Building the Modern Portfolio Company: Paul Brown, CEO of Inspire Brands

I am very much.

Well, if you'll indulge me a little bit, I'll have to go back a little bit in history and give away a little bit about my age as well. Because a lot of what we've been doing is recognizing the impact that technology is going to have on the transformation of the restaurant industry, in many of the ways that it has done in other industries. And I had a little window into seeing that happen in a couple of industries along my career, which has helped inform how we're doing things at Inspire. So back in 1994, way back when I first started at Boston Consulting Group, my first consulting engagement was with Northwest Airlines, and the question they asked us is, this internet thing, how is it going to impact the airline industry and change how things are done? And we spent a lot of time thinking about that. And my next project was in 1996 doing the same thing for Holiday Inn, and ultimately I went on to work at Holiday Inn, multiple hotel companies, and then ultimately at Expedia. So I saw how technology fundamentally transformed the airline industry and the hospitality industry. And so I joined as CEO of Arby's almost eight years ago today. And after a few years of being CEO in that industry, started seeing signs of the same type of impact that technology was starting to have on the restaurant industry many decades later. And ultimately saw that the restaurant industry was the largest industry in the world that had yet to see fundamental transformation driven by technology, changing the way that customers interact with restaurant companies and also how technology can be used to fundamentally change the operations throughout the restaurant industry. The challenge though that we saw is that many of the companies in this industry are relatively small. In fact, it's an incredibly fragmented industry. It's a $600 billion industry in the United States, a $2 trillion industry worldwide, whereas however only four companies today — it was actually three before — had sales over $15 billion. So highly fragmented. And if you go back several years ago, particularly public company CEOs in this industry were really talking about how difficult it was for them to make the investments they really needed to make to deal with the changes that technology was driving into the industry. And so I, along with a co-founder Neil Aronson, started thinking about the fact that maybe there's an opportunity for us to actually drive some of the change in the industry and actually drive some of the consolidation in the industry. And so we went on a path of thinking about various ways and looking at different models and saw that, really quite honestly, the hotel industry if anything would be a good model for how that industry developed and maybe how the restaurant industry could actually develop — creating a portfolio of distinct brands, buying very successful businesses in their own right, but actually integrating them in such a way that we were able to make investments as an enterprise in technology and infrastructure that any one of those brands individually would not have been able to do. And so we were in the process of doing that. Buffalo Wild Wings became available through activists, and I could take you through all the history there, but it really has unfolded almost precisely the way that we had hoped, and we are seeing all the impacts that we had thought and the real benefits of this strategy.

Yeah, so if you're thinking about buying various businesses, there are various ways to go about that. One is more of a holding company where you buy the business and you loosely integrate it. You look at the various services that one would expect — financial services, back office services — and you share that, but basically the rest of the business is more or less intact and running as an independent enterprise. And if you look across the restaurant industry, that's how most of the multi-brand companies operate. Our model is more similar to the hotel industry, rather, where you look for core capabilities where by sharing those capabilities and benefiting from scale and building a platform that can ultimately be extended across each of the brands, you're able to keep the brands as distinct in the eyes of the customer but actually leverage the real benefits of scale. So things that we are focusing on are particularly digital platform, data analytics, personalization, supply chain, operations infrastructure, and innovation. Those are areas where we actually share those services in a tightly matrixed structure to where the brand presidents and the brand teams are leveraging off of those investments. And then we are, importantly, building those capabilities and the technology supporting those capabilities in a way that we can easily extend that to each of the current brands that we own, and then the next and the next as we continue to expand inorganically. And I think that's really the difference in our strategy — the fact that we are one, building it with the eye to the fact that part of our strategy is inorganic expansion, so we know that we will continue to buy businesses and integrate them, and so we need to make sure that what we are building is done in a way that will continue to extend. And we are seeing the benefits of that, both again from the platforms that we're building but also by being in various business models it helps us to share learning across that. And in fact, to be honest, what happened during COVID, particularly last year, really served as a validation of that thesis in so many ways.

