or even strong regional players probably have good flavors. Like they have a variety of sauces. Sure. I will tell you wing zone, when they started, Was the first to do that.
They were the first to introduce a wide variety of flavors and they were the first to really start delivery as well. So those, that's what drove the early growth of the brand. And they just had a great, they had a great product. They won the, the Buffalo, New York Hall of Flame contest or something like that, like Oh, gotcha.
And they had a great product. But we felt like we could apply our expertise in growing brands and building brands and the management team and the resources required to do all that. And so we also felt like we could differentiate ourselves. We could just be the best operator that applied the most technology to be the most efficient operator with a really good product.
So we'll continue to innovate on the product side, but it's also heavy on the back of the house, robotics, artificial intelligence, all those kind of things to just make us. Easier to operate, more efficient, which over time has a really significant impact on the business.
Sid: Is there a difference in how you operate both brands, or is there a massive overlap in the discipline and the process and the planning?
It just so happens to be two different products.
David: You keep asking really good questions, so you challenge, really challenge. Challenging me to think here at a very high level, we operate, you'd call a shared services model. I see. . So our real estate, our franchise development team, our real estate, our design and construction teams, our accounting and finance teams, our it, the senior leadership in marketing and supply chain, they are in that shared services model, which is great cuz we can go to a Cisco and say hey, right.
We've got two brands and now we're negotiating our IT contracts, whether it's a LOHA or ncr. And so we're able to leverage both brands, but as you drill down into the management team that's actually doing the work, they tend to specialize because marketing at Capotes versus. Opening a a wings zone is a different process.
It is a different customer. The brands are in a different place in their life cycles in terms of brand awareness, and so as you drill down, we specialize, but at the highest level, it's a shared services model. .
Sid: Got it. Now, clearly, like operationally, like very driven in process and you know how to run and scale businesses, but going back to what you were saying earlier, that your very values driven too.
Like you mm-hmm. care about values. You have a mission, people are important to you. The team is important to you. Who you work with is important to you. You know how, and that translates to, I think, some of what I've read online, which is. You don't just look at your customers as customers, you call them fans, right?
So clearly you're doing a lot of things right, but in the hospitality business mm-hmm. , what do you have to do to invoke that kind of sentiment, not just within your own company, but also with your customers?
David: First of all, I think it has to be real, has to be genuine. Some people use the term authentic, but we are at our core, a values driven group, and we align from a value standpoint with.
With franchise partners, with employees, with vendors, and with ourselves. And I can just tell you that if it, when there's non-alignment, when it turns out we're not aligned, one of us self-selects pretty quickly and goes in a different direction and we're just, we're fine with that. You know, we've learned that if.
In order to have a business alignment long term, there has to be a very high level of trust. In order to have healthy conflict and all those things that a healthy organization has, there has to be a high level of trust, which means you have to align first and foremost from values. So I'd say just number one, we live out our values.
We put it front and center. We make it clear who we are and how we think about life, which also by definition means who we're not. Right. We're not gonna be, we're not big institutional, private equity. We're not looking to go public tomorrow, and frankly, to my mind, ever, we're not looking for global dominance.
You know, I hear all those kind of cliches all the time. Oh, we're gonna dominate the world, like looking to dominate the world and looking to do great things with great people, and that I think are important, have fun along the way, and we expect to make money. We expect to get a good return on our investment.
That's it. Life's pretty simple after that. So I think. Uh, people get that and they appreciate that, number one. Number two, one thing that does differentiate us a bit is we own and operate the brands that we franchise, which if you look at a lot of franchisors, huh? They actually don't do that. They may have one or whatever, but they're not really in the same business as they're franchisees, which means they're not waking up every day looking at the same information, right?
Focused on the same thing, feeling the same. Pain and because we're actually a pretty significant operator of those brands, if something goes wrong, we're probably gonna feel it the most, we're gonna get hurt the most. It also is where we invest in all of our innovation. A lot of the technology innovations coming out to date.
They take a couple years, two, three years to prove out and if you don't have control of your operations and you can't take all the arrows that come along with it and really have your entire team focused on figuring out, cuz it almost never works right out of the box. I've never introduced something that just worked.
Day one, right? Like it always takes adjustments and fine tuning and whatever, and then actually deciding is this a big lever for us to pull or is it just a shiny object and let's put it on the side. So I think owning and having company owned and operated, when we acquired Wings on, there were no company owned and operated stores, and I think one of our first orders of business.
