Danny Klein [00:00:00]:

Both our models are both free to anyone in the industry in terms of getting a subscription to the magazine. As long as you work in the industry, we will send it to you free of charge. We're monthly on the print side. You also can sign up for our e letters that way as well. It's on the same kind of menu bar for subscribe. We have five of those a week for QSR every morning, and then four a week every morning from the FSR side.

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Angelo Esposito [00:00:24]:

Welcome to Wisking It All with your host, Angelo Esposito, Co founder of WISK.AI, a food and beverage intelligence platform. We're going to be interviewing hospitality professionals around the world to really understand how they do what they do. Welcome to another episode of Wisking It All. We're here today with Danny Klein, editorial director at QSR and FSR magazines. Danny, thank you for being here.

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Danny Klein [00:00:55]:

Yeah, thank you for having me. I appreciate the time.

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Angelo Esposito [00:00:59]:

Absolutely. I mean, you know, if there's anyone who's on top of the industry, both on the QSR and FSR side, it's probably you. I follow you on LinkedIn. You're always posting super interesting things. So really, maybe to start off for our audience, can you maybe just go back and maybe give us a story of what led you to become, you know, the editorial director at QSR and FSR magazines?

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Danny Klein [00:01:21]:

Yeah, it's. I've told this story to some people. It's a little convoluted, but, yeah, so, basically, I. You know, I was. I went to school to. For journalism. I was actually my. My father's idea.

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Danny Klein [00:01:36]:

I wanted to become a zookeeper. But when I told him that, he, you know, he thought I was kidding. So that response. That response at that time, you know, when I was, whatever, 1817, whatever it is, I. I was like, okay, yeah, sure. I was joking. Yeah. And I was, you know, journalism was kind of a natural thing for me.

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Danny Klein [00:02:00]:

He was. You know, I was always a writer, and he was just somebody that really saw this version of me of being a sports writer. He used to read me columns in, like, the New York Daily News and things like that, and Mike Lupica. And, you know, he would be, just say things like, you'll do better someday. So then when it got time to college, I basically became a journalist for him. And so sports writing was really the first thing I did. I did that throughout college. That was the track that I was on at the University of Florida, and then spent about ten years or so doing so in Florida, different newspapers.

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Danny Klein [00:02:43]:

I worked at a small daily in St. Augustine, Florida, kind of a beach town near Jacksonville, did that for a long time, almost seven years. I was the sports editor there for about a year and a half. Went onto the Daytona Beach News Journal, you know, doing similar things, covering mostly high schools, you know, once in a while getting into colleges, professional, very, you know, here and there, and then, you know, once in a while doing NASCAR. When you're up in, you know, Daytona, that's just kind of the part of it. But anyway, you know, like a lot of people in newspapers, I got to a point where the industry got a little bit dicey there. You know, I was part of a group of department that was being outsourced to Texas and laid off after my newspaper had been acquired by Gatehouse, which is sort of like a larger conglomerate throughout the southeast and other places, and got it. I ended up not losing my job, but in that period of time, I was looking for jobs, assuming I was about to be fired.

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Danny Klein [00:03:55]:

And my wife actually came across where I work now, which at the time was called Food news media, and sent it to me. She wanted to move to North Carolina, which is where it's based. Beyond that, knew nothing about the industry, about FSR magazine, which was where I started, about b two b journalism in general or really anything. It was more just like, well, I like the word. Food is in here. We all eat. You know, I know you want to move to North Carolina, and I'm about to be laid off, so I'm going to apply to this job, and, you know, we'll see what happens. And, you know, somehow I got, you know, through the interview and was very, very surprised to get the call back, you know, with the job offer.

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Danny Klein [00:04:42]:

And in the process of coming up here, originally really fell in love with the company and the culture. You know, it was a very small organization. You know, there was family run at the time, and, you know, just really loved everybody. It was just such a 180 from what I was used to in the newspaper business, which, you know, we were in this, like, building that looked like a condemned middle school, and everybody was miserable. And I came over here, and they were having this, they were doing what they did monthly at the time, which was take, you know, everybody out to lunch for somebody's birthday. And I was just like, man, this is just such a different vibe. And the magazines were beautiful, and the office was so nice. And Chapel Hill, which is where it's located, was also really a great place.

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Danny Klein [00:05:29]:

And so, yeah, you know, I was like, well, even though I'm not getting laid off. I'm gonna go take this other job because, a, I think you sent me a pretty clear signal that this is not a good idea to stay here. And secondly, this just looks like a cool opportunity. I really got into it kind of sideways there and then kind of jumped right into the fire. The very first story I ever wrote was this 5000 word feature for the magazine on how restaurant groups scale. And it was very intimidating. I mean, a lot of my colleagues love to tell this story that my first day there, I mean, I was legitimately terrified. I had moved my family up here, all these different things and they handed me this seven page booklet of tasks and things I would be working on.

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Danny Klein [00:06:19]:

And as I began to read through it, I realized I didn't know how to do literally any of this stuff. I didn't know the subject matter. I didn't know the technicalities of what the role entailed. And I went home and cried. So my colleagues always like to remind me that I cried on my first day of work here. But with that said, you know, the very first person I ever interviewed completely changed my outlook on the industry right away and what I would be doing because the guy was in his basement building the restaurant that I was interviewing him about. And it was just such a good peek into kind of what I would come to appreciate about hospitality. You know, that you have people who are.

