Freshii founder: How mistakes lead to brand growth
Although Freshii has reported one of the industry's highest same-store sales for the last four years, CEO Matthew Corrin told a crowd at the Restaurant Franchising and Innovation Summit in Louisville that he had a few missteps along the way. Hard lessons, however, are an imperative part of any brand's success, said Corrin, who launched Freshii 13 years ago as a health-based fast food option in Canada.
Corrin admitted in his Thursday keynote — moderated by the brand's Chief People Officer Ashley Dalziel — that the now 500-unit global chain's initial operational model was too complicated to scale. That realization, Corrin said, was key to setting the publicly traded company on a firm path to franchise growth.
Freshii, which Corrin initially built around each diner's self-customized order, was — at first — "brilliant and really worked well." But when the brand began to grow in earnest, it was clear that the operational model needed to change.
"People were having broth with blueberries in it ... because, really, we were asking them to be their own chefs," he told the audience of restaurant executives at the Louisville Omni Hotel. "So we shifted away from that ... to how we execute today with a chef-driven menu, where you can have a turmeric smoothie, then add something ... and it can be vegan or high protein or whatever. That's our model to scale."
It's working. Thanks, in part, to an initial public offering in January 2017, the brand has grown dramatically with expectations of having about 750 stores globally by the end of next year. Corrin admitted, however, that making that leap to a publicly traded company was a bit "nerve-racking" in that the brand had basically laid out its inner workings for all the world to see.
"But, we raised $150 million," he said. "And you could totally knock off [Freshii's approach] ... but you can't knock off the culture. And the amount of time and effort we spend on people culture now has truly been outrageous over the last two years ... but now I think we've totally cracked the code. ...
"Our attitude is bad stuff first, good stuff last and every morning in our huddles, it's the worst things first and then we roll into other updates. ... But I think that's really important and also finding ways to talk to [franchisees] directly is very important. ... It really makes me feel like we have our finger on the pulse."
As the brand grew from a purely North American chain to one that is now in 18 countries, Corrin had to build local nuances into the operations. And he's still working on it.
"What I wanted to do was make healthy eating comfortable all over the world," he said. "Those are things I wanted to build into Freshii and I knew if we waited too long we wouldn't be able to do that."
He added that globalization is great for growth because it allows a brand to "roll with the punches," so to speak, in the event that any market develops problems due to the economy. He said that variegated global approach, along with the brand's ongoing work to also variegate its audiences, is working to keep Freshii moving forward in the perpetual ebb and flow of the finicky restaurant industry.
"It's why I say I'm scared of the restaurant industry because I think there are way too many [brands], while rents are getting higher ... and labor is not getting any easier," he said. "But my goal was not to be introduced as a restaurant company but to be a health food company. So we're on Air Canada now ... and you will start to see 'pret-a-manger' Freshii in retailers later this year. ... And we've just launched meal boxes to your door."
Appealing to franchisees
As far as franchisee and prospective franchisee buy-in, Freshii appears to be doing what it takes. In fact, Corrin said that although it hadn't advertised until just this year to potential franchisees, the brand still has received more than 7,000 applications annually for franchises through its website. Last year, in fact, it opened 120 stores, with 40 percent of those being established under existing partners.
And the more you listen to Corrin, the more you understand this is a restaurateur who finds great value in learning and growing from his brand's mistakes. For Freshii, that has involved everything from realizing when the operational model needed to change, to the time that he said he failed to keep a close enough eye on his performance numbers.
That painful moment nearly did the brand in, he said, but once he uncovered his mistake, he did the hard work needed to turn things around. It taught them that restaurateurs can never take their eyes off those numbers.
"So we are now obsessed with numbers," he said.
Flexibility and a readiness to adapt have been key to Freshii's success, said Corrin, and all restaurateurs must have the ability to make ongoing incremental changes in order to grow. Checks and balances are essential, he said, in a business that requires that brand stays flexible enough to bend with customer whims while remaining true to its key mission at the same time.
"Like our smallest store is like 300 square feet," he said. "Our biggest is 3,000, so we don't have a box model and we can go to anyplace. ... We no longer go for the homerun leases. We go for the singles and doubles. ... We really believe healthy eating is for everyone."
Cover photo: Willie Lawless
Topics: Franchising & Growth