Going out as we were redesigning the concept and signing leases to open company operations and so we could do all that testing and it, that's been really huge for us. It's also where we do all of our training. It's where we develop our people. It's, I think there's some things inside, inside the beltway, so to speak, that you can do to assure that you have that alignment.
You're all focused on the same things, and then we operate. Our company's using a program called eos, the Entrepreneur Operating System, and the actual platform is called Traction, and that ensures that everybody in the entire organization throughout the company is aligned on where we're going, what we're doing, where we're targeting our resources, and then.
Obviously also where we're not focused and what we're not concentrating on and where are we at in terms of metrics and scorecarding that literally week in and week out. And so there's a lot of, I think, process things that you can do to achieve that goal. And part of the EOS program. I would also say the first step in the program is write people right seats.
So going at and acquiring and sticking with. What we think to be the best in the industry that align with our vision and values. That's what allows us to go fast and do what we're doing today, is we have just great people that are highly aligned, incredible franchise partners that are attracted to all that, that also care about their people.
Right? Right. They care about their communities and so, It, it cascades throughout the organization if, if you live it long term.
Sid: With regards to the franchise locations, right? Mm-hmm. , how much do you set standards versus how much do you actually control?
David: Uh, it's a good question. The control is really vis-a-vis the franchise disclosure document or the franchise agreement in terms of intellectual property and things like that.
Control and compliance are not words that we use a lot. What we certainly do, as I said, we're gonna go out and test things. We're gonna work really closely with our franchise advisory council on setting our strategy. Sure. Our annual strategy and getting their input on what they think is important and getting feedback.
And as tests start to roll out beyond us into more regional basis, they are often the ones that want to do the test first, cuz they're always really inquisitive and they're obviously great partners. I would say it's more of a consultative approach and that is, Here's what's working. Here's what we're doing.
Here's the results you should expect if you do it that way. And when there's non alignment there, we can sit down again because we're in the same business and say, Look, your food cost is here. We're running 20 stores and this is ours. Your labor cost is here. This is what we're paying for insurance. Or maybe we have a franchise partner out there that's got a better deal on insurance or whatever it is that we can share with the system.
And so we really use that consultative approach. Cuz at the end of the day, it's not about us. It's not about. Anybody's ego is we just want to win. And I think when you take that, it's not about David Bloom, right? David can think X, Y, and Z, and candidly, I'm, I may not be the actual customer. Like maybe I'm not the prototypical wing zone customer.
So taking my personal opinion for exactly what the flavor profile should be for certain sauces may be. Right. Like completely wrong. Sure. And I think a lot of companies don't take, and part of the EOS process having a lot of data and using 50% data and 50% experience to arrive at the right answers. And I think that's an important part of the process.
How
Sid: many locations do you have in both the brands? Today
David: we have about 180 caps open with about 300 in the domestic development pipeline and other Wow, 50 or so internationally in the pipeline. Caps is entering its first international market this year, India, with some great partners that we're really excited about.
Really Love Wing Zone. When we acquired it was 70 units, half domestic, half international. Today in total, we've got about 90 open with. Almost another 200 in development domestically and another almost a hundred internationally. So that gives you some sense of where we are.
Sid: That's great. Clearly what you're doing is working and there's a tremendous amount of growth.
I guess as you expand more locations, , you're gonna have a few challenges, and one of those is delivering a consistent and compelling experience for your consumer. Because when a consumer walks into the wing zone in Dallas and walks to one another part of the country, They're expecting one brand, one experience.
They're expecting wing zone and when if they had a bad one, right, they're not gonna say, Hey, I'm not gonna go to that branch. Not I'm gonna go to the other one. They're thinking wing zone. So what is your experience with managing that scale and that growth? Keeping the customer in mind? And also what is the experience you want your customer to have when they walk in and they walk
David: out?
Again, it's a little different for each brand, but first of all, as a franchise system, we have to be able to lock down those critical points, those parts of the experience. So for instance, On the wing zone side, all of our sauces are manufactured for us out of giraffe foods and from Toronto. One of the best in in the world, I would say, at doing that.
So we know you're getting exactly the right flavor. Exactly the right, consistent. Exactly. It's not. Some we're not mixing 'em up and back and hoping that some 18 year old kid gets the recipe right. And we're willing to invest in making sure we have the right products with the right partners. And the same thing goes across the brand.