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Danny Klein [00:07:08]:

You have to be invested up to your neck in this to be willing to deal with all the stuff that you have to. So everybody who lives within this world of restaurants tends to be very passionate about what they do, which is great from my perspective, and also really good people. I mean, I will tell you that obviously there are your exceptions to that here and there. But the vast, vast majority of people who work in restaurants, and I think it's because they have that kind of mindset of serving a guest. They're just such good people. Compared to sports, the sports industry is just filled with people who are a little bit on the edge of sanity. So it has turned out to be an amazing thing. And like I said right away, talking to that guy, I felt better about things and just evolved.

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Danny Klein [00:07:59]:

And my current role came about, maybe I think at this point, it's been two years ish or something like that. I had gone from working as an associate editor at FSR magazine, which is our full service publication, to being in charge of our digital properties for over six years, which was a new role for us as kind of a reflection of what was happening in media. And then my current role when my former boss moved on to another publication. I stepped into that. That's how I got here. I know that was a somewhat long story, but it's been really a life changing thing, to put it lightly. I mean, it really changed so much of my life. You know, it gave me normal hours.

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Danny Klein [00:08:46]:

I was able to have children, you know. Cause working in a daily newspaper and sports, I was working four to midnight, never saw my wife. Now I work Monday to Friday. You know, eight to five things do not happen after 05:00. And if they do, it's okay, you know, you could wait. And. Yeah, it was just one of the better decisions that I ever made, even though I made it without having any idea what I was doing.

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Angelo Esposito [00:09:13]:

That's super interesting, like, jumping in without knowing anything about the industry. But I think the same way you fell in love with the industry is what happens to a lot of people. Cause it's like hospitality is a pretty special thing when you think about it. A lot of, like, the best moments, whether it's personal or maybe with your wife or maybe with a group of friends or celebrating something, are at these kind of venues one way or another. Like, things happen, celebrations happen, these memories happen. And so it's like, there's something special there. And then I agree with you. Just kind of expand on that point that on the owner side, the hospitality side, there is something special about, like, their passion and their love for what they do.

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Angelo Esposito [00:09:52]:

And it's kind of contagious. It's kind of contagious in a way, which, on my side, is why I love what, you know, we're in the tech side, but helping restaurants. But same thing. I'm just passionate about helping these people because they are so passionate about what they do.

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Danny Klein [00:10:06]:

Right. Yeah. No, I mean, that's 100% correct. I had the very surreal pleasure of interviewing Andrew Cathy, the CEO of Chick fil A, last September for the keynote of the very first event that we ever threw. And, you know, it's just. I mean, first of all, I remember sitting there the night before, thinking, how in the world did I end up here? You know, how did I go from that story that I just told you to interviewing the CEO of Chick fil A in front of 900 people? But again, to what we were just talking about, the way that he talks and the things that matter to him, you know, in that company, you know, it's just such an infectious thing. To your point, you know, people ask me all the time about them, specifically of, like, how, you know, how are they also friendly, you know, and how they. And, yeah, part of it is training, of course.

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Danny Klein [00:11:02]:

And, you know, they're sort of their high standard for the way that their employees are. And there's, you know, accountability for it. You know, you're not going to go work there and not be that way. It's just not going to be a thing. But they don't. But it's gotten to a point now where, you know, he was talking about this. It's really about the operator, the owner operator. They have to be that kind of person, and then they tend to hire that kind of person.

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Danny Klein [00:11:28]:

But more even so than that, if you go to work there now, you just kind of know you have to be that way. And so you, you know, it's like that's what you already bought into because their culture is so deep and rooted in something very specific of being, you know, just friendly that you're not necessarily going to go work there unless that's the type of person that you are. So, yeah, that, to your point, is pretty special. I mean, you just don't see that kind of thing in most industries because they can't live that day in and day out the way that a company who feeds people does. And so, yeah, it's a pretty incredible thing.

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Angelo Esposito [00:12:10]:

Yeah, that's really cool. And then, like, I can only imagine what were maybe some of the things that stood out apart from culture. And, you know, sounds like that's obviously something that chick fil a does really well. But now that you mentioned it, it's super cool that you interviewed the CEO. Was there anything else that really stood out that you can share?

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Danny Klein [00:12:29]:

Yeah, I mean, it was such an interesting conversation in so many ways. And one of the moments that a lot of people have talked to me about, even now, I mean, I just saw a post on LinkedIn about this literally yesterday from the CEO of Big Chicken, which is a, you know, fast casual that's growing, that, you know, Shaquille O'Neal owns, or at least is part, you know, involved in her, whatever. But, yeah, so he, he mentioned Andrew Cathy, that, you know, one thing that he does is he reads his children books at night about how to read a P and L. And so when he said that at the time, you know, I didn't know if he was kidding. You know, he was like, is he making a joke? So I asked him about that on stage, and he was totally serious as something that he had been brought up in that world and Dan, Cathy and so forth, it kind of instilled in him. And so I made a comment on stage at the time about how I read my son this book about owls and what does that mean, my child is going to grow up to be? And it was just kind of a funny light moment in between all the things he was talking about. But his kind of, his, his famous line from that, from that keynote was he had, going back to what I was saying a minute ago, he was this, he had this thing where he was saying that cared for people. Care for people.

