As the North America Chief Operating Officer and President of a global restaurant franchise organization—think Auntie Anne’s, Jamba Juice, and Cinnabon—Kat Cole isn’t your typical guest on Full Comp. She’s not a chef nor does she run a restaurant on a daily basis.
But then again, Kat Cole is anything but typical.
She went from hostess to waitress to vice president in less than seven years at Hooters, opening global franchises for the restaurant chain at only 19 years of age. She shepherded FOCUS’s beloved brand Cinnabon through the recession in the early 2000s, taking the tasty Cinnabon products from mall food courts to supermarket shelves, partnering with a major brand, to expand revenue streams. She got her MBA from Georgia State University without a completed bachelor’s degree.
We all have a lot to learn from Kat Cole, and fortunately for us, she’s ready to teach.
“I do have a genuine compulsion to help, and I always have even as a child,” Cole said in a recent conversation with Josh Kopel, host of Full Comp. Asking for advice and help doesn’t have to be daunting, and it doesn’t have to take up a lot of time, according to Cole.
“There was something to be learned from everyone—a peer, an entry-level person, a CEO—and it was far less daunting to say, ‘Hey do you have five minutes? I heard you’ve dealt with this—I’m about to do it. I’d love to know what your advice would be, or I’d love to hear one thing you learned.’ Just a mentoring moment—five minutes at the water cooler, quick phone call—not a heavy lift for them.”
Known as much for her backstory as her successes in business, Cole often did things her way, guided by instinct until she had enough experience to help with decision making. One of those early decisions was to drop out of her university.
“I still think higher education, universities, degrees are one of the greatest privileges of our time. And in most cases, if someone has access to it, they should pursue it,” Cole said.
“But what I enjoyed more was traveling around the world opening restaurants. And I was not making a lot of money doing it, but I was making enough to pay my bills, and it turned into a career unexpectedly. So, my advice is if you have a compelling alternative that is giving you education—my international franchising experience was absolutely giving me education—follow that compelling alternative.”
Even with all of her success in business, it’s hard for publications—and the public—not to focus on her start as a Hooters waitress, known for their somewhat skimpy uniforms and bubbly personalities. Cole has learned to use that unique background to her advantage.
“At first, I appreciated those headlines, especially when I was running Cinnabon because no one wanted to talk about Cinnabon. So it was the only way to get that door open… they didn’t want to talk about Cinnabon—they wanted to talk about the former Hooters girl that was now a president. So I got the interview and then I would talk about Cinnabon. Over time, the Hooters thing became a footnote.”
Cole notes, however, that a male COO with a similar background probably wouldn’t have to worry as much about the clickbait headlines she has dealt with over the years.
“I think it’s human nature, the clickbait, the fact that people tend to lean toward whatever is more spicy, controversial, negative, paradigm-shifting. So I learned to just focus on the content in the article. And it almost became a bit of a mission of mine to have it be such a bait and switch. Like, you click on it, and it’s spicy, and then it’s like channels, retail ecosystem, growth.”
All of that experience, she said, has made her the leader she is today. In this episode of Full Comp, Cole and Kopel discussed the difference between management, telling people what to do, and leadership, inspiring people to do the best they can, and how that makes all the difference in any business’s success. She found her early inspiration from her single mother.
“My mom was working three jobs to support us. She would leave me instructions, and I would have to get the kids fed and get them to bed and do my homework. So I learned to follow, to listen, and respect the fact that someone else is a leader and know what that looks like.”
At the same time, Cole said, she learned a lot about leadership early on in her career, from both good and bad managers, and good and bad employees. Her international franchise management taught her the most, she said, because the feedback was instantaneous.
Cole also learned the best ways—and times—to innovate, and that involves not only brilliant ideas, but the right timing and a little bit of restraint.
“Just because I can do something does not mean I should. That is about discipline, respecting limited resources, fiduciary responsibility. But if I only listen to that, I’ll never innovate, I’ll never do anything. And if I only say yes to everything, I’ll drive us like a race car into the wall.”
For the full picture of Kat Cole’s rise to success and the lessons learned, listen to the full episode of Josh Kopel’s Full Comp below and listen or subscribe on Spotify or Apple Podcasts.