We contract for all of our food products directly with the manufacturer. A lot of companies will go to Cisco and say, Hey, what kind of roast beef do you got? What kind of meat do you have available in this market? Okay, our bakeries are baking our product, which requires a pretty significant. Capital investment on their part.
So the only way you get people on board to do those kind of things is if you can demonstrate you're, you are actually gonna do what you said you're gonna do, which is grow, have great sales in your store so they can have, they can make their investments and then. . So I'd say number one, it's from a supply chain standpoint.
Number two, technology does give you a lot of insights into what's actually happening. Like I said, into the supply chain. We actually invest in technology that gives us insight into Cisco's warehouses and what's on their shelves and what's being bought in our stores to ensure that our franchisees are actually buying the product that's supposed to be bought.
So there's a lot of. Process kind of things. There's the obvious quality inspections. We invest very heavily in customer service scores and metrics from a couple of different perspectives. We work with a group called Service Management Group. I think they're the best in the industry, and so we get thousands and thousands of customer surveys on a monthly basis.
But it's also just personal relationships. Our business consultants are in the shops. We're constant lines of communication. We invest very heavily in training. We have a really good training platform, one huddle great partners. There. Again, I hate to say it, but you gotta do it all nowadays, right? You gotta do it all.
Hey,
Sid: I'm your host Sid Shetty and I hope you're enjoying this conversation so far to make sure you're up to date and have access to all our episodes. Make sure you're subscribed to the podcast. Also, if you have thoughts, comments, or questions. Be sure to follow Service Channel on LinkedIn so you can be part of our community of like-minded folks as well as have access to a lot of other great content.
Feel free to also connect and follow me on LinkedIn. I'm your host Sid Shetty, and now back to the show.
I wanna pivot slightly to. Like the actual physical location, right? And this is something very pertinent to our show and our audience, like folks who are in the restaurant, operators and construction and facilities and new store openings, and so on and so forth. Clearly your growth is dependent on the actual physical space.
So you know, you look at the physical space and on the assets that are contributing to the experience of the consumer. Revenue generating assets, how important it is to you, what the physical space looks like on day one. How it looks like on day 100 and contribution it has to the consumer's experience when they walk in through that door.
David: Yeah, I think that's a great question. First of all, it is certainly a critical part of their customer experience, right? When they walk in, does it feel good? Right? Is it clear? Is it clear where they should go? Which way should they go? Is it convenient? Is the ordering process really convenient? Is it personal?
Yeah, it's easy and it's digital and it's high tech. But does it feel good? Am I talking to somebody? Is there any kind of, I just walked into your business. Is there a greeting? So there's the physical space coordinated with the, I call it the human resources side of the business and integrating those along with all the technologies that may be.
tracking people when they walk in the door and just starting to connect with them and provide all the loyalty programs, access to payment and menu ordering. So it's this confluence, more integration of physical space, human resources and technology and making sure it all works in a way that's seamless, right?
I think that's the consumer expectation today, because they know what can be done well, cuz lots of brands are doing it really well. I can tell you I've listened to incredibly interesting entire dissertations on. World class people that have deep studies into being able to drive consumer behavior based on the audio profile and actually employee behavior based on time of day.
Are they setting up? Are they closing down at the end of the night? Right? Is it during peak periods or is it off periods or lunch when people, you've gone from set up to lunch to off peak, to getting ready to. What kind of music do you want playing to drive that behavior? It's integrating all that stuff that's really the trick.
And doing it in a way that's flexible because we have a return on investment model that's super critical to the growth of the brand and to the franchisee. Right? Right. So balancing all of that is the tricky part and I wish I could tell you that it, it's one and done and we figure it out and then it's on track for the next five years, but it.
Just the opposite. It's every time we open a store, we're opening Capriotti'si in Hawaii today, I can tell you it's a much bigger challenge we're opening in India today. It's a much, it's a much different environment. The real estate's different. The, the labor model, everything's different. So being really flexible, and I think iterative, it's the old technology paradigm, fail forward fast is kind of our approach.
Sid: E, everything you just said about like the physical space is phenomenal. Some of the rhetoric that exists in our space is that, hey, certain teams are only thought about when something breaks and they work on resolving it, and that's it. And our hypothesis and what we know is that it's not true like that are teams that are responsible for making the location feel warm and welcoming and in line with the brand.