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Danny Klein [00:14:01]:

And so in the time that he had said that, a lot of people started posting it online. And I posted the video a couple weeks later, and that line really resonated with a lot of folks. And again, it's not a complicated thing, but is just more. If you're a franchise organization, you cannot really control how your operators hire and you can't control the way that they manage some of those things. You can give them guidance and what have you. But that's the whole nature of a franchise system, is the owner operator. And so the idea at Chick fil A is really to care for that owner operator. And then these cared for people will care for people.

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Danny Klein [00:14:44]:

And again, that kind of goes down the ladder of the hourly crew member to, you know, the people that, you know, you don't see in the back. Again, it's just kind of a model of hospitality. But, yeah, I mean, that, that was kind of. But, you know, he told the whole story of Chick fil A at the beginning. It was an interesting thing because I, I had talked to him a little bit, kind of maybe like a couple weeks before, but, and I didn't really know what he was like, though, because I never had a long conversation with him. And somebody was asking me that morning as I'm standing there in the back of the room, what kind of guy is he? Is he going to be really talkative? Is he going to be short with you? And I'm like, I have literally no idea. I asked him this first question and he just talked for eleven straight minutes. That's awesome.

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Danny Klein [00:15:42]:

Telling the story of his father and grandfather. And so then at that point, I was like, okay, well, you know, this is gonna be good. And he went into telling the story about how he was a football coach and how he came up in the business because, you know, they made him work in the business. He didn't just become CEO. He was an operator. He worked in the corporate level. You know, he was out in South Africa. And so he had gone through a lot of levels in the organization.

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Danny Klein [00:16:11]:

And I went to visit Chick fil A, not to turn this into an entirely chick fil a podcast, but you know, a couple months ago I just kind of went down to headquarters and there are a lot of Cathy's who work there. I did not know that. They work at a lot of different functions, but the model being that, you know, they're not, they don't just ascend, you know, they all come up through system to get them to where they are. And so again, it's just a really well run organization that cares about the right things. And then, you know, then you sit there and they go, okay, well, they made $18 billion in sales last year across 2700 locations, which is astronomically crazy, by the way. And that's how they did it. You know, I love it. It's an amazing story.

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Danny Klein [00:17:05]:

Probably, you know, of those in the last 20 years in the industry, it's just hard to rival that one.

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Angelo Esposito [00:17:13]:

Yeah, no, super, super interesting. And for people who want to check that out, including myself, is that interview online? Because this sounds like something I'd love to check out.

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Danny Klein [00:17:22]:

I'll just. I only have one clip online. Yeah. I didn't share the whole thing for various reasons.

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Angelo Esposito [00:17:29]:

Okay.

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Danny Klein [00:17:30]:

But with that said, on a shameless moment of plugging. So that conference, as I mentioned, was the first year that we ever did that, and that was last September in Atlanta. It's called the QSR Evolution Conference, which was a. The process of putting that thing together and launching it from the ground up was something that aged me greatly. But the payoff was amazing. Like I said, with interviewing him, getting him the keynote, it was unbelievable. I never thought that was going to happen when I first reached out. And so that really set the tone.

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Danny Klein [00:18:07]:

Not bad for the first time, right?

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Angelo Esposito [00:18:09]:

Yeah.

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Danny Klein [00:18:11]:

And we had, I mean, we had so many speakers, it was. That was kind of how we wanted to differentiate ourselves or we were going to really make it very content heavy, which is kind of how we operate as a magazine too. But the. So we had 161 speakers and 159 of them showed up, which was amazing. And one of them had COVID and the other. I don't remember what happened.

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Angelo Esposito [00:18:36]:

Wow.

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Danny Klein [00:18:37]:

But the news there is that I'm about to open registration for year two at the. On March 1, probably. So be on the lookout for that. I do know who the keynote is. I have not announced it yet. I'm in the process of making some graphics and things, but be on the lookout for that. I mean, this might air after that news, but yeah, this will probably air.

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Angelo Esposito [00:18:58]:

In a couple of weeks. But for people who want to check it out. Can you maybe like what will be the link they can go to to kind of learn about the conference or sign up or register?

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Danny Klein [00:19:06]:

Yeah, yeah. I mean, honestly, the best thing to do would just be to follow me on LinkedIn and just kind of wait for it. If you want to reach out to me directly, that way I can do so as well. There is a QSR evolution website for it specifically, which is just let me check what it is exactly, just to.

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Angelo Esposito [00:19:26]:

Make sure we put people in the right path.

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Danny Klein [00:19:28]:

But yeah, it's qSR evolutionconference.com dot. But again, if not personal LinkedIn, you would just be refreshing that. So the best thing really to do is just to follow me and wait for me to. Because once it's, once it's announced, I will, you know, I'll go with it. So best way is just to follow me. And I love that. Stay tuned.

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Angelo Esposito [00:19:49]:

I love it. So you heard it, QSR evolution conference.com or just follow Danny Klein on LinkedIn and he'll announce that. That's exciting. If it's coming up in September, depending where it is, is it going to be Atlanta? Same thing in Atlanta?

