Qu - Restaurants Reinvented - Paul Macaluso - Transcript
Jenifer Kern: [00:00:00] Hello everyone and welcome back to Restaurants Reinvented. I'm Jen Kern, the host this year of the show. And today with me, I have a amazing president and CEO, it is Paul Macaluso from a Broken Egg. Hello, Paul.
[00:00:15] Paul Macaluso: [00:00:15] Hi! How are you doing, Jenifer? Thank you for having me.
[00:00:18] Jenifer Kern: [00:00:18] Yeah, thanks so much for joining the show. Well, we were referred by our mutual friend, Brandy Blackwell, who I'm, you know, always so indebted to for her amazing networking skills and particularly within the marketing space. You just, she's a great person for connecting folks together. So I'm super appreciative that I know you worked with Brandy a few years ago and you have an really impressive track record with
[00:00:41] lots of big QSR Brands. Not to name, you know, just a few, but Burger King, Taco Bell, Sonic, McAlister's and most interesting I think for our audience is that you were a marketer who became a president and a CEO. So I'd love for you to tell our audience how that all came about and, and, and background on yourself and how you got into the restaurant industry.
[00:01:04] Paul Macaluso: [00:01:04] Sure. Great. I I'd be glad to give you the quick overview. Yes, so I actually started off my my time in the industry right out of grad school. I was recruited by Taco Bell at the time. They were owned by PepsiCo, so that tells you how long ago that was, but... I actually started off my career with Taco Bell in an operations role.
[00:01:22] And I came up through operations and quick, kind of quick story of my, one of my first GM conferences that I went to. The president of Taco Bell at that point was onstage. It was a GM conference and he was talking about how important is to, you know, support general managers and make them successful.
[00:01:38] And he gave a story about how he had, how he has started off in the industry, as a general manager and worked his way up to become president. So I thought to myself, "Wow, that's pretty neat." You know, "How can I make that happen for myself?" And so, one of the great things about Taco Bell at that point was they were very dedicated to developing people, cross train them and develop mentors and, and a program to kind of, you know, accelerate my career path.
[00:02:02] And so I had the, I was very fortunate that they you know, wanted me to, to grow in different areas. I ended up having seven different roles there over 10 years. HR, franchising, but I got into marketing kind of towards the end. I was at a I was at a co-op meeting or a DMA meeting, I was watching the promotional calendar be discussed from, and I was an operations role
[00:02:23] and I saw them talk about all this consumer research that went into these new products, and the promotional calendar was like, "Wow, that's fascinating." You know, that really understanding what drives consumer behavior and why we're launching these products. And I was like, "I want to do that. I want to do that.
[00:02:36] I want to do that role." I got into field marketing and then end up getting into product marketing with, with Taco Bell while I was there. So 10 years great foundation to my career and really found my knack in marketing roles. Middle part of my career was really progressive marketing roles, so I spent five years at Burger King in a field and product marketing.
[00:02:56] Then in at Sonic for almost five years with a merchandising media and more product marketing. And then I was recruited to go to work for Moe's Southwest Grill as the chief marketing officer. That was my first chief CMO role. I was there for three years. It was a great time for that brand to grow and, and really got, was there a part of Focus Brands.
[00:03:18] And one of the blessings I had with Focus Brands is they really looked at marketers to, to go grow into general management positions. They really wanted marketing people to take, to become brand presidents. And so that, that's when I knew it was the right kind of fit for me, 'cause that was my longterm goal.
[00:03:33] So, you know, you gotta find the right organization that believes in, in the skillset that marketers have and that, and that worked out very well for me. I became president of McAlister's and I've gone on to do a couple of other things in the last 18 months at Another Broken Egg.
[00:03:47] Jenifer Kern: [00:03:47] Yes. Yes. So exciting, that's really neat. And I can just imagine that you've seen so much change in the marketing profession. I mean, you, you mentioned all the different roles that you've had and, you know, from field marketing to product, product marketing, to CMO and you know, everything that's involved, you know, with, with the different roles merchandising. What do you think has been the biggest change
[00:04:10] that's come into the marketing profession?
[00:04:14] Paul Macaluso: [00:04:14] I, I don't know, there are so many changes. I remember, I remember when I was at Sonic. Right before I got there, they had started doing national advertising because it was, they had reached a critical efficiency, did a national cable.
[00:04:27] Jenifer Kern: [00:04:27] Right.
[00:04:27] Paul Macaluso: [00:04:27] Instead of buying all these co-ops and national cable and that led to a lot of expansion for Sonic, because they, when they started going into new markets, they already had brand awareness, because they had the national cable going.
[00:04:38] And so then I remember trying to replicate that at Moe's and now that's totally different. I mean, with all the digital marketing, natio, you know, buying TV, getting through this national media efficiencies is really so different than it was, you know, 15 years ago when I was, you know, big into media.
[00:04:55] So that's been a huge change, I think, and I think as we 've come through this pandemic the media changes and being hyper-local has really helped us a lot, as we were opening stores at different times and having, you know, different municipalities, had different rules about what we could do in terms of opening and hours of operation and things.
[00:05:13] So I think that that, that the digital media space and, and, and ways to create awareness of, definitely are one of the biggest things. I don't know. I don't know if it has been the biggest, but definitely one of the biggest changes in marketing since my early days, for sure.
[00:05:27] Jenifer Kern: [00:05:27] Yeah.
[00:05:28] Paul Macaluso: [00:05:28] There are things that are still the same as really, it's still about what's great about a marketing mindset,
[00:05:33] what I think it works so well for presidents and CEOs of company, is it, is a marketing mindset is really about understanding the consumer and how to grow a brand. And those things are very much front and center for a president or CEO of brand, the same kind of things. You basically, how can we grow this brand?
