In April, FSR magazine announced its first NextGen Casual Council, a group of 11 industry leaders who will help illuminate the trends and topics central to the future of full-service dining’s most exciting segment. Throughout the year, they’ll gather to discuss best practices and actionable ideas for peers to follow. And we’ll let you in.
This is the first article, which centers on hospitality, culture, and bringing guests back to the dining room.
Before diving in, meet the Council:
Ricky Richardson, CEO, Eggs Up Grill
Founded in Pawleys Island, South Carolina, Eggs Up Grill has 55 locations with plans underway to reach the 100-restaurant mark by 2023.
Anita Adams, CEO, Black Bear Diner
Founded in 1995 by Bruce Dean and Bob Manley in Mt. Shasta, California, Black Bear Diner is one of the country’s fastest-growing full-service franchises, with more than 140 locations in 14 states.
Caroline Skinner, COO, Tupelo Honey
Tupelo Honey began serving its Southern staples and elevated hospitality to Asheville, North Carolina, residents in 2000. It’s grown to 19 units since, with plans to enter four new markets this year alone.
Paul Macaluso, CEO, Another Broken Egg Café
Another Broken Egg Café is one of the fastest-growing, franchised breakfast and brunch concepts in the nation, with more than 80 locations in 15 states and dozens more in development.
Christine Ferris, director of marketing, True Food Kitchen
The Phoenix-based brand, known for its anti-inflammatory food pyramid, was co-founded in 2008 by physician Andrew Weil and has more than 40 locations nationwide, with Oprah Winfrey as one of its backers.
Chris Artininan, CEO, Condado Tacos
Condado Tacos is a build-your-own taco concept operating since 2014. FSR’s Breakout Brand of 2021, which has 30 stores today, opened nine restaurants next year and plans 10–12 openings for 2022.
Yavonne Sarber, founder, Agave & Rye
Agave & Rye is a tequila and bourbon hall known for its eye-catching spaces and epic overall experiences. Founded in 2018, the brand has grown to 10 locations and recently announced plans to bring two locations to Columbus, Ohio.
James O’Reilly, CEO, Smokey Bones
Smokey Bones, an affiliate of Sun Capital partners, has 61 locations across 16 states. In 2020-21, it outperformed the casual-dining industry in comp sales, more than doubled its off-premises business, launched two virtual brands, opened two ghost kitchens, maintained liquidity, and was certified a Great Place to Work for the second year in a row.
Scott Taylor, COO, Walk-On’s Sports Bistreaux
Based in Baton Rouge, Louisiana, Walk-On’s Sports Bistreaux was founded in 2003 by Brandon Landry, a former walk-on basketball player at LSU. Today, Walk-On’s boasts $5 million average-unit volumes and was named Entrepreneur’s “No. 1 Best Sports Bar Franchise” for the second consecutive year.
Liz Moskow, food futurist and Principal at Bread&Circus Ltd
Liz Moskow is a seasoned and creative innovation leader, food futurist, and virtual kitchen hospitality product/program strategist with extensive hospitality expertise and a proven track record of building and strengthening restaurant, hotel, and CPG food brands.
Aaron Lyons, CEO/founder of Dish Society/Daily Gather
Houston-based Dish Society was founded eight years ago and has built a model around counter service at breakfast and lunch and table service at dinner. It’s locally sourced, seasonal, farm-to-table menu is looking to expand in Texas. The higher-end Daily Gather concept opened in January.
Note: This story includes insights from Lyons, Richardson, Moskow, Ferris, O’Reilly, and Artininan.
Culture at the heart of growth
Restaurant growth through the COVID-19 era has been hailed as a “big getting bigger” storyline. And it’s often felt confined to fast-food giants, especially those with drive-thrus able to absorb early hits. But fast casuals from Chipotle to Wingstop to Potbelly have tossed four-digital projections in front of investors in recent quarters.