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Danny Klein [00:20:02]:

Yeah, it's gonna be in Atlanta again, same date range. It's the week of Labor Day, so it's the fourth and fifth. Got it. The only difference being that we put it in a larger hotel because we're actually. So last year it was three conferences in one or two conferences in one venue. It was the QSR evolution conference, and then what we called the Next Gen Restaurant summit, which is just full service, basically. So it's kind of what we identify as the emerging brands within the full service space. We call them next gens, but again, it was just more like, but they lived in the same venue.

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Danny Klein [00:20:41]:

You got one ticket, you can go to whatever track you wanted.

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Angelo Esposito [00:20:44]:

That's cool.

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Danny Klein [00:20:45]:

We just branded them separately for marketing purposes and also to just make it so that if you were interested in one side of the industry and not the other, you didn't have to go to, you didn't have to listen to full service stuff if you didn't want to.

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Angelo Esposito [00:21:01]:

Right.

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Danny Klein [00:21:01]:

Which again, is how we operate it as an organization, which is really difficult at times since nobody else tries that. Everyone else sends like one email in the morning and we send two. But we do that so that we can speak to a very specific group. But anyway, the point is we're adding a third show this year, which is, it's going to be called the Pizza Power Forum. Okay. It comes from a magazine that came into our family of brands about a year ago, PMQ. So they're going to have a track at the show too. So we're going to a larger venue, the Marriott marquee, so that we can house three events instead of two.

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Angelo Esposito [00:21:42]:

Okay. Wow.

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Danny Klein [00:21:43]:

So it's going to. It's going to be even bigger, I guess is the theme to take away from this?

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Angelo Esposito [00:21:48]:

Very cool. And look, when we publish this, we publish on YouTube, on Spotify, on Apple Music, all that stuff. And then we also throw it in our newsletter so we'll definitely reconnect. And when it's live, if we could throw in some type of promo code to the listeners or something. It doesn't have to be a promo code, it could be something else. But we'll definitely link details of the event. So we have a big restaurant audience so happy to help and to add some visibility. And I know that QSR celebrating their, I think, 27th year and FSR their 12th year.

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Angelo Esposito [00:22:17]:

So I'd love to know and this might be a loaded question so we can dissect it, but how have you seen the restaurant industry evolve during your time at these publications? So, like we can maybe like do some highlights of like how you see maybe the QSR side evolve and then maybe a couple highlights on the FSR side. Because we have a lot of restaurant operators and owners that listen in and love to just hear your take on the evolutions that you have been seeing on both QSR and FSR side.

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Danny Klein [00:22:44]:

Yeah, I mean, it has. It has definitely been a lot of things. So I've been here about nine years now, and I think like most people in this industry, we live in two spaces in our brains right now. So when I got here, you'd always write these things, like before the recession and after the recession kind of thing. And what was interesting about that, though, is that from a restaurant perspective, yeah, it wasn't great for some people, but for the most part, the industry was relatively recession proof. That's just one of the things about it, because people have to eat and then they have this whole lipstick effect thing where people might cut back on more expensive things in their lives, like going to disney World, but they'll replace it by going to dinner with four. So the industry changed a lot out of that time. But what was different then is what kind of happened was you saw a lot of larger chains kind of become overleveraged and start to retract, especially in casual dining.

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Danny Klein [00:23:54]:

And then what you saw in response was you saw this wave of fast casual growth you know, that was the big story in, like, 2010, you know, was that you had this entrepreneurial movement happening at this other side of the quick service spectrum. And we started to call it fast casual 2.0. So, you know, essentially giving a moniker to a brand who is even a step above the quality growth that Chipotle basically introduced into counter service. And then you started to see brands like modern market and Sweetgreen and things like this. So these were what we were calling 2.0s that they were, and they were opening like crazy. And we opened, we launched this report called the 40 40, where we basically take 40 of them under 40 units every year. And we've been doing that for eight straight years now to kind of give you the scope of how many of them, however. So that, to me, was like the post recession story.

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Danny Klein [00:24:58]:

You had a lot of bankruptcies happening because the money that came into the sector at times was a little bit cheap, and it didn't. You had a lot of debt pile up for some brands who couldn't support it in the end. And so you got to start to see a lot of larger brands go bankrupt. And even in the QSR space, there wasn't a ton of growth happening at that kind of level. I mean, McDonald's, you know, they just grew for the first time this past year. And I don't remember off the top of my head of what it was, but it was many years, and that was kind of the story. It was like, okay, well, the financial implications and what have. What's happened here and the rent, and then you had fast casual start to flood these inline locations instead of drive thrus and so on and so forth.

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Danny Klein [00:25:45]:

And they, it spurred this explosion of that side of the industry. Now, again, to go back to what I said at the beginning, now we split our lives in the pre and the post COVID conversation.

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Angelo Esposito [00:26:01]:

Yeah, everything's free and post COVID.

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Danny Klein [00:26:02]:

So true, right? And so COVID was entirely different effect. It was nothing like the recession I remember at the time. You would sometimes see comparative kind of looks from that view, and it never made any sense. For restaurants, the pandemic was more like a disaster event. It was like a. A hurricane, you know, coming and, you know, causing a disaster in the city versus a recession, because, again, you had to do all these crazy things like close the dining rooms and then open them at 25%, put plexiglass up, you know, have servers who are, you know, wearing masks and then putting, you know, taking the tables off the menu. All these different things that were happening that were so unnatural to the way that the experience existed.