And a C level exec absolutely does care about that, and it's a matter of putting the right narrative in front of the C level exec and get the message across as to what we do and why we do it. Would you agree with that? Yeah. I'll
David: give you a good example. When we opened our first wing zone, what we call Wings Zone 2.0.
We leaned in really heavy on kiosks, self-order kiosks. Sure. And what all of our consumer feedback metrics told us and all of our scraping of social media comments and all that kind of stuff. It told us pretty quickly that consumers actually wanted more interaction, needed more interaction, and particularly for a new brand where they didn't really.
they didn't know, Hey, what is this sauce versus that sauce and what should I order? They wanted more human touch and fortunately we had built that flexibility into our system and could just flip the screens and adjust our staffing levels and provide it. We went in with one hypothesis and, hey, people just, they want the least amount of interaction.
They want to just come in and hit a kiosk and place their order and have their food brought out and, and there is some segment of the consumers that want that, and so you can provide that opportunity. , but a lot of consumers in that brand in particular wanted the interaction and wanted to be able to ask questions and, and they wanted to somewhat more of an ambassador to enhance their experience.
So something as simple as that, maybe it's, it sounds simple, is just critical to the success of the brand. Otherwise, we're a commodity, right? It's just a transaction and there is no brand loyalty. That's one of the tenants that we build our brands on is we want to build up a, as you said early on in the conversation, we want to have, we call them cap addicts on the cap side, like people that are literally handing it down from generation to generation, love of the brand, and we're trying to build that on the wings zone side as well.
Yeah,
Sid: and it, it's interesting, right? As you push the envelope with technology and innovation, you can be so mindful on about what happens when it doesn't work, right? If you have a kiosk like we hear in the restaurant space of different brands using robotics to bus tables and deliver drinks to the table, it's great when it works, but when it's not working, you have to have a plan on how you resolve it quickly, because.
The experience that a customer will have when they walk in and they see two of the three kiosks not working, or a robot that's just sitting in the middle of the in room dining space, dead it. That works against you big time, right? Yeah.
David: Robotics, just to take that, we work with all the major robotics guys, have deep partnerships with everybody and have been in that space very early for a number of years now.
Testing and iterating. But candidly, while it technically works, it has a long way to go before it's really dependable a hundred percent of the time and has been fully adopted. Because you don't just plug and play that stuff. You actually have to adjust your supply chain the way product comes in the door.
You have to adjust, as you said, the physical layout. Not just to accept the machinery, but to do it in a way that maybe has a personality. Like Right. Just sticking a robot in a restaurant, that's not what consumers are looking for. So how do you make that personal? How do you give that a personality? Right.
How do you make it a good experience for the employees that have to work next to that robot so that they're actually not just accepting it, but like embracing it and wanting it to come in? And I've seen it done well, and I've seen it done
Sid: poorly. Yeah. It felt. The restaurant space had this old school mentality of what worked and then that just worked for years and years, and then all of a sudden there's this massive focus and this huge amount of disruption and innovation and technology that's flowing into this space.
Would you say that's happened in the last, like five years and maybe has Covid accelerated?
David: Yeah, certainly. First of all, I think it's a balance, right? Like we're still in the hospitality space. We're still in a people oriented business, right? Where that's having great people and developing people and keeping great people.
Attracting and keeping is critical to the success of the business. Flip side, the technology adoption curve has certainly been accelerated in the last few years, but I will tell you, I've been on podcasts with other leaders in the industry before that have said to literally on the podcast, have said, yeah, once this is over, I'm pretty sure it's going back to the way it used to be,
And I'm like, I don't think so. And the reality I think is it's not what I think, or you think it's what does the consumer expect? That's right. Right. And the reality is Amazon has taught everybody in the world you can have whatever you want, whenever you want, wherever you want immediately. Right. And they can have that in every other part of their life.
Why can't they have that in the restaurant? And that's gonna mean, that's gonna require technology to satisfy that kind of demand, that kind of convenience, that kind of efficiency, right? So at the end of the day, it's, it has to be about what is the consumer want, where are they
Sid: going? Yeah. The consumer expectations have significantly increased, I think, over the past three to five years.
And I'm talking about, as a consumer myself, I interact with a restaurant. Through different channels. It's not just the one physical space, it is the website. They're ordering system omnichannel like Uber, DoorDash. And now because of Covid, a lot of brands have introduced drive-throughs. That means that there's a lot of different interactions that consumers having with the business, and honestly, like we want all of them to be perfect.