However, whether this is a reaction to the market or a sign of what’s to follow is where the debate veers off. Chains focused on speed and convenience are thriving. But so are experiential brands, which feel they’ll have room to scale alongside quick-service’s top players simply because demand will dictate it. It’s the middle that’s becoming blurry.
One of the hallmarks of NextGen Casual is counter to just that—a commitment to differentiation that starts internally.
In this case, call it the ability to provide an alternative in an increasingly transactional world, says Eggs Up Grill CEO Ricky Richardson.
“A concept like ours is all about culture,” he says of the nearly 60-unit brand. “We’ve done a lot of work around it. Ensuring that we’re really, really clear as a brand, brand owners, brand guardians, what it is that differentiates us. What our guests appreciate. Why they keep coming back.”
As overused as the word “culture” might be, Condado Tacos CEO Chris Artinian adds, it’s a trait that has to go beyond lip service if restaurants want to separate from the field, hire, retain, and make guests feel like they found a brand they can align with. Millennials pulsed that latter attachment about a decade ago, but Gen Z lit the fuse. “One of the special things about Condado is we talk about this celebration of individuality,” he says. “And in COVID, over the last two years, there’s been every polarizing controversy on the planet. I think hospitality, historically, has always been the great equalizer of that—of how to bring somebody into the four walls and create an experience that puts that stuff to bay and creates a level playing field.”
Condado, FSR’s Breakout Brand of the Year for 2021, is a NextGen concept that, as Artinian labels it, “is a full-service restaurant that plays like fast casual.” It can get tacos out in three-and-half minutes (to-go generally just under 9). And it does so through menu simplicity and defined purpose.
There’s eclectic artwork, no set uniforms, and “every walk of life,” in restaurants, Artinian says. If there’s one thing NextGen brands embrace, it’s being the antithesis of the all-things-to-all-people mindset of old. They’re recognizable and relatable, but lasered in on their core guest. Instead of trying to court generations through wide-net offerings, they push accessibility and identity. There’s no graying of DNA, or fear of falling into the trap of “being good at everything but great at nothing.”
“I think the value is driven in making sure transparency in quality and not taking those short-cuts, because prices are up,” Artinian says. “No one is discounting.”
Naturally, delivering on NextGen differentiators and culture often comes down to having the staff to do so. Aaron Lyons, founder and CEO of Five 12 Restaurant Concepts, operates six elevated fast casual brands. His counter-serve, Dish Society, runs as a fast casual from midday until 3:30 p.m., when it switches to full service with a social hour followed by dinner.
About 35–40 percent of the brand’s sales come after the 3:30 p.m. switch. In January, Lyons opened a NextGen Casual called DailyGather. It’s a brand built to bring people together for interaction—servers even place mini decks of cards on the table as conversation starters.
Versus quick service, hiring for Daily Gather—and Lyons says this is true of the category overall—requires a new approach. You’re looking for an employee with a service-forward personality. And now, operators aren’t just competing with other restaurants, either; they’re also working under COVID-era conditions and a surging gig sector.
“I think there’s an opportunity to teach our teams how to engage and observe with empathy,” Moskow says. “And understand what the customer is there for.”
“It feels unnatural now to provide hospitality where three years ago, it was natural for a lot of people,” Lyons says.
Full service became a space where employees were asked not to approach tables, touch credit cards, drinks, menus, and so on. But customers have begun to push back, especially given inflation and how they’re deciding to spend their money. “That level of hospitality is just not where it used to be,” Lyons says. “The conversations that we’re having with [employees] is to think about times where they’ve experienced exceptional hospitality as an end user; to get them in that mindset of how that made them feel.”
“And it’s not about hey, let’s teach somebody to be more hospitable,” Lyons adds. “It’s about getting them in the mindset of how does that make you feel? Don’t you want your guest to feel that way?”
One of his talking lines: “Hospitality is a feeling. Service is an action.”
Smokey Bones CEO James O’Reilly says his brand hires for attitude and trains to playbook. The chain brings ops leaders together once a month to look at performance from “the various dimensions of the guest experience.” Those best practices work up and down the C-suite, he says.
