Mathew Focht interviews Chad Coulter, Co-Founder of Biscuit Belly, about the growth of Biscuit Belly, navigating the pandemic, the future of the restaurant industry, and the most important advice he has ever received.
Mathew Focht 0:05
Thanks for joining me, I appreciate you taking the time Chad. Biscuit Belly sounds like an amazing ride right now and I’m fortunate to be a small part of your story as you build the brand. I know EMERGING is really excited about everything you’ve done to date and seeing the path that you guys are you’re paving right now is incredible. So Chad, can you start by telling us a little bit about you, and then we can go into a bit about Biscuit Belly and how you started this thing?
Chad Coulter 0:41
Yeah, so I am originally from Georgia and kind of randomly stumbled into the restaurant arena. My wife and I are both partners in this concept together; we are actually both pharmacists by training, so we went from drugs to biscuits. We had a couple of other stops along the way but you know we’ve really fallen in love, so to speak, with the restaurant industry and the people in it. Granted it’s a very hard industry to manage, especially right now, but we’ve definitely kind of figured it out and we have this great new concept that we’re trying to grow. We have a lot of really like-minded franchisees that we’ve recently brought on board that are going to help us expand to new cities and help us push the brand forward.
Mathew Focht 1:44
That’s exciting! How would you describe Biscuit Belly today? What is biscuit belly in terms of a concept today? How would you describe it to somebody on the street?
Chad Coulter 2:04
Yeah, so we kind of take all three of the segments of the restaurant industry being QSR, full service, and fast-casual, and kind of throwing them into one. The QSR is the most recent kind of transformation that COVID has taught us, it’s a have a drive-through if you’re a restaurant concept; so we’re about to go live with that right now. But we’re essentially a fast-casual concept at heart that focuses on the morning lunch daypart with emphasis on gourmet biscuit sandwiches, as well as other southern fares with a little bit of a twist. Our menu was developed by a more classically trained chef so you know it’s definitely got the right flavor profiles and we spend a lot of time to get our biscuit recipe correct or fried chicken recipe correct and really have fun with the rest of it. We got our staples down pat and we’re just seeing where we can run with it now.
Mathew Focht 3:24
Makes sense, the menu looks incredible. I mean, the dishes are everything the market responses I’ve seen have been incredible. What do you plan on doing in the next two to three years? What do you see in the sights for growth for Biscuit Belly?
Chad Coulter 3:42
Yeah, so we’re going to continue to build out our global market. So we’ve got three locations here in Louisville, Kentucky. We’ve got one in Evansville, Indiana that we just opened; that one will be the one that has the drive-thru that I referred to that assuming we can get staffed up properly and comfortably enough to open it, that’ll open here in the next week or two. So that’s going to be kind of our dive into that kind of QSR segment that a lot of brands are trying now. You’ve got Shake Shack that’s doing drive-thrus and you’ve got all these other brands that never thought in a million years about drive-thru. So we’re gonna try to tap into that market and see what that does to our model and our unit economics.
So we’ll continue to build out the global market. And then I think most of our growth will be in the franchising segment. So we’ve signed on for area development agreements for a total of 20 stores. So our first franchisee is based out of Lexington, KY. He is historically in Lexington and Knoxville, he’s got 30 KFC’s around the Kentucky Tennessee market. So he’s gonna kind of stick to what he knows, the areas he knows. So he’s multi-generational, his dad built the KFC’s, passed it on to him, he’s grown it, and now his daughters are getting involved. So franchise times did a pretty cool story about them about their involvement in the restaurant game.
Our second franchisee is in the Alabama market. So they’re gonna do four stores, two in the Birmingham Hoover market and two in Huntsville. They are a big, big group; I really like them. The way their hierarchy is why they’re so so successful. So their Power Brands Hospitality out of Alabama, they’re in about 12 or 15 different brands, they usually own between two and four of each brand. Just basically in those markets. They know the markets well, they know how to execute in those markets. And they’re like why to try to venture out to other areas, let’s just stick to what we know. So we are really excited about them and tapping into some of their markets. And people that they know of other franchise networks because obviously, we’ve all seen it before the franchise world is very small. They’ll start talking if it’s successful for them, they’ve actually already referred another franchise friend of theirs for the Atlanta market, Missy and Keith. So they’ll be doing Newnan, Columbus in a couple of spots in northern Northwest Atlanta; suburb markets like Marietta, Cobb County, all those places. So they’ve signed up for five.