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Angelo Esposito [00:26:50]:

Right.

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Danny Klein [00:26:51]:

And so the effect on the industry at that time and at the whole was just nothing like a recession. And what ended up happening was almost like the reverse. And so what you see now is you see brands like Burger King's parent yesterday, this is February 15, outlining they're going to get the 40,000 locations. McDonald's put that number at 50,000, Domino's, I think, at 55,000, Starbucks at 55,000. Chipotle up their number to 7000, and so on and so forth. Why that happened is, again, it's kind of like looking at this in reverse, where they were able to secure capital during the early COVID days. They pulled these revolvers out and did all sorts of things, were able to really withstand the effect early on, more so than a full service restaurant and definitely more so than an independent. And then they all recovered a lot quicker than we expected or that anybody expected.

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Danny Klein [00:28:00]:

I mean, quick service was back on its feet literally within months because of the drive thru.

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Angelo Esposito [00:28:05]:

Yeah. Curbside pickup and all that.

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Danny Klein [00:28:07]:

Yeah, curbside takeout delivery, all these things that was just seamless for them to get involved in. You know, most of them were already talking about it, or, you know, as we always used to say, COVID was not really an inventor of trends for the quick service industry. It was just an accelerant. And so that's a much better place to be than, you know, again, if you're a fine dining restaurant and you're trying to put all your customers into an igloo outside, some of this crazy stuff that was going on.

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Angelo Esposito [00:28:37]:

And so, you know, the inside of the outside. Right? Like, when you think about it, it made no sense. Right?

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Danny Klein [00:28:43]:

Yeah, I know. I remember, I remember seeing, I think it was, it was a red robin. And this is not a knock on them. They were just doing what they were allowed to do. But they had like a big tent outside near me, and I was like, that doesn't seem safer, but I get what's going on. And so again, what ended up happening there is the. So that's what really triggered what's going on now is you're starting to see a lot of, at least from a unit expansion level growth, from kind of the big, getting bigger, you know, and franchise growth is also holding steady because the line, the capital, is a lot easier if you're trying to grow a franchise than it is if you're trying to open your own concept. And so it's really, it's really stunted some of that entrepreneurial type of fast casual expansion.

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Danny Klein [00:29:31]:

And then at the same time, you know, a lot of those brands struggled pretty mildly through that stretch and are still trying to recover. Same thing with independence. And so now I do think they're going to come back, especially fast casual. You're already seeing it now. But what's really interesting about all of that is that it's not necessarily what the market commanded. It wasn't like the customer asked for this. I would say in 2010, there was a little bit of that because global menus, higher food quality, brands of sustainability, things like that. That was a lot of what like a younger generation was looking for.

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Danny Klein [00:30:12]:

Like, if you look at how Shake Shack grew, it was like they were kind of built to being the quick service for a changing generation. And that was really what gave a lot of credence to some of these brands popping up in, like, urban centers and being so successful. But like, you look at it now and people love independent restaurants. It's not like we don't want more independent restaurants in our neighborhoods. Yeah. So it isn't being driven necessarily by the market as much as by, you know, what happened, you know, and what the current cost to operate businesses. You know, of course, as you know, that's the topic now is just the price of everything. And so, you know, the broader theme is it's like the guest counts across the industry right now are a little bit strained, you know, especially in January.

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Danny Klein [00:31:06]:

And most of the growth that you see now is coming from price. And there is getting to a point now where I was talking to someone recently about this in an article that we posted, and it's just like, there's nothing to left the trade down to. The industry is going to have to solve that problem at some point. When you have McDonald's telling investors that they're shedding visits from the 40,000 and under income demographic, that's a little bit of a canary in the coal mine because no one would have ever thought that would be happening. And they've been balancing it out by people trading down into McDonald's out of casual dining and what have you, or even fast casual, which has become 14 $15 average checks. And at some point for McDonald's. And they know this. I mean, they talked about what they're going to do to draw that group back, but they're not going to continue to bank on that being the reason that they grow the people trading out of casual and higher priced restaurants, because that's just not who they are.

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Danny Klein [00:32:22]:

So that's kind of where we're at now is most brands are not growing traffic. Some are Texas roadhouses, as I wrote this morning. So is Chipotle. And part of that, I think, is because they're a little bit higher priced and their quality proposition is very clear. And if you kind of price, like at Chipotle right now, say it's like twelve, fourteen dollars, the gap between them and McDonald's now is not what it used to be. And so I think that that's actually helping them and helping brands like them because the guests are able to kind of be like, well, you know, McDonald's costs $8910. If I want to order for delivery, it's dollar 15.

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Angelo Esposito [00:33:12]:

Exactly.

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Danny Klein [00:33:13]:

And Chipotle has sort of been responding with the, they've got over 800 of these pickup lanes where you could order and pick up. You don't have to pay the extra price. And so that kind of technology like shake shack has the 30 drive thrus now. And so these things are blurring the lines of convenience and it's helping some brands while straining others. And that's not to say McDonald's is struggling. They're doing the opposite of that. But they are in the midst of evolving to that. What kind of value can they bring back? Because it has made the sector a pretty interesting place right now.