[00:05:51] Now you've got to have more, you know, a stronger financial mind as well and, and, and there are more things to think about, but, but in fundamentally about growth is really has really helped me be successful, as a president and CEO, because of the things I learned as a marketer about growth.
[00:06:08] Jenifer Kern: [00:06:08] And understanding the consumer, I mean, always something, I mean, as marketers, we're always trying to stay one step in front of the consumer, at least be able to predict how we can position the brand and the product to most resonate with them. So what are some of the things you're doing today at Another Broken Egg?
[00:06:24] Not a broken, Another Broken Egg.
[00:06:27] Paul Macaluso: [00:06:27] Another Broken Egg. Yes.
[00:06:28] Jenifer Kern: [00:06:28] Yeah.
[00:06:28] Paul Macaluso: [00:06:28] Yes. It's, it's you know, it was really challenging as the first full service brand I've ever worked for. And so when we had the shutdown, you know, we were, we were when in dining got shut down, we were shut down because we only did about 2% of our sales to go or off-premise.
[00:06:43] So we had to shift. Big time. And fortunately people love our food and they wanted to see us succeed. And so we started really promoting off-premise third party delivery, our own online ordering platforms and now it's a significant part of our business over 15% of our business. So it actually carried us through the pandemic.
[00:07:00] We were able to open back up with, just to go and, and at least have, you know, breakeven and, and keep things going, provide jobs for people and, and keep the brand growing. So that is now, you know, a big part of our business and something that I think will be for a long time. We've had to change some operations models, have changed some of our prototype layout, operations procedures,
[00:07:20] so all that is, is, you know, about, you know, consumer demand. Understand what consumers want wasn't part of, of what we were thinking, you know, two years ago, but now it's a big part of our future. And the other big consumer trend, which is exciting for us is, is alcohol. We have full bars, you know, it's a boozy brunch kind of thing.
[00:07:37] And we've got Mimosas and Bloody Marys and we've got, we've got full bars and we're really seeing that that part of our, of our menu and that part of our percentage of our sales has really taken off after the reopening. Alcohol mix is in some of our cafes over 20% of sales. It's double digit growth.
[00:07:55] We know Monday through Thursday alcohol sales have grown more than 40%. So different, you know, dynamics about how people are spending their time, maybe working from home, maybe having some flexibility during the week. And then when you talk about, you know, the consumer mindset in terms of what people are having to deal with, the stress of life and change, and alcohol is, is, is playing a part in, in helping to ease that,
[00:08:18] I think. So we're, we're benefiting from it and we're growing. We're really leaning into that where we've got some a lot of innovation in our alcohol business. It's really helping to fuel some tremendous growth for us. We've just finished our fifth period of the year and our same store sales versus 2019,
[00:08:35] we're not comparing anything to 2020 because a lot of our cafes were closed, but versus 2019 are up over 25%. So we're really kind of revitalized from, from everything that occurred and, and coming out even stronger than we were before.
[00:08:49] Jenifer Kern: [00:08:49] Wow. And how many locations do you have?
[00:08:51] Paul Macaluso: [00:08:51] We have 75.
[00:08:53] Jenifer Kern: [00:08:53] Seventy-five locations? Mostly in what area of the?
[00:08:56] Paul Macaluso: [00:08:56] Mostly in the Southeast. The brand was founded in Louisiana.
[00:08:59] We have most of our locations are in Florida, Georgia, Louisiana, but we have a few in Texas and Kansas and we're spreading out now kind of from the Southeast.
[00:09:09] Jenifer Kern: [00:09:09] Okay. So you got to come up to the East coast.
[00:09:12] Paul Macaluso: [00:09:12] Yes. Yes.
[00:09:13] Jenifer Kern: [00:09:13] I've never been to one, but I was looking at the website and I was definitely salivating.
[00:09:17] Paul Macaluso: [00:09:17] Yeah. So we've got a few in South Carolina, North Carolina. We're opening our first cafe in Virginia in about three weeks.
[00:09:24] Jenifer Kern: [00:09:24] In which city?
[00:09:25] Paul Macaluso: [00:09:25] In, oh, I'm drawing a blank. Hold on one second. It is...
[00:09:28] Jenifer Kern: [00:09:28] Charlottesville?
[00:09:29] Paul Macaluso: [00:09:29] No, it's a, it's a it's a touristy city. It's a Williamsburg.
[00:09:33] Jenifer Kern: [00:09:33] Oh, Williamsburg.
[00:09:34] Paul Macaluso: [00:09:34] Yeah. Yes. Yep.
[00:09:36] Jenifer Kern: [00:09:36] That's a... Yeah, that's an awesome location. And your menu, for those who might not be familiar with your concept, it looks like you have all day breakfast, is that correct?
[00:09:45] Paul Macaluso: [00:09:45] Well, it's, it's, it's definitely breakfast brunch. We have lunch items, but it's, we have limited hours of operation. We're only open from 7 to 2. So, so all day breakfast is as all day as we're open. Yes, but yeah, we're only open 7 to 2, so we're premium upscale. Again, full bars, but lots of seafood on our menu,
[00:10:04] really high quality ingredients. We have a lobster and Brie omelets. We have shrimp and grits. We've got just cinnamon roll french toast, very indulgent. Really delicious stuff. I love the menu.
[00:10:16] Jenifer Kern: [00:10:16] What's your most, what's the most popular menu item?
[00:10:18] Paul Macaluso: [00:10:18] Most popular are um, chicken and waffles, shrimp and grits. Our traditional breakfast is one of the top five. It's just eggs and bacon and, you know, aside. Yeah. So those are our most popular we've got. Oh, we've got seasonal items every, every three months we bring in four or five new things. So let's, it's a lot of fun.
[00:10:36] Jenifer Kern: [00:10:36] Sounds good. Yeah.
