DiSilvestro estimates that express locations will do roughly one-third less in sales compared to full-service units, but these smaller stores also come with 60 to 70 percent less in expenses. The express stores’ EBITDA should be somewhat comparable even with a lower level of sales, the CEO notes.
The growth will come exclusively through franchising, a program Ynot started in 2010. DiSilvestro prefers multi-unit operators, especially in bigger markets like Richmond and Raleigh, because it makes scaling and training much easier. As for the personality of the operator, the CEO wanted business-oriented franchisees. But also, the candidate must understand the importance of community.
“The three qualities of our brand are family, quality, and community,” DiSilvestro says. “So it's one thing to have a quality person and quality food, but another thing to understand that you're investing in a brand that’s very, very focused and dedicated to the community that we're in.”
As Ynot opens more locations, one major issue will be the labor shortage, which is hitting restaurants across the quick-service and full-service segments. DiSilvestro employs roughly 70 to 100 workers in his full-service restaurants and he anticipates 40 to 50 team members working at the future express units.
He expects hiring to be much easier for the quick-service restaurants for multiple reasons.
“[The express units] don’t have to have the front-of-the-house mentality of servers and hands-on customer service right at the table,” DiSilvestro says. You can typically go with somebody that's ran another [quick-service restaurant], whether it be Jimmy John’s or Pizza Hut, Domino’s. So that actually makes it a lot easier because you don't need that full-fledged dynamic GM that's used to running big operations, 6,000-square-feet restaurants with 100 employees. So operationally it's definitely easier to hire for. And the pool of employees is bigger.”
DiSilvestro, for one, believes the labor crunch will be short-lived. He adds that after stimulus checks were dispersed, Ynot experienced a tough hiring period of three to four weeks, but the situation improved afterward as people settled back into their normal lives.
The CEO explains that new express stores will actually double as a retention tool. Ynot, which is big on rewarding talent and promoting upward mobility, will give employees the opportunity to possibly own an express unit.
“I think that we still have probably six months of difficulty with hiring. But you know what, we make it through and with our employees, we invest,” DiSilvestro says. “So when we say family, we don't just mean external families coming in. Our employees are our family. We have health benefits for all of our employees, we have 401k for all of our employees, so we invest in our staff. And that's what really helps us differentiate ourselves.”
A year ago at this time, DiSilvestro says COVID “hit us all on the side of the head.” But he’s proud of the way Ynot pivoted amid the unprecedented environment. The chain entered COVID with a 50/50 split between off-premises and dine-in, which of course changed to 100 percent off-premises for a stretch. When Virginia began allowing dine-in, the ratio switched to 85 percent off-premises, 15 percent dine-in. By the end of 2020, Ynot captured nearly 90 percent of its prior year sales. The momentum has continued even further throughout 2021.
The availability of real estate has increased and rates have become more attractive, the CEO says—opportunities that likely wouldn’t have been there 13 months ago. As if that weren’t enough to fuel Ynot’s optimism, vaccines are growing, jurisdictions are loosening restrictions, and consumers are more confident about eating out. DiSilvestro says it’s a recipe for success come summer time.
“For me, everybody always asks who's your competition. I say anybody with a seat,” DiSilvestro says. “So it's a matter of how well do we do our job to take advantage of the opportunity that's coming ahead.”
