BurgerFi International, Inc. (NASDAQ:BFI) Q2 2023 Earnings Call Transcript

We need true restaurant operators to help grow our franchisees on the BurgerFi side. On the Antony’s side, I think it’s time and you talked about footprint, we can talk about it strategically from a geographic perspective, but I also think you need to think about Anthony’s from a physical footprint and we have re-modeled in [indiscernible] of Anthony’s that performs very well, smaller footprint, much easier to operate. And I think this is kind of the launching pad that we’ll work on to create a very, very inviting opportunity for new franchisees. So that will be more of a strategy around finding right franchisees to help us grow in our existing markets and in new markets. I think from a franchise perspective, there’s two strategies that you employ.

You go to strong markets where we have brand awareness from corporate as well as franchise and you create like what I would call a fortressing strategy around those markets where we already have brand awareness. And I think that is probably the smartest strategy. I always say when we’re growing franchise business, we should grow like a bush not like a vine so that we can really get the economy of scale we can get the economy of scale when I talk about guests, talks about operations, talk about supply chain and as well as market penetration. So I think those are the strategies that we’ll employ over the next few months as we kind of jump into this thing.

Peter Saleh: Great. Very helpful. And then, Chris, just — you come in with fresh eyes and you get to see this business for the first time. Just curious as to if you see any low-hanging fruit on the cost side. I think you mentioned diversified some of the beef distributors or suppliers. Any other opportunities that you see going forward in the back half of the year?

Chris Jones: Absolutely. So I would reiterate what we said on the call, which was, we do see food costs to continue to be a positive trend. We have also seen from a labor perspective, improving trends. One of the things that’s happened over the last couple of months as we’ve seen an improvement in employee turnover, particularly on the hourly labor front. And so we see dramatic reduction in training hours, which has been pretty significant. And we think that trend is going to continue. I would say that there’s also a lot of work to be done just in sort of the analytics in terms of getting better analytics on overall food costs there as well, I don’t think that the organization is fully adopted and embraced sort of the technology that the industry really uses today. So from that perspective, I think we greatly reduce food waste, be more active with our ordering. All those things, I think, are sort of things to come.

Peter Saleh: Great. Thank you very much. I’ll pass it along.

Chris Jones: Thank you, Peter.

Carl Bachmann: Thanks, Peter.

Operator: And our next question will come from Mike Albanese with EF Hutton. Please go ahead.

Michael Albanese: Hi, Carl. Hi, Chris. Welcome to the company. Glad to have you. I won’t talk for you with too many questions to a specific segment. I know it’s still early. I wanted to ask more specifically on the BurgerFi side. I mean, we were arguably seeing some improving trends. And then this quarter, obviously, really tough same-store sales, comps. I just wanted to see if you could add some color. And it seems like really the decrease in the top line that was driving the weaker unit level contribution, but if there’s anything kind of also contributing to that if we talk about that a little bit. But just any color really in terms of what you’re seeing in the top line with BurgerFi what’s driving these significant decreases? Is it purely macro? Is it more under the hood?