Well, a couple of things were happening with us, and I think maybe other things were happening with the Dunkin' board and management team in parallel. As I said, what the events of 2020 really served to validate a lot of our thesis in many ways. First, the importance of digital and the growth of digital channels. Digital was growing as a percentage of the restaurant business pre-COVID, but what happened in COVID is it absolutely supercharged the adoption of digital channels of customers in a way that was well above what had been happening in the past. And companies that had been able to invest in digital and able to actually take advantage of that were significantly advantaged versus their competitors. And then the second thing is having access to multiple brands, multiple dayparts, multiple business models, as we do, because we own and operate 2,200 restaurants and we actually franchise another 34,000 restaurants, we see all of it. We were able to share learnings across the various business models in a way that others weren't. For example, when Buffalo Wild Wings — all the restaurants were shut down this time last year — we went from a business that had 75% of its business in the dining room to a business that had zero. That looks a lot like a QSR business doing a lot of takeout and drive-thru. We were able to take our learnings from our Arby's teams and our Sonic teams and our Jimmy John's teams and actually very quickly pivot the model of Buffalo Wild Wings to be primarily — actually exclusively for a while — takeout and delivery, and go from about 14-15% digital to 40% digital almost overnight. And so we were seeing this and saying, this really validated the thesis. And I think other companies that weren't able to do that at the same time were actually starting to really see some of the challenges with their model, and particularly challenges with remaining maybe independent or single brand for the long term. So you put those together, and inorganic opportunities happen for many, many reasons, but it just ended up being an opportunity where it made sense for us to think about making the investment and buying Dunkin'. And obviously their board made the decision that it made sense at that time for them to actually go a different way and sell themselves.

Yeah, so I would put it in two buckets: the consumer-facing technology and then how that technology is also being used to improve the efficiency of operations. On the consumer-facing side, you know, obviously there's a lot of discussion around moving to using this device, if you will, to be the point of interface for restaurants, and that obviously provides a lot of benefits with digital as a channel. But it goes beyond that. It goes beyond the fact that people talk about the fact that we can save some cost by having the orders being done directly versus having people taking orders, but what that also does is this device provides a channel of communication and relationship building outside of the restaurant. If you go back even five years, the relationship a restaurant had with their customers started when they walked in the door and ended the moment they walked out of the door. There was absolutely no continuity in that relationship. There was no channel to have any kind of dialogue directly with a customer or relationship for that matter. That has fundamentally changed. And what that allows restaurant companies to do is actually start developing the ability to market and communicate and personalize through a direct channel, reduce our reliance on traditional marketing channels. The restaurant industry is a very heavy advertiser, for example, and a very heavy advertiser through traditional TV, et cetera. And as those channels change dramatically and the effectiveness of linear advertising like television and others goes fundamentally less efficient, it allows us to shift that relationship to a direct channel. And this is going to have a fundamental shift in this industry — I would say perhaps more than it has had in virtually any other industry because of our dependence and reliance on traditional marketing channels. And I can spend more time talking about that. But if you now go to the operations, the fact that we can use technology and we use artificial intelligence to actually help to build technology for demand forecasting, that can turn into more efficient labor scheduling models, we can pass our demand forecast up through the supply chain to help our suppliers actually be more efficient about when they manufacture and when they distribute so they can plan more efficiently. It goes on and on. We can actually not only just take a lot of cost out of the model but more importantly be more effective and efficient at how we provide service. And we assumed a lot of this would actually be there, but it's actually become more evident to us over the past several years than we thought originally.

We have a set process that we go through every time we bring a brand in, and it's a process that we initially started at Arby's and we've refined it every time we bought a brand. And it starts with the following: being very clear who our target customer is and, by definition, who our target customer is not. We do this by doing a lot of the traditional research that one would expect to understand not just the demographics — in fact, more importantly the psychographics — of who that customer base is. And we go through an exercise of actually naming the customers and actually creating personas for those customers. And then out of that, that helps us think about and define what our purpose is with those customers, what our brand promise is, and what our brand values are. And that is unique for each of our individual brands because the target customers are different for each of our brands and therefore the brand promise is also different. And then once we define that, that creates really the anchor point, the true north, and everything that we do from that point forward — whether it be the menu, whether it be the marketing, whether it be the brand imagery, operations, building type — all the way through everything is actually derived out of that. And we make sure that at all points we actually make sure it all ties back. And even brands that have been around incredibly successfully — like Dunkin' for 70 years, and Sonic for 60 years, and Arby's for 50 years — over time even those great brands lose a little bit of gravity. You know, compromises are made here, compromises are made there, and they lose a sense sometimes around what their true north is and who they really are serving, who the target customer is. And so that process we go through all the way through. And some of you who may have seen the new Jimmy John's advertising and some of the things coming out from Jimmy John's over the past several months is the product of the work we started once we bought it a little over a year ago. If you go back, we did the same thing with Sonic, and the new campaign and the new menu and the new building design came out of that process. And we are at the first stages of that process with Dunkin'. So again, the output of it is fundamentally different for every single brand, but the process is one that we've refined and perfected over the past several years.

