Salem Najjar [00:00:00]:

One of my biggest frustrations when I was doing bookkeeping and tax work for my clients was that it's a lot of, like, garbage in, garbage out. You know, you surprise so many people just, like, undervalue the services that, you know, a good accountant should provide. You know, people are just like, oh, I want to pay the minimum monthly bookkeeping fee and, you know, whatever. But you don't realize that you're not going to be able to improve your business profitably if you don't know where you're overspending money.

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Angelo Esposito [00:00:27]:

Foreign. Welcome to another episode of WISKing It All. We're joined today by Salem Najjar, founder and CEO of SERVE Hospitality Group. Salem, thanks for joining us.

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Salem Najjar [00:00:51]:

Yeah, happy to be here.

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Angelo Esposito [00:00:53]:

So, as always, I love having hospitality professionals on the show. We have a pretty good amount of restaurant listeners and subscribers as well to our. To our podcast. And so the idea is simple. We like to just kind of share knowledge, experiences, and stories. I always like to start with how people got into the hospitality space. So we'll definitely talk about SERVE hospitality and get into that. But I'm curious on your journey, like, how did you get into the hospitality space in the first place?

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Salem Najjar [00:01:23]:

All right. Yeah, it's a big question. I'll summarize it the best I can.

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Angelo Esposito [00:01:27]:

Yeah, don't worry. We got. We got time and we love stories, so don't worry.

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Salem Najjar [00:01:30]:

Yeah, so I grew up in retail. My father did convenience stores and gas stations, and believe it or not, I really enjoyed that. The thing I didn't like about it was that it wasn't really scalable.

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Angelo Esposito [00:01:42]:

Right.

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Salem Najjar [00:01:43]:

So it was fun working in the business, a lot of hard work, and that part of it I enjoyed, but it wasn't scalable. So I really liked numbers and math. And one of my uncles is an accountant, and he advised me to kind of go the. The accounting route because he said, hey, I know whatever you do, you're going to be an entrepreneur, so you might as well be good at accounting so that you can manage your own taxes, your finances, all that kind of stuff.

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Angelo Esposito [00:02:09]:

Right?

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Salem Najjar [00:02:09]:

So it was a good piece of advice, actually. So. And because I, I enjoyed math and those things, I went down that whole path, became a cpa, worked for one of the big four. Couple of years in, I decided to open up my own accounting practice. And so I started building that out, and slowly I actually started picking up franchise clients of various different brands, some larger than others. But that's what really introduced me into franchising and the concept of franchising And I really liked it. So I decided I wanted to passively invest in franchising. At the time time, I thought it was going to be passive, right? And I was like, I'll bring in an operating partner.

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Salem Najjar [00:02:48]:

Maybe he can run these, you know, four or five restaurants for me, and then I can still keep growing my accounting practice. But it was a rude awakening. And I quickly learned that, you know, especially the standards that I like to operate my businesses at, I needed to kind of grab the thing by the horns and do it myself.

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Angelo Esposito [00:03:04]:

Right.

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Salem Najjar [00:03:05]:

So I decided to basically stop doing the accounting practice and vertically integrate into the hospitality franchising stuff. So I. I wanted to take all my accounting skills and relevant experience there with financial acumen, basically, and plop it into my restaurant management business so that I could run really profitable restaurants first. A couple steps back when I was looking for franchises, I found Tropical Smoothie Cafe, which was maybe 300 units nationwide and only about 30 of them in Michigan. But the CEO came into town and Metro Detroit, where I'm from, and I went and met with him, and I was really impressed. And, you know, after doing some due diligence, I really decided that was going to be the brand that I wanted to sign up with. So I signed up for, like, five, six locations. And then we can get all into the stresses and the highs and.

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Angelo Esposito [00:04:02]:

Right.

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Salem Najjar [00:04:02]:

But it was a. It was a really grunt, you know, grunt journey of, you know, five to six years of building out sort of the base of it all. And then from there, once the infrastructure was in place, it was like, now it feels a little bit more like pouring gasoline on a fire.

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Angelo Esposito [00:04:17]:

Right.

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Salem Najjar [00:04:18]:

So.

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Angelo Esposito [00:04:19]:

Wow, that's awesome. And so. So what gave you inspiration to go from the accounting practice to then kind of jumping into, to, you know, like you said, whole vertical, but specifically on the hospitality side.