QR codes and contactless realities
During the pandemic, True Food Kitchen implemented a contactless model like so many in the industry. Guests could tap a QR code to order and pay. Christine Ferris, the 40-plus unit chain’s director of marketing, says it’s been a constant reevaluation since to understand where hospitality fits in. Essentially, what occasion is True Food Kitchen optimizing for?
For a quick lunch, for example, the QR code model works. “But at the same time, True Food was built on hospitality,” she says. The concept was based on science and the anti-inflammatory food pyramid, the brainchild of its founder, Dr. Andrew Weil. In turn, it’s not always an easy message to get across in the palm of customer’s hand.
What True Food discovered of late, Ferris says, is people have returned to in-store dining wanting servers to brief them on what makes the menu special. It surfaces a common question of late: Do some COVID pivots need an expiration date?
Liz Moskow, food futurist and principal at Bread & Circus, says QR codes are “convenient,” but whether that’s the aim or not is something every brand needs to ask itself. “What I feel you miss as a consumer is they don’t get the breadth of the menu,” she says. “Especially when you’re looking at it on the phone. You’re seeing one list. Either entrees or apps, and you’re not seeing that cohesive experience of how your drink maybe coordinates with an appetizer.”
Moskow says the issue of hospitality in a no-touch dynamic, and how NextGen brands can get past it, is a challenge with a lot of levels to it. There are servers now who are Gen Z or “young millennials” and simply not big on human interaction. “They’re more engaging with their phone at their dinner table at night than they are with their family members,” she says.
“I think there’s an opportunity to teach our teams how to engage and observe with empathy,” Moskow notes. “And understand what the customer is there for.”
If you’re a brand that caters to somebody who might want to use a QR code, for instance, or at least during the daypart where it fits, there’s opportunity to keep it going. But the approach can evolve. Moskow suggests making sure there’s an employee paying close attention who can help customers through the process. “A server who is observing rather than looking at a kiosk or a handheld POS system might see that that guests is getting frustrated and bring him a paper menu,” Moskow explains. She calls this, “stealth hospitality.”
“You don’t even know that they’re listening to you,” Moskow says. “They’re providing you with what you need because of something you said. They didn’t have to call out for it.”
This approach provides a clear separator from the automation-heavy fixes seen in quick service. “Teach your employees how to become a caretaker and give people what they need in that moment,” Moskow says. “As opposed to how do you get them to upsell a beverage or wine.”
Tech to enhance
O’Reilly says Smokey Bones keeps tech goals simple. If the platform makes the experience better, it goes forward. There must be utility for guests. “For some, it will make their experience better,” he says. “For others, it won’t.”
The burden on hospitality is higher than other industries, he adds. Restaurants were long seen as a laggard to innovation. COVID changed that, but it’s also disrupted guest response.
Whatever restaurants invest in, Ferris says, they have to think about the process just as a retail company might strategize ecommerce. With digital ordering, guests require the same ease and convenience they’ve come to expect of Amazon.
This has, though, created challenges in dining rooms. A customer who can’t figure a QR code will spend time with an employee solving the technology. That’s time lost that could have been spent on menu education, or informing them of a drink special.
One recent opening, Ferris says, True Food handed out comment cards. Guests noted they understood the QR code tech. But many were ready to return to elevated service. They wanted a guide, so to speak.
“It’s a story telling opportunity,” she says. “When our guests visit a restaurant, I think people want to get behind a brand that actually means something and has a purpose.”
How can a QR code spell that out that through photos and scrolling? It’s a question brands and tech companies are going to try to answer.
In the interim, though, offering contactless convenience and speed without losing engagement is a critical task of the NextGen field, Artinian says. “A lot of things that we work on with our management teams—that old cliché, and forgive it—is are we leading by example?” he says.
Condado asks managers to walk the line and check the door. Are they backing up service staff at tables where an opportunity to remove friction might arise? To Moskow’s thought, managers who observe and identify pain points can find opportunities that are unique to sit-down restaurants.
