Commentary

Four Foods Group CEO: Why restaurateurs should stop obsessing over their number

As CEO of Four Foods Group, Andrew K. Smith raised the necessary capital to develop and operate 132 restaurants in a nine-state territory but has decided to stop obsession on his number count.

November 12, 2018

By Andrew K. Smith, CEO of Four Foods Group

I'm a contrarian.

I am the CEO of a company headquartered in the conservative state of Utah, and I have long hair. I have a 18-year-old son, and I still love fast cars. I develop successful restaurant brands, and I think counting the number of restaurants you own is an idiotic way to measure success.

Let me explain. I've decided to focus on unit strength rather than unit growth because I have come to realize the "how many units do we have" goal, which I mistakenly held on to for years, was a good way to kill successful momentum for my business. If you're running a restaurant brand — or really any business — you'd be wise to learn from my mistake.

"How big are you" used to be cool

I get it. "How many units?" is a good question to ask when you're trying to measure growth. It not only provides an objective number, but it also validates a leader's ego. This seems true for many companies, and it's especially true for franchised or multi-location businesses. However, my industry needs to change this mentality. It needs to shift from pushing for "more units," to craving "better units." Now, it is critical to grow slower and smarter instead of faster and dumber.

Obviously, growing fast and smart is the panacea, but it's difficult to do. Really difficult. We find ourselves short on management talent and we often set our team up for failure by bringing them into a situation where we're already running down the growth hill so quickly it makes falling inevitable.

We all have egos. I have one but pounding my chest over how many units I have just doesn't do it for me anymore. Now, when I look at investing in a restaurant concept, I don't care how many units they have nearly as much as I care about how strongly the restaurants are operating. I'll talk to anyone — even if they only have one location — if it's kicking ass. If it's not, I don't bother.

Warriors zig when others zag

I love warriors — men and women who go to battle in any situation and at any time. I'm lucky to be surrounded by them every day in the building where I work and in the restaurants we operate. Warriors are decisive and resilient. They are optimistic, and they trust the processes that have proven to win in battle. They're also creative and prefer zigging when others are zagging.

We started our company in 2008, in far less heady times than we're experiencing today. The country was in the deepest throws of the Great Recession. Starting a business? Crazy idea! In 2008, people were "zagging" by trying to cut costs, peeling back and hanging on. Not us. We were "zigging." I felt strongly the right thing to do in a recession was to grab as much market share as possible. Then, when the pie grows, as it did, you will have a bigger piece of it. It's risky, but it also makes sense.

Today, the economy is humming in many areas where we do business, so it would seem like the perfect time to grow fast. Here we go zigging again. We think the right play today is not to automatically add units — that's the "zag." The "zig" is now making EVERY unit strong and profitable. Today, I'll trade you one unit that is making a lot of money for four that are limping along. That is how to build success momentum, and that's what we're after. Momentum is much harder to sustain than simply adding more locations. It's also more valuable.

How do you create "strong units"?
In my experience, there are three keys to building an organization capable of delivering strong restaurant units. These are:

Building a team of competent and decisive people.
Teaching an organization to be committed to a systematic approach.
Nurturing a strong and distinct culture.

People
There is nothing more important than finding and developing talented, decisive people in your organization. Nothing. We need strong people at every level of our company – finance, operations, real estate, human resources, marketing – who have the expertise to excel in their role. Beyond that, we need people who are decisive. You must be willing to gather facts and make a decision – even if it is occasionally the wrong one. Organizations that create success momentum always have a bias for action.

Systems
A valuable byproduct of decisive people is that they generally put the best and most reliable systems in place. They are willing to lean out because their systems have worked in the past, which provides a confidence that blossoms into great decisions. These types of operating systems can be repeated and scaled, and they are at the core of developing profitable restaurants consistently.

Culture
Finally, a commitment to a strong company culture is critical to making sure you can sustain the success momentum created by profitable, strong operating units. The right culture clearly identifies expectations for what is to be done, and how it should be accomplished. Shining light on that culture gives team members both the expectation and the permission to act in a certain way. The Four Foods Group culture is one of the most crucial and proven factors in our success, and it's been deliberate and nurtured all the way along.

Today, people are looking for an experience — a combination of entertainment and eating. As staggering as it sounds, you can have okay food, but if it is coupled with a great experience, satisfaction levels are going to be high. The food will taste better if there is a good vibe, good service and a good-looking meal on the plate. All that, along with engaging conversation, enjoyable music and a spotless restaurant, will have customers walking out saying, "that place is bitchin'." That's how restaurants become profitable, and that is the road our industry needs to travel right now.

Operations