Ready for more? Check out more episodes of Full Comp:
Episode 1: Building a Restaurant Empire in a Recession: Tender Greens’ Erik Oberholtzer
Episode 2: Creating Opportunity from Tragedy: Serial Restaurateur Darin Rubell
Episode 3: Redefining Cocktail Culture: Death & Co’s Alex Day
Episode 4: The Art of the Pivot: Iron Chef Eric Greenfield
Episode 14: The Benefits of Community Building: Chef Nina Compton, Chef/Owner of Compère Lapin
Episode 22: The Art of the Pivot: Mark Canlis, owner/operator of Canlis
Episode 26: The Future of Restaurants: Dean Alex Susskind, Cornell University
Episode 34: Becoming a Brand: Celebrity Chef Jet Tila
Episode 36: Fighting the Good Fight: Celebrity Chef Rick Bayless
Full Comp, episode 45 transcript
Revolutionary Leadership: Kat Cole, COO of FOCUS Brands
[Josh Kopel]
Today’s episode is presented by Yelp. Yelp’s mission is to connect people with great local businesses. They also offer great solutions for restaurants looking to streamline their front of house and increase sales. Millions of diners are already using Yelp, and these products are a great way to capitalize on that network. Head over to restaurants.yelp.com to claim your free page and learn more about these powerful tools for your business. Now, here we go.
[Kat Cole]
Lean in to your founder’s story. People want to support people, and customers are learning that there is a human behind their restaurant. If they didn’t know it before, they really know it now. So, find ways to tell your story.
[Josh Kopel]
Welcome to Full Comp, a show offering insight into the future of the hospitality industry featuring restaurateurs, thought leaders, and innovators served up on the house.
[Josh Kopel]
If hosting this show has made one thing incredibly clear, it’s that teamwork, data, and resources will be what help us thrive post pandemic. Understanding that, Yelp and I have created a cheat sheet offering insight into consumer behavior, popular trends, and free tools and resources to help you get open and stay open. You can download that guide at JoshKopel.com/resources. Didn’t write that down? There’s a link in the show notes as well.
[Josh Kopel]
What does the COO of a 350 million-dollar restaurant conglomerate have to teach independent restaurateurs? More than we could imagine. Kat Cole worked her way up the ranks from waitress to executive vice president of Hooters, and went on to become the president of Cinnabon, and now sits as the COO of Focus Brands, a corporation consisting of household names like Schlotzsky’s and Jamba Juice.
[Josh Kopel]
On this episode, we tackle strategies for growth, creating multiple revenue streams, connecting intimately with your customer, and creating a plan to thrive today and tomorrow. We begin by discussing the importance of education in Kat’s life.
[Kat Cole]
I think education is the higher-order concept, is the great equalizer, it is the great opportunity provider. So, whatever brings someone to a moment or a path of learning I say, all in, do whatever you can, it will always be worth the time, energy, effort, et cetera. What’s changing for me is the dominance that higher ed, formal higher ed once had, the monopoly it once had on providing really relevant education. I still think higher education, universities, degrees are still one of the greatest privileges of our time. And in most cases, if someone has access to it, should pursue it.
[Kat Cole]
In my time, so that was ‘98, ‘99, closer to 2000 when I dropped out. Yeah, 1999. And I’d only been in for two years. I was the first person in my family to get into college, but I had a compelling alternative. I didn’t just think, “College is dumb, why do I need it?” I really appreciated it because no one in my family had it and I was learning and I did enjoy it. But what I enjoyed more was traveling around the world opening restaurants. And I was not making a lot of money doing it, but I was making enough to pay my bills and it turned into a career unexpectedly. So, I had a compelling alternative.
[Kat Cole]
So, my advice is if you have a compelling alternative that is giving you education, which my international franchising experience was absolutely giving me education, follow that compelling alternative. If you don’t have a compelling alternative, get in school, stay in school. It is still an unbelievable path. And now, if you are just entering that stage, post high school, man, the world is your banana. Just learn, learn from free classes, learn from Harvard workshops that are free to sit and audit a class. The access is so phenomenal, and I do think companies are starting to evolve. They’re not as fast as they should, but starting to evolve their requirements and what they say is mandatory for prerequisites for positions. And so as corporations move in that direction of more flexible prerequisites, I mean this thing is just going to take off into the world of flexible ed.
[Josh Kopel]
What about your kids, do you care if they go to college? Do you have a dog in that fight or would you prescribe the same thing for your own children?
