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Innovations and Growth Strategy in Fast Casual: Featuring Jason Morgan of Original ChopShop

• Erika Rivas

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In this episode of the Restaurant Technology Guys podcast, host Jeremy Julian welcomes Jason Morgan, the CEO of Original ChopShop, to discuss the brand's unique fast casual offerings and growth strategy. Jason shares his journey from accounting to hospitality, his experience with Zoe's Kitchen, and how he's leveraging those lessons at Original ChopShop. They delve into the restaurant's diverse and healthful menu, the importance of technology in maintaining quality and consistency, and the challenges of scaling a company-owned business. Jason also discusses the brand's focus on customer feedback and its efforts to expand in strategic markets while highlighting their catering program. This episode is a must-listen for anyone interested in restaurant innovation and growth.

00:00 Original ChopShop

01:21 Introduction and Guest Background

01:59 Jason's Journey in the Restaurant Industry

03:37 Original ChopShop Story

05:54 Unique Menu and Concept

08:16 Menu Development and Technology Integration

15:26 Breakfast and Expansion Strategy

17:55 Revealing Industry Insights

18:21 Company-Owned vs Franchise Models

20:23 Strategic Market Expansion

23:40 Challenges and Achievements

28:09 Signature Dishes and Personal Favorites

31:27 Catering and Off-Premise Strategies

33:11 Final Thoughts and Future Plans

Speaker:

This is the Restaurant Technology Guides podcast, helping you run your restaurant better.

Hey everyone. Welcome back to the Restaurant Technology Guys podcast. I'm Jeremy. Julian, the Chief Revenue Officer of CBS North Star. And as always, I wanna thank you guys for tuning in. I know you got lots of choices when it comes to hanging out on the internet and podcast. So thank you guys for spending time with us today. Today you're in for a treat. Uh, if you love the fast casual, uh, and innovations that are happening. In the fast casual environment today, we are joined by Jason Morgan, the CEO of Original ChopShop. Jason's got a great entrepreneurial story where he talks a ton about how things came to be at ChopShop and what he's doing to continue to make the world a better place in his restaurants. His journey is a fascinating one from starting out in accounting to helping Zoe's, uh, kitchen go public to now leading a really unique. Brand that has better for you dining. If you have not been to shop, shop, I would highly encourage you. There's one close to the house here in Dallas and I love it. So grab your headphones, maybe go order a protein bowl if there's one local to you, and let's get into the episode.

Jeremy Julian:

Welcome back to the Restaurant Technology Guys podcast. I thank everyone out there for joining us, as I like to say each and every time. I know you guys have got lots of choices, so thanks for hanging out today. We are joined by a restaurateur entrepreneur. I'll let, Jason talk a little bit about kind of his background, but it's a, an interesting deal and he has the privilege of running. A brand that, I have an affinity for. He and I got a chance before I hit the, the record button. But Jason, before we jump into kind of what you guys are doing at an original ChopShop, why don't you give a, give our listeners a little bit of background. Who is Jason? Where did Jason come from? How did he get into the restaurant space and what have you been up to the last number of years?'cause you've got, a pretty diverse background that I'm really excited for our listeners to hear about.

Jason Morgan:

Okay. Very good. thanks for having me today. First of all, my background has pretty much been hospitality my whole career. I finished a business MBA program at Vanderbilt, long time ago. Thought I wanted to be an accountant. I did that for about a year and a half and realized I didn't wanna be an accountant. and then just took those skills and, ultimately started in hospitality and casino business, and then transitioned to hotels and then did a couple of small startups at on paper, should have worked but didn't work. And, and then ended up with a phone call in 2008 from, the Elliot Group, for a CFO position at Zoe's Kitchen. And, I think I was so unhappy in the job that I was in that I would've taken any job at that point. And we, I interviewed for the job was a dark horse candidate, actually was the, I think the second choice for the job. And, and luckily ended up with the job. And so moved my family from Nashville to Birmingham where Zoe's was located at the time. Started, at store 20. we were, I was a first external employee to the brand after private equity bought the business. And, was the CFO from for the next eight years. Grew it from 20 to 150 and then took it public in 2014. And then about a year and a half later as I was like, let's just really wanting to do something different. it was in the number two seat and really wanted to be in the number one seat and it wasn't gonna happen for me there. And everyone was telling me that I needed to, I needed to go be A-A-C-O-O somewhere or a president operator. I just, and I was like, I don't know if I need to do that. I think I could hire people that can do that. I've got the rest of the stretch strategic piece down and a playbook from Zoe's. And so I got very lucky and, in my networking, I found, a connection to original ChopShop and and he and I formed a, basically a fund fundless sponsor. And we raised the money and bought original ChopShop at three units in 2016.