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Salem Najjar [00:04:31]:

Yeah. I mean, so, you know, I think my background in retail with my dad's business has influenced that a little bit.

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Angelo Esposito [00:04:37]:

Right.

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Salem Najjar [00:04:37]:

So, like, him being in retail and me enjoying that and then seeing franchisees and saying, okay, wait a minute. This is a way to kind of be in retail and service, but in a way that's more scalable, right? Not like convenience stores and gas stations. This is a way you can actually scale something bigger and, you know, have systematic processes around it. And that's really where a lot of my core competency is, is like, you know, I'm not necessarily a restaurant guy, I'm kind of a numbers guy, but really, really systems, processes and procedures. So I really liked the idea of getting into Franchising so that I could have a model that I could then scale up. And I saw the potential to, you know, be sort of a multi unit franchisee.

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Angelo Esposito [00:05:17]:

I love that. No, and it's great to have you on the show because I think we'll definitely get into the. The numbers. And it's, it's something I always preach. It's like part of the reason WISK is exists is that we realize that so many restaurateurs get into the business because of their love for hospitality and this and that, but they don't realize until later, like holy bookkeeping and recipe costing and inventory and all these super tedious, boring but important things are the business. And so it's kind of like, oh wait, you kind of have to be decent at numbers. Like, like a restaurant is more numbers heavy than people might think. So it's really cool to see that.

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Angelo Esposito [00:05:54]:

We'll jump into that. I'd love to get your perspective on P. Ls and managing labels and cogs, all that fun stuff. But walk me through the journey because, you know, people typically say, you know, your first restaurant's the hardest. They said the next, the next big milestone is getting to like five. From what people tell me, five is kind of like uphill battle and then five onwards, it gets easier. I'm sure there's other big muscles, but I'd love to know from your perspective, walk me through the journey. Did you buy five right away or you started with one? Tell me a bit about what that looked like.

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Salem Najjar [00:06:23]:

Yeah, I would agree with that.

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Angelo Esposito [00:06:24]:

Right.

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Salem Najjar [00:06:25]:

I think that, you know, there's a lot of people that come into franchising or into the restaurant industry and they buy their way in.

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Angelo Esposito [00:06:30]:

Right.

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Salem Najjar [00:06:31]:

And that's if you've got the money to do it and you can acquire an infrastructure that's already in place. I mean, you're going to deal with different challenges certainly.

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Angelo Esposito [00:06:38]:

Right.

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Salem Najjar [00:06:39]:

You know, I tell people all the time the grass isn't always greener on the other side. And, you know, not necessarily that one industry is better than another. Every business is going to have its own challenges. It really just depends on what you want to be working on.

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Angelo Esposito [00:06:50]:

Right.

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Salem Najjar [00:06:51]:

So for me, I want to be working on the challenges that are related to growing the business. Figuring out how to, you know, generate the maximum returns for my business, how to create careers for people, how to grow the organization. Those are the things I thrive at working on.

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Angelo Esposito [00:07:06]:

Right.

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Salem Najjar [00:07:07]:

There's a lot of things that you have to deal with the way before that that are not as sexy to kind of earn your way to that point, right? So the first one, all of my locations were built by me, right? And so in the early days, it was a lot of like, okay, I open one, I bootstrap it myself. I take a lot of financial risk. I get that one up and running, get that one making money, bootstrap the second one, bootstrap the third one, right? And just keep going. And so I'm like, constantly reinvesting in myself. And you're never really financially stable, right? So it's like, you know, it's peanut butter and jell sandwiches for a while, right? You're just like, you're really. You're really going all in, right? So, but then, you know, the, the point about, like, whether it's getting to five or getting to six, it did resonate with me because that was kind of a breaking point. And it's only a breaking point from the sense of now you can sort of afford having more people, right? It doesn't necessarily need to get to five to five or six. If I was a, maybe a trust fund baby or if I had venture capital money behind me, it could have been easy from day one, right? But what you're really looking to do is get to the point where you have enough profit to be able to aff things like, you know, a district manager or an office manager or a secretary or a staff accountant in the office, right? Because until you get to that point, especially when you're.

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Salem Najjar [00:08:22]:

You're balling on a budget, it's a lot of. You're wearing, like, nine hats, right? Like, you're the. Like, I was figuring out how to post stuff on Facebook myself. I was figuring out. So I was doing the marketing, I was doing the hr. I was onboarding people. I was, you know, doing the accounting for my own, you know, restaurants. I was figuring out how to run the operations, how to put together the right protocols.

