So we do see Q4 with lower pricing than Q3. And we do believe that that trend will continue into the first quarter of next year. There were two pricing windows. Last year, again, if you recall, we were — the hyperinflation that we were experiencing in 2022 was very, very relevant on people’s minds at that point in time. So we took basically 2% in pricing in January, another 3% in March. So that’ll begin to roll off in Q1, which again, should put some downward pressure on overall pricing as we move into the first part of next year. With regard to the FAST Act. So that is, as you would expect, clearly on our minds and what we — one of the key things that we are focused upon. Clearly there will be pricing that will be required, and we look to take that in a very strategic way.
It’s not going to be some blanket level of pricing, should be in the very spirit that we came to the November, a very targeted where the elasticities exist with RMS in these new pricing clusters that we talked about. So should be very strategic. We will also look to utilize other means. I went into the — just a minute ago with Jake quite a bit on off-premises that — whether that be our virtual brands, Franklin Junction, whatever that may be, that has been a very beneficial part of our story that we look to continue to drive forward. And then beyond that, you would look to — for us to do what any good brand would be doing, we’re looking into to automation to understand, to ensure that the labor that we deploy in California is the most efficient.
So we’re — we are clearly paying attention to that on. If you were just to put your thumb in the air with — if it was only to come through pricing and nothing else, not driving traffic, you’d probably be somewhere in that 3% plus range to just cover FAST Act. As you are aware, this is a fast — a QSR initiative. We do believe that it will have repercussions into all of the restaurant industry. But right now — as we sit here, right now, our servers with their — with tips are materially above $20 per hour. And our cooks right now are just ever so slightly underneath. So we don’t — all of our labor is won’t be exposed to this. So on a relative to position to QSR, where we believe the majority of their labor will be exposed to this, and we do believe that we’re at a relative advantage and likely we’ll have to take less pricing than QSR.
Kelli Valade: Yeah. Yeah. Yeah, that’s exactly what I was going to add, Robert. So you alluded to it there in your last sentence. But I think you’re going to see fast food QSR fast casual. We’ve already seen some of those announcements of having to take increased price to cover it because you have to very directly cover it versus an indirect impact that we know will be there. And we’re not naive to that, but working with our franchisees, and really being very focused. We have an excellent employee proposition all across the country. We talked about our GAIN program. Over a hundred people are working on getting their GEDs. I was in California and celebrated an area director getting her GED with Denny’s. And we had a huge celebration on that.
So our industry turn — our turnover company ops, including California, where we have 20, is exceptional. And we beat the family dining and casual dining industry handedly. And again, we just keep adding to the value proposition for employees. So we’re really comfortable there, and yet we know. We’ll look at everything we have to in partnership with our franchisees. Automation, robotics, while early in our proof-of-concept on a couple of those things, you’ll hear us talk more about it because we do feel like there’s things that we can absolutely do to offset that labor and to help with the business model at a time where it’s really critical. And those virtual brands we’ve mentioned a couple times adding Band of Burrito and testing Franklin Junction, you can be sure we’ll look to that market to be able to do whatever we can there first.
Nick Setyan: Thank you. And then just last questions for me. The margins, the company owned operating margin was actually much healthier than I thought they could be with comps where they are, the company owned comps where they are. Instead of going maybe like line by line, just kind of tell us if any of those items kind of exceeded your expectations going into the quarter where some of that upside came from. If there’s anything one time that we need to be aware of.
Robert Verostek: Hey Nick, this is Robert. Nothing really of one time nature to call out. Internally, it’s kind of a moniker, a term that we’ve been using internally to for robust margins, is called no stone unturned. So we have been looking across that P&L to ensure that the margins remain as healthy, as positive. So we — it really is a focus of ours. We’ve kind of moved those forward clearly off the depths of the previous two years. So again, nothing of any significance to call out at one time.
Nick Setyan: Thank you.