[Kat Cole]
I think exactly the same for my kids, yeah. My kids are one and three. My husband and I talked about this all the time, it’s like, “Will they drive? Will their friends go to what we call college today? I don’t think so.” And so man, if they can travel, learn, have internships, apprenticeships, maybe those come back, I hope they do in the next several years. I’m a huge fan of apprenticeships, skill-based mentorship, paid experiences. Yeah, I mean, our kids names are Ocean and Arrow, so who knows what they’re going to end up doing. They might just be like surfing around the world. And that’s cool, we’re kind of hippies so it’s fine. I hope they love learning and I hope they see and that we as parents bring them to the understanding that learning and growth is what matters, how is not.
[Josh Kopel]
Did you get value from your MBA or was it a function of trying to open more doors for yourself?
[Kat Cole]
It was both. Maybe not open more doors, but the conversation I had with a mentor was the opposite, which is she said, “You know, if you want to get a CEO role or a president role … ” I was vice president at Hooters at the time, but I was well known in the industry. I’d run a ton of nonprofits, mentored a lot of people, was active in the industry’s associations, and she called me one day and she just said, “You know, if you want to get a job in the industry, you’re not going to have a problem. People know you, your skills speak beyond the resume. But if you want to go anywhere else, you will not get through their HR filter.” And when she said that … I mean, was a 28-year-old when I had this conversation with her, vice president of a company doing just under a billion in sales. I didn’t need the degree to have a dope gig. Like, I had a dope gig at a young age.
[Kat Cole]
But just hearing her say, “Doors will be closed that should not be.” I thought, “Why would I want any doors to be closed if there is a way?” And then I thought, “Man, I don’t want to go back and get my undergraduate.” I’ve tried like the occasional online class. Either I lack the commitment or it lacks the quality. I don’t see that making sense. And then she said, “There are business schools that offer executive programs where nights, weekends … You still have to take the GRE or the GMAT, you still have to score higher than the average entrance exam and you’ve got to have a lot of either letters or advocates or ways that the school can know you’re a risk worth taking, but it’s possible.” And it was those two things for me that were the driver of pursuing an MBA even though I didn’t have a bachelor’s, and they in fact were the outcomes.
[Kat Cole]
So, I didn’t want doors closed. I guess the other way, to say what you said, is doors to be opened. But that was more of my focus. I wasn’t trying to use the degree like many people are for a specific door to be opened. I just didn’t want to lose the optionality. And that was worth it for me. And the fact that I could do it more flexibly and not have to go back and make up everything. Those were the two things that enabled it as an option for me. And then the benefit was also I rounded out my financial acumen, which is an operator. I knew it intuitively, but I couldn’t speak at the level of analyst, attorneys, investors. That helped me, but I could have gotten that now, today by taking an online course or listening in on clubhouse conversations or listening to VCs podcast, right? I can get that now. That wasn’t available then. And so I really did level up certain technical areas of knowledge, and it reinforced some areas of confidence for me that I was as good in business as I thought I was, but not because I just had success in one company, because I was recognizing where I sat and where my decisions fell relative to other well-known business cases.
[Josh Kopel]
You brought up mentorship and you’re an advocate for, I think you called it “mini mentorship.”
[Kat Cole]
Yeah, mentoring moments.
[Josh Kopel]
Can you talk to me about that?
[Kat Cole]
Yeah. I think growing up, child of a single parent, alcoholic father, worked at Hooters. It’s not as if I was this super appealing mentee, where people thought, “Oh, she’s high-potential.” I was, but it didn’t look like that on paper. And so I didn’t have mentors or a bunch of people around wrapping their arm around me from other industries saying, “Let me teach you. Let me give you perspective.” I had amazing leaders in the company, clearly, who gave me opportunities and developed me and coached me and that I learned from, but not those really impartial external mentors.
[Kat Cole]
And so my way to get at it was to realize that there was something to be learned from everyone; a peer, an entry-level person, a CEO, and it was far less daunting to say, “Hey do you have five minutes? I heard you’ve dealt with this, I’m about to do it. I’d love to know what your advice would be or I’d love to hear one thing you learned.” Just a mentoring moment, five minutes at the water cooler, quick phone call, not heavy lift for them. I’m not asking them to be my mentor or my sponsor and put their name on me. I just want to learn for a minute. And then there were people over time that I would learn from and they would then occasionally reach out because they noticed I was receiving that information and putting it in practice. That organically grew into what someone might call a mentor-like person, but without all the formality and the monthly check ins and a program around it. So, mentoring moments are so accessible to anyone. And actually allowed me to 10x the mentoring and the feedback and the perspective that I got over what I would have had from a more traditional mentor.