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Salem Najjar [00:08:43]:

Right. I mean, the franchisee is going to do a great job of being a partner. Hopefully they will if you choose the right franchise partner. Right. They'll do a great job of giving you, like, the processes and procedures so you don't have to think about the recipes or, you know, the mark creating the marketing assets. But you still got to do the local store marketing. You still got to do the. The accounting.

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Salem Najjar [00:09:02]:

You still got to do the things that are necessary to make the business make money.

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Angelo Esposito [00:09:06]:

That makes a ton of sense. And you, you said something there, which is perfect segue, which was if you choose the right part or franchise partner. So Again, we have a lot of restaurant listers, full service, quick service, everything in between groups. We have some awesome people on the show, from five locations to 300 locations. So I'm curious to know from your perspective, right, you've lived it, you've experienced it, what are things you could share with our audience of maybe what to look out for or things to maybe keep in mind when looking for a franchise partner?

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Salem Najjar [00:09:36]:

Yeah, I mean, teach their own. Everyone's going to have their own set of criteria. I'm famous for you. Whenever I've done podcasts or interviews or mentored people, for me it was really always three really clear criteria. Right. The first one for me was the leadership. I wanted to make sure that the leadership behind the brand had a very clear vision. Because when you have a lead, when you have leaders behind a company that are maybe like just money hungry or profit driven or have the wrong style overall, they're not going to be a sustainable player long term.

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Angelo Esposito [00:10:12]:

Right.

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Salem Najjar [00:10:12]:

So I really wanted to pick a frame franchise that I felt was like, this brand has ambition to grow nationally to like 15002000 plus units and be another big brand.

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Angelo Esposito [00:10:25]:

Right.

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Angelo Esposito [00:10:25]:

So that's a good one. Yeah.

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Salem Najjar [00:10:28]:

So the CE meeting the CEO in person at the time back in 2015 really made a big impact on me wanting to choose that brand and believing that they have the right vision and the right brand strategy. The second one is, you know, obviously I'm a cpa and you know, more importantly, regardless of me being a CPA or not, this is a hard business and we get into it to make money.

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Angelo Esposito [00:10:49]:

Right.

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Salem Najjar [00:10:50]:

And so you can't run a successful business to where you can promote and develop people and create careers and do it in a sustainable way if the business is not making money. So having a laser focus on, you know, what are the food costs, what are the labor costs, how difficult is this business to run. And even at the time, like I took it a step further and was really thinking about what's going to be my ease ability of getting employees and attracting them to my organization.

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Angelo Esposito [00:11:17]:

Right.

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Salem Najjar [00:11:17]:

Because some businesses are harder to run than others. And as the labor market goes up and down through its different peaks and valleys, I wanted to be thinking about, you know, how my brand is going to stand out compared to the competition when we're competing for the same labor force. And then the third one is I had to choose something that I would want to be in myself and I'd want to be proud of being associated with because like me personally, I would. I knew that I was going to have to go into the businesses, especially in the beginning, and I wouldn't have, I wouldn't have been able to candidly go into a business where I came home every day smelling like grease or fryers.

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Angelo Esposito [00:11:52]:

Right.

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Salem Najjar [00:11:53]:

So choosing the brand that I chose in the beginning was something that I felt like, all right, I'll be able to take my family here. I wouldn't mind working here a lot of days and hours and putting in the blood, sweat and tears that it's going to require and I'll be proud of what I'm contributing to the community. So those were my three buckets.

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Angelo Esposito [00:12:10]:

Right.

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Salem Najjar [00:12:10]:

And those are the three that I still pay attention to today when looking at the other brands that I get into.

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Angelo Esposito [00:12:15]:

Do I love that? I love that. And then for people that don't know, this is probably a good thing to talk about is tell them a bit about the brand, tell them a bit about Tropical Smoothie Cafe. Like, you know, good amount of people should know, but I guess depending on, on certain states, maybe they don't know.

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Salem Najjar [00:12:30]:

Yeah, so. So my company, SERVE Hospitality Group is basically a brand within a brand.

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Angelo Esposito [00:12:35]:

Right.

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Salem Najjar [00:12:35]:

Like I, I made the decision back in like 2019, four years into running my company, that this was going to be bigger than just me being a multi unit franchisee. This was going to be a hospitality group where we're go, you know, develop the right benefits and compensation packages and we're going to grow regionally and we're going to give people the opportunity to create careers. So that had to have all the things that a company needs to have.