Jeremy Julian:

Very cool. And, the part that for me is so intriguing is Zoey's was such a unique brand that obviously you guys got it to a place that it grew so rapidly because it was so different. when Zoey's came out, like there was not a whole lot out there, and it really kava, I think you guys paved the way for a kava to be able to go really hit that, hit that demographic and hit what. What it is that you guys were doing, and I'm sure you guys had a lot of lessons and that kind of growth over that period of time was probably a fun ride. And then having to go through all the paperwork to take'em public also was, was probably not something that, that you would enjoy doing again, but it was probably a huge learning experience for you.

Jason Morgan:

Yeah, that was great. And I'll tell you the, one of the things I like about ChopShop. Because it's got a lot of similarities with Zoe's in that there's no one doing exactly what we're doing in the fast casual space. There are people that do bowls and there are people that do salads, and there are people that do, juices or shakes and everyone's really moved in the last several years to more of a singularly focused menu category where they focus on one thing. It's a very small, limited menu, and we've done something very different. We've got probably one of the biggest menus in the fast casual space. Over 50 items. it looks very difficult. It's, it is more difficult than some concepts, but, but it's a lot of scoop and serve once you get the sub prepped for, pre-lunch. I'm very thankful a lot of times, or most days where, Zoe's was unique. ChopShop is unique. I don't know if I could run a brand that wasn't unique, like if I was in the hot chicken space or the salad space or the burger space or the pizza space. I just don't think I'd have the same drive and the same motivation to go do this every day. Because I think it's just a lot more difficult and it's rare, like it's rare in the restaurant space that you could say, I've got something that's different and, but this is very different.

Jeremy Julian:

and it's super unique and that's part of I'd love for you. For those that haven't been to an original ChopShop, I got the privilege that there's three of them, where I frequent, and so you and I talked a little bit before I hit the record button. It is one of those things that, that quite honestly for me, there's so many unique things about your guys' menu. I don't know that I've had the same item. Twice there, I think about it and then I get there and I want something, and then I'm like, wow, but that looks so different and I'm gonna try it. And it's always, it always ends up hitting the spot from the perspective of the execution and the flavor profiles and really just even even the delivery timeline. So talk us through what is original ChopShop for the, all of the listeners out there that haven't been to one.

Jason Morgan:

so I'll start at the very beginning. husband and wife founded the concept back. almost 11 years ago. and the story they tell is that they were tired of eating OT every day and they wanted something that, that fit their lifestyle and was a little bit better for you. And so they developed ChopShop. They built a menu based on what they like to eat. And so we, we've taken that menu and we've adjusted it over the years, but essentially about 40% of what we sell are protein bowl. and, it's not walked the line, so it's not Cava or Chipotle or Sweet Green. we're taking the order at the counter, bringing the food to the table. but it's also highly customizable in terms of you could take anything out of the bowl or add anything to the bowl that you want. It just happens in the back in the kitchen that you can't see it and it can't point to it. about 15% of the mix is salads. About 15% of the mix is sandwiches. but really the unique part of the brand is we have a big beverage component and a big snack component. So we do fresh squeeze juices, we do acai bowls, we do protein shakes, we do parfaits. That makes up about 15% of the business as well. and then we just recently rolled out breakfast all day, and so that's another 10% of the business. Plus we have, the remainders catering. the menu is so diverse that you can come for different occasions. So you can come after a workout for a juicer shake. You can have a business lunch, you can take it home for your family for dinner. And because the menu is so differentiated, you can come multiple times a week. So we, our most frequent guests are coming a lot, whereas I would argue some of the other bowl concepts, the flavor profiles pretty much the same. And you might go once every three or four weeks at ChopShop, you can come multiple weeks, multiple times in a week and have a very different experience.