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Danny Klein [00:33:49]:

McDonald's has done, I mean, their top line in the past four years has been as impressive as any restaurant chain in America. It's just what does the future look like? And that, I think, is where we're headed right now. You're going to see a different definition of value and I think most likely through digital, through what do you get for what you give? If you're giving somebody an email or frequency, what kind of offer you get a response, what kind of menu innovation is going to meet this? And then at the same time, seeing brands like Wendy's and others just Burger King really improve the way the restaurant looks, how much technology is in the drive through, so that if you are paying more money, you're going to have a better experience instead of the old trade off of, let me just do this as fast as possible so I can get fed for as cheap as possible, because that's no longer really a proposition for a lot of people. Interesting, long answer, but it was a complex question.

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Angelo Esposito [00:34:51]:

No, I love it. I love it. So there was a lot, a lot of good information there. So, like that, super interesting. Like you had me engaged the whole time. And it's funny when you mentioned about like independent restaurants and like it made me think. It's like, and I'm curious to get your thoughts on this, but, like, when I think about, you know, cool cities worldwide, that's something that makes a city cool apart from its history, is the fact that there is a lot of independent restaurants, right? Like, it's a difference between, like, going to Montreal, that's where I grew up, let's say. And there's a lot of cool independent restaurants or going to New York.

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Angelo Esposito [00:35:24]:

Right, versus going to maybe a city where it's only chains. And so there's something to be said about like, yeah, that mix of what people want. And I think that that's probably a big driver of, like, tourism and what makes something cool. But on the flip side, there's just the unity economics that's, like, balancing, like, cool places and cool restaurants. But also, it's really hard to do it independently. So you're seeing more and more chains and franchises, but it's like, do people really want that?

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Danny Klein [00:35:49]:

Right? Yeah. And that's, you know, so this thing that we call next gen casual, as I briefly hinted before, a lot of that, a lot of that is a response to that. So it's kind of like this idea that you might be a chain, but you kind of look and feel like an independent, you know, leave a little bit of scale and leverage to be able to survive some of these things. But your restaurants look different. You know, like, we, like, true food kitchen is kind of a good example or like a, you know, a tupelo honey, you know, where they don't look like, they look like they fit the market that they open in. The food comes out nice, you know, the plates, the presentation. They've got chef driven things from the beverage side to the food side. And so we've seen that, you know, as kind of like a kickback of the difficulties to run an independent restaurant.

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Danny Klein [00:36:39]:

But yeah, it's, you know, it's. That was the great tragedy of COVID was what it did to independent restaurants. And what's frustrating about it now, through those years, it was just like one ridiculous thing after another in terms of federal aid and all this kind of stuff. There were different state by state regulations that a lot of times made no logical sense. And the way that they were handing out money and, I mean, it was just a, you know, there's so much advocacy happening at the time and left a lot to be desired in the end. But even now, I mean, there are things now, we were writing a little bit about it this week, you know, just things like the tip credit, you know, and so Washington DC is kind of in this process of phasing that out. And again, it's, it's like a regulatory move where, you know, basically they don't want people to pay servers. Three, $4 an hour historically has been the case.

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Danny Klein [00:37:47]:

Three, four, five, whatever it is by state, you know, even though the rule always required restaurants to cover that up to minimum wage through tips, you know, if they didn't, they had to pay for it. And it was a system that worked forever. The idea of phasing it out is such a misguided and absurd concept that it's forcing people to close and lay off employees in DC like crazy. And it's killing independents because they can't pay 17, $20 an hour to a server. And on top of that, the server doesn't want to make that anyway because they were making way more than that before. So then you end up with all these things like, are we going to tip pool? Can you even tip pool in this state? And it's just a, I posted this on earlier in the week where there's just like a lot of times people make laws who don't actually spend any time in a restaurant. And if you did so you would know that nobody is asking to get rid of the tip credit. Same with like the joint employer thing that's going on now.

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Danny Klein [00:38:51]:

So independence just, I mean, joint employer is more for franchises, but, well, actually, to a degree you would consider that an independent problem because a lot of franchisees are actually just independent restaurateurs who are running a corporate location or a brand with a corporate banner. So again, it's just independents always face these things on a daily basis that are really crazy, like the commodity inflation and the things and going on in rent in some cities like New York, and not to get on a soapbox a lot of times. And I've talked to many of them who tell me this, or it's like they look down the pipe at what they're going to have to do, financially speaking. And they're just like, I don't want to do this anymore. So they sell, they back out, they go join a larger group, whatever it might be, then that doesn't benefit literally anybody because to your point, they make every market that they're in better, even for chains. There's an upside to having that in whatever place you want to open. I've never heard a chain tell me I want more independence to close. I guess they wouldn't come out and say that outright, but still, broadly speaking, it's sad.

