Leading Investment Prospects to Watch

Thank you. And we likewise have Clinton Anderson, the CEO of Fourth, who will be moderating the discussion with Jason. Jason, how about I let you provide the audience some details about your background and you can likewise inform them a little bit about Chop Store. And then I'll let you take it from there, Clinton.

My name is Jason Morgan, CEO of Original Chop Shop. We bought the brand name in 2016three unitsand I've grown it to 26. After a brief stint of trying to be an accounting professional for about a year and a half, I transitioned into casino residential or commercial property and worked in corporate financing.

I was the very first staff member there after personal equity bought business. Assisted grow that from 20 to 150 areas, took it public in 2014, and then left about a year and a half after going public to do this at Chop Shop. My hope is that we can reproduce the success we had at Zos, and we're off to an actually excellent start.

We're at the counter, we bring the food to the table. It is mainly protein bowlsabout 40 percent of the mix. We likewise do salads, sandwiches. The key to the program is we have a beverage component as well with fresh-squeezed juices and protein shakes. We do all stables, we do breakfast all day.

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A little more complicated than a few of the walk-the-line principles that are out there, however we think we have actually got something pretty special. We're going to add another shop this year and a minimum of four shops next year. We will be 31 or so shops by the end of next year.

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I've been in this function for about 6 years. 4th, as many of you understand, is a leading service provider of software application solutions to the dining establishment and hospitality market. Our objective is to help our customers be effective in driving success and being efficientmanaging labor, handling inventory, and essentially offering them with tools they need to provide their vision.

It's rare to have companies that are precious and growing quickly, that can duplicate that success year after year. Jason, among the factors I was so thrilled to have you join our session is the success at Zos was remarkable. I've only fulfilled a handful of brand names where there was such a strong customer affinity for the brand name.

When you talk to consumers about Chop Shop, they enjoy the location. And to be able to take what is a relatively complex principle in terms of delivering a great experience for the client, and be able to grow that from a couple of stores to now north of 30 stores next yearit's fantastic.

We're going to discuss how to scale a dining establishment organization. Every restaurateur I ever talk with has imagine taking one store, two shops, 5 shops, and turning it into something much biggerexpanding across the city, across the state, into several states, and eventually national, even global reach. It's not easy, especially in today's environment.

Labor is difficult. Inventory expenses remain high. It's not a simple time to drive success and growth at the exact same time. But we're thankful to have you here today, Jason, due to the fact that we're going to dig into that topic. The questions are going to be really around: how do you grow a service? How do you scale it and make it effective? How do you duplicate early success? And from there, after we speak about your experience and the lessons you've found out, we 'd like to then say: well, look, how could technology help? How can you utilize innovation as a multiplier to replicate early success to significant success? Second, beyond innovation, how do you scale excellent teams? And last but not least, AI.

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The very first question I have for you, Jasonlook, you've done this two times now in the restaurant industry. What has your experience been in terms of what it takes to really drive success in expanding restaurants?

We talked a bit before we started about LinkedIn, and I have actually got a post teed up to follow this next week about what the playbook is likepoint by pointfor growing a service. To me, one of the key things, and I feel really lucky, is that both brands I have actually been included with are special.

And there's absolutely nothing precisely like Chop Store in terms of what we're doing with a big, varied menu. The majority of brands today are very singularly focused in regards to what they're offering from a food. I feel like we started at an advantage with both brand names by having something unique that filled a niche nobody else was doing.

Since it's simply harder to stand apart when there are 10, 20, 50 principles within a 2- or three-mile radius attempting to do the specific very same thing. A lot of it starts with the brand name. Does your brand name have something special that nobody else is doing? That's rare.

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The second thingI came from a financing background, so a lot of my learnings are more financing and data-driven versus a lot of early startup restaurateurs who are imaginative types. They enjoy the food, they built the menu, they developed the brand.

They don't know their breakeven sales. They do not understand how margin improves as sales increase. I have actually seen so numerous business where the numbers just don't work.

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If you do not have those 2 things, you shouldn't be developing stores. Since as I hear your description, you've highlighted 3 things: execution, brand name differentiation, and financial practicality.

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Second, you require an engaging brand name or special concept that resonates with clients. And 3rd, the mathematics has to work. If you don't understand your system economics, your fixed and variable costs, you might be broadening blind and losing money. Precisely. And another essential lesson is about getting in new markets.

When we expanded to Dallas, I expected brand-new stores to do 5070% of Phoenix sales in the first year. Too many operators assume new markets will open at complete volume day one.