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Angelo Esposito [00:13:01]:

Right.

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Salem Najjar [00:13:01]:

Like a set of core values. And it needed to have a vision and a mission and all those things. So that's where SERVE Hospitality was born from. And you know, Tropical Smoothie Cafe is a friendly, better for you concept serving, you know, bowls, smoothies, sandwiches, salads, that really appeals to any kind of audience. Right. It's not ridiculously healthy. It can be.

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Angelo Esposito [00:13:25]:

Right.

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Salem Najjar [00:13:26]:

And then there's also, you know, more indulgent options.

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Angelo Esposito [00:13:29]:

Right.

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Salem Najjar [00:13:29]:

But it's a place where I really feel like any customer can go to and find something that appeals to them. And so I've been a franchisee of that brand for nine years now. And more recently I've become a franchisee of Seven Brew Coffee, which is Drive Thru Coffee that is expanding rapidly across the United States. And I'm going to be developing a large territory in Michigan. So it's filling a need where we're trying to be really fun, you know, coffee really fast, great service and Cultivate kindness. So two brands that really align with those three buckets that I referenced earlier.

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Angelo Esposito [00:14:05]:

I love that. And those three buckets is going to be a great nugget for our listeners to really take away because it's someone who's lived it. And I'm curious, like today, how many franchises do you have of each?

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Salem Najjar [00:14:19]:

So I have 31 tropical smoothie cafes open across Michigan, Illinois and Wisconsin. We have another 20 to 25 in development, meaning, like areas that I have the territory for that I'm searching for sites on or I'm currently building a site in. At some stage or another, we're building out those markets. And then with Seven Brew Coffee, we'll be opening 65 of those, predominantly in Michigan.

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Angelo Esposito [00:14:45]:

Wow. Okay. So again, I hope that excites our listeners, someone who knows what they're doing. Even just having 31 today is a huge number. So thank you. Congrats is huge and it's super helpful. I'd love to kind of go through a bit of that trajectory again. I'm always about like sharing that knowledge.

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Angelo Esposito [00:15:02]:

You've lived it. You put the blood, sweat and tears, you know, you're at a different stage now. So, like, I'm sure, you know, next time we speak, you're going to be like, hey, how do you go from 30 to 100 locations? And you're going to come with a different perspective. But for people listening, right. Getting that first one I think we briefly spoke about, which makes sense criteria look for find that right partner. Great. How do you know when you're ready to go from that first to multi unit? What was the kind of numbers you looked at? Because I think that's a good pivotal point for a lot of people. Right.

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Angelo Esposito [00:15:31]:

They mostly like going to France. You know, QSRs are. I, I think most are not hoping to just have one. So what's, what's that kind of pivotal moment where or advice you would give where now they can open a second or a third?

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Salem Najjar [00:15:43]:

That's a tough question. I can tell you what worked for me, right? So what worked for me was like, you know, almost like a sprint and then slowing down and then a sprint again. And there's, there's a methodology behind that. So, you know, I wanted to grow really fast in the beginning and grow through the pain.

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Angelo Esposito [00:16:02]:

Right.

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Salem Najjar [00:16:03]:

Because I knew that once I got to that certain size or scale, things would start being a little bit easier because I'd have more resources.

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Angelo Esposito [00:16:10]:

Right.

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Salem Najjar [00:16:10]:

When there's enough location open for me to be able to afford additional people on my team to help me, right? That was where I kind of had to, like, grow through the pain. So the first, like, three, four, three years, I would say, was a lot of like, just go, go, go. Open, be busy, work crazy hours. Go.

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Angelo Esposito [00:16:26]:

Right?

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Salem Najjar [00:16:27]:

Then, you know, once I got maybe up to like, 10, 12 locations, it was a big slowdown for me. And I think of it like, there's a story I think of all the time. The story of the bamboo tree, right? It's like, you know, the bamboo tree, you plant the seed, and it grows for a time below ground before you actually start seeing the bamboo tree rise above the soil. And then once it does, it, like, sprouts up and grows faster than any other tree in the jungle, right? And the reason I like that story so much is because I feel like it plays a lot into our story as a company, is like, we're doing a lot. We did a lot of the. The underground infrastructure work, right? That people don't see. It's not really the sexy stuff. Even in the beginning when I say I'm sprinting, yeah, I was sprinting, but my name wasn't really on the map.