[Josh Kopel]
And I think you bring up a valid. I would say the secret to my success in the hospitality industry stems from everything I learned from outside of the industry. We have a tendency to live in an echo chamber, right? Where it’s chefs talking to other chefs about chef shit, right?
[Kat Cole]
Chef, chef, chef, so chef.
[Josh Kopel]
Right! And everybody’s in agreement, right? It’s this echo chamber. And so, what are some of the valuable lesson that you were able to pull from outside of the industry and bring into it?
[Kat Cole]
When I was leading the Women’s Foodservice Forum. So, I was the chair of the board of a large women’s development organization. It’s all hospitality, so hotels, convenience and fuel, CPG, distribution, manufacturing, and restaurants. There was a woman who is the CEO of the organization, and she was so busy and so sought-after and beloved and so hard to access from a formal perspective. And I had a relationship with her from being a chair of the board and she was the CEO, but not a lot of one-on-one time. And I went through a period where my story was in the media a lot and it was almost excessive. It was “Undercover Boss,” it was Fortune’s 40 Under 40. It was lot of things between the 2013-2014. And it felt very heavy and I had no PR person. All of it was inbound. And I started to get some feedback that it looked like I was promoting myself, and I wasn’t. I was doing nothing. I was just being responsive and thought it was super positive because it was certainly benefiting my company in terms of awareness, attention, franchise leads, sales, people wanting to do business with us.
[Kat Cole]
And it was really good for young women, especially that saw and heard the story. But I started to hear, whatever you want to call it, haters, or whatever that, “Oh, she’s clearly making it more about herself than other people.” And that couldn’t have been farther from the truth. And I just went dark. I mean, I stopped. I said no to everything. I said no to every interview. It just weighed on me. I worried about the optics of that. And I told her about it and asked her if it was the right path. It was a 10-minute conversation. And she had this really sharp, clear perspective, which was, how dare you not leverage the platform you’re being given.
[Kat Cole]
She was a very religious woman. I’m one of those spiritual, not religious people. She was very religious. She said, “How dare you not leverage the gifts you’re being given by the Almighty? And who are you to hold your light, dampen your light, dampen your voice when it’s most needed in the industry?” And she gave me some stories about when people said things about her as one of the first African American female CEOs in manufacturing and in distribution and how hard that was for her to navigate and how she made decisions about how visible she was and how she’d use her time.
[Kat Cole]
And that advice for me, not from restaurants, not from an operator, you know, tangential, was one of the most formative for me because it allowed me to reframe the way I looked at using my own story in relation to an industry or a company, and to rise above the fray and focus on positive intent of course, know my true value and intentions, and to think more broadly about the impact relative to a little bit of noise. So, it was deeply personal advice that transcends any industry, and that I’ve used to remind myself over time.
[Josh Kopel]
Now, how much of that, I guess that throwing of shade, we’ll call it, do you think that that had anything to do with you being a woman? I don’t see anyone turning to Richard Branson and saying, “Hey bro, you need to pipe down a bit.” Right?
[Kat Cole]
Yeah. Tone it down. No more models on the back of the jet ski please.
[Josh Kopel]
Exactly, right? Do you think that’s a situation unique to your gender?
[Kat Cole]
Yeah. Looking back, I didn’t call it that then because I was so in my own head. But looking back and seeing how that’s played out for female tech founders, female CEOs. It’s like, “Man … ” I don’t know if it’s because our sample size is smaller and so when something’s going on, we stick out more relative to the group, and/or just embedded misogyny, and/or the role we’re supposed to play in people’s hearts and minds you know, be a good little girl and go keep your head down and go run that company. Now, I see it. There is definitely a lot of that at play. But true to form as a woman, I was worried about how that looked and if that would confuse people about my intentions and how dare anybody suggest I have a PR person, which everybody has and I didn’t and was still getting that.
[Kat Cole]
So yeah, looking back, I definitely see that now. But I just didn’t even pop into my mind then. I was like, “Ah, it’s just an unusual amount of media and people in our industry aren’t that forward with their story and it makes people uncomfortable. And I don’t have to do it and I’m not getting paid any more or less for it, so why deal with the bullshit from it?” And then I realized no, I should deal with the shade because it makes a lot of impact and inspires people. And to your point, now, there are plenty of other people that not only have no problem when it comes their way inbound, make great effort to go outbound and tell their story.