Jeremy Julian:

and that's the part that I find it, most unique about it Jason, is that you guys execute, a, his, Mexican type concept or somewhere Tex-Mex, you've got Asian, flavors, you've got Mediterranean flavors all in the same concept. And so I guess I'd love for you to talk our listeners through how do you even come up with those things, I guess first and foremost. And then how do you guys execute? Because again. Profile, the proteins are the, are probably the same. It's chicken thighs or it's chicken breasts. It's, it's shrimp, it's beef, but the marinades, the sauces, it blows me away every time I go there. And it's so diverse. And there's very few brands, like you said, that have been able to execute at a high level and keep the quality, keep the timeliness, all of that, in there. And so I'd love for you to talk through even how do you guys come up with that and really what have you guys put in place to be able to continue to execute?

Jason Morgan:

Yep. So lots to unpack there. so we're, first of all, we're making everything in the shop. So all the sauces, all the dressings. I think at this point, every single thing that goes on a bowl or a salad from a dressing sauce standpoint is made in the store every day. And so that, that keeps the quality, keeps the freshness of what we're doing. what we bought the concept, it was much more an Asian focus. it wasn't intended to be that. we would consider ourself an American concept, but most of the flavor profile in the bowls was Asian. There was teriyaki chicken, Korean steak, a, a tival, it was all Asian and and so in the last few years we've made a conscious effort to. to expand that profile. and one of the things that we did is we, asked the question to the team was like, excuse me, who are our biggest two competitors in the bowl space? And the obvious answer is Chipotle and Kava. And so what we did was we came up with two bowls that resemble something that you could get at each of those. other competitors. And so we have a chopped burrito bowl, which is basically a burrito bowl. that, that looks a lot like Chipotle, but skews a little bit more upscale in terms of the ingredients. And then we have a hot honey chicken and hummus bowl that looks like something you could walk the line of kava and get. And so both those bowls are, been huge wins for us as a brand. and, and expanded the flavor profile. What I'll tell you is I was a picky eater as a kid. like I think I ate my first salad when I was 24 years old, if you can believe that. And I ate a lot more salads today than I ever have, but, and so a lot of this is, I almost feel like if I like it, then almost everybody's gonna like it. And so we've got an outside chef that we work with that's been with us from the Zoe early days of Zoe's. He lives here in Dallas as well. And so he's been super helpful in Id ideating new recipes and getting things standardized for us. the other thing we've done to that, that, is we've, we focused a lot on technology early. And like the first things we did was we built technology to make this business scalable. And so new point of sale almost immediately, new back office system almost immediately. Ideal versus actual food costing almost immediately. So all the recipes were confirmed and reconfirmed, and so all of that goes into it as well to be able to do things consistently across, a number of stores and a number of markets.

Jeremy Julian:

Yeah, and I tell people all the time to be able to execute at a high level, you've gotta have some of the best in class tech technology to be able to help your staff members.'cause you're not getting Harvard PhDs that are coming in to go work at original shop. They need to be able to execute and keep the customers satisfied as well as. Fulfill those needs for people onto kind of the other, categories. So we talked a little bit about bowls. You guys have got wraps, you guys have got sandwiches, you've got salads. Talk to me a little bit about how you guys skew there.'cause again, the thing that I learned a long time ago, David Overton, cheesecake Factory, CEO, he likes to talk about the Novito rule and Cheesecake Factory is one of those places that you can go and everybody can eat. I love the fact that you guys have got sandwiches, you've got bowls you got, so you can go with a group of, a diverse group and everybody can get something that's their own. But it doesn't all look like kava. It doesn't all look like Chipotle. And again, those brands have obviously been incredibly successful, but the fact that you might have a party of four or party of six, now everybody can get something different. So I'd love to walk, walk our listeners through that. Haven't been able to go through some of those other categories, sandwiches, wraps, and such.

Jason Morgan:

so one of the things about ChopShop just globally. Is that we've tried to keep the menu, approachable, and affordable, right? So a lot of the, a lot of the, we don't use the word healthy in how we describe our brand. we use the word healthful better for you, but a lot of the healthy concepts tend to be weird, right? They tend to come from New York or DC or California. And as they come to Dallas, people look at some of the ingredients and they go, what the hell is that? I don't know what that is. I'm not gonna eat that. or just, it's just,

Jeremy Julian:

Yeah. Farrow instead of

Jason Morgan:

That's right. That's right.