It's not okay to just do three of the five. It's still your brand. What are your thoughts on.
David: Well, I think you used the word omnichannel and being really good at every channel and you as a consumer. And I know for me, sometimes I'm gonna get outta my car, I'm gonna walk in, I'm gonna order, I'm gonna sit down and I'm going to eat.
Sometimes I'm gonna go through the drive-through. Sometimes I'm gonna go on their apps. Sometimes I'm gonna order directly off of one of the other apps. Sometimes it's a catering event. Sometimes it's dinner at home or lunch in the office. And like we have to be omnichannel. We have to be. We have to be everywhere that the consumer is.
Like I go back to the where does the consumer want to be, right? Some consumers are very loyal to GrubHub or DoorDash, or Postmates or Uber Eats, or whoever it is, and some companies dictate, okay, if you're going to eat out while you're on the road, you have to do it through one of our approved vendors, which means De Nova or whatever.
Or you've gotta order your catering through easy cater. We have to be on all those platforms and all those platforms have to integrate with our payment systems, our loyalty programs, right? All of our menu updates and pricing real time right, has to be fully integrated with our back of the house, our operations.
So this, that, that integration or convergence of all these technologies. Is making us today, I would say at least 30%, maybe closer to 40% a technology company as much as a restaurant company.
Sid: Wow. Has the mix in terms of how customers interact with you changed significantly since Covid, if you compare.
The takeout versus Uber Eats and DoorDash orders and the in room dining, like how has that makeup changed before and after Covid?
David: Yeah. I would take it back to the plastic technology adoption curve. So pre covid we had what you would call in the technology world, early adopters, loving all those platforms and being real loyal.
It candidly took us a little while to get our heads around it. We adopted it very early. We were beta testing Olo Rails and those kind of integrations with our partners at Olo who are awesome, frankly. And we had national agreements in place with all those platforms very early on. And we were testing ghost kitchens, we were testing virtual brands.
We had everything. We already had all that stuff going pre covid. The difference is C O v SP sped up the adoption curve into that next group where you had people in their sixties ordering, sitting in their home and ordering on GrubHub. That normally would've taken 10 years. Instead it took two years. And so I think it just, we sped through the adoption curve much faster.
Right. And obviously, and once the cat's outta the bag, people are not going back. And there is a certain generation, my, my daughter and her husband, they wouldn't dream of walking up and down the aisle at a grocery store to pick up what they want. Like they wouldn't dream of that. Right. That's just a total waste of their time, and my wife and I, we still do that, right?
We still walk up and go, I'm gonna go look at what I want. They're like, no, I'm ordering it ahead. Maybe I'll pull in the lot and have 'em bring it out to me. Sure. Otherwise, I'm having it sent to the house and it's just, I think that cat's out of the bag and I think it's a good thing.
Sid: Are there any strategies that you deploy over the past three years to change your physical spaces to to adapt to the change in demand and the change in the mix?
Because some of the leaders I speak to, their brands have introduced drive-throughs in a whole bunch of restaurants in a certain areas. They have changed the makeup of the kitchen. Mm-hmm. , they've changed the proportion of the in room dining versus the kitchen. To be able to fulfill those orders. Has that been the same experience for you and how have you dealt with it?
David: Yeah, I would say again, we had dove into all that for several years before covid, so we were already testing pickup windows, pick up cubbies in our stores because of the rising costs. Again, because we're in the same business as our franchisees, were very cognizant of inflation around real estate early on, and which was forcing us to go.
Smaller footprints become much more efficient in terms of the kitchen and the back of the house. And we were already seeing a mix. And I think if you dial back about five years, what you would see is the fastest growing glory within the restaurant space was off premise is not people coming in and sitting down.
That was pretty flat. Off-premise consumption has been the fastest growing segment for years, and certainly the aggregators very quickly became a critical middleman in in that relationship. And I will just tell you today, we couldn't exist without them. They represent such a significant part of our business.
So our challenge early on became. How do we make that relationship work for us? How do we, from a pricing standpoint, from a physical plant, so those drivers can come in and get their orders quickly and they, and they can get out quickly, which is what they care about. How do we make it convenient while also making it non-disruptive to the people that are, are coming in and waiting online and waiting for their order?