Yes. You know, we've thought very, very hard about that. Because in a company that's buying successful companies that have been around for many, many decades, those companies and brands come with a rich culture and a rich set of values on their own. And the objective for us is to make sure that we keep all the great richness that comes along with the companies and the brands that we're buying, but ultimately supplement that with a culture and a set of behaviors that is Inspire. And it needs to be a platform that is additive to it. And quite honestly, I've been involved in a lot of inorganic companies — that is a really hard thing to do correctly. And I feel like we are in a fairly good place there. So several years ago, we went and said, what is the purpose of Inspire and how is that going to relate to the purpose of the individual brands? What are the core behaviors of Inspire and how are those going to relate and supplement the values of the brands? And then how are we going to create this one Inspire culture — that's what we call it, the one Inspire culture — that is actually additive and helpful to the brands. It doesn't get away from them being distinct entities to the franchises and the customers they serve. And so our core behaviors — and in fact, I was just in Oklahoma City with our teams this morning doing a culture workshop with the teams there around this — our core behaviors are the kind of behaviors that you would think a founder would have: Mavericks, Allies, Visionary Achievers, and Good Citizens. Those are the core behaviors of Inspire that cut across every single entity and every single brand that we have. And then each brand will have its own values that guide the frontline team members on how they deliver that experience. And I think that it's just really, really important, particularly in a highly acquisitive environment that we're in, is getting that culture right and making sure that the culture is actually additive and helps you on your way and helps you on your strategy versus kind of gets in the way.

Yes, I mean, it starts with communicating and talking about it all the time. And that's sometimes, I think, the hardest thing, certainly for the CEO and the leadership team, because it can feel like you're becoming incredibly repetitive. The natural thing is, okay, here are our core behaviors, let's communicate them out, let's put them on all the materials — okay, we've kind of done our job, let's move on. And what I've learned over the years is you have to talk about them all the time. We are talking about our values, our core behaviors, our purpose at every single meeting that we have, at either the brand level or at the company level. In fact, I had an all-team meeting this morning — virtually, partly virtually, partly physically — for the entire company, and talked about the core behaviors and what they mean. The second is how do you bring them to life. And so we have been going through an exercise, starting with my direct reports and the team, and then continuing to go through the organization where each of the leadership teams get together and talk about our core behaviors and what it means to them as individuals, what it means to their particular part of the business, and how they can bring them to life. And then as that continues to go through the organization, we also have things where we give awards out. In fact, we have building blocks that you can give out to any individual for people that show evidence of doing great things that relate to either Mavericks, or Allies, or Achievers, or Visionaries, or Good Citizens. And we celebrate that at our meetings and we celebrate that individually. Sometimes they're just small little awards that people give individually, and sometimes we make a big presentation about that. And then we incorporate those in our review and feedback sessions, incorporate them in how people get evaluated. And then ultimately, the real test is: do they guide your actions? Do you make decisions based on them, whether they be easy decisions or hard decisions? And do you stand by them? That's the real test, I think, is quite honestly, are you making decisions based upon them even if they're not easy decisions.

Oh, to get my information as a CEO? Yeah, it's funny you ask that, because there are — I have really tried over the past several years particularly to limit the sources of information, because they can be so overwhelming and can be very distracting. And so I obviously spend a lot of time looking at various publications that I feel provide a good window into what the business community is doing and our business is doing. I have an amazing team that is constantly out there and helping me make sure that I'm seeing the information that I need. Particular publications I like are obviously the Wall Street Journal and The Economist, where I actually really like spending time there. I turned off the TV, to be honest, because I think there's just a lot of noise going on there that I just don't think, quite honestly, a CEO is particularly helpful and can be kind of distracting. And so I really try to distill down to what's really happening out there. The lens I always use is: does it impact my team members, my franchisees, or my customers? And if it does, what can I do about it? What can the team do about it? And try to be very focused. I think the worst thing a CEO can do, and certainly a CEO of a very diverse business like ours, is to run around kind of sending people a lot of different directions, having people chase a lot of things. And so I really try to make sure that when I ask the team to do something or follow up on something, that it's actually an activity that has a real impact on the business.