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Salem Najjar [00:17:13]:

I wasn't getting invited to go on podcast, right? Nothing like that. It's like, you're just building. You're building, right? And so a lot of it is the infrastructure work. So then once you have the infrastructure built out to where now you can get, you know, lenders to help finance you. If you don't have enough cash flow to really go at a crazy speed yourself, or you have enough people in your office, or you have enough of an operations team, right, Then you can really hit the ground running. So, you know, there's been years where, like, 20, 23. I opened seven locations that I like, you know, was, like, very fast, all back to back, you know, and most of them were. Were financed by us directly, right? And so that was one of my busier years, right? And then there's years where it slows down and it goes up.

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Salem Najjar [00:17:56]:

But the reality is, is that you want to be able to put yourself in a situation where you've built out enough of the infrastructure so that you can grow quickly when you need to.

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Angelo Esposito [00:18:05]:

Right?

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Salem Najjar [00:18:06]:

Because the opportunity doesn't always knock when you need it to knock, right? You know, it's. You don't always go and seek out the opportunities and get them. Sometimes you got to be patient, and an opportunity is going to knock, and you have to be ready to say, I have the infrastructure. I have the money. I have the resources. Now I can do it.

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Angelo Esposito [00:18:22]:

I love that. Really well said. And one thing I want to hit on again, just because it's like you're really interesting guess from the perspective of restaurants are things about scaling numbers background cpa. So it's like you have a very interesting angle. So I'd be kicking myself if I didn't focus a bit on the numbers because a lot of restaurants struggle with numbers. I want to zoom in a little on some numbers. What are some KPIs that you really focus on at maybe the individual restaurant level and then maybe more at the macro level?

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Salem Najjar [00:18:56]:

Yeah, I love that question. I mean, I'm very data driven. KPIs are very important and I think every business needs to identify what they are and they're going to change over time for you.

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Angelo Esposito [00:19:05]:

Right?

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Salem Najjar [00:19:05]:

But you got to identify what are the ones you want to pay attention to. Do one of the biggest things, you know, just speaking on the, the CPA stuff for a second here and then I'll get into what my specific APIs are. But like one of my biggest frustrations when I was doing bookkeeping and tax work for my clients was that it's a lot of like garbage in, garbage out. You know, so many people just like undervalue the services that, you know, a good accountant should provide. You know, people are just like, oh, I want to pay the minimum monthly fee and you know, whatever. But you don't realize that you're not going to be able to improve your business profitably if you don't know where you're overspending money.

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Angelo Esposito [00:19:43]:

Right?

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Salem Najjar [00:19:43]:

And the only way to figure out where you're overspending money is by taking the time to really break out your expenses properly and understand where your waste is.

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Angelo Esposito [00:19:52]:

Right?

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Salem Najjar [00:19:52]:

And so many people just all they look at is their bottom line profit number and they have no. And they're just throwing expenses that are not categorized properly and they have no idea. Am I wasting too much money on chicken? Am I wasting too much money on, you know, bread? Am I wasting too much money on marketing fees? Like you don't know where you're categorizing your expenses. That's a huge problem. So I would say that you're. Before even getting into KPIs, you have to be willing to shell out the money or hire in staff accountants or whatever. You need to make sure that you're breaking out your expenses properly. Set up a good system for tracking your expenses so that you can figure out where the pitfalls are in your business.

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Salem Najjar [00:20:31]:

Right? But KPIs specifically I mean we look at weekly KPIs, I've got a KPI dashboard that I look at very meticulously every week. And the main ones on that are gonna be, you know, the four that are always the industry standard for our industry is definitely like customer service, osat.

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Angelo Esposito [00:20:49]:

Right.

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Salem Najjar [00:20:49]:

Overall satisfaction. You've got speed of service, you've got inventory variants, right? Like theoretical versus actual food cost. And then you've got labor variants.

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Angelo Esposito [00:20:59]:

Right?

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Salem Najjar [00:20:59]:

Theoretical labor versus actual labor. Those are the four that really are gonna drive your. But we have plenty of other ones that, that we look at as well. So I would say expanding upon those four, I look at what my training scores are, right? Like are all my employees do their doing their brand standard training and I look at what is our average ticket, right. I look at comp transactions more important than comp sales. I mean people are raising price all the time and inflation affects things. So I really want to see are we bringing more people in the door every year? Are we growing the business?

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Angelo Esposito [00:21:31]:

Right.