Right? And all of a sudden they don't, they see a restaurant that has no customers in it, but their order's taking 20 minutes. Why? I don't get it. , like how do you deal with that? So that's again technology, right? It's also physical plan. Having different places to pick up and order for those different types of customers.
We even played with having separate doors based on the type of customer. Interesting. I wish there was an easy answer to any of this that just isn't. It's figuring it out for your brand and your customer and your economic model. You know how to make it
Sid: work. That's great. Let's pivot to like the future, right?
As you look to the future and your brand is very important to you, right? You've got two brands that you are not only taking national, but international. What do you want your brand to to stand for as you think about the legacy of the two brands or as you expand to more brands in the future?
David: Yeah. I think again, each brand is a little different.
I think CAP is is always gonna be about having a very best in class product. We were named Greatest Sandwich in America. Nice. That's what people know us for, and so there's always gonna be that defining characteristic if it's not the very best. That we can provide. We're not doing it. We're not gonna be the cheapest, frankly, probably not gonna be the biggest.
That's not our goal in life. It's just to have the best product, the best return on investment model possible for our franchise partners and build a great brand. And because we're not owned by private equity, we're not public. Company. We don't have some of the mandates that some of the other brands maybe have to live with.
Hey, you guys gotta get here by this point so we can exit this investment. And we have great alignment with our investors and our board members, and our management team and our franchise partners. So I think that's on the cap side. On the wings zone side, it's really more about innovation. We call it speed, getting the product out the door quickly and efficiently because so much of wings are consumed off premise, they're delivered or picked up or what have you.
So if we can get to the door in 20 minutes or 25 minutes with a hot, delicious, crispy product, right? Versus our competitors maybe being at 45 minutes or an hour, we win. Right? And so it's being, it's a little more about innovation, it's a little more about being really efficient. We have a very.
Consolidated menu there because we have to be able to produce that product, keep the quality high, and have very high throughput during peak periods. And so that that's really more, we call it flavor really fast, and that's what we want to own. We want to be the most flavorful, but also the most innovative.
Company in the space, and that's how we differentiate ourselves. Future brands will have their own brand promises, right? Their own niche, so to speak that that we think we can own and grow at scale, whether domestically and internationally or what have
Sid: you. That's great. You talk a lot about innovation and as you look to the future, I mean there are some really interesting examples of brands.
Doing things to be efficient and clearly you are too. And you've got Chippy with Chipotle and and flippy with White Castle and Ottawa with panda restaurants. What do you think the future's gonna look like with robotics and innovation with the back of house and the front of house? What do you think in your view right now is experimental and, yeah, it may not really last long.
I think
David: automation, particularly in the back of the house, is clearly going to happen. The. Companies you mentioned they work with Meso Robotics or Nala Robotics, and we're involved with both those guys and know their teams really well, and I think they have great teams with really smart people that are committed for the long run.
Again, our mission is to find out who's the best partner for us long term. And so that's part of how we approach it, is let's go find the right people to partner with for the long term and make the right decision there. And I think in the back of the house, it's clearly a huge lever because if you. Take two or three people off your schedule, and that significantly changes your model, your business model, and not just from a labor standpoint, but also, hey, I can stay open later.
I can be open 24 hours a day in certain locations, or it expands your revenue opportunities as well. . But as I said earlier, it's also gonna drive changes in supply chain and throughout in in other aspects. So I think picking the right partners, knowing who those people are gonna be is part of whether this is gonna work for you or not in the long run.
And those partners have to integrate with your other partners. So your POS providers, your loyalty programs, your online ordering. It's not just standalone, are they the right people, but do they integrate with my training platforms? All the other things that you're doing in your shop. So having a really good IT stack and well thought out and what coordinated will determine how well it works for you individually.
But I don't think there's any world where AI, robotics, and even whether it's augmented reality or virtual reality, All those things. This is a great book out called The Future is Faster Than You Think by Steven Kotler and Peter Diamandas, that if you haven't read, I just suggest people read because it's not just our industry, it's real estate, it's finance, it's supply chain, it's, it's everything.
Every industry's being impacted by this and really what it's about. It's not the standalone, Hey, is it gonna be robotics or ai? It's the, where you get really powerful is when you converge ai. With robotics, with 5g, with big data. When you get all that stuff working together, the exponential returns are off the charts.