Jeremy Julian:

having

Jason Morgan:

That's exactly right. It's just call it what it is. Like people want to know what it is. And so what we've done is we've, we've been very conscious to having ingredients and recipes that are recognizable, and. shocking for, not shocking, but for us, the most recognizable items on the menu are what sells the most. So our biggest seller is the teriyaki chicken bowl. And it's awesome, but it's shocking how much it sells compared to everything else. Our biggest selling salad is a kale Caesar. And again, it's just it's it's not complicated. we're doing, made to order scratch food and that's prepared daily. And people just, they, I think they can taste the difference in what they're doing. So on the salad side, we've also done the same thing. we've implemented several upgrades on the salads, in the last several years. we brought in a, a Greek salad for the first time a couple years ago that rose to the top, and then,

Jeremy Julian:

is so good. Sorry.

Jason Morgan:

yeah, that's right. And then this week we actually, a week ago we rolled out a, we replaced, we had an American salad. That sort of looked like a cob, but wasn't really a cob. it had a couple of one skew items in it. They were like, maybe we could do something better here. And so we put in a, a, we call it, we're calling it Scottsdale cob, and so it's got a cilantro lime dressing, and then it's boiled egg, a sliced boiled egg that we're making in store as well. And again, like if you look at a lot of our competitors, they, no one has a sliced boiled egg on their salad. So you almost have to go to casual dining to see that. And that salad in the first week has gone to number one in the pix for salads. just right off the bat, just it's, it is crazy how accepting everybody was. And now I've got another protein option that I can add to salads and to bowls and to, to everything else. In January, we actually took 18 items off the menu. which you might, you probably, because I menu's still so large, you probably wouldn't have ever known. we'd done that.

Jeremy Julian:

again, almost every item that you've talked about, I'm like, oh yeah, I remember having that tie, that tie bowl? I'm going through it, so sorry. I'll let you keep

Jason Morgan:

No, that's good. so we've done, we've just continually tried to upgrade through, just alterations of what we were serving and we consistently try to make things better. And so a couple of things, I'll get examples of that is that, we've always had sweet potato hash as like a base item for our bowls. and we probably got more complaints about that than anything else in, in the basis. And it turns out that they just, we were cutting them too small, so we started cutting them bigger and people love that more. in

Jeremy Julian:

Are you using any tech to get that feedback?

Jason Morgan:

we are,

Jeremy Julian:

so many brands that don't get that and I'd love if you guys are using tech to, to get that. I would encourage everybody to make sure that they've got a feedback tool.'cause it's huge regardless of what tool you use. Having some feedback tool. Do you guys use something?

Jason Morgan:

We do, we, we use Ovation.

Jeremy Julian:

Love Zack. Love that

Jason Morgan:

yep. So Ovation has been a big win for us. We do about 54% of our business digitally. and about half of that comes direct to us through our app and our website, which is a gigantic number compared to most brands. And so we're sending a two click survey through Ovation to the, to that subset of people and responding to everybody. And so it, it really takes what would've been no chance to recover or no chance to interact with the guests. And allows us to interact with everybody that's, interacting with us. And so that's been a big plus. And then we're responding to everything through Google Reviews, to Yelp reviews, to Uber Eats, DoorDash through Moos. and it's very similar platform. but responding through that as well. So we have really good feedback of, of what people like, what people don't like.

Jeremy Julian:

Yeah, and it allows you guys to pivot, which I guess leads me down that path. You talked about the hard boiled egg for the salad. Talk to me a little bit about breakfast. I've never had breakfast there, so I'd love Is that something brand new that you guys went all day breakfast or have you guys always had breakfast and I just always been lunch or dinner, for me as a consumer. But have you guys always done that and why did you guys decide to move to all day breakfast? I know a lot of people like, you know what, we might as well open for breakfast'cause we're here prepping sauces and any, stuff anyways, so you might as well add another day part and give people a healthy option to meet coffee, drinks. You talked about your beverage, program being so successful. I'd love to hear the insight behind that.

