Breakthrough: Three Ways To Keep Your Best Customers

Cultivating a successful business is no easy task in an oversaturated market that is likely headed toward a recession. However, even in a perfect market and economy, companies within the hospitality industry often struggle to keep newly acquired customers.

In this episode of Breakthrough, Paul Barron explains how operators can better engage and retain customers through his three-step “Triple Power Punch.”

1. Establish points of super service.

Poorly trained staff and lack of consumer engagement are the primary reasons why customers disappear. Employees need to be able to effectively communicate your restaurant’s story to your customers, and their interactions with your customers need to feel genuine.

“The first engagement [with a customer] has to be able to establish the tone of your business,” says Barron. And when engaging with influencers, you need to be at your best. “Every influencer comes to your restaurant for one reason: to be noticed,” adds Barron.

Employees should follow a four-step process: meet, check back, educate, and ask for a comeback. Education could include sharing your specials or describing the unique programs your restaurant offers.

“A lot of servers are embarrassed to [ask for a comeback],” says Barron. “But they have to start being trained to get the ask.” Asking for a comeback could include prompting a customer to schedule a reservation for the next week or inviting them to a wine tasting.

2. Cultivate influencer loyalty.

Barron cites Sweetgreen as one of the most successful companies when it comes to consumer loyalty. Sweetgreen maintains one of the highest customer retention rates of any restaurant, and over 82 percent of its guests use the company’s mobile app.

“The top 20 percent of your guests or customers matter much more than you realize,” says Barron. “You have to create goodwill with your best customers.”

Some successful restaurants add a fee for premium tables, or require a credit card or some exchange to place a reservation. This can severely damage your relationship with current or potential customers—you want to be constantly offering upgrades or perceived upgrades to customers. “Double down on creating value,” adds Barron. “Do something you normally wouldn’t do to get those great guests to keep coming back.”

3. Create the perfect club.

Accomplishing “perfect” is no easy task, especially when it comes to a club. Clubs are a great idea, but they need to be implemented effectively and targeted to the right type of customer.

“Your influencers are the best opportunity you have for new customer acquisition,” says Barron. “The most expensive thing you can do is try and go acquire a new customer.”

Creating opportunities for special influencer engagements and parties is the better route for emerging businesses. Power guests want to connect with other influencers—and if they make great connections at your club, they will remember where they were and share the story of your business elsewhere.

Check out the episode above to learn more about connecting with influencers and crafting the perfect club!

Private Equity Firm Ares Management Acquires Cooper’s Hawk

Cooper’s Hawk has been acquired by Ares Management for over $700 million. Some estimates suggest the purchase price approached $800 million—an unthinkable number for many burgeoning restaurant chains.

Cooper’s Hawk offers consumers a unique restaurant-winery experience. The Chicago-based restaurant crafts its own premium wine with 50 unique blends. The wine is made in the chain’s suburban Woodridge production facility.

According to data from Restaurant Business, the deal is likely worth about 23 to 26 times that of the restaurant’s 2018 earnings before interest, taxes, depreciation, and amortization (EBITDA). Chicago Business estimated lower, calculating the deal to be worth 17.5 times that of the restaurant’s income last year. Cooper’s Hawk reported $31 million in earnings in 2018.

Experts compare the move to Fidelity investing $200 million in Sweetgreen in late 2018. The investment implied a billion dollar valuation for Sweetgreen, surprising some in the industry.

Current owners and operators Tim and Dana McEnery founded the first Cooper’s Hawk restaurant in 2005. The chain is understood to be the first restaurant-winery hybrid of its kind in the state. It remains unclear what the McEnerys’ role will be after the deal is completed.

Cooper’s Hawk currently operates more than 35 restaurants in ten states. The chain just opened a new location in Rockville, Maryland. Cooper’s Hawk also features a wine club that is now comprised of over 400,000 members. Club members pay $19.99 a month for a total of twelve company branded wines each year.

Sweetgreen Launches Initiative with FoodCorps to Make School Cafeterias Healthier

Besides serving healthier meals to the masses, the fast casual chain sweetgreen has just announced that it has partnered with FoodCorps to improve the food offerings in school cafeterias across the world.

The restaurant knows firsthand what an impact healthy food can make. With that in mind, the “initiative will pilot innovative ways to guide students to experiment with real food and make healthier choices for their futures.” 

Sweetgreen has pledged to donate $1M over the next two years to help make school food systems healthier yet “craveable.”

The goal is to inspire and educate students to live a healthier lifestyle by providing nutritious yet delicious meals.  

“Healthy food fuels a healthy life. When students know where their food comes from, they’re empowered to make better decisions for themselves, their families and their future,” writes sweetgreen. 

As sweetgreen points out, based on current eating habits, 1 in 3 children are on track to develop diabetes in their lifetime.

This is partly because of the lack of good food availability in the country. 23.5M Americans live in food deserts, which are areas where access to healthy affordable food options are limited or almost nonexistent.  

Sweetgreen is working with local communities in food deserts to make nutritious food more accessible.