[00:10:37] So from a brand perspective and a competitive landscape perspective, so who do you compete with the most? I mean, that's a seven to two, I'm assuming you're in there with the IHOPs and the waffle houses and some of those, but who are you competing with the most and then how do you differentiate that brand to really attract the consumers?
[00:10:53] I know you mentioned the alcohol, but I'm sure there's other things.
[00:10:55] Paul Macaluso: [00:10:55] Yeah. It's it's, there really is no one exactly like us, which is great. The closest competitor would be First Watch, Snooze is also a regional competitor. First Watch has more locations, they have 400 locations or close to 400 locations, they're more spread out. There are getting into alcohol, but they don't have alcohol at all of their locations.
[00:11:15] We play more and the indulgent side a little bit or at our culinary is a little bit more elevated. And like I said, we have more seafood on our menu and we have full bars. So that's, that's kind of the space we're in.
[00:11:27] Jenifer Kern: [00:11:27] So that's the biggest differentiator. It it's the full bar.
[00:11:30] Paul Macaluso: [00:11:30] Yep.
[00:11:30] Jenifer Kern: [00:11:30] Some of that. Now I'm curious, have you heard of the ghost kitchen concept or the host kitchen, host kitchen concept?
[00:11:37] Paul Macaluso: [00:11:37] We have. Yeah, I have, I have actually. In some discussions, just kind of exploring that right now for us. Yep.
[00:11:43] Jenifer Kern: [00:11:43] Okay. 'Cause that's an interesting thought for your time period, right? Seen as you're not open all day or there are ways that you're exploring, re-purposing, using your kitchen for those things.
[00:11:54] Paul Macaluso: [00:11:54] Yeah. We thought about it. You know, there are some challenges with that and but there are also some benefits, so we were exploring it. Maybe something we'll try before the end of the year. We've, we've had some people reach out to us and, and kind of ask about it. And we're thinking through that. We, you know, the fortunately, you know, our businesses is performing extremely strong right now.
[00:12:12] And so anything we do like that, we're gonna really just kind of take our time and think through it, but we're not feeling it pressured. If you, if you would ask me that a year ago would probably be like, "Yeah, we need to do it. We need to do anything we can to, you know, create some revenue." But fortunately we were doing, doing really well with more based business.
[00:12:29] Jenifer Kern: [00:12:29] Well, that's great. What about the labor shortage? Is that impacting you and your...?
[00:12:34] Paul Macaluso: [00:12:34] It is, it is, it's a, you know, it's a impact, impacting everyone. It certainly is impacting us. I don't think as badly as, as I've heard of some of the other places and certainly other brands I've worked for. And I think we have a couple of advantages that are helping us a little bit. One, you know, we're only open 49 hours a week. Seven to two, seven days a week.
[00:12:53] So our managers, you know, have a real nice quality of life that I think, you know, helps keep them, you know, committed to us and us committed to them. And, you know, th th they know they're going to be home every afternoon to be with their kids. They don't have to work nights. You have to deal with alcohol, but not at night, you know,
[00:13:09] so there's, there's, there's some benefits there with our quality of life and our hours of operation. And the same, the same for our hourly employees, servers or cooks. They can have a second job at night and they know there's never going to be a conflict with that because of our hours of operation. And, and our servers make good money, because our check average is high and people are treating themselves.
[00:13:29] Brunches is a kind of celebratory occasion. People are really looking for that to connect with each other again, and really get out. We have, you know, an opportunity, so, so there are some advantages, but we certainly are feeling the pinch and, you know, doing a lot of things to, to try to address that.
[00:13:44] Jenifer Kern: [00:13:44] Can you share some of the maybe innovative things you're doing to...?
[00:13:48] Paul Macaluso: [00:13:48] Yeah.
[00:13:49] You know, it's, it's, you know, it's a smaller company. We don't, we don't have a lot of the things, you know, that I've had at other brands. You know, just looking at things like the compensation structure we, we, we do pay well and have good benefit, good tips and stuff, but we we're extending our benefits now to, to more of our employees, we actually are creating 401k program.
[00:14:06] We haven't had that before. I mean, these are things that other, you know, larger brands have and have in place and we just had continued to grow as, as we're growing our brand. We started this year off with just under 70 units and we're going to open 18 this year. So it's a big growth year for us and there's a lot of foundational things, you know, that we're still putting in place.
[00:14:25] The brand was, was led by the founder until just three years ago. It was brought out by our private equity.
[00:14:32] Okay. So one of the other things that we're working on now is just improving our rewards and recognition. You know, just making sure we're investing in people and, and, and kind of rewarding the right behavior, right? So we have we've outlined our core values, we're doing some recognition or peer to peer recognition for people doing a great job.
[00:14:50] When I come in and visit cafes, I recognize people who are doing that at different layers of management. So that's one thing that we're doing, you know, just to continue to invest in our people. And then the other big thing we're doing and, and this goes back to kind of my first story about Taco Bell is making sure we're creating careers for people.
[00:15:09] You know, that's, you know, I've benefited from that by, because I was, Taco Bell invested in me and my future and, and cross trained me and that's that's the biggest thing. So people that are, you know, hourly people that have a desire to get into management, we've got a nice career path for them to like a kind of an hybrid management role, then a full salary mentor role, salary managers can become territory managers who create opportunities for people to continue to advance through the organization.
[00:15:36] So, you know, that that's, you know, not for everybody, because some people don't want that, but for the people that, that have that desire we're making sure we have those programs in place, which is kind of near and dear to my heart. So...
[00:15:47] Jenifer Kern: [00:15:47] Yeah.
[00:15:47] I think that's so important. I think a lot of the industry is going through this recollection of, "Okay, how do we help our these, this labor issue out while making sure that we're doing the right thing by our employees?" Right? And I think there's a big focus on that. And that's, it's so important because traditionally I think the industry has, like, you're saying really attracted, you know, part-time or hourly workers
[00:16:13] and now it's like, "Let's think about the career path here." Right? "And let's do it in a more meaningful way."