Well, clearly I had a lot of jobs along the way, and so I wouldn't say — I noticed that, yes, it's easy for some people to say, I want to be a CEO at some point, so here I am at 22 or 23, I would like to plan my path to being a CEO. There's — and I was that way too initially. And if I had done that, I don't think I would have gotten the breadth of experiences that I got along the way. What I ended up doing was looking at things that really interested me. And as I did one thing, I learned a lot more about myself, learned more about what I was interested in, and learned what I was good at, what I was less good at doing, and then used that learning to influence the next step, and then the next step, and the next step. And always tried to make sure that any step in my career was moving me forward in some way — not just forward in comp or forward in level, but actually moving me to the next level of learning and responsibility along the path that I was figuring out I really liked, enjoyed, and was good at doing. And I guess I was fortunate that what we've been able to do over the past eight years, and what I've been able to do here at Arby's and at Inspire, I can look back at every single career opportunity as well as what I did in education. Had any one of those individually not happened, I'm not sure I would have been as equipped to do what I've been able to do over the past eight years. And so — and there's no way that I would have planned this career out.

Certainly not 25 or 30 years ago. And so that's what I encourage people to do is be patient, be planful, but don't try to chart it out so rigidly, particularly at an early age. Because there's a lot about you that you don't know yet, and there's a lot about the world that you don't know yet. And by the way, the world is going to change dramatically between point A and point B, and you're going to change dramatically between point A and point B. So really think about it in kind of bite-sized, finite chunks along the way.

Oh, I'm afraid I don't know. You've asked a lot of good questions. I guess am I having fun is a question. I am loving every minute of what we are doing. I work with some of the best people in the industry, period, and certainly the best people I've ever worked with in my career. We're excited about doing things that haven't really been done in the restaurant industry before. It's an incredibly dynamic time in business in general. And so if someone is intellectually curious and is looking to try to drive real results, there's no better time to be in business. I look forward to every single day, and I think that's one of the best things anyone can say about their career and their job.

Yes, so I think in terms of automating certain operational processes, clearly we're looking to automate and transfer the interaction from face-to-face, human-to-human versus using this device and others as a way for that initial point of interface. Consumers tend to like that, it's very consumer-friendly, and it's actually very efficient for us. Labor represents about 30% of the cost in a restaurant, and each restaurant is a mini manufacturing plant in many ways. We have 32,000 of them around the world, so is there an opportunity to be more efficient and use automation? The answer is absolutely yes, and we've done some of that. But not in the way that a lot of people think — people go straight to robotics in restaurants, and that may at some point happen. But if you think about the challenges of implementing robotics in 32,000 different locations, that is a very challenging and expensive task. There are other ways — new equipment innovation, new oven technology, fire technology — things that help make the job more efficient and improve quality, and we've been rolling that out. Supply chain is actually the biggest area of opportunity for automation. We are using robotics up in the supply chain, and we are actually doing some interesting things with sous vide technology that allows us to do amazing things culinary-wise up in the supply chain that actually allows it to be a higher quality product in the restaurant but actually do less of the actual preparation in the restaurant itself. That has huge implications on both the quality of the product and the type of product. A lot of the product at Arby's, for example — whether it be gyros, brisket, or smoked turkey — that would not have been possible several years ago if it had not been for fundamental technology transformation up into the supply chain that allows those types of products to be done effectively and efficiently in the restaurants themselves. So that's where we're spending a lot of our time and energy, and then you back that by analytics that helps us be more efficient up and through the supply chain and distributors. That's where I think the biggest operational benefit of automation is going to be, at least in the near term. There will always be the news item about a totally automated restaurant with robots, and we can experiment with that, but at scale, I think that's a long way away.

