As Another Broken Egg Café rapidly approaches its 100th café opening, president and CEO Paul Macaluso is thanking his lucky stars he joined the upscale breakfast concept in 2019–even if it meant leading the brand through the challenging pandemic starting the following year.
When Macaluso first joined, ABEC had about 18 franchise partners in the system. Now, there are approximately 40, including multi-concept operators from brands like MOOYAH Burgers, Fries & Shakes, Chicken Salad Chicken, Boston’s Pizza, McDonald’s, and more. And while 37 out of the brand’s 91 locations are company-owned, Macaluso notes the benefit of having a firsthand perspective on running a café to speak to food costs, labor, hiring, construction costs, and developing people. “Our skin is in the game in a big way,” Macaluso says. “[It shows] we are continuing to invest in the brand.”
“We have the ability to really help them at a granular level. Other brands, if you don’t have corporate cafes, there’s always a suspicion [that] all you care about is growing the top line, because you just want the royalties. But we’re the largest franchisee in the system,” he adds.
Known for its Southern, chef-inspired menu offerings with fresh twists, Another Broken Egg Cafe showcases gourmet and indulgent breakfast, brunch, and lunch offerings in a modern setting. Founded outside of New Orleans in 1996, the concept also leans heavily into its full bar with signature cocktails, mimosas, and Bloody Marys; alcohol sales account for more than 14 percent of total sales across its units.
“We were founded outside of New Orleans, so [alcohol] is integral to what we do,” Macaluso says. “We’ve had some competitors come into that space and world and they’re doing pretty well with it, but we still have a really big lead when it comes to alcohol.”
Yet, his team was quick to introduce creative non-alcoholic beverage concoctions when they saw consumers asking for more options. ABEC set about developing offerings with functional benefits in time for Dry January, a challenge to avoid alcoholic drinks the first month of the new year, which is part of a growing sober trend. “We did a great job of saying, OK we need to fast track this, because we want to have it tested and ready for January,” Macaluso says. “And that’s going to mean we’re going to have to get everybody together and reactively redeploy resources.”
Culinary innovation is part of what sets the NextGen Casual concept apart from competitors in the space. On January 2, the brand launched its newest seasonal menu and introduced four new dishes and one craft cocktail, including a Deep South Biscuit Sandwich featuring crispy chicken tenders, pimento cheese, an over-medium egg, and bacon jam on an over-sized biscuit with a pickle and fresh country potatoes on the side; Lemon Pound Cake French Toast, S’mores Waffle, and Creole Shrimp Benedict. A spiked s’mores cold brew brings rich chocolate cold brew together with espresso, marshmallow topping, and a graham cracker crumb rim, with the option to enjoy it alcohol free or spiked with Maker’s Mark Bourbon.
A laser focus on franchisees
Macaluso is no stranger to franchising. Before joining ABEC, he got his career start as a general manager at Taco Bell before it was acquired by Yum! Brands. After that, he served in a variety of positions at Burger King, Sonic, Moe’s Southwest Grill, FOCUS Brands—where he led McAlister’s Deli as president—and The Krystal Company, where he was president and CEO for nearly two years.
Now, Another Broken Egg Café’s franchising strategy is ramping up thanks to Macaluso and his team. The daytime-only concept had a unit growth rate of approximately 20 percent in 2023. By September 2023, it launched 11 new corporate and franchise cafes in existing markets including Austin, Texas; Brentwood, Tennessee; West Columbia, South Carolina; and its first cafe in Maryland, located in Elkridge. Plus, the brand added more than 15 new franchisee groups to the system and achieved record-breaking sales on Mother’s Day, with 50 cafes setting new records. In 2022, more than 30 cafes surpassed the $2 million sales mark.
“Part of that is being with a relevant brand that’s growing and is an exciting daypart,” Macaluso says. “So it’s really critical that we get the right kind of franchisees to join. We take that process very seriously.”
Beyond broad financial and experience-based qualifications, Macaluso and his team have candid conversations with franchise candidates at discovery days, hosted at the brand’s support center for two days.