And then Biscuit Belly corporate, so to speak, I’m involved on the corporate side and some other big franchisees and franchisors are going in on a joint venture together for the Nashville market. So we’re going to do four to five stores there as well. And obviously, you guys are helping with that, you’ve found us some sites as well. So yeah, we’re up to 20 you know, after nine months of going live the franchise, and yeah, we couldn’t ask for better franchisees. Seeing what they bring to the table, we think they’re going to help us a lot. They’re super strong operators. And it’s really all about your first three or four, if these don’t go well then that kind of stops our growth right in his tracks.
Mathew Focht 7:59
So it’s super important. You’re coming out of blocks with great operators, that’s huge. And it says a lot about the concept too, you’re able to attract that level of talent.
Chad Coulter 8:16
Yeah, not to toot our own horn, but you know, they love the product, they love the branding, then they come and visit to do discovery day and say, you guys really have your stuff together. And they even say, we’re involved in X, Y, or Z brand with 100 units in development, and they actually don’t even appear to have their stuff together as much as you guys. So you know, that’s kind of the extra confidence boost that we need and we’re just constantly working on building our systems and just making sure we’re ready to hit the ground running. With franchisee number one that should open here in January, and we were building all these toolkits that are going to make them successful.
Mathew Focht 9:07
Smart. So what inspires you? Why are you in this business?
Chad Coulter 9:16
You know, that’s a question a lot of people ask me. Just knowing me on a pretty personal level, the restaurant industry didn’t seem like one that you would be in. It’s about high stress, dealing with a lot of people, dealing with issues all the time. Definitely, there are no two days that are the same, which I definitely like. And I don’t know for us, I love bringing people on and giving them an opportunity to kind of grow with us, that’s fun and exciting for me. Our very first general manager was a server at another concept that we owned before this that we’ve since sold. That was full service, heavy on the wine, training, and all this and that. So anyway, we brought her over to Biscuit Belly and she opened up the first store, the second store, the third store; she started to be a lead trainer, as well as the general manager and then has kind of grown into a Director of Training role. And so that to me is exciting and bringing some other people on board that were kind of unhappy with where they were before. And then showing them this is what a good team, that’s bought in, with a good culture can really do for your morale, and do for your productivity. So trying to get some good people that were maybe a little unhappy in some other workplaces on to show him what we’re doing. And then just seeing them kind of blossom and flourish in their new role under new leadership and the new company and all that. So yeah, I guess it’s just building something from scratch.
We have a mentor, Chuck Schattner is a partner he was there from Papa John’s number three or four store to 4500. So he’s kind of he’s helping us avoid pitfalls as well as a lot of other smart people in Louisville along the way. Louisville is a great food town, we’ve got Texas Roadhouse here, we had Papa John’s until they just left for Atlanta. There is still a lot of talent that’s left behind. YUM brands, I mean we’ve got three of the largest restaurant companies in the US and world right here in our backyard. So there is a lot of talent and a lot of mentors; I don’t know, maybe we’ll be that next big Kentucky hit. Let’s hope so.
Mathew Focht 12:09
Is there a piece of advice that you’ve received over the years that stuck with you?
Chad Coulter 12:17
There’s not like one thing that sticks out, I don’t know how much advice this but when we were looking to raise money for LouVino, which was a concept before Biscuit Belly. We wanted to do a few more, we were at location three, looking to build four or five maybe six and we just started to talk to some people about raising money. We didn’t know what the deal should look like, we didn’t know who we should talk to or anything. I can’t remember where I read it or who told me this, but they said, if you ask for money you’ll get advice if you ask for advice you’ll get money. And so I asked for advice from a few people and one of them ended up being Chuck who ended up writing a check. So I guess that’s kind of stuck with me a little bit.
Mathew Focht 13:19
Yeah, that’s to see much better. The guys that want to invest, they definitely want to be heard and the fact that they are in this corner, they know you’re gonna listen and their opinions matter, that’s where they put their money to work. That’s huge. It’s a great piece of advice.
So what are the biggest challenges you think you’re facing in the restaurant space in general or at Biscuit Belly specifically right now? What do you see as some of the biggest headwinds?
Chad Coulter 13:56
Honestly, it’s cliche to say, but the labor force is probably number one.
Mathew Focht 14:03
Chad Coulter 14:04
The biggest issue we’ve had, it’s not too bad in Lousiville, but in Evansville, it’s pretty rough getting staff. And we thought we had this shiny golden ticket that we like to think of ourselves as, and that’s that it’s a morning shift. There are no nights, it’s good pay, you know, a couple of bucks an hour more than most people are paying. We still will schedule 30 to 40 interviews a week and maybe one or two will show up. It’s just, it’s brutal out there. And obviously, we’re dealing with some inflationary issues with commodities. commodity products, but I’d say the people pieces is the bigger issue. And it’s this is every industry, it’s not just restaurants. We’re getting work done on our house and it’s like two months lead times on things. I’ve heard of a yearly time for some HVAC units the other day. What do you do? Yeah, it’s just crazy.