A lot. Every single brand we buy comes with its own point of sale system — the system that's actually in the restaurants that you interface with. Some of those are cloud-based, some are resident-based, some are state-of-the-art, some are 20 years old. And that is the foundational technology that allows you to ultimately connect anything that's going to be done differently in the restaurant — it actually has to work with the technology that is resident in those restaurants. That is an example of how we've had to think about this in a very extensible way, because if we were building the personalization platform or the digital platforms in such a way that it depended on us having exactly the same technology in every single restaurant, that is an impossibility. Because we might get there with the brands that we have, but the second you buy another one, it's not. So that's what I talk about — building the extensibility in the technology platform, the layer above the restaurants, that is able to interface with various point of sales systems and restaurant technology platforms to deliver a unified experience to the customer, even though the platform that they're actually ultimately interfacing with is not. We are a long way from finishing that journey. I'm not saying we are done, but we are making great, great progress. And then of course you have the traditional challenges that happen with a highly acquisitive company — around ERP systems, HR systems — and we are in the process of obviously doing the heavy lifting that goes along with that. I put that more in the camp of what every company goes through when they're doing integration. I think what's unique about us is what we're trying to do is build a middle layer, or a digital platform, a data platform, that will interface with disparate systems, many of which we may not know what they're going to be until we buy the next company.

I really try to get out and go to restaurants as much as I can. However, I'm very clear that I am not the operations expert. My job is not to go into one of our 32,000 restaurants and somehow come up with a better way of doing whatever is happening there. I go in there and I talk and observe, and my main objective is to get to know the team members, try to understand why they're working for us, what we in corporate can do to help support them, what they're hearing from customers — for example, how easy was it to train on a limited time offer promotion. And also just to recognize and spend time — I like to go in there and thank them. Especially these days, over the past year, you can imagine it has not been — it's always difficult to work in restaurants, and we can imagine what it has been like over the past 13 months particularly. And so actually I've transitioned most of my time in restaurants to just saying thank you and asking what can I do to help you. I also like to look at different formats. I spend time looking at our competitors, what others are doing interestingly, particularly when it comes to building design and technology innovation, because that's where I think I can take that, translate it, and take it back to help our teams do something differently.

As an example, Jimmy John's delivery — yeah, the answer is absolutely. It depends on how core it is to the business model of that brand. Jimmy John's is a great example — Jimmy John's does its own delivery with its own captive drivers. We have no intention of taking that model and putting it on any of the other brands that we currently have. But it's core to the Jimmy John's model and we have no intention of taking that away, so we have to keep investing in the uniqueness of that. What we do though — the trick is to try to distill it down to as many commonalities as possible across the business model. An example is at Buffalo Wild Wings, which is right now a sit-down model with servers coming to the table. If you look at the core elements of that, particularly in a world where people are going to be using their own devices to do the ordering and more people using their own devices to pay — if you look at it that way, it looks at its core very, very similar to Sonic, for those of you who interface with Sonic, where you now use your app to order ahead or you order through the menu board and you pay that way, and the team member still brings the food out. But at its core, from a technology standpoint, it's very, very similar. So on one hand you'd say there's no way Buffalo Wild Wings has to be completely different than Sonic, but if you distill it down to its core from a technology capability, it's highly similar. Once you recognize that, it makes innovation very similar. The challenge that we run into more than do we do it for one brand or another is as we are migrating the brands onto a common platform — obviously that doesn't all happen at one time. And so during that time period, a brand that hasn't yet been migrated to the common platform may need something that if we build it right now, we know ultimately it'll be throwaway, versus if we waited to build it later, it would actually not be. So we're always having to think differently. That doesn't mean we don't build it; it just causes us to have a different view of the time horizon by which the benefit will come. So a lot of the challenge as we're migrating to common platforms is more about when do we do it versus do we do it, and also making sure that we look for the commonalities at its core as much as possible, because that obviously simplifies the platform.

Well, thank you, I'll comment on that. We talk a lot about that. I say this — I said this actually today in our team — for anyone who does not work in a restaurant at Inspire, we have one reason to exist, and the one reason to exist is to help those that are serving in the restaurant, whether that be our own company team members or whether it be our franchisees through their team members. That's the business. We don't make a dime outside of our restaurants. And I think any company that is that type of company — and by the way, there are a lot of companies like that here in Atlanta that are very good at really making sure that is core to their culture — is recognizing that. So there is no headquarters. There's no such thing as a headquarters, because headquarters implies hierarchy. While obviously in some way shape or form there's always a bit of a hierarchy, but culturally we do everything we can to make sure that everybody knows that. COVID has in some ways made that a little harder, because there is a group of employees of our company that can and do do their jobs virtually, but there are 600,000 team members either in our franchise or company restaurants that have to get up, leave their house, and go to work physically every day. And we cannot ever, ever lose sight of that.