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Angelo Esposito [00:21:31]:

Okay, interesting. So on that one, just pausing there. So you're saying the number of transactions, not just the total sales specific.

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Salem Najjar [00:21:37]:

Yeah, specifically the comp transactions.

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Angelo Esposito [00:21:39]:

Right.

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Salem Najjar [00:21:40]:

So like comparative over last year, same period last year. Right. If we took a price increase this year of 3% and my comp sales are up 3%, but my comp transactions are flat, you know, I'm not growing my business.

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Angelo Esposito [00:21:51]:

Right.

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Salem Najjar [00:21:52]:

It's just the only reason my sales went up is because of inflation. Right.

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Angelo Esposito [00:21:55]:

And typically you guys compare same week last, last year. Is that the kind of thing like.

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Salem Najjar [00:21:59]:

Week 32, same period? Exactly, yeah, same week, same period, all that stuff. And then so yeah, comp transactions, training scores, speed, customer service, average ticket, those are the big ones, right. And the four pillars that I mentioned.

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Angelo Esposito [00:22:16]:

Yeah, I love that. Now, super well said. And let me ask you, how do you think about when it comes to the comparative data between stores? Right? So you got the comparative data of like this store versus last year. How's it trending? But do you ever benchmark stores against each other to see like, why is this. We're doing so much better. Why is this one not.

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Salem Najjar [00:22:34]:

Absolutely. Yeah, absolutely. I mean, so for, for several reasons, right? I mean one, you know, geography is going to play a huge part in, you know, why one store might be performing better than another. Real estate, location, population, there's all these metrics that are going to affect that, right? So some are within your control, some are not in your control. But going through that exercise is going to teach you how to Better pick locations next time. Right. That's number one. But also you want to benchmark and this goes back into your expenses.

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Angelo Esposito [00:23:02]:

Right.

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Salem Najjar [00:23:03]:

So I don't necessarily have KPIs to track repairs and maintenance or utilities expense. But when we're looking at P L's weekly or on a period level.

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Angelo Esposito [00:23:14]:

Right.

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Salem Najjar [00:23:14]:

And I'm putting stores next to each other, I'm able to see, okay, my average, especially when I'm running the same business.

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Angelo Esposito [00:23:19]:

Right.

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Salem Najjar [00:23:20]:

Because it's all the same franchise concept. I know. Okay. Food costs should be this, labor cost should be this. Utilities should be this.

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Angelo Esposito [00:23:26]:

Right.

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Salem Najjar [00:23:27]:

So if I see a spike at any one of my locations that's outside of that standard, that benchmarking exercise really helps me figure out now there's got to be something wrong at that store. You know, maybe there's too much waste if it's a food cost issue, maybe there's a gas leak or a water leak if the utilities is spiked.

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Angelo Esposito [00:23:44]:

Right.

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Salem Najjar [00:23:45]:

So that's where I'm able to benchmark and improve the business from a profit perspective.

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Angelo Esposito [00:23:49]:

I love that. And I guess as you open more stores, like another massive advantage must be the predictability.

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Angelo Esposito [00:23:54]:

Right.

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Angelo Esposito [00:23:55]:

Like the more stores you have of the same, the probably better you get at forecasting because you just have a larger sample size. Right?

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Salem Najjar [00:24:03]:

Exactly.

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Angelo Esposito [00:24:04]:

That's amazing. Okay. And then switching gears to the. I just like the seven brew pub.

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Salem Najjar [00:24:11]:

Seven brew coffee.

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Angelo Esposito [00:24:12]:

Seven brew coffee. Tell me a bit about that one. So I love, I love what you're doing with, you know, Tropical Smoothie Cafe. You're up to 31 locations. You're looking at, you know, 20 plus more. Tell me a bit about the journey that now, you know, went from one sort of five to now you're in all 31. Learned a lot KPIs, which by the way, I'm sure people are going to meet writing notes because those are a great list of things to look out for. What made you then want to go for, for coffee chain? Like tell me a bit about that, that journey and, and, and was it the same type of thing? Did you go all in with one and then you opened up many at the same time? Like I'd love to know like what that was.

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Salem Najjar [00:24:47]:

Yeah, that, that's, that's a totally different experience than, than the Tropical Smoothie. The Tropical Smoothie was me like, like seeking out a franchise that I wanted to participate in and then kind of finding one that I fell in love with. The seven brew thing was more of an opportunity knocked at my door and like, thankfully I was ready for it.