[00:16:18] Paul Macaluso: [00:16:18] Right.
[00:16:19] Jenifer Kern: [00:16:19] Maybe that'll help people stick around.
[00:16:21] Paul Macaluso: [00:16:21] I think so. I hope so. You know, I know part of the benefit of being with a growing organization is that we create a lot of opportunities. We need people. We need people to open up these new cafes. We need people to oversee multiple locations. So it's, it's very natural for us to be able to provide those opportunities for people to stay within our organization and may have a long-term career with us.
[00:16:43] Jenifer Kern: [00:16:43] Yeah. And are you selling franchisees?
[00:16:46] Paul Macaluso: [00:16:46] We are. We're actively selling new franchises. We're opening companies, cafes as well. We're actively recruiting new franchisees to join the brand. We've brought in several this year. And more experienced and, and franchisees are finding us now. They're hearing about how well we're doing.
[00:17:01] Now we're getting to that kind of critical size now, or we're getting multiunit operators of other brands. We've just assigned a multiunit operator from Tropical Smoothie to join us. They've bought the rights to open three, in Fort Myers, Florida area. We've brought in a former iHub franchisee. That's the one opening in Williamsburg.
[00:17:19] So he's converting a restaurant right there right now to open up next month. And yeah, it's very exciting. We've got, we've got a lot of interest with existing franchisees, opening more locations and then new franchisees joining.
[00:17:30] Jenifer Kern: [00:17:30] Nice. That's really exciting. Well, let's shift a little bit and talk about other reinvention strategies that you may have deployed either, you know, coming in as the president and CEO or during the pandemic. So we talked about, you know, labor, menu, you know, the alcohol. What do you believe are some of the main things that restaurants need to be focusing on today as part of their reinvention and positioning to really be attractive for the guests today?
[00:17:59] Paul Macaluso: [00:17:59] Yeah.
[00:17:59] Yeah.
[00:18:00] You know, we, we tried so many things during the pandemic. We were you know, w w, so a lot of our cafes closed, but we kept some open just to try some stuff, just to test some things. One of our franchisees stayed open and we stayed open with with a handful of company cafes and we tried. You know, we launched into third party delivery and, and, and off-premise and online ordering, but we also tried extended hours.
[00:18:19] We tried dinner kits, we tried, you know, toilet paper promotion. Of course, everybody had to throw one of those out there when we were running out of toilet paper. So, you know, we, we tried a little bit of everything and I think, you know, what we found is, is obviously the, the things that were core to us.
[00:18:34] I mean, people wanted us to be successful in that and wanting to support us, but we were known for our products and we're known for, you know, the indulgence of our alcohol and our great products. So that's really what resonated at the end of the day that those are the things that worked. And, and so, you know, as a kind of former, you know, marketer, I think those are always good reminders that, you know, whatever your true strengths are as a brand, whatever the things are that kind of got you going your differentiators, you know, continue to lean into those.
[00:19:03] Obviously you can look to bring in new things as trends become, you know, more apparent and more broad, but continuing to stay focused on the things that really got, just got your brand going. And that's really what, you know, I always look back on from things that were successful in my past, whether I was, you know, we're launching new products at Burger King when I, was my first product marketing role. And I got to work, I was actually working on breakfast, which is weird
[00:19:27] that I'm working for breakfast concept. I did a launch, a new products and breakfast and coffee there at Burger King. And and it was one of the products that really fit with, you know, not the 'me too' kind of trying to copy McDonald's, but the ones that were really core. And that fit with the personality and the, and the heritage of a Burger King,
[00:19:46] those are the ones that did well. You know, not a surprise. So, so those are, those are the things that I, you know, I reflect on and obviously you know, we talked a little bit about how digital marketing is changing. And so leveraging that is a big part of, you know, how to be at new markets and new and new cities. It's easier for us than, than before
[00:20:04] where you had to rely on television you couldn't afford it when you entered a new market. Now we've got all these great digital and social ways to engage customers and when we enter a new market, it's, it's actually much more affordable to do so. So that's exciting for a brand like us.
[00:20:18] Jenifer Kern: [00:20:18] Absolutely. Absolutely. So staying true to your core.
[00:20:21] Paul Macaluso: [00:20:21] Yeah.
[00:20:22] Jenifer Kern: [00:20:22] Sounds like, yeah. Nice. And what about, speaking of your core, what about your technology foundation? Have you had to make any updates or changes to that? I know you talked about like 2% versus now 15% is, is off-prem. How have you kind of like kept up with that and, and what's your vision going forward?
[00:20:40] Paul Macaluso: [00:20:40] Yeah. I mean, technology again, similar to our HR infrastructure, as I mentioned, we've got a long way to go. I think our technology infrastructure was in, was in similar shape, you know. So again, smaller company and, you know, just didn't have a lot of resources in that area or a lot of energy or focus.
[00:20:55] And so it's a big part of what we're doing, in fact. You know, it's all on the top three initiatives that I only focus on over the next several years. We just brought, we're just bringing in a new person to lead that group for us. They started in a couple of weeks and they've got a great rich background in technology and, and I think it's really going to elevate that for us.
[00:21:13] We need, you know, we need, we need to look at technology as a way to grow our business and we had tested several things. We did try some things more from a necessity standpoint. So again, it's a full service restaurant. You come in, you get a menu, the server brings your check, get your credit card, takes it away, brings it back to you.
[00:21:31] So sanitation, we had some concerns about sanitation and menus and all and sanitation of handing stuff back and forth to customers. There was a lot of that, you know, at the early part of the pandemic. So we, we, we tested and successfully feel good about a a, a pay at the table solution where we don't have to, we can bring a receipt.