“Some people are really passionate about serving others and seeing people happy and making their day; some people, that’s not how they’re made up, and this is not the right industry for them,” he notes. “Some people feel like serving others is beneath them. And so we have a lot of really in-depth conversations about our values, and making sure we have as close to a match as we can to what resonates with them.”
Another key part of the process is validation, where candidates call up current franchisees to spill the truth on what it’s actually like to be an owner of Another Broken Egg Cafe. Potential partners are given copies of the brand’s Franchisee Satisfaction study, done in 2021 and 2023 by Franchise Business Review. “We do receive overall high marks, but there are always things you need to work on,” Macaluso says. “And we’ve used the feedback to help us strengthen [the system].”
At ABEC’s recent franchise summit in Nashville, many of the breakout sessions were based on the Franchisee Satisfaction study. “We’re an open book, and I think that is a big part of just getting off to a good start and a good relationship with prospective franchisees,” Macaluso notes.
“Feedback is a gift when it’s given with respect,” he adds. “So long as we’re talking, being honest with each other about the things we need to work on. No one’s perfect, no organization is perfect.”
An important factor to Another Broken Egg’s success is cafe owners are intimately involved in shaping the direction of the brand, local-store marketing, and other initiatives.
“I’m really passionate about taking the franchisees along the journey from day one,” says Brandy Blackwell, vice president of marketing at Another Broken Egg Cafe. “We want to create scalable marketing tactics that not only ladder up to and complement national tactics, but also give autonomy and a little bit of independence to franchisees, when they are able to customize plans.”
Blackwell also encourages franchise partners to use part of their local marketing budgets to give back to their communities in areas they’re passionate about, like sponsoring the local baseball team. “We have the tools and resources available for them to do that,” she says. “It’s really finding that hybrid, both of how we can help them and provide guidance through some of the resources and people we’ve built out, versus dictating exactly what to do with it.”
Blackwell joined the company in May 2022 after previous stints at FOCUS Brands, including Tijuana Flats where she served as director of brand marketing, McAlister’s Deli and Dunkin’ where she took the reins of off-premises and digital channels, and Jimmy John’s, where she was director of digital e-commerce.
Prior to Blackwell coming on board, Another Broken Egg Café had an agency model for marketing, social media, and monitoring creative channels. “She moved all that internal, which was a big, big lift,” Macaluso says. “And it’s really setting us up to accelerate growth, which is awesome.”
“I talk a lot about the importance of our cross-functional work, which I think we do a really great job of, but it’s getting prepared to continue to scale,” Blackwell notes. That’s where bringing in the right technological tools and systems and automations come into play to enable ABEC to grow at its record pace. “We’re pretty diligent about focusing on technology that is really needed, whether that be because we’re growing and you want to make it more efficient for our brand and in our system, or it will ultimately make everyone’s lives better and more profitable.”
“We put things in that really have a purpose if we feel passionate about it, and we know it’s going to change their lives, so it’s a little bit easier to sell it,” she adds. “We don’t want to drop behind, but we certainly don’t want to spend a lot of our time on the shiny things that don’t show a return and don’t financially make sense.”
Blackwell says a lot of what she has been working on is turnkey initiatives and programs that can be easily activated by franchise partners, and proving out how those programs will be effective by showing the actual return through a lot of digital initiatives.
ABEC recently expanded its Franchise Advisory Committee to include more members, reflecting the growing number of franchise partners in its system. Franchisees serve for a couple years and rotate off to bring in new members, which means it isn’t just the partners with the most locations who get to offer up their perspectives. It also allows the brand to ask for guidance when testing new initiatives, whether it’s for operations or marketing.
For example, in ABEC’s recent opt-in local store marketing program, several franchisees were involved from day one, which created natural advocacy when they shared successful results. “Coming from me, it’s not as effective as going from a franchisee to a franchisee,” Blackwell says. “I think that is the most effective way to really create trust and buy-in from your franchisees.”
Macaluso estimates the brand will hit the 100-location benchmark by February, an important milestone in any emerging brand. And considering how the brunch segment is continuing to grow in popularity at a rapid pace, Another Broken Egg Café will continue to be a key player to watch in 2024 and beyond.