“Working with the Los Angeles Food Policy Council’s Healthy Neighborhood Market Network, sweetgreen led a complete transformation of Hank’s Mini Market, located in one of the worst food deserts in South LA. In 2018, Hank’s Mini Market grew revenue by over 300% from 2017 to 2018,” writes sweetgreen about its efforts.

Like most fast casual brands, sweetgreen prides itself on making a positive impact on both the food system and the planet. Read more about the chain’s eco-friendly practices here now.

We have been following sweetgreen and how its redefining fast food since its start. Watch this past Fast Casual Nation episode to see how this restaurant has morphed into a lifestyle brand.

15 Restaurant Brands to Watch in 2019

When looking back on 2018, it was apparent that there were a clear group of concepts that were starting to separate from the pack in the restaurant industry. Restaurant closures topped at 50K closed locations in 2018– so the market seemed to have some correction.

While we did see some closings of lower performers in casual dining with Applebee’s alone closing over 250 locations in the past two years, the good news was the emerging brand's sector saw significant growth. This sector showed better performance in 2018 than any other brand groups.

These emerging brands consist of about 250 total brands that have multiple locations and are starting to take control of categories. Make sure to check out our 2018 Emerging Brands Report and to be on the lookout for our 2019 list.


All that said, my 15 brands to watch for 2019 are led by a group of leaders that I think have some unique and interesting aspects that put them in the limelight.

For example, Sweetgreen is setting a new standard of what it means to be a restaurant. The restaurant has morphed into a lifestyle brand or platform that will prove to be a new strategy for several brands that have the following.

lemonade restaurant logo

Lemonade is one of these as well and what separates the brand from the pack is its quality and the brand connection that is prevailing in a big way with guests. If they continue on a growth strategy this could be a player in the healthy halo sector very quickly.

Mod Pizza logo

Mod Pizza is another in this group that has clearly won the fast-casual pizza wars, now with over 400 locations and a management team that is geared toward people and culture this brand could be one to bet on.

Cava restaurant logo

My special mention would be Cava, while not on my 15 brands to watch, their acquisition of the Mediterranean fast-casual chain Zoe’s Kitchen creates both opportunities and challenges that I think are worth mentioning. They also have a rockstar group of investors that are a good reason to keep an eye on them.

Don't miss the episode of The Barron Report above where I break down why these brands have that X-factor.

How Sweetgreen is Becoming the Next Fast Casual Unicorn

On this episode of the Barron Report Live, host Paul Barron discusses which wing-focused restaurant brand is taking on pizza for the next Super Bowl, the fire sale of Diageo’s liquor brands, and how Sweetgreen becoming the next food unicorn in the fast casual industry.

Wings Take on Pizza in Super Bowl Challenge
At :35 - Paul discusses the growth of the popular takeout brand, Wingstop. The chicken-wing fast casual chain has seen a 15.5 percent increase in annual growth last quarter, with systemwide same-store sales also growing by 6.3 percent, and its net income jumping 33.8 percent.

The increase in store count to 1,215 global locations, is pretty major move compared to growth in the fast casual segment is slowing down overall. Additionally, the company’s strategy and lack of direct competition are leading them to take over the takeout industry over pizza.

Diageo to Sell Off 19 of Its Brands
At 5:00 - Paul discusses Diageo’s, the world’s largest spirits producer, decision to sell 19 of its lower-end spirits brands to Sazerac for $550 million. The strategy appears to allow Diageo to focus on its premium labels.

This decision will allow the company to take on the trending craft spirits market. Paul has seen firsthand when filming the Foodable show “Across the Bar,” just how often mixologists have opted for a more unique craft cocktail brand.

Sweetgreen to Become the Next Fast Casual Unicorn?
At 6:31 - Paul discusses the biggest news of the week — how salad chain Sweetgreen is quickly becoming the next fast casual market leader.

Foodable identified early on that this concept would be a breakout brand in the fast casual market. With Sweetgreen’s HQ move to Los Angeles in 2016 to join other tech-focused restaurants that are raising money in private rounds at valuations of $1 billion or more, they are here to stay. “CNBC” recently reported that Sweetgreen is nearing a $200 million investment with Fidelity Investments.

The key to Sweetgreen’s success like other fast casual stars is to have a unique,  Xactor. For the salad chain, it’s all about lifestyle. Showcased in previous events like the Sweetlife festival, Sweetgreen is able to connect with their consumers celebrating passion and purpose.

Another brand that has been able to achieve this in the past is Chipotle, controlling the burrito business with ambiance, food, and environment compared to Baja Fresh.

In recent news revolving Chipotle, hedge fund Pershing Square Capital Management has sold another large chunk of its Chipotle Mexican Grill investment. The affiliated entities have reportedly sold a total of 118,307 shares of the fast casual chain for a total of $55.8 million.

Watch the live podcast above to learn Paul’s predictions for the fast casual market and what he believes to be next for these two stars, what other factors are playing into Wingstop’s impressive acceleration and its edge in takeout, and to find out which brands are being sold to Sazerac.