Mathew Focht 15:26
It is crazy. I know Chuck has been a great mentor and investor for you. How important has he been for you building out Biscuit Belly? How often do you interact? Do you see that support as needed for a growing brand?
Chad Coulter 15:48
Yeah, well, he jokes because sometimes he’ll call Lauren, my wife, who does our franchise sales and development, among many other things, and they’ll have a conversation and then he’ll relay that to me. So sometimes we talk to him more than we talk to each other, depending on the day. So yeah, I think it’s it’s just a good sounding board. And you know, he is not there, and not that we would want anyone to be there all the time, because we’re trying to grow this ourselves. I mean, he’s part of the team, obviously. But it’s a good sounding board, just to bounce things off of like, we do the franchisee wants this. And then, okay, well, here’s some experience sharing based on Papa John’s, here’s what we did, or here’s what went wrong. So I think that is pretty vital in the FDD process, like, what are some just basic things to do or not do in your FDD and documents. And some of those early negotiations with franchisees, I can’t even think of an example, but what would be the impact seven years from now if we allow them to have this in their FDD versus what it says? You know, it’s just so hard, and to have somebody that has lived that and seen the pitfalls of some of these early decisions is very helpful.
But we’re also, especially to Lauren’s credit, she’s in all these emerging franchise roundtables, she just did this springboard with our marketing director for the last three days and got a lot of valuable information about that. So, you know, it’s a little bit from Chuck, it’s a little bit of learning from other people in our same position. It’s networking, you get little bits and pieces from everywhere, and you’re like, Okay, well, 90% of the people say, to do it this way. So let’s go in this direction. So it’s experience sharing, it’s learning from the people that have done it 4500 times, like Chuck I don’t know. And then some of us just like, common sense. You hear over and over and over and over again that it’s the first three or four franchises are so important, because, again, that sets the tone for the rest of time, almost. And then another thing that we heard over and over and over and we’ve stuck by this is not bringing on somebody who doesn’t know the restaurant industry. No offense to like the mosquito Joes out there, or whatever, these more service-based concepts, but\know, you cannot get into a biscuit belly for $50,000. You know, a restaurant is a little bit different than spraying backyards for mosquitoes or cleaning out gutters or insert service-based company here. We’ve just had so many tire kickers that think it’s fun to open a restaurant, whether they have the money or not to open one. And honestly, we’ve probably had two groups that we’re pretty sure they wanted to do this. They knew the restaurant space, because they may have worked in one as like a 16-year-old but now they’re 30 or 40. And, you know, we’ve had some come in here and we make them work for a day or two in the restaurant and they’re like, No, I’m good. You know what that just saved them $800,000 and saved us a closure.
Mathew Focht 20:04
Yeah, no doubt, that’s brilliant. Just give them a little bit of taste and make sure they have the hunger for it. So I know you just came back from Greece did you read any books or are you reading anything interesting?
Chad Coulter 20:22
Man, I am I am not a reader at all. I had the attention span of like a squirrel in the middle of the road. So there’s just always business issues whether they’re good or bad popping up. So I buy a lot of books just thinking that like from osmosis I’ll learn that. Audiobooks.
Mathew Focht 20:46
Audiobooks are amazing. It’s tough, I used to be a reader and then I just switched to the audiobooks. It’s been great. The audiobooks you should give it a shot.
Chad Coulter 20:57
I’ve tried a few of those too. And I think, not that I listen to podcasts either, but a nice 20-minute thing is good for me. Or like on a long trip, you know, maybe bust out like a Serial.
Mathew Focht 21:17
It’s like Grease wasn’t long enough for you?
Chad Coulter 21:20
Oh, there are some good movies. The only TV I really watch is college football. So the Dogs are doing well this year. We are going to go see them this weekend too. But we caught up on some old, I can’t remember what I watched, like three or four classic movies that you know you’ve heard of all your life but I’d never watched that before.
Mathew Focht 21:56
That’s cool, yeah. It’s tough, when you get free time to put a movie on it, those moments are so few and far between when you’re running hard.
Are there any other restaurant brands that you really looked up to respect in the industry that you think are doing some things that are right? Or have done things right if you do look back?
