Co-Founder and Chief Executive Officer, Inspire Brands, Inc.
Coles College of Business at Kennesaw State University presents Atlanta BIZ - Paul Brown
About Paul Brown
Paul Brown, co-founder and CEO of Inspire Brands, has been active in discussions about the franchise business model, consumer behavior, and the role of technology in the restaurant industry. In May 2024, he hosted an "Open For Opportunity" roundtable at Inspire Brands headquarters alongside International Franchise Association President Matt Haller, where he described franchising as a "uniquely American business model" that allows entrepreneurs to start and grow businesses. Brown also praised Atlanta as a "phenomenal place to headquarter and grow a business," citing its talent pool and business-friendly political environment. In interviews and appearances throughout 2024, Brown discussed consumer spending patterns, noting that the company sees different behaviors among lower-income households, particularly those earning below $45,000, who are increasingly seeking value. He highlighted the restaurant industry's shift from analog to digital marketing, stating that in 2019, 80% of Inspire's marketing spend was on linear TV, while by 2023 it had shifted to roughly two-thirds digital and one-third linear. Brown also addressed the company's growth strategy, including expansion in India and Latin America, and noted that Inspire has no exposure in China. He emphasized that the restaurant industry is "the last really large industry" to be fundamentally transformed by technology, and that Inspire has adopted OKRs (Objectives and Key Results) to improve prioritization and transparency across its highly matrixed organization.
Transcript (17 segments)
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Narrator0:05
When you go out to eat, you typically have a range of restaurants to choose from, whether it's sit-down fine dining, fast casual, or simply grab and go. Chances are you have your choice of food options — options that exist thanks in part to individuals who have craved entrepreneurship and a taste for something different. In a time when hamburgers rule fast food, two brothers decided they would buck the trend, replacing the burger business model with roast beef instead. Sure, it's just a little more time to cook, which in turn meant it cost a bit more to eat, but the succulent sandwiches filled a hungry populace wanting a quick, high-quality meal. Arby's hit the scene in 1964, and everyone knew when they saw that neon sign shaped like a ten-gallon hat, they were in for a delicious dining experience. Through the years, the artisan chefs at Arby's would cook up assorted culinary creations, even leading the way in menu choices. And though good food is the core of Arby's business, the company has an insatiable appetite for community, as reflected in the efforts of the Arby's Foundation. The story of Arby's is one of twists and turns and sometimes flat-out dead ends, and yet the brand endures. Much of its recent success can be attributed to CEO Paul Brown, who himself has had an interesting career journey, as you'll see in today's executive profile.
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Paul Brown1:37
Born and raised in Atlanta. I went to Georgia Tech undergraduate, lived in Atlanta for the first 20, 23 years of my life.
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Interviewer1:43
What do you think you were going to do?
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Paul Brown1:45
I really didn't know what I was going to do. I was one of the ones that I knew I wanted to go in business. I knew ultimately I wanted to run a company, and that's really basically the extent of my aspiration. So the first step out of Georgia Tech was what was Andersen Consulting, it's called Accenture right now, and I was a software engineer working for Delta Airlines as the client. Spent four years working on maintenance systems for them. Really a great way to start. My wife had her MBA, and we met while we were at Accenture, actually. And she kind of said maybe you should think about going and getting an MBA. So the thought of getting an MBA, particularly with the focus on marketing, was appealing to me. So I chose Northwestern, particularly because of Northwestern University's Kellogg School's marketing focus.
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Interviewer2:36
So you ended up in the hotel business, which I think people think, well, how has a guy in the hotel business ended up working for a place like Arby's?
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Paul Brown2:45
There's a lot of similarities if you look at it. Multi-unit, it's very operationally focused, very real estate focused, and it's very franchise-oriented. And franchising is a fairly unique element of business, learning to work with franchisees. The commercial side of the business, the selling side of the business, is very different. The fast-food environment is very fast-paced. It's about people making a decision that day where they're going to eat, whereas in the hotel industry they can plan that out months and sometimes a year in advance. So the selling cycle and the commercial side is quite different.