[00:21:49] And we don't have to take the credit card and customers don't have to hand it back to us. So paying at the table now is something we're we're doing in some of our cafes and probably will extend. As you mentioned with third party delivery and online ordering, all of the you know, points of convergence now of all these different customers, pieces of customer data and also of the different ordering. You know, streams are coming into our cafes and,
[00:22:12] and it didn't work with our legacy point of sale system. It's a very, you know, it worked 25 years ago when the brand started. It was, was fine, but today it's not. And so we are testing a new point of sale system that's cloud-based, that is open, API that allows for integration much easier. That will be launched later this year.
[00:22:31] So there's a lot, there's a lot going on in our technology stack. All to help us be more nimble and be more open and, and utilize all the different data points we're getting up from a customer standpoint to make sure we're engaging with them, you know, much more seamlessly.
[00:22:46] Jenifer Kern: [00:22:46] Yeah. Yeah. So just curious, how many different, like disparate systems do you have right now and are you able to get that any of the data, like the guest data?
[00:22:56] Paul Macaluso: [00:22:56] Somewhat. Yeah. Some of it we're starting to be able to get. So we've got, I think six or seven, we've got our point of sale system. We've got an email communication system, you know, marketing system, pretty old school email. We have our online ordering platform now and, and the app. So we've got that. We've got a reservation system where you can go in and get on the wait list before you come into the cafe. So you can get, so we've got data data there.
[00:23:21] We've got a gift cards to some people that have ordered online gift cards. So there's at least five, I'm probably missing a couple off the top of my head. So we've got a lot to kind of, you know, commingle and, and, and, and streamline. We've got a great team of people working on that now. So it's, you know, a matter of the next, you know, 12 to 18 months we'll get all that really organized and we'll just be more efficient and we'll be more effective in how we talk to customers, engage with them.
[00:23:46] Jenifer Kern: [00:23:46] Yeah. Yeah.
[00:23:46] Well, you're not alone in that. I mean, it might, it may feel like a lot to you, but I I've heard of a lot more systems than five or six, right? Maybe needing to integrate and talk to each other and it's a big challenge for a lot of restaurants. I would think particularly being full-service, because you know, you're right there in front of the customer all the time and it's not necessarily the
[00:24:05] the thing you're thinking about the most, but... You know, the servers I think are now, you know, they're, they're digitally, some of them are digital natives. And so they're expecting some sort of like technology interaction all throughout the day as they're working. So, some of the gamification stuff that I've seen coming up is pretty cool and, and ways to incentivize employees.
[00:24:26] Paul Macaluso: [00:24:26] Yes. I've seen that too recently and even, 'cause we've been talking about, as part of the solution to help with our staffing challenges, you know, some, some employee referral programs and I've seen some gamification things along those lines too. So yeah, there's, there's real, there's really great technology, every, I mean, every other day I'm learning about something new and interesting and, and so making, you know, trying to figure out how all that integrates and even with our, with our payroll HRS system, right?
[00:24:53] So there's all these other things behind the scenes that we need to make sure are integrated, to make it as easy as possible on the organization itself.
[00:25:00] Jenifer Kern: [00:25:00] Now do you have a CMO at Another Broken Egg?
[00:25:02] Paul Macaluso: [00:25:02] Yes, we do. Yes, we do. Jan Barnett. She's, she's a veteran in the industry. She's been with the brand for over five years. So she's, you know, been here a few years even before me and she's fantastic. She's just done an amazing job at keeping the brand, you know, front and center with, with customers and all of these initiatives, you know, that I've mentioned. She's been running all those and would love to connect her with you one day.
[00:25:24] She's awesome and, and, and has a lot of great stories about this brand for sure.
[00:25:29] Jenifer Kern: [00:25:29] That's great. That's great. And one of the things I was thinking about is when you talk about the technology and this, this project, that'll be, you know, 18 months or two years, which is, you know, I think even a very safe estimation, right?
[00:25:42] Like some of the digital transformation plans that I've seen CMOs working on are, you know, upwards of two to three years, but it's hard to plan out beyond like two years.
[00:25:51] But one of the benefits that I'm hearing a lot from guests is the alignment of marketing and IT and Ops, that comes along with some of these initiatives. So I'm curious within Another Broken Egg, if you have already some strong alignments, maybe there are some differences being at full service or if that's one of the benefits that you're looking to gain from the...?
[00:26:15] Paul Macaluso: [00:26:15] Yeah. That is one of the benefits of being a smaller organization. There's not a lot of people to, not a lot of layers of bureaucracy. It's all of these initiatives that I've laid out. My head of operations, my head of marketing, myself, my head of IT are all working on. I mean, we're, we're there, we have a few other people on our teams, but it's not what we've got.
[00:26:33] It's not like we've got an organization of a hundred people or whatever. So yes we are. It's not like the information has to get filtered back up through, through the department heads. There, we're all on the IT steering committee, all personally on it. So we are all in the weeds and in the details and, and working side by side and agreeing to the priorities and agreeing to the resources needed to make things happen.
[00:26:55] So that is definitely a benefit of a smaller organization, is alignment is a lot easier to get in and communication, you know, it was a lot faster. So, it's, it's a benefit. We are able to move quickly because of that. And to your point when, when operations marketing and IT are aligned, things just move so much more seamlessly.
[00:27:13] Jenifer Kern: [00:27:13] Yeah. Yeah, that's great. Well, I've worked in mostly smaller organizations, so I really, you know, appreciate working with the CEO and head of product and head of IT all the time. I I'd love to know like what advice you would have for folks that work at bigger brands, like you were before, like whether it's a Focus or a Sonic or
[00:27:35] you know, any, any of the large brands you worked at... What, what's the difference for you working on smaller brand? And what would you recommend to people saying, "Hey, I'm thinking about coming over and say, you know, work for a smaller brand. Should I do it or not?"