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Angelo Esposito [00:25:04]:

Right.

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Salem Najjar [00:25:04]:

So, you know, this is a concept that started in northwest Arkansas. And you know, it's, it's really, you know, craft quality coffee with over 20,000 combinations. It's a lot of energy drinks, it's a lot of cold beverages, it's. And it's a really fun drive through only concept. Right. But what happened though was that I had made a good enough reputation that someone had my business partner now in that concept. I have a business partner in that concept. And he had called me up and said, hey, you know, look, I just got approached to, you know, take on this territory in Michigan.

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Salem Najjar [00:25:39]:

I don't live in Michigan. You do. And you're the only person I could think that I'd want to run this thing with me. And I know we'd grow it big together. So the right opportunity came at the right time. But, but even taking it back to his side, right. Why did this brand was very selective. They didn't go out and like advertise franchising on their website.

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Salem Najjar [00:25:57]:

They had a very meticulous approach of they wanted to contact big multi unit operators and sell them very large territories.

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Angelo Esposito [00:26:04]:

Right.

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Salem Najjar [00:26:04]:

So like the average deal size is like 30 units, 35 units, something like that.

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Angelo Esposito [00:26:09]:

Right.

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Salem Najjar [00:26:09]:

So they called up my buddy who owns a bunch of wingstops and they were like, hey, we love what you're doing with that brand brand. You're a great operator. We have some territory available we'd like you to be a franchisee of if you're interested.

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Angelo Esposito [00:26:21]:

Right.

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Salem Najjar [00:26:22]:

And so he called me and he said, I'd love to do this with you. And then, you know, we looked at it, we did our due diligence and again, it was, it was a fun brand. It was a brand that I could see myself working in the, the unit economics were phenomenal. The EVs are phenomenal, the profit's good, you know, and then I, I loved the leadership, I love the culture, I love the vision for what they're trying to build. So, so I fell in love with it and I said, yeah, this is something I could totally get on board with.

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Angelo Esposito [00:26:46]:

That's awesome. That's really cool. I love it. It's super, super methodical the way you think through it. One question that always comes to mind, especially from someone like you who's been building, building rapidly growing CPA background. One of the biggest challenges people always talk about, you know, I mean, the two big ones, there's, there's a million and one in the restaurant space, but the two big ones, people always Talk about labor shortages, or it's hard to retain staff, and. And they talk about, you know, food costs rising or just costs in general rising. How do you think through those? Any tips, any advice of how you kind of manage that? Like, love to just hear your.

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Angelo Esposito [00:27:22]:

Your perspective on labor and your perspective on rising food costs.

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Salem Najjar [00:27:26]:

It's tough. It's really tough, Angelo. It's like, you know, first of all, you know, the. The brands that I operate in, I'm fortunate enough that they, you know, have enough size and scale to where they can engage professionals to give us advice on, like, elasticity.

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Angelo Esposito [00:27:42]:

Right.

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Salem Najjar [00:27:42]:

So we have, like, companies that advise us on, hey, this is how much price increase we think, you know, your friend, this franchise location can take. So we get a report from them, you know, every six months, telling us, hey, this is how much we think you can go up. But to be completely honest with you, it's. It's an art, not a science. I mean, you can use a little bit of the science in there, but, you know, there's been times where I've gotten one of those reports and said, man, this is too big of a price increase. I don't feel like I can do that to the people in this community, you know, And. And more importantly, like, there's been times where it's the opposite, where the price increase is not big enough. And quite frankly, we'd have to shut down the business if we can't increase price by more, because rising labor cost, rising food costs, like, people don't understand that these things directly impact what we have to charge our customers, because otherwise there's no business to run.

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Angelo Esposito [00:28:34]:

Absolutely. Like, for people in the restaurant space, I'll tell them there's a reason it's called the prime cost. It's like your biggest cost is labor and cost of goods. Like, it's literally could easily be 55, 60 of the business is just those two things.

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Salem Najjar [00:28:47]:

Absolutely.

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Angelo Esposito [00:28:48]:

Those two things are rising. It's like your main thing, your main cost is just rising. Right. Like, if you negotiate a good lease, like, that kind of stays the same. Right. So you're, You're. I always tell people it's like your admin, slash, you know, whatever. Other expenses will generally stay the same.

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Angelo Esposito [00:29:04]:

Right. It's all. You're negotiating at least month to month. So it's like, okay, the only two variables you can really mess with is labor and. And. And cost of goods.

