In 2024, the chain will hire its 10,000th employee and open store No. 100.

When Fogo de Chão CEO Barry McGowan sees higher labor costs in the P&L, he doesn’t view it as a “drag” as some operators might.

To him, that’s “equity-driving growth.” The number is proof the Brazilian steakhouse is first building a pipeline of people and then using that to support its restaurant site selection. McGowan began his tenure 11 years ago by implementing training systems and platforms focused on employees. It’s the first metric Fogo spends time on, from the CEO and CFO down to the store level. McGowan noted Fogo likes to go upstream by “not trying to save cost of sales” and “not trying to save labor.” Instead, it’s investing in staff so it can reap the benefits of traffic.

As the company enter this year, it will applaud the opening of its 100th restaurant at some point. But it will arguably be even more celebratory of the fact it will bring on team member No. 10,000.

“We’re not accelerating growth. We’re just leveraging and incrementalizing growth,” McGowan said last month at the ICR Conference. “One team member, one general manager, and one location at a time.”

Fogo finished 2023 with 85 locations, 66 of them in the U.S. Fourteen stores opened last year, comprised of 11 domestic units and three South America-based franchises. This includes spots in Rhode Island, California, Texas, Ecuador, New Jersey, and Mexico.

The brand has proven it can perform anywhere it plants a flag. In the West (California, Nevada, Oregon, and Washington), AUV was $11.5 million in 2023 and average restaurant contribution was $2.9 million. Below is how Fogo succeeded in four other regions:

Midwest (Minnesota, Michigan, Missouri, Illinois, and Indiana)

AUV: $10.5 million

Average Restaurant Contribution: $3.1 million

Northeast (New York, Massachusetts, Pennsylvania, Virginia, New Jersey, Rhode Island, Maryland, and Washington, D.C.)

AUV: $10.2 million

Average Restaurant Contribution: $3 million

Southeast (Louisiana, Georgia, and Florida)

AUV: $9.5 million

Average Restaurant Contribution: $2.7 million

Southwest (Texas, New Mexico, Arizona, and Colorado)

AUV: $8.6 million

Average Restaurant Contribution: $2.5 million

Across 2024 and 2025, U.S. openings are planned for New York, Virginia, Florida, New Jersey, Washington, Illinois, Maryland, Tennessee, Texas, Oklahoma, and Washington, D.C. Internationally, there will be spots in Toronto and Vancouver, Canada; the Philippines; Brazil; and Turkey. Eighty percent of future locations will be built in existing markets. That’s a far cry from where the brand was a decade ago when its only multi-unit market was São Paulo, Brazil. In 2023 alone, it debuted three stores in the Los Angeles metro area.

These upcoming restaurants will feature an enhanced design, menu options, and platforms. However, McGowan prefers not to call it a prototype because the brand thinks about each site uniquely.

That’s how it drives experiences and why 87 percent of its customer base is millennial and Gen Z. The company, born in Brazil, has 85 percent awareness in the country. In the U.S., it’s only 35 percent—showcasing just how much runaway is possible for the brand. The CEO expects U.S. brand awareness to reach 50-55 percent in five years.

“They want to customize, they want it immediately,” said McGowan, describing younger customers. “And by the way, the social aspect of enjoying a meal with different people who have different diatribes is part of the discovery so that everybody at our table can have whatever they want. So adding a pescatarian side is great. It’s also indulgent. You can have Wagyu dry age and branzino blistered at the table to share. So it just becomes another level of experiential value.”

Fogo’s goal is to become more than a $3 billion enterprise in five years.

AUV was $10.4 million in 2023, a jump from $7.7 million in 2019. Pre-pandemic, each Fogo restaurant in the U.S. welcomed an average of 129,000 guests, marking the culmination of six consecutive years of increasing customer traffic. The number of visits took a downturn in 2020 as a result of the COVID-19 pandemic. However, in 2021, positive foot traffic rebounded and the streak was reignited. The CEO attributed the consistent growth to expanding occasions and giving customers more opportunities to use the brand, like when it debuted a brunch daypart about eight years ago.

Restaurants are prepared for the influx of guests across the world. The chain’s been 140 percent staffed since the start of 2019.

“We hire a lot of people. More than we need because we always want flexibility,” McGowan said. “Our industry is a great place to work. We just got a great environment for them. So we do that. We get multiple flexibilities. We feed our team members whenever they want to eat. We don’t charge them. It’s a family meal to us. … It’s fun and the reward is when they see the path to grow, they step up.”

It’s a new era for Fogo. In August 2023, the brand revealed it would be acquired by private equity firm Bain Capital. That put to bed any near-term plan to file an IPO. The brand filed paperwork to go public in November 2021 but never took it a step further. This would’ve been its second time trading on the stock market. Fogo first went public in June 2015, with a value of roughly $545 million. In February 2018, private equity firm Rhône Capital purchased the steakhouse for $560 million in an all-cash deal.

McGowan hinted that Fogo will re-try the public markets at some point, but right now the chain “just wants to keep focusing on discipline.” The best way to do that is continually promoting from within.

“We spent the last five years just building our human capital pipeline, building a GM-ready bench,” the CEO said. “And basically now we’re catching up to the pipeline.”

Feature, Growth, NextGen Casual, Fogo de Chão