[00:27:48] Paul Macaluso: [00:27:48] Yeah, Gosh. I've enjoyed. You know, I really enjoyed it all of the different brands I've worked for. They've been, yeah, they've been quite different. I think I, myself, I'm a little bit more entrepreneurial, you know, personaly, so I enjoy kind of owning things front to end, you know, front to back and, and, and getting into details.
[00:28:07] I don't think that's necessarily for everyone. So a small, coming from a larger organization to a smaller organization may be challenging for certain people that, you know, that they'll not enjoy that. But I don't, I, I, I I've had great experiences with all the brands. It's just, it's so different. I mean, I, I even when I was at Sonic and I got to run the marketing department as a kind of interim CMO for a few months, I can't remember the number,
[00:28:30] it was something that the, you know, the ad budget was a massive, it was a massive number. And, but I still remember trying to figure out what, "We want to do this, and we want to do that and we don't have enough money." And then I'm here, you know, at a smaller brand where it's literally like a hundredth of the budget we have for marketing.
[00:28:48] I mean, it's just, it's just small, it's so much smaller. And you know, we still have the same conversations, like, "Well, what are the priorities? How do you make it happen?" So, you know, big brand, small brand, you still, it still comes down to prioritization and alignment, you know, and making sure you're doing the things that are going to drive the business.
[00:29:04] So it, I, I kind of find it refreshing to work on a smaller brand now, because I am able to, you know, because I've worked on all different disciplines along, you know, my almost 30 years in the industry, it's nice because I can, I can appreciate it, I can have an impact and add value, you know, across the different disciplines as well.
[00:29:22] Jenifer Kern: [00:29:22] Yeah. What would you say is your biggest challenge today? What keeps you up at night?
[00:29:26] Paul Macaluso: [00:29:26] So I mean, staffing is definitely, you know, biggest. I don't, I don't think that's, you know, a, a long-term challenge. I think it will be something we have to deal with for the next year or so, but I don't think it's you know, something like,... I think technology, we talked a little bit about it, I do think, you know, it is for, for us or smaller brand is making sure we're making the right investments in the right places.
[00:29:47] Because of that small size and, and, and the, the length of time it does take to bring things to market with technology making sure that we are making the right bets, that, you know, we're like, we want to start this project, but we know that it has to integrate with this thing and this thing's not ready yet,
[00:30:02] so do we start this or wait. You know, all those things in terms of the, "What's the next thing six months from now that...? Is that going to work with the things we're investing in now?" There's, there's definitely you know, you have to make, you have to make your bets and you have to, and you have to kind of do your diligence, but so much is changing
[00:30:18] there. That's really one thing that, you know, we, we are making an investment is, like I mentioned, in terms of the resources and the personnel that we're bringing in to help us to help us make the best decisions possible now. Unfortunate though, I, you know, I've been with other brands that were
[00:30:32] older or maybe not as relevant or, you know, either the food or the service model wasn't as relevant. And those are much more challenging situations, you know. How do you reinvent a brand and keep it relevant? I feel very fortunate not to have that with this brand I'm on now. It just it's, we're growing, you know, and it's, it's, it's exciting.
[00:30:50] Those, those other, in terms of what keeps me up at night, I've been on those on brands that kept me up at night and fortunately I'm not in a place like that right now. So.
[00:30:58] Jenifer Kern: [00:30:58] Yeah.
[00:30:59] Well, good. Well, good. That's great. What recommendations do you have to marketers that are looking forward and saying, "Hey, I think I might like to be a president or CEO someday." What do you recommend they do?
[00:31:11] Paul Macaluso: [00:31:11] Yeah. I mean, I think it's it's, you know, about finding the right connections you know, one of the key things I did with my career planning early on was not only, you know, what are the skills I need to develop, right? I needed to, I'm going to have some operations I want to get into marketing and marketing
[00:31:23] I needed to learn a little bit of finance. And so all those things are, are natural. But I think the other thing that, when my career really took off was when I made as equal of a investment in the, in the relationships. So it wasn't just about the skills, but it was about the relationships. So finding mentors, finding people that you can really confide in, people that can be honest with you about what your opportunities are,
[00:31:45] how to get resources there. So, you know, for someone that's in marketing wants to become a brand president, connect with somebody that's done it, connect with somebody that's made that leap. That's advanced that from that path. You know, have honest conversations about where you are, where you need to grow, invest in the relationships, part of it.
[00:32:02] That's my, that's my advice.
[00:32:04] Jenifer Kern: [00:32:04] That's great advice, that's great advice. That's one of the reasons I started doing this, is to get marketers, you know, help them to connect and grow their networks. And are all your mentors marketers or former marketers? No?
[00:32:16] Paul Macaluso: [00:32:16] No, not all, just how it worked out. Yeah, some are, some aren't, but I've got, I've got a great network of people that help me, you know, almost every day I'm talking to one of them. So for sure.
[00:32:25] Jenifer Kern: [00:32:25] How do you keep it active? Do you find that you're the one reaching out the most? Are they reaching out to you?
[00:32:30] Paul Macaluso: [00:32:30] I pretty much am the one. Yeah, I think I I've always taken it really seriously and, and you know, I, I'm a big believer in, you know, you own, your own career. And, you know, yes, it's, it's great if your company provides resources or they provide, you know, development plans or these, you know, schedule of events and they invest maybe the paper or conference or whatever.
[00:32:52] That's great, but I'm a big believer in, you know, you are, you the owner of your career and you gotta make the investment. And so, I'm actually a little bit anal about it. I've got like every year I go through a list of like, "How am I going to get this done? And who are the people that are going to help?"
[00:33:06] And then I, you know, make sure every week I'm doing something to make that happen.
[00:33:11] Jenifer Kern: [00:33:11] So you're really asking for help? It...