Jason Morgan:

So if I was starting the brand today, I probably wouldn't be open for breakfast. but when we all ran, they were open for breakfast and the locations that they had, they did a pretty decent breakfast business. Breakfast menu was huge. Probably 10 plus items. On top of that, you had juices and shakes and usables and all this other stuff that you get to get for breakfast. as we started expanding, we saw breakfast was still pretty strong in, in what I would call urban locations and urban, not New York urban, but Dallas Urban, like around SMU and Park Cities or, in Lakewood. you still saw people coming for that, those early hours in the suburbs. We didn't see hardly any business between seven and nine. And so we've adjusted some of our hours to, to be more conducive to when the business is coming in. but what we did in January is that we took those 10 items, sorry, we took those 10 items and we, we narrowed it down to four items. And one of the items is a build your own breakfast bowl where you get to choose a couple of bases. You get to choose a couple of mix ins. You choose an egg preparation, and, and it's actually a lower price point. the price starts out at$9, instead of 1150 for the other bowls. And, it's pretty good value for that. And we

Jeremy Julian:

I don't know. I think I might be ordering a cheat, cheat day burrito'cause that thing looks pretty

Jason Morgan:

Yep. and the cheap, the cheat day. The cheat day wrap has always been a big winner. And, the BRE was a big winner. That's something we brought after we bought the business. And then the avocados host was always something that was sold to too. So providing that all day, we've seen quite a bit of people will order those four items during the, during the lunch hour, during the dinner hour, even.

Jeremy Julian:

I love that. I love that. Jason, I'd love to understand your guys' growth.'cause I think you guys started here in DFW, or in this metro area. You guys have grown here. You guys have grown, in Texas is traditionally does a pretty good job when you travel outside of kind of the DFW Metro down in Houston or Austin or some of the other places, San Antonio. but you guys are in multiple states and now growing, growing even into kind of the Arizona market. I'd love to get your understanding, why Georgia, why Phoenix? help me understand, how did you get there? Because I know, just from yours in my conversation, everything's corporately owned. So it's gotta be hard to create consistency across, such a divergent, swath of stores in different states and stuff.

Jason Morgan:

Yeah. great. So I'm gonna give you a stat first that, that I always pride myself on finding information out there and taking information and turning into strategy, right? So here's something that, that I came across in the last couple of months. we were at the Movers and Shakers event in Chicago a couple months ago. We were lucky enough to be included. We were number 13 on the list of the hundred, movers, shakers in the VA guys world. And as I started looking at the list, and I've looked at the lists before and I've seen the same pattern. I was like, wow. Like none of these groups are company owned models. Everybody's a franchise model. So of the top 15 or 12 were franchise models, and there were three concepts that were listed that were company owned models. It was Chipotle, it was Urban Cafe outta California, and it was us. So it led me to start digging around okay, who actually is doing what we're doing across the country? And I put it out to LinkedIn and asked people for feedback and did some research. And what I found was there's only if you have these criteria, less than 40 units, fast casual, a hundred percent company owned in three states or more. Okay. So those are the four criteria you would think there'd be dozens of companies that meet that, that criteria across the country. There's only 10. There's 10, which is just mind blowing to me that there's only 10. And if you take that 10 and you further, segregate it down. Four of the 10 are shrinking. So they've tried to grow and they're not growing anymore. That leaves six, two of the, two of the remaining six are really small. There's a six unit pizza concept out of Ohio, a seven unit taco concept outta California. and they may grow, but they're not gonna grow very fast. that leaves you four, two of the raining four are vegan concepts, which in my opinion, don't have a whole lot of. White space to grow. They can grow in big cities, but they can't come to Dallas and build 15 of them like, like we could. so that leaves two, it leaves us and Hattie Bees as the only two concepts that sort of meet that criteria. And because there's been no investment in the small emerging company owned models since COVID, I don't think anybody's going to show up all of a sudden and get to 50 units. So it's my belief that we're the only concept in the country. That has the chance to get from what we're at 26 units today to 50 units by three years from now. and if we can do that, then we're gonna be a shiny penny that, that is gonna be the only one out there, that's performed and, is investible at that point. that's, I'm gonna start with that. So that's the footprint of what we want to do. So the business started in Arizona. The first three stores were in Arizona. We bought the brand in 2016. And at Zoey's we used a hub and spoke model. the strategy of Zoey's was very different in the early days. the founder of Zoey's franchised the brand out to seven different states. There were seven states with 20 locations. There were two here, two there, two everywhere. when he sold it to private equity, he bought all the franchises back. So when I started, we were all spread across the country. We had no, no more than I think two in any main market outside of Birmingham. And so we basically filled in those markets over time. that was the strategy there, but it was a hub and spoke model from that. So you went from Dallas to Houston, to San Antonio, to Austin, so forth, so on. So our strategy's been very similar. we started in Phoenix. The plan was let's build out Phoenix the best we can, and while we're building out Phoenix, we're gonna build out Dallas. Dallas was very similar from a demographic psychographic standpoint, and it is, we all lived here. So my entire team came from Zoe's kitchen. and so my, almost my entire senior team, a lot of people in the stores, regional managers, A lot of folks here from Zoe's and so it's rare that you get to live in the second market that you open. And so that, that was a, a big plus there because, you could make sure you'd be in the stores every day. You could make sure the culture is what you wanted to be and you could really control the growth. So our plan was to build two markets, Dows and Phoenix, and scale them up enough that we have enough EBITDA to be able to go and open the third market in the fourth market. And so we chose the third market of Houston. Partly because it was close to Dallas, partly because we owned a second brand called Bella Green at the time. We've sold that in 2022. and we felt like we knew the Houston market really well, and we could make good smart choices there. Houston was also a good market for Zoey's and so that all checked all boxes. So we got a couple stores open there. we opened our third store late last year in, in my view, you need four to six stores in a market before you really have some traction and some brand awareness. And because of capital constraints, we're, we don't have four to six stores. We have three. And so we've, we've been making, making positive strides in that market. I think now we're 10 outta the last 11 periods EBITDA positive in Houston. And so we've made it past the hard part and now it's just a matter of can we get. Store number four is gonna open next year, and then can we get five and six And, we believe Houston will start to look like Dallas in terms of AUVs. Once that happens, Atlanta's the exact same copycat story of Houston. We opened two very quickly, took forever to open the third. We don't have the fourth plan because of capital constraints. And so we're, at this point we're not quite in as good a position as we're in Houston, but we're three of the last five periods EBITDA positive, and we're making enough sales in Atlanta to be positive. We've had some operational challenges here and there. but we will be positive there. So in the next year and a half, all the thing, all the stores we open will be, in the existing markets. And so we'll start filling those in and then, assuming that some point there's new capital in this business, we then would look at, spoke to Dallas or spoke to Atlanta. So whether it be Austin or San Antonio, or Charlotte or Jacksonville, Florida or Nashville. that's how we would think about it. So we believe that we've got a team and tech stack and systems and all in place to be able to open six to eight stores a year, starting next year if we had the money to do it, and then we could stair step that growth, going forward. interesting enough, when it was at Zoe's, I tell people I didn't realize how good we did that. Like we, we were like, and maybe it was just my naivety with just not being in the restaurant business, but. the private equity group bought that business and they, in 2007, they put a little bit more money on the balance sheet in 2009, and then they never put another dollar in. Like we just, we grew it through cash flow. We grew it through the building to leverage that cash

Jeremy Julian:

operating profits. That's incredible.

Jason Morgan:

It was incredible. And so you look at brands like Sweetgreen who have been picking on online quite a bit these days, but if you look at them and they lost$600 million in the last 14 years and they've had to just keep raising money and raising money to. To fund that operating loss. we've done it just the opposite. We've been EBITDA positive every year we've run this business, and the goal is to, once you get past that certain point where it's self-funding, I don't think we need a whole bunch of money to make future growth happen. I.

Jeremy Julian:

Yeah. and I, I'd love to go back real quick, Jason, to talk about your idea, because I think, I've watched too many brands put a single outlet. In a single location or maybe two Houston's ginormous as far as a physical market. So even if they're in the same part of town, getting to that, getting to that place where you've got at least, at least four, if not six or eight or 10 in a market, ends up being one of those things that, that, moves the needle quite a bit for people because now it's recognizable. And as I said to you. I know there's one close to my house. I know there's one close to my office, and I know there's one close to where my daughter plays softball. So it's if I'm looking and I look on my app or I, going to do something, it's oh, I remember the last time I had food there. That was really good. I should go check it out. And when you don't see it often, it makes it harder to, harder to drive into that, to that area. And so I want. Listeners to hear that says you've gotta get some penetration.'cause you get economies to scale as a business, but then also the consumer recognition of what your brand is. You guys. Sounds like you guys did that quite well at at Zoey's.