Chad Coulter 22:30
I mean, Texas Roadhouse, honestly. Of the three here, not to, you know, dog on to Papa John’s or anything, but you look at Texas Roadhouse. They just, again, everything can look shiny and nice on the outside. But, you know, from the people we’ve talked to, once they’re in, they live and breathe it. They love it. There’s an opportunity for growth, they have the way they do their managing partners, and they just have such good buy-in. And so it’s like man, how do you that? And I never really got to know Kent that well, I’ve met him a couple of times before he unfortunately passed. But he was a mentor for a lot of people here in town. How do you build something with that much like buying it? That’s the hard part. And we feel like we do a pretty good job of it. But it’s a different world. I think from a year ago to now it’s that you almost have to hire whoever walks in the door, even though that’s the worst thing you can do. You just have to have bodies, you know? And it’s just tough to find people.
Mathew Focht 23:55
Yeah. Last question. For you, what do you see as trends in the industry? If you’re you’re going to identify a couple trends today that stand out to you that are appealing or maybe not even appealing. But would you recognize anything that is a little bit different than it was 5-10 years ago?
Chad Coulter 24:22
Yeah, I mean, other than the obvious things that were just accelerated by COVID. And, again, I don’t think it’s a bad thing for us, it’s going to be interesting to watch this unfold, but the whole like all the like the ghost to brands, essentially, that may be the wrong term. But was that
Mathew Focht 24:46
Ghost kitchens or virtual kitchens?
Chad Coulter 24:48
Well, not even that, but yeah, you have those but these are like brands that only exist in those ghost kitchens, right? Like they’re only available by third-party. And now they are basically wanting you to utilize your kitchen during either slow or closed times to operate these side hustle brands. Which makes sense for us if we’re a breakfast thing, we close at three but then you just think operationally what’s already hard to get people and I do I have the cooler space or just the storage space in general? That’s going to be really interesting. You know, Chick-fil-A actually, they just came out with, like Blue Star Kitchen or something Blue Light Kitchen, I can’t remember what it’s called. But it’s basically three or four of these ghost brands that they’re operating out of? I don’t think their current stores because they do too much volume, but they’re going to just have basically a kitchen somewhere they sell Chick-fil-A out of, delivery only, and all these three other random brands that you’re not gonna see like a brick and mortar, it’s just all virtual. Yeah, that’s gonna be interesting, because that’s like a totally different experience. It’s not like you can go there and enjoy it. It’s like, you can only have it at your house. Which I mean, delivery pizza made a pretty good business delivering to your house. So I don’t know, those virtual brands are going to be pretty interesting.
And just like what happens with delivery trends in general? Honestly, I’m shocked we did 0% To-Go, just basically because we said no because we were too busy for it Pre-COVID and now it’s consistently 30% of our business. Now only 10% is third-party, the other 20% of that is our own app, and just people coming in to get takeout.
Mathew Focht 27:07
Chad Coulter 27:09
Mathew Focht 27:11
How much of that is pickup versus delivery?
Chad Coulter 27:15
Um, I’d say so if you got the 30%, 10 of the 30 orders are purely third-party delivery. And then the other 20 of the 30 is essentially pickup.
Mathew Focht 27:33
Interesting, interesting. Well, that it is it is an exciting area. These virtual brands, you think how easy it is to set up and the efficiencies they are driving. But I think it’s it’s been a little bit of a catastrophe for some kitchens trying to convert overnight.
Chad Coulter 27:54
Was it Applebee’s that did the wing concept?
Mathew Focht 27:57
Yeah, there’s a handful of concepts, some of our clients have been fairly successful at generating. One client-generated three-quarters of a million dollars in incremental revenue out of eight units. So it’s serious, but I think it’s their downtime and they have big kitchens so it works. But I think it’s in the future when you get back to full production. It’s tough to justify when you’re holding up your kitchen for delivery.
Well, I’m excited. Thank you for taking your time Chad. You’re really impressive and how quickly you guys have come out of blocks. It was not that long ago that you and I started these conversations, and you guys are executing your vision on an amazing level. You’re doing everything you said, and you’re doing it at the highest level. It’s so impressive and I’m thankful that you’ve given us an opportunity to be a partner with you in this growth. It’s awesome to see, I can’t wait to see the next year or two.
Chad Coulter 29:30
Me too, it’s going to be interesting. I think we’re ready for it, but you never know. Until you get in there and start opening these doors and seeing what the demands are from the franchisees and where do things need to be tweaked. And, again, I think we’re going to learn something from them. I mean, they’re more experienced than us. I’m not afraid to say that either. I will say these Three or four groups they’re attracted to that, they like to help, they’ve been early in almost everything that they’ve done. I know one group that was in Five Guys, certain things that they did on the operational side, but Five Guys adopted that and continue to use it today. So just little things you know, we’ll kind of learn a little bit from everybody.
Mathew Focht 30:37
Yeah, no doubt you get good people they’re gonna bring some innovation for you. Awesome that thanks Chad.