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Danny Klein [00:40:17]:

The challenges that they get hit with are. It's tough, unfair. That's the thing about COVID is like, I remember talking to the NRA at the time, National Restaurant association, not the gun lobby, and they were just saying, well, you know, most independents have like two weeks of cash on hand, and that sounds alarming, but it really isn't because that's just how they ran. They were happy enough being able to pay themselves, their employees, month to month and living the life that they had dreamed of living. They weren't meant to cash bank accounts with $50 million in them. And so this idea of you've got to close or you got to go to 25% for six months. And, I mean, it just was never realistic, you know, and then they tried to go to delivery, and they got just completely gouged by aggregators and so on and so forth. And, you know, there was a place by my house that, you know, they tried to.

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Danny Klein [00:41:16]:

I remember I ordered one time because they were having like, a support us night, and, you know, it was like a duck breast came in a plastic container, and it was just terrible, you know, and you didn't, you didn't get the experience of sitting in there and what it smells like and what it looks like in the service, and they. They just could not live within that world. And it's tough, and they're gonna come back and they are, you know, and they're always gonna be wanted and they'll always be successful, but they just have to face so many trials. And, you know, that's one of the things we try to do. I mean, we try to write about it and be an advocate for him and, yeah, it's just. It just never ends.

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Angelo Esposito [00:41:56]:

Yeah, I hear you. And on the switching gears a bit on the tech side, I know, like, all these things have evolved and you kind of alluded to it, but, you know, post COVID, a lot of things were accelerated on the QSR side. But I'm curious also about the FSR side. So just maybe like, touch on a couple of different technologies or trends you've seen tech wise, both on the FSR side and maybe on the. I think QSR is a bit more obvious, but I'd still love to hear some interesting things you see. And I think, like, if I'm not mistaken, one of my previous guests was talking about how Chipotle has, like, an automatic avocado cutter slice, you know, tech like that. But I'd love to hear from you, like, what are some technology trends you've seen.

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Danny Klein [00:42:37]:

Yeah, well, I'll say, like, in so full service, and this is true, most the industry, like the Chipotle's avocado cutting, I think they can't remember the pun exactly.

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Angelo Esposito [00:42:48]:

It was a good name. Yeah, I remember it was a good name, but I can't remember the name.

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Danny Klein [00:42:50]:

Yeah, the autocado, I think, if I'm not mistaken. But anyway, like that. So that they're about to test that in one location, so. But the, those type of robotics and really sexy kind of cool technologies they have, you know, they kind of happen here and there, and they're awesome. But the vast, vast majority of technology in the restaurant industry is not that flashy. And in full service in particular, because, you know, a lot of the operators want some invisible tech. You know, they're to kind of balance it out. Like Texas Roadhouse yesterday, you know, they were talking about they're putting KDS's into their restaurants, and this is something that first watch has been doing in the past couple years as well.

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Danny Klein [00:43:37]:

Makes all the sense in the world. Right. Especially from the perspective of the employee, because that kind of what you expect to see on tv, where, you know, they're putting the ticket into, like, the little whatever you would call that, and they're spinning it, and then the chef is yelling, and it's just, you know, it just creates complete and utter chaos. In some places, that's cool. That's kind of like what it is. But, like, in a place like Texas roadhouse, there's no. There's no upside to that. And so a Kds is just a great concept for them.

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Danny Klein [00:44:13]:

And then the other technology that they're using on the other half of that is they're doing table pay, you know, pay at the table kiosks. And that's been a big full service thing that kind of emerges. Well, because, you know, there are a lot of experiences in the full service space that I don't think everyone wants to be. Tech fixed.

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Angelo Esposito [00:44:35]:

Yep.

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Danny Klein [00:44:35]:

You know, there are some people who hate QR codes, some who like them, you know, but there are very few people who have a problem with not giving their credit card to a server or having to flag them down and wait for them and things like that. So I think that that's a technology you're going to continue to see more of. And you see that both at the table, in their case, and then you see it in the hands of the servers themselves. I think there's a lot of room to grow that. I think right now that remains a little bit clunky. And a lot of restaurants haven't really figured out, like, how to do that and kind of because it's weird. It's like you put it in front of the customer and you usually, like, stand over their shoulder, pick how much they're going to tip you. I've been to a couple places recently where they just, like, put it down and walk away.

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Danny Klein [00:45:29]:

And I like that. But again, there's room to grow that technology, you know? And so that one I think you're going to see a lot of. And also, even in the case of, like, you know, another broken egg and some other brands who have servers with handhelds while they take your order, which has a lot of benefits, too, because you're able to, you know, in that case, if you're trying to train somebody, they can see the menu, like, right in front of them. Right. They're not trying to, you know, you're not constantly trying to have everybody memorize every single special. So I think there's a lot of room to grow that, too. They're not going to work for every brand, but for somebody who moves a lot of volume at a day, part, like brunch makes all the sense in the world, and then it's stuff that's just kind of happening behind the scenes. There's AI and automation entering the scheduling space and the inventory space and things to make the lives of a GM easier or even an independent restaurateur and somebody who maybe wants to go greet guests instead of crunching that kind of stuff all the time.

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Danny Klein [00:46:36]:

That's all really exciting technology and probably going to be pretty ubiquitous within a certain period of time. Yeah, but outside of that, I mean, I would say those are kind of the main full service things right now. There are obviously a multitude of other things, as I'm sure you know, but those are the ones that I would say that I see the most of right now is either handheld technology, pay at the table technology, and kds. Those are kind of like the, the trio of things. And I talked to someone the other day who had one of those robot servers from Bear. Robotics is super cool, but you have to have a very specific operation, and those are going to work for some people and not for others. Probably amazing in hotels, but, yeah, it's a never ending thing, for sure.