Jason Morgan:

I'll give you another stat that, that sort of shocks people. I'm a hundred percent certain I'm right in terms of what I'm about to tell you, but when I tell people, they look at me like I've got three heads, I've seen it enough to know that I'm right. And so when you open a store in a new market, you're likely to do 50 to 70% of sales of what your average brand volume is. and look, there are people that don't, there are people that buck that trend, that have big marketing budgets and hype and stuff, but 99% of brands will do 50 to 70% in that first year, maybe two years, maybe three years maybe until you get four to six stores open. And so what happens to people is that, they don't expect that to happen. They, the model doesn't produce any cashflow at 70%, or less. And they get a couple of stores open in these new markets and then they can't open anymore because they,

Jeremy Julian:

you mean most recently, we're recording this in August of 2025. Portillo's is having a similar problem. I love the brand. I had lunch there this week, but it's one of those things that they grew so fast expecting, if I build it, they will come. People need to learn about it. You get your diehards, that will come, but then it tails off and they're seeing that, here in Texas. they admitted in their latest, quarterly earnings that they grew too fast and didn't market enough.

Jason Morgan:

And so the other thing that happens is because look, if you go back over the last 15 years and you look at the Nation's restaurant news. Like hot concepts every year, every single person, I'm gonna double the brand in the next three years. I'm gonna go from 10 units to 60 units. It's not, it's every single person. And you look at

Jeremy Julian:

for every time people

Jason Morgan:

and no one does it. And the reason no one does it is because it's super expensive to be able to go out. if I wanted to build six stores in Houston, that's$8 million. I don't have enough EBITDA or enough levers to go build$8 million. I've gotta get someone to give me$8 million to take that risk. and if they don't, if I assume that I'm gonna build the first two stores, they're gonna be profitable and they're gonna be my average volume and that's gonna reduce cash flow and I've signed four or five leases, to come behind them. I wake up one day when I'm doing 50 to 70% the first year, and I can't afford the next four stores. And then the whole business is broken,

Jeremy Julian:

Yeah, and you can't afford the debt payment for the$8 million that you raised. I've watched it happen again. I've been in this business for 30 years. There's a brand that I love called Kroo that was outta California, and they grew so fast in Southern California. Once they got a little bit. growth capital and they grew in so many markets. I was early days of Ruby, I was back in California too. Do the, did the same thing. They got into too many markets and then they got too many dogs and I ended up bringing them down. And so I love that you guys are focusing on let's create some penetration in certain markets so that we can build a brand and then go out from there and, so I'm gonna pivot real quick, Jason,'cause we're getting close to time. if somebody comes into ChopShop, give me two or three items that are your guys' signature items. What's your favorite? How do you modify your favorite item? But what are let's start with just, I'm a brand new consumer. I see an original ChopShop in the place that I'm looking to go. What are one or two things that you're like, you know what, they have this, they're gonna come back and they're gonna enjoy our food. What are those two or three items that, that you would suggest and then, throw in what do you do? Because almost every restaurant tour modifies the crap out of the standard stuff that's on the menu.

Jason Morgan:

Alright, so if you come in for the first time, I'm gonna steer you towards a protein bowl. And if you don't want a protein bowl, I'm gonna steer you towards a salad. and so on the protein bowl side, I'm gonna put the Terri chicken bowl in front of you. Probably do roasted veggies and jasmine rice. that's probably the most favorite combination right now, and I think you'll have a pretty good meal there. it comes with, avocado, sliced avocado. It also comes with, it's got sesame seeds. it's got some Brussels sprouts as a topping to that. So it's a good option. If you're gonna choose a salad, I'm gonna push you towards the grish. Or actually, I might push you towards a new cob because it's pretty phenomenal. and people have, I have really gravitated to that so far. and then, I, from a juice standpoint, if you want to, you wanna spend a little bit more money and juice, I'm probably gonna recommend a fruitier juice. It's called Slim Squeeze. and so we put you to that. for me, I've been, I've been really ordering something that's strange lately. And so my daughter turned me onto it. she calls it the trio. And we're, we're probably gonna market it as the trio some at some point next year. And so I order a kid's teriyaki bowl. I'll order a protein shake. I've been getting the, Jack, bb and j, which is strawberry banana, a peanut butter and a cookie. And I end up with this like variation of different things, all small portions. and it works out to be about 14,$15 all in. and it's, it gets me a little taste of everything. And so I've been eating like that lately.