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Interviewer3:22
Tell me about how the Arby's opportunity came about. What was going on in your life that presented you this opportunity to join the company?
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Paul Brown3:28
I was working at Hilton Worldwide as president of brands and commercial services, based in the DC/McLean area, and I got a call about an opportunity at Arby's. A private equity firm, Roark Capital, which is a locally based private equity firm, had purchased it from Wendy's about a year and a half before, and they were looking for a CEO to come in and help with the next wave of growth for the company. It was intriguing.
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Interviewer3:53
Tell me about your thought process in making a decision like this.
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Paul Brown3:54
Well, the things that intrigued me is it is a 50-year-old brand that has been historically extremely successful, a unique position in the market, differentiated product offerings, and a brand legacy that I think could have been unlocked — that really intrigued me. Now, what concerned me is I wasn't a restaurant guy, right? So going into an industry that I didn't know a lot about.
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Interviewer4:18
What were the opportunities, let's say, that you had before you to turn things around?
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Paul Brown4:24
One of the best ways to think about making an older brand relevant is to go back and look at what made it successful to begin with. And so I spent time going back and talking to franchisees, many of whom either they or their families had been there from the beginning, looking at what consumers were saying, looking at actually videotapes of the founders from 15 years ago talking about what they were thinking, what they were trying to accomplish when they started the brand, and teased out some really interesting insights around what Arby's was trying to do, what part of the market it was trying to address. And said, well, really what we want to do is find the 21st-century incarnation of that. And what we've done is tried to create the right incarnation of that under our vision of deli-inspired, delicious craft sandwiches.
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Interviewer5:15
Let's talk about the execution piece, because last year for your company, in 2015–2016 timeframe, has really been a fun time for Arby's. It all started with Pharrell and his hat.
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Paul Brown5:27
He came on the Grammys in 2014 wearing this hat that looked eerily like our logo, and one of our social media managers was savvy enough — he was sitting at home watching it and sent out the tweet heard round the world, which is, 'Hey Pharrell, can we have our hat back?' In sequence, so the next thing that came along was Jon Stewart. Jon Stewart started making fun of Arby's on his show, really about six months after I started as CEO. Arby's is there anywhere else we can eat? 'Arby's, the meal that's a dare for your colon.' So we were faced with the decision: what do you do, right? You can either ignore it, you could get defensive about it, or you can play into it. And the way we like to think about brands — think about brands like personalities, like friends, right? You don't want to be friends with somebody who gets defensive all the time. You like friends that are okay being a little bit self-deprecating and having fun. And so we started catering him when he made fun of us and sent him fun notes back. His team started to really like us and get excited about it. And so when he decided to retire about a year later, our social media team sent out a fun tweet saying, 'Hey Jon, feel free to reach out to us at [email protected].'
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Interviewer6:46
What are you showing your team in terms of when to step in, when not to step in? How do you trust your instincts to know what's right and what's wrong? Because how many things could have backfired.
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Paul Brown6:55
Absolutely. The first thing about social media is that it cannot be a command-and-control style. You have to empower the team to act in a moment, because if you're not acting in the moment, the moment is gone. And we changed our policies and procedures around the ability of relatively young and new employees, if you will, to speak on behalf of the brand. And I think that's a big part of it. But if you're not willing to take risks with the brand, then you're not going to have the breakouts. So it's really a trade-off — you've got to be willing to take risks if you're going to get the breakout success.
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Narrator7:28
Arby's has been busy on both the social and sustainability fronts. The company raised nearly four million dollars last year for its No Kid Hungry campaign to combat the issue of hunger. It also ran a summer lunch program. Arby's incorporates energy and water efficiency measures throughout its restaurants, and it's in the process of sourcing chickens raised without antibiotics.