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Angelo Esposito [00:47:29]:

We've seen that, too on our side. The mission at WISK has always been, and you kind of alluded to it, giving restauranters or time back to focus on the things they love. So really, it's like, I always joke around. It's like we help with a lot of just the boring back of house stuff, which is boring but necessary. But inventory ordering, invoice management from your suppliers, recipe calls all this stuff that's like necessary. And everyone's somewhat doing, whether it's on other systems or on pen and paper, but it's like how if we make it just a little less painful so they can just get time back. And I think, like, to me, those are like, I love those types of tech because it's, it's really helping these people. And it might not be the sexiest thing.

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Angelo Esposito [00:48:09]:

Like, inventory is not sexy and invoicing is not sexy, but it's mass audience. Like, everyone kind of needs it. Where to your point? Sometimes you kind of have these niche things that a small percentage, and, you know, they make the news because they're interesting and the robotics, but it's a much smaller audience maybe adopting the, these things, you know?

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Danny Klein [00:48:28]:

Yeah, I mean, I remember I was listening to White Castle give a presentation on technology at a conference, which was amazing. They were talking a lot about flippy the robot, the burger flipping, or actually doesn't flip burgers. In their case, it cooks the onion rings and stuff. But anyway, they were talking about it for a long time and it's incredible. And they're kind of like the big case study for it and they're about to scale it, or maybe they're in the process of it. I haven't heard an update in a little while. Anyway, they were going on about it for like 40 minutes. Amazing questions back and forth from the crowd.

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Danny Klein [00:49:04]:

And somebody was just like, how many stores it is it in? The answer is ten. You know, and I was like, I thought it was in ten, like three years ago. But again, so it, so that's just a much slower burn and it's going to happen, you know, and it's going to happen in specific places like Chipotle's, avocado cutting Rotabi. And then, you know, now they're also doing the digital make line. I haven't heard them recently talk about the, you know, tortilla chip cooking robot. Yeah, but, you know, these things, again, like inventory and those kind of technologies, those are always going to actually be more vivid and present. It's just that, yeah, they don't gain the same kind of headlines.

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Angelo Esposito [00:49:47]:

Right.

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Danny Klein [00:49:47]:

But that stuff is fun to talk about and somebody is going to do it and do it in a way that helps them. But, yeah, I think the, the broader industry trends and the things that are actually happening and optimizing on a broad scale right now are actually things like what you said and technology that's happening to make lives easier for other tasks versus some of these cooler type of headlines that we read.

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Angelo Esposito [00:50:13]:

That's awesome. And then last but not least, I can listen to you all day because you have so much knowledge, because you're writing these stories and you're up to date on all these brands and the industry. So it's so interesting. So for people who want to check out these publications, you know, follow you on LinkedIn, I want to give you a chance just to plug everything, the QSR side, the FSR side, your personal LinkedIn, because your wealth of knowledge. So please feel free to plug away.

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Danny Klein [00:50:39]:

Yeah, well, like I said earlier, just follow me on LinkedIn. I'm not really into any other social platform at the moment. I used to have a Twitter presence, but I let that die for a lot of reasons. It's just too crazy out there. And I couldn't, I couldn't drive any traffic, really. Any. That's another story. But.

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Angelo Esposito [00:51:01]:

And then on the QSR. Sorry, sorry, go ahead. I was going to say the website.

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Danny Klein [00:51:05]:

Yeah. Qsrmagazine.com. Fsrmagazine.com. We are both, our models are both free to anyone in the industry in terms of getting a subscription to the magazine. As long as you work in the industry, we will send it to you free of charge. We're monthly on the print side. You also can sign up for our e letters that way as well. It's on the same kind of menu bar for subscribe.

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Danny Klein [00:51:31]:

We have five of those a week for QSR every morning and then four a week every morning from the FSR side. So a lot of different things. Like I said, we got the event coming up actually here in two weeks, I think probably either right when this airs or right before. We're having an event called the Women in Restaurant Leadership Summit, which is the first time we've ever done that. That's coming up here on February 28. So I'm kind of gearing up for that now. But you could always become a part of that if you're interested. It's kind of a movement that we're starting to build.

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Danny Klein [00:52:05]:

And. Yeah, that's a story.

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Angelo Esposito [00:52:07]:

I love it. I love it. Well, you heard it here. Check out Danny Klein on LinkedIn. Follow, check out QSR magazine.com, comma, fsrmagazine.com. Both the women in tech event and their other event coming up in September. So we'll be launching that beginning of March or not launching but announcing it. So follow me on LinkedIn.

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Angelo Esposito [00:52:27]:

Danny Klein, editorial director at QSR and FSR Magazines thank you for sharing your knowledge and for joining us today on the WISKy and all podcast.

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Danny Klein [00:52:37]:

Yeah, thank you for having me was awesome.

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Angelo Esposito [00:52:40]:

Feel free to check out WiSP AI for more resources and schedule a demo with one of our product specialists to see if it's a fit for you.

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