“It’s really incumbent upon the managers to create the engagement with their team members so they’re expressing hospitality,” Artinian says. “It is a little bit of servant leadership by serving your teams and knowing that you have their back and you’re not hiding as a manager, hiding behind that technology in dealing with them. … Rather, it’s I’m going to be on the floor, engage, and show them hospitality and show them what a difference that can make.”
The path to differentiation
Prices are up. That’s hardly a secret at this chapter of 2022. Customers are splitting hairs between restaurants and grocers. The food-at-home index rose 11.9 percent over the last 12 months, the largest calendar jump since the period ending April 1979. For food away from home, it was up 7.4 percent (the biggest bump since November 1981), with full-service menu prices 9 percent higher.
Plainly, both sectors are squeezing budgets. But what hasn’t changed, Artinian says, is one category requires you to cook the food and clean the dishes. The other does not. “Having enough staff to answer a question or being present, I think that’s what’s driving the value,” he says.
This inflationary puzzle offers an inflection for NextGen restaurants to accentuate what makes them stand out. “We not only have the opportunity to create value at these price points but we must absolutely must create value at these price points in the way that we deliver those experiences,” O’Reilly says.
“You talk about frictionless, well, it’s got to be frictionless for the staff, too,” Aaron Lyons says.
In True Food’s case, Ferris adds, the brand ramped up its healthy halo. You can’t sneak price past the consumer, she notes. But you can’t explain to them why it’s worth it. “Everyone is saying it needs to be perfect every single time, from the in-store to off-premises to even engaging with the brand on social media,” she says. “All of that is all-encompassing.”
Richardson says the industry has to work backward. Brands shifted standards during COVID because they had to. Guests understood the dynamics. Service was different. They bought into the technology. You had the unique scenario of being greeted by an employee in a mask trained “to smile with their eyes.”
“I think the key is making sure that we don’t hold on to standards that we adopted because we were forced to,” Richardson says, “and not forgetting what it was that made a difference originally for us. … When you compare those things that short-changed the guest experience with what made us successful in the first place, we’re reclaiming those.”
Lyons says his group looks for employees who are naturally outgoing and hospitable. “Somebody who can smile and is genuine, and that has that empathy,” he says. “And you can ask questions around that. You can get sort of that gut feeling form somebody a little bit.”
In recent months, he says, they’ve tried to simplify jobs and give employees fewer things to concentrate on so they can execute better. In one example, they’re experimenting with creating different positions. “Servers don’t like rolling silverware,” Lyons says. “They don’t like polishing glasses. They just want to show up, work for four hours, and make $500. That’s great, but it’s not reality.”
“You talk about frictionless, well, it’s got to be frictionless for the staff, too,” he adds. “That’s what we’re focused on. Who else can perform some of these tasks? How can we improve their quality of life while they’re here?”
It can be as straightforward as comfortable mats for hosts, or not asking them to memorize the entire menu. “But hey, let’s pick eight things and you’re going to know everything about those eight things,” Lyons explains. “And if you get a question about something else, you can punt it to the manager. But I’d rather you know everything about those items versus nothing about the whole menu.”
Lyons wants to move past the menu tests of old. To use a sports analogy, he feels shrinking the playbook will do more than curb costs—it can result in engaged workers.
Additionally, are there tasks operators can take to reduce steps of service and improve other areas? Like preset tables so servers don’t have to. “When you’re running a shift with nine servers versus the 12 that you need, now you don’t need to close an entire section and lose out on those sales because you can have fewer employees be just as efficient if you can reduce some of their job functions.”
At Smokey Bones, there’s a structured program where employees collect “pieces of recognition” for performance. If they get to a certain tier, they earn rewards. Smokey Bones runs contests and programs to award prizes. One example being a partnership with a vendor where a winning server gets a trip to a tequila distillery in Mexico.
“No. 1, work should be fun,” O’Reilly says. “And it’s hard work in hospitality. But we can find ways to make it fun and rewarding beyond just a check.”