Well, the trends are actually more accentuated outside the United States, particularly the utilization of digital channels and the expectations that customers have. But the platforms are different because we franchise and have so many different business partners outside the United States. It is difficult to utilize the same technology that we are developing in the US outside the US. In many cases, we'll actually learn first outside the US, and so we take a lot of the learnings but not as much of the core technology platform. That's a difficult line to find — the right line, I should say — because on one hand you would like to have a common platform around the world because of the efficiencies that we get, but it can also slow you down, and there are some regional differences that you need to be able to move more quickly and nimbly on outside the US than it might be in the US. So we're still trying to find the balancing act.

You are raising a massive issue and opportunity for this industry. We are arguably — we being the restaurant industry — the most advertising-dependent industry out there. There are others that advertise more, but if you look at the direct impact, we can put an ad out there and turn on advertising today, and I will be able to tell you in my numbers tomorrow — literally tomorrow — whether that advertising campaign is working. It has that big of an impact on this business. Where if you look at other big advertisers — insurance and others — the cause and effect is not as immediate. I can also tell you once we turn off the marketing, I'll see our sales go down. So it's highly dependent. And it's on traditional — and the dynamic is really interesting. Not only are eyeballs going down on traditional TV, the number of people watching it, but the advertising eyeballs are going down even faster, because a lot of people that are still watching traditional television, it's actually a subscription-based model where there isn't advertising. So what's happened is the supply of advertising eyeballs for lack of a better term is going down, the demand is staying constant or going up, so the cost per advertising eyeball is going up dramatically. So it has massive implications. So what are we doing? First, we've actually created a new group called demand generation. We have put every part of the business together that has anything to do with actually driving demand into our restaurants. That includes traditional media, programmatic digital media, our direct digital channels, our loyalty program — so all of our direct channels as well as our indirect channels — under one umbrella. And then what we do is have a function we call audience planning, and so each of the brands works on who am I trying to reach, what are we trying to tell them, in what way are we trying to tell them. And then out of that we say, okay, therefore what channels can we use — not only at a macro level but at an individual level. We've gotten to the point where we can know that if Paul Brown now started to interface with us directly on our app, then we don't need to send Paul Brown any messages through Facebook anymore, because why would we actually advertise to Paul Brown through Facebook now that we are actually talking to Paul Brown directly? And so it allows us to actually migrate our dollars as the individual migrates to channels. And so it's not just moving from linear TV to digital channels to direct, but it's actually doing it in a very sophisticated way backed by personalization analytics. So I threw a lot at you, but that's really where we are trying to go, and we are making some great progress doing that.

Yes. The first thing I do and we do is try to get to know them as much as possible, and go in it with a mindset — a mindset that this is a successful business, this is a business that by definition must have a good culture or it would not have been successful, and we have to respect that — versus playing the role of we are the acquirer, we bought you, therefore you are now going to do things our way. I won't say that at every point in our journey did we actually get it right. We're getting better at it. I would say that we were a bit more that way with Buffalo Wild Wings than in hindsight I would have been, and we of course corrected. But it's really going in there and going at the mindset of these are very talented, very successful people running very successful businesses that have been successful for decades, and then looking for opportunities to really supplement that. The balancing act, though, at the end of the day, we have to be one company, and the one Inspire is important. But doing it in a way — we also really try to bring people from the companies that we buy into key roles in our own company. In fact, if you look at Dunkin' recently, several people from Dunkin' Brands have already taken very senior positions in our shared services group — not just in the Dunkin' brand group but in our shared services group. And by doing that, they're bringing great learnings from all the great things they were doing there and making us better. So while we have a playbook on integration and we talk a lot about that, we modify and improve and expand our playbook with every acquisition we do, because one of the benefits is we get better as a company because we keep buying great companies, and we want to take the great things from those companies and use it to make us better as a company.