[00:33:13] Paul Macaluso: [00:33:13] Yeah. All the time. Oh yeah.
[00:33:15] Jenifer Kern: [00:33:15] Wow. That's awesome. I love hearing that, because I think a lot of times as marketers, we just get, "I can say for myself." I get so focused on what I'm working on, get a little bit too down in the weeds heads down and there were years where I've really let my network go.
[00:33:29] Paul Macaluso: [00:33:29] I, I tell you, I so I'm very focused on getting things done. I'm all about checking the box, right? Like I want to have a checklist and get it done every day. And so I would, yeah, heads down, not, not invest in, in those relationships, 'cause I love getting the things done. And it wasn't until I really understood that and appreciate it
[00:33:45] and then I kind of made it work for me. So like example, I put on my calendar, I'm like, you know, an, a recurring meeting that every, every,... This was, this was when I was CMO at Moe's and I was part of Focus Brands, it was a bigger organization. I needed, I needed to reach out and learn more about other brands and, and just kind of build those relationships.
[00:34:06] I remember putting on my calendar every Tuesday and Thursday at like two o'clock, "Walk the floor." And so I would put it on there as a meeting, because if it was a meeting, I would do it. If it wasn't a meeting, I wouldn't do it, 'cause I would just, "It's not important." So I put it for like 30 minutes and I would, "Okay.
[00:34:22] Write down three things that if I ran into somebody, I would want to tell him about. Either one thing I was working on, or one thing I heard was great". It's just a quick little snippet. And I would walk the six floors of Focus Brands and run by people's office to say, "Hi. Hey, have you heard about that?"
[00:34:37] And so it just kind of forced myself to get out of my desk and actually start working on the relationships. Then as I started to get to know more people, we'd scheduled lunches or we would schedule meetings. So, I had to make it work for me to talk about gamification. I had to make it work for me in something that I knew that would work so I could check it off and say, "I did that today-
[00:34:54] Check." Weird, strange, but it was what worked for me. And and so yeah, you gotta kind of figure out what works for your own personality and your own work style. But like I said, investing in the relationships and networking has been a huge, huge piece of advice that I would, I would pass on to other folks.
[00:35:13] Jenifer Kern: [00:35:13] Yeah. I love that. So you created your own gamification model?
[00:35:17] Paul Macaluso: [00:35:17] Yeah.
[00:35:17] Jenifer Kern: [00:35:17] Just put it on, put it on a calendar appointment on for yourself to do something and it'll get done.
[00:35:22] Paul Macaluso: [00:35:22] Absolutely.
[00:35:23] Jenifer Kern: [00:35:23] It's a, it's a great way to think about building those relationships first, working inside your company. You know, and then I'm sure you're you, you have one semi people move around all the time.
[00:35:33] And so they leave and they go other places and then you keep in touch with them, but during the pandemic, I'm sure that was, you know, that was probably not happening as much the walking around and so.... Were, did you, did you use other tactics?
[00:35:44] Paul Macaluso: [00:35:44] Yeah. I mean, definitely now I've evolved into other things. Most of my connections now with my, you know, networker or not within my small, you know, my smaller company. And obviously one of the great things about Focus Brands as I was, I was one of six presidents, so I had a built-in net, peer network. Here I'm by myself.
[00:36:02] So, so yeah. I've got, you know, folks I've worked with at other companies now. They moved on, I've moved on and we still connect with each other reach out. So I've got to make more phone calls... And I had a couple of folks that I wanted to, you know, connect with for coffee and there, you know, a few months back, they weren't ready to meet, you know, because they were still nervous.
[00:36:19] So we'll still do, you know, Zoom call or have a phone call. We'll make it work.
[00:36:24] Jenifer Kern: [00:36:24] Yeah. Well, I'm really looking forward to getting back to shows and events. And so, you know, I heard FStech is happening in the fall, I think RLC is going to happen. Are you planning on attending any shows?
[00:36:34] Paul Macaluso: [00:36:34] I am, I am. I'm planning on getting out there, as much as I can for sure.
[00:36:37] Jenifer Kern: [00:36:37] Which ones are...?
[00:36:39] Paul Macaluso: [00:36:39] Well, I, I, I'm definitely gonna go to RLC the next, next time we do it. I was really hoping we were going to do NRA this past year, but we'll... I actually was supposed to speak at MEG, that's how Brandy Blackwell had me back about the kind of CMO to president progression.
[00:36:53] So maybe I'll get a chance to do that next time.
[00:36:55] Jenifer Kern: [00:36:55] Yeah. That's actually where I met Brandy. Was
[00:36:57] that
[00:36:57] Paul Macaluso: [00:36:57] right?
[00:36:58] That's right.
[00:36:58] Jenifer Kern: [00:36:58] Yeah. Yeah.
[00:37:00] Paul Macaluso: [00:37:00] So, yeah, I'm a big fan of all of those IFA. I have been to in a few years. I'd love to go back there as well.
[00:37:06] Jenifer Kern: [00:37:06] Yeah. And RLC, I believe it's going to happen in December.
[00:37:09] Paul Macaluso: [00:37:09] Okay.
[00:37:10] Jenifer Kern: [00:37:10] Yeah. So I have it on my calendar. I think we're going to sponsor. So, yeah.
[00:37:14] That should be a good one. That should be good one. I know they're going to limit the attendance a little bit, but I think people are just ready. It kind of antsy to get out and talk about relationship building.
[00:37:23] You know, that's like the easiest built-in network possible. It's right there at a lot of those conferences.
[00:37:29] Paul Macaluso: [00:37:29] Yeah. We had our, our brand had our convention scheduled for last September. We obviously had to cancel it, but we've got it booked for this September. So we're going to meet for our brand, what we call it summit, but convention at the end of September. So we're looking forward to getting together with all of our franchisees and vendor partners and, and kind of celebrating coming through this thing and, and, and the growth that we're experiencing and recognizing, you know, great performance and talking about all the key initiatives for next year.