Jeremy Julian:

I love it. Yeah. I think, my go-to, when I go into the, if I just, Hey, somebody wanna go here? I think I get, I end up getting the, what is the beef bowl?

Jason Morgan:

Korean Steak Bowl.

Jeremy Julian:

Korean. Korean, The steak bowl that, that is definitely my favorite with the jasmine rice. That's, I love that. with, to your point, the veggies is, is really awesome. so Jason, we've talked a little bit about where you guys are at, where you guys are growing, how you guys have done it. Is there anything else that we missed that you would want our listeners to hear?'cause we got lots of people out there that are gonna have heard the story. They're gonna be in kind of some of these markets that, wanna check things out. So anything else that I missed as far as what you guys are up to?

Jason Morgan:

No, I think we covered a lot of it. we have, I think what I've ended with is we have a product and a brand that is ready to grow. like we have two high net worth families that are backing the brand. we'd like to grow faster than we're growing. we've been very unlucky in terms of, going out for additional capital times for whether it was COVID or whether it was inflation or whatever it was. We've, we've just been really unlucky, I think. I think we have one of the best things out there in fast casual. I think the numbers support it. the team supports it. The, it's, it's got every box checked and so it's just a matter of, can I convince. Someone to, to invest alongside me or the brand or the current investors and take this to a, to the next level. And so that's what I'm looking for. That's what I'm hoping for. to be truthful, I'm a little bit bored only building two stores this year. We have a team of people that was building 25 to 30 at one point at Zoe's. And so we have the wherewithal to do more. and like I said, we built all the systems and tech to do more. And so it's just a matter of, can we get started?

Jeremy Julian:

I love that, just because I forgot to talk about it, and I know it's something that you guys have, have, or at least I believe you guys have, is as off-prem. You talked about kinda where you guys are at. How are you guys tackling catering? Are you guys, big on catering and I know your product travels so I'd love to just, for those that are doing things, looking for a better option, I believe you guys do some of that. And I'd love for you to talk to our listeners a little bit about that.'cause they may be like, oh, I hadn't considered those guys. I've been there for the bowls, I've been there for the wraps or the sandwiches. But, talk to me a little bit about your guys' catering offering and your off-prem stuff.

Jason Morgan:

So we do about six to 8% catering across the brand. We can do everything we do catering, everything from protein bowl salad sandwiches to the breakfast items. We also cater as a bars, where we bring, and you can put the toppings on it. so it's a, it is as wide as a range as you can have from a catering perspective. About half our catering business comes from ezCater. I wish it didn't. it's, it comes at a huge fee and it comes at no markup for us of eating the fee. and I don't own the customer. we've been trying different methodologies to win those people back. From a direct standpoint, it's a slow go. but, that's, that's our goal is we'd rather have you direct. One thing we did do is we put in a catering loyalty program several years ago. and it's actually through patrons. It's stacked on top of our main loyalty program through Patons. And so if you spend a thousand dollars in a quarter, we actually give you back 10% in form of a Visa gift card. So that's been a big win for folks. a lot of people give away, they'll give you 10% back in food, right? and like people really, I don't think they really want more food because the, their boss is paying for the food. but, we're, we're giving people back 10%, in form of an Amazon or Visa gift card that they can't go spend somewhere else. So that's been a big win for us in terms of keeping those guests loyal.

Jeremy Julian:

Awesome. Jason, thank you for sharing the story. Like I said, I'm a huge fan. I, I love selfishly when I get a chance to hang out with people that, I enjoy their brand and go to on a regular basis. So thank you for continuing to create can. Thank you for continuing to innovate. I love the innovations. You guys continue to change. Every time I go in it's oh, that's new. Lemme try that, lemme check this out. And I know you're very active as well on LinkedIn. We were talking a little bit about that before I hit, go. So if you guys haven't already checked it, checked in with Jason Morgan, original ChopShop, go, go follow him. He, he writes some pretty cool stuff that, I know is getting, getting some conversations going for sure in the restaurant space. thank you for that. Thank you to our listeners guys. Like I said, at the onset, I know you guys have got lots of choices, so thanks for hanging out and make it a great day.

Speaker 3:

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