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Salem Najjar [00:29:12]:

Absolutely.

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Angelo Esposito [00:29:14]:

But this is. This is super cool. So, you know, as we kind of slowly wrap up, I want to hear just kind of what's next for you? Right? So, like, and then I just want to be able to, to plug whatever you want to plug and, and, you know, include all kinds of links and, and fun stuff. But you built an awesome business. It sounds like you're still growing, so it's super exciting, but really just a chance for you to share what's next for SERVE hospitality. When, when you think about, you know, just kind of growth, what's next for.

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Salem Najjar [00:29:43]:

SERVE hospitality is just like, perfect and improve, right? I mean, our, our purpose is, you know, we exist to raise the bar and inspire others to do the same. And that's kind of like our motto for how we think about tackling the day and growing and expanding the company. Right. You know, we're constantly looking to improve, so we got a long way to go in terms of always finding ways to make things easier for our general managers, improve our culture. You know, our goal with both brands is to be the most fun place on the block to work, right? So that people, like, really enjoy and want to work in our company, and that's going to help catalyze our growth for the future. But we're just trying to be really good at being visionary leaders and thinking forward and making sure that we're proactively foreseeing problems that are going to come up, right. So that we can get better and be stronger. And so every day is just kind of perfecting our craft.

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Salem Najjar [00:30:35]:

Craft. That's, that's really it.

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Angelo Esposito [00:30:37]:

I love that. And then last but not least, I like to always plug away. So people want to find you your websites, LinkedIn, whatever you want to plug. Like, it will also include the links in the podcast episodes. We publish YouTube, Spotify, Apple, whatever. But where can people find you and find your, your restaurants, basically, like, if they want to learn more about you or more about your. Your two concepts?

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Salem Najjar [00:30:59]:

Yeah, sure. I mean, so we have a. We have a company website, SERVE hg.com S-E-R-V-E-Hg.com so we did that so that employees could have more of an opportunity to understand what we're doing, what we're building, where we're growing.

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Angelo Esposito [00:31:13]:

Right?

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Salem Najjar [00:31:13]:

So anybody that wants to see what we're up to can check out our website. I'm also on LinkedIn and Instagram and things like that. But, you know, I try my best to participate at franchise conferences, multi unit franchise conference, restaurant finance and development conference, and I try to say yes whenever a podcast comes my way so that I can help others. And, you know, honestly, Angelo, I Got a lot of mentorship throughout this process, and I'm very thankful for my mentors that helped me, like, grow and develop in the business. And even just hearing people talk on podcasts, I mean, can. Can do wonders for somebody calibrating their journey and what they're thinking about doing. So it's good that you do this for your listeners. And so hopefully what I've shared today can help other others.

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Angelo Esposito [00:32:00]:

100. It really, it really does. And sometimes I even forget, like, not that I forget, but sometimes, you know, you're just in the, the, the flow of things and doing podcasts and then a client will reach out or doesn't even have to be a WISK client. It could just be a restaurant in general. And this was not too long ago. I had one reach out and he's like, oh, man, I love that episode about xyz. It really helped. And you know, I'm now using, I don't know, this temperature control thing for my fridge.

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Angelo Esposito [00:32:24]:

It could be that the thing that I don't even think about, and it wasn't even a popular episode and someone gets value out of it. So. So for me, I love that. And one thing we do, just so you know, and this, this will definitely go to use, especially the way you outline the KPIs and you outline the three things to look out for. We turn these podcast episodes also into a newsletter. And so what's cool is it makes it like super easy, like key takeaway, some, some points. And we send it out weekly to. I think we have like 25, 000 subscribers on that newsletter.

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Angelo Esposito [00:32:52]:

So we'll definitely be turning your knowledge into a nice little newsletter that, again, it really does help people. So thank you for joining the episode and for sharing your knowledge. And once again, Salem Najjar, SERVE Hospitality. You could check out SERVE hg.com and Salem, just want to thank you for, for joining the podcast and sharing your wisdom.

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Salem Najjar [00:33:16]:

Thank you, Angelo. No, it was fun. And thanks to all you're doing both with your podcast, but also with your platform to help franchisees and restaurant owners be more profitable. Incredible.

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Angelo Esposito [00:33:26]:

Thank you, man. It's been. It's been awesome. If you want to learn more about WISK, head to WISK.AI and book a demo.

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