And right now you might have people physically writing your training manuals. I could literally go on to chat GTT right now. Yeah. And have a training manual and video series. Produced for me in two minutes for a hundred bucks. Right. Phenomenal. Yeah. And it, okay, it's not perfect then I'm gonna have to customize and what have you, but clearly that's gonna get a lot better, a lot faster.
And that's, that's the first step towards actual personalized ai. Right? Right. Like where it feels relational. And again, I think this is all happening in the background a lot faster than people realize, but it, it's. .
Sid: That's great. David, any advice you have for folks in our audience that are responsible for construction and facilities and operations and development in general?
Do you have any advice on how they can connect what they do every day? Mm-hmm. to what's important to a C-level exec, no matter how big or small the organization. So it's not just about a specific task, but about connecting what you do to the broader mission of the organization. .
David: Yeah, I think number one, you still gotta be really close to the consumer and in our industry, the franchise partner.
So having real conversations with real people and uncovering what are the pain points and therefore what are the opportunities, and being strategic about that thought process is where it all starts, right? Like you gotta have your feet on the ground and be out there and talking to people, number one.
Number two, you personally, have a responsibility to be intellectually curious and learn and grow and read and be a part of what's happening. Otherwise, you are gonna get left behind. And that goes for me and everybody else. So I think being intellectually curious, reading. Studying learning here. We're in Vegas, we're close to U N L V.
We're always speaking at U N L V and part of their innovation center and having great partners and learning from them. And then lastly, I just think recognition that we're experiencing the greatest headwinds our industry has ever experienced between economic and social and all the, the global things that are going.
But we're also in the greatest period of opportunity that's ever existed, and people that can work through the headwinds and the obstacles and even turn those into strengths somehow by getting ahead of the curve, are gonna be the winners in the long
Sid: term. That's great. All right, David, I'm gonna end with one last fun question.
How do you like your wings? Are you a heat guy or do you like them Mild? Unfortunately,
David: I have to tell you that as I've gotten older, I've gotten Wim. There was a day when I put jalapenos on it. Um, my wife and I, we ate jalapenos on pizza, omelets, everything she still does nowadays. Everybody here at the office laughs at me cuz I am a total wimp.
So I like them crispy and juicy, but. It's gotta be mild, unfortunately for me. That's
Sid: awesome. I cheat a little bit. I will have super spicy wings, but I'll have like half a bottle of ranch with it. So I dunno. , I don't know how much that counts, but I love it.
David: We have a sauce called nuclear habanero and we're at the, one of our restaurants TA testing a new chicken sandwich the other day and they brought out some nuclear habanero and some of the guys that, some of our leadership team was like, it's not hot enough, you shouldn't be able to, I'm like, I like dipped.
Pinky and then I put a little, my, I was like, I, and I'm obviously, I have no hair, so I'm like sweating from my head for the next 10 minutes and they're all laughing at me. I'm like, that's hot enough. Believe me, that's hot
Sid: enough. It's nuclear enough. It's, you know, it's awesome. David, that, that was fantastic.
I really appreciate the conversation. I really enjoyed it. Thanks for taking the time to chat with me and for all those in our audience, David, what's the best way they can reach you? Sure
David: I'm, I'm very active on LinkedIn, so certainly you can just shoot me an invite and I generally accept as long as you're not selling me something like 30 seconds later.
I'm always just openly accepting and sharing, and I think LinkedIn's a great platform. My email's, David dot bloom caps.com. You can always just shoot me an email. I tend to be very active in the industry, so if you're at an iffa or multier franchise or MCO or any of the technology, I'm usually either speaking or I'm there.
So please say hi. And the great thing about our industry is it's a small world, right? And that's right. You get to know people and build relationships, and that's like what I said first off, is that's the most important thing to me, is building long-term relationships with people that are equally passionate and are here for the long run and want to do great things.
Sid: Well, that was David Bloom, Chief Development and Operating Officer of Cab and Wings Zone. There are so many great takeaways from that conversation, but some that really resonate with me are his and his company's focus on values, people, teams, and partners, all surrounding the singular mission. Of servicing the customer and giving them a great experience and a quality product.
The hospitality industry is a really tough industry and the key is to listen to your customer and meet them where they are. Clearly the awards and the growth capabilities and wings on our seeing our Testament to that. With that, I'm Sid Shetty and I'll see you on the next episode of Elevating Brick and Mortar.
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