A lot of it goes to the direct channels to customers and how they interface with restaurant companies. I keep pointing to this device, but this changes a lot of the utility of how people can work and interface with brands. Whether that be ordering the same thing over and over again — it's not just about ordering, but how do I make the whole experience more convenient. Give you an example: we have some technology — we are piloting it in one of the restaurants in the Atlanta area of Dunkin' — that if you order on your app, we can know when you have pulled into the lot. When you get into the lot, we fire the order. But it's important — well, we don't know, so where are you going to pick it up? Are you going to pick it up inside, or are you going to pick it up through the drive-thru? Well, instead of you having to tell us, we can tell where you're going when you're in the parking lot. And if you're pulling in this direction, then we know you're going to come in the restaurant, and so we fire the order so it's going to be sitting there waiting for you when you come in to pick it up. If you turn in this direction, we know you're going through the drive-thru, and so we know where you are in the drive-thru. And once you get to the drive-through screen, instead of seeing the traditional menu board, it says, welcome Paul, your order is ready, pull up to the next window and get it, without any kind of interface. That is a fundamental transformation in the entire experience — to the benefit of the consumer, clearly, but also the benefit of us from an efficiency standpoint. And then you can think about personalization, you can think about one-to-one pricing, which this industry has never been able to do. Pricing has always been the same for everybody because it's there on a menu board. But you can do targeted discounting — it changes everything about this industry, and it makes it so phenomenally exciting. And we are just at the early stages of it. I can go on and on, but I know we're getting close to time, so I'll stop rambling.

Ultimately, organic growth is the most important thing, because if we cannot prove that we help a brand grow organically — whether that be through revenue top line of the restaurants themselves, or through building more restaurants, and franchisees building more restaurants — ultimately, if that part of the story doesn't exist, then you don't have a business case to actually buy more. And so that's why we talk about our purpose being to ignite and nourish flavorful experiences at the Inspire level. If you aren't nourishing them, if you actually aren't helping them grow faster, then you have no right in many ways, and certainly you can't financially justify buying inorganically. So the platform that you're building — I've been talking about — by individual brands being able to leverage that, by us being clear around who our target customers are, by us actually having a center of excellence around culinary and food innovation, by us being able to actually do a better job at demand generation — all these things I've been talking about really are targeted to help us drive better organic growth. Again, whether it be four-wall economics of the restaurants that we currently have, or building new restaurants — we call that organic growth; building new restaurants is still organic in our world. That is really 75% or more of our focus, and inorganic is a byproduct of being successful at organic.

There's a couple of them. One of them is — there's a lot of talk about ghost kitchens, and really, what is a ghost kitchen? It really is a real estate arbitrage. For those that aren't familiar, it's where restaurant concepts can go into the same building — whether they own that building or whether they lease it — and share space. It's efficient, and it's almost purely a delivery model, so drivers can come and get scale by going to one location, and by going to one location as a delivery driver, you actually can take food from five, six, seven different concepts. And the advantage of the concept is it's a lower real estate cost, and particularly helpful in high real estate cost areas like urban centers, et cetera. So what that does is it changes the relationship and what the brand is — from being a physical incarnation of the brand to being where this is purely the interface, really the only interface, to the experience. And so is that disruptive? It certainly can be, in certain areas, positively disruptive — not necessarily negatively disruptive. For example, we don't have a Sonic in Manhattan. Certainly in its current format, does it make sense to have one? Could we effectively do a Sonic in a ghost kitchen in Manhattan? Maybe. It does change the model. And along with that comes really the implications on delivery. There is a big jury out around whether delivery can economically be a viable — food delivery can be economically viable over the longer term. It's certainly not today, even on a marginal basis, for the third-party delivery companies. That's a question. But whether or not it ultimately proves to be economically viable or not, what happens between now and then certainly has had and will continue to have a significant impact on the business, both positively. So I think a lot of that is a business that has been traditionally a physical, four-wall, real estate-oriented business to where maybe it doesn't have to be as much that way in the future — would certainly be disruptive. Again, probably disruptively positive for a company like ours more than negatively. Which is why we're actually building our own ghost kitchen, Alliance Kitchen, which will be opening in Atlanta in July of this year to test it out and see what the implications are. So we'll have all five of our brands — pre-Dunkin' and Baskin — in that concept, actually right around the corner from Georgia Tech, that'll be opening in July. More to come.