[00:37:55] Jenifer Kern: [00:37:55] Yeah. Well, great takeaway just the networking, build your network, get some mentors, build those relationships and, and have a checklist for it. Before we wrap, there's one other thing that I'd love to know, and this is something a lot of the folks that I have on the show will ask about other brands, you know. What's your number one traffic driver, whether it's, you know, a marketing channel or campaign or something you're doing in marketing, or just outside of that? Like, how are you getting...? You know, you talked about this,
[00:38:21] you know, over 2019, your, your sales are up significantly. You know, what is, is it one or two or three things that are really driving that?
[00:38:30] Paul Macaluso: [00:38:30] Yeah. It's I, I think it's the two, the two main things are the growth and the off-premise business, which is really incremental for us. There are a lot of other brands were doing it. I've been doing off-premise and third-party delivery and online ordering for many, many years, it's nothing new. But it was new for us,
[00:38:44] 'cause we didn't need to do it before. So that's all incremental, we feel like it's all incremental. And and the alcohol sales, you know, that's, that's not so much a traffic driver, but that's a check driver for us. And maybe it's, maybe it's a traffic driver, but but we you know, those are the two main things that are growing, growing our, our base business right now.
[00:39:04] You know, we've got new product innovation and things like that to some smaller degree, but it's really, it's really off-premise and all are helping us right now.
[00:39:13] Jenifer Kern: [00:39:13] Yeah. And do you think the off-premise will continue?
[00:39:16] Paul Macaluso: [00:39:16] I do.
[00:39:16] Jenifer Kern: [00:39:16] Do you think it's gonna?
[00:39:18] Paul Macaluso: [00:39:18] I do. I do.
[00:39:19] Jenifer Kern: [00:39:19] Yeah.
[00:39:20] Paul Macaluso: [00:39:20] I think it's going to continue to arise, for us. I originally thought it was going to kind of taper off, but the reality is on week, for us on our weekends, Saturdays and Sundays. Most of our cafes are on an hour to two hour wait.
[00:39:33] Jenifer Kern: [00:39:33] Wow.
[00:39:34] Paul Macaluso: [00:39:34] It's really about, you know, people really, you know, we do about 50% of our business on Saturdays and Sundays. So I think our premise will continue to be a major driver for us, because it's a way for us, for people to still get our great food and even now we're doing alcoholic drinks to go, because it's been opened up. When they can't get in, they can still get to go now and do it a brunch at home or brunch at the picnic.
[00:39:54] So I, we, we are, we're adding capacity and, and I think that'll stay for a long time for us.
[00:40:00] Jenifer Kern: [00:40:00] Yeah.
[00:40:01] Great. Okay. Well, as we wrap, I always ask for a plug. If you want to put in a plug for your brand or for a team members or a charity you support or local community, but you know, parting thoughts from, from this CEO of Another Broken Egg.
[00:40:17] Paul Macaluso: [00:40:17] Thank you. No, I appreciate it. I mean, I think, you know, I love our brand. I I've loved Another Broken Egg even before I was here. When I was a customer, I would, I'd love brunch. And I I loved, you know, something, my wife and I enjoy doing, we actually were, we were there yesterday at one of our cafes, just on the day off enjoying brunch.
[00:40:32] As much as I can take time off when I'm there, I'm not really taking time off, but I'm trying to, I'm trying to relax. And so, you know, I think, I think our brand's fantastic. I love the food and I love and encourage people to give us a try, you know, if you're in one of our markets, because I think you really will enjoy it.
[00:40:46] So I'm super proud of it. Haven't always been super proud of the food at some of the other restaurants I've worked for. So I'm very proud of our, of our food. So thank you for, for that, yeah. Appreciate that. And yeah, we're you know, we're building all of those things, you know, like you said, a charity, whatever.
[00:41:01] We're actually looking at a couple of partners right now for our summit, for our convention to bring in and do some, I think that's a big part of what we should be doing. So reaching out to our communities and being generous is a, is a, is an opportunity for us where we're investigating. I've done some work in the past with Pace Center for Girls in Florida, which is a great organization.
[00:41:20] We're looking at continuing that with Another Broken Egg as well.
[00:41:23] Jenifer Kern: [00:41:23] Great. Great. Well, I have a feeling that your Williamsburg location is also going to do fabulous, because it's an college town. There's a lot of colleges down there and a lot of tourism. So, gosh, I'm going to have to make the trip about three or four hours for...?
[00:41:37] Paul Macaluso: [00:41:37] Is that right?
[00:41:38] Jenifer Kern: [00:41:38] Yeah
[00:41:39] Paul Macaluso: [00:41:39] Yeah, we've got, we've got more coming up that way, so we'll be there.
[00:41:42] Jenifer Kern: [00:41:42] I've done it. I've done it before, after I get off the show, I've been like, "Oh, I really want to try it."
[00:41:46] I did it with Fuzzy's Tacos. The closest one was Charlottesville and I'm like, "I'm going this weekend. I'm just going to go. Like, "What else do I have to do? Let's do a road trip."
[00:41:54] Paul Macaluso: [00:41:54] Yeah.
[00:41:54] Jenifer Kern: [00:41:54] So it will be fun. Well, thank you so much, Paul. I really appreciate it. All my best to you at Another Broken Egg and good luck with your expansion.
[00:42:02] Paul Macaluso: [00:42:02] Thank you so much, Jen.
[00:42:03] Jenifer Kern: [00:42:03] And thanks for joining us on the show.
[00:42:04] Paul Macaluso: [00:42:04] Take care.
[00:42:05] Jenifer Kern: [00:42:05] Take care. Bye-bye.
[00:42:06] Paul Macaluso: [00:42:06] Bye.