[Josh Kopel]
Yeah. When I was doing research for the interview, and this is somewhat related. I saw this article and the headline on the article was, “Hooters Girl to President of the company.” I’m not sensitive. I’ve been in the hospitality industry for 20 years. I don’t even know if I have feelings anymore. But when I read it, it conjures an image, right? And it could have said, “From server to president.” Right? It could have said that. But that wasn’t the purpose of the title. The purpose of the title was to conjure an image of you in these little orange shorts, and now you’re probably wearing the same outfit but now you’re sitting at a big desk. Like, I really … And I have a daughter so I think differently. From the day she was born, I began to see women and the role of women very differently, especially in business. But like, I’ve read that title and the article itself is fine, but the title is messed up in my opinion. Wouldn’t you agree?
[Kat Cole]
At first, I appreciated those headlines, especially when I was running Cinnabon because no one wanted to talk about Cinnabon. So, it was the only way to get that door open. And it was really good for the company and our franchisees. Like, they didn’t want to talk about Cinnabon, but they wanted to talk about the former Hooters girl that was now a president. So, I got the interview and then I would talk about Cinnabon. Over time, the Hooters thing became a footnote. But in those early days, it was the headline and I was so honest that they wouldn’t be talking to me otherwise, that I appreciated it. But then after the first 9, 12 months, I’m like, “Okay, people get it. Not hard to find.” And then I realized it didn’t bother me nor did I love it or appreciate it, I just thought, “Man, it’s a shame.” It just motivated me. Like, I clearly need to build a much bigger business story so that this isn’t what they want to talk about. So that my now and my future is much bigger than my past. And that happened. That happened organically over time.
[Kat Cole]
I think it’s human nature, the clickbait, the fact that people tend to lean toward whatever is more spicy, controversial, negative, paradigm-shifting. And so it’s the click. So, I learned to just focus on what’s the content in the article. And it almost became a bit of a mission of mine to have it be such a bait and switch. Like, you click on it and it’s spicy and then it’s like channels, retail ecosystem, growth. Just like, “Woh, woh.”
[Josh Kopel]
You have told a great story. I want to delve directly into that, because there are many conversations that you’ve been a part of where people talk about management versus leadership, right? Because management is like just controlling someone else’s behavior, whereas leaders set a path and inspire people to follow along that path. You achieved a lot in a very short period of time, you are further along by your late 20s than most people are by their late 40s, and it was because you made a considered effort to lead as opposed to manage.
[Kat Cole]
Yeah.
[Josh Kopel]
Where did that idea come from and what were the individual elements along that path?
[Kat Cole]
I think it was a little bit of nature, a little bit nurture. So, the things that were organic as I’ve always been comfortable speaking up and helping others. And that is a bit of an elementary definition of leadership. So, I do have a comfort with speaking up and I do have a genuine compulsion to help, and I always have even as a child. I’m a hugger. I pick people up when they fall. Just like those basic building blocks.
[Kat Cole]
And then there’s the nurture part, the things that happened along the way. Leaving my dad when I was 9, I had to fill the role of co-parent in our house. I have two younger sisters. And so at a very early age … My mom was working three jobs to support us. She would leave me instructions and I would have to get the kids fed and get them to bed and do my homework. So I learned to follow, to listen, and respect the fact that someone else is a leader and know what that looks like. But I also recognized I was both a manager and a leader in those situations. So from a young age, I had responsibilities that I couldn’t shirk. There is just … I had to do it.
[Kat Cole]
And then because we were poor, starting to work at a super early age. That also gave me exposure to good and bad managers and leaders, good and bad employees. So I had a lot of exposure events. It sounds like a virus, but a lot of exposure events where I was very clear kind of what version of that I wanted to err on the side of. And then having an explorer type of a DNA when I was asked to go to Australia to open that first ever Hooters restaurant in Australia and I’d never been on a plane. So, saying yes to that. Being thrown into or throwing myself into these situations where there’s a lot of chaos and a ton of unfamiliarity and unknown. That also really emphasized my leadership muscle.
[Kat Cole]
And then I learned how to build trust. I learned the importance of building trust even when you don’t know people and they don’t know you. I’m only there for 40 days and we have to get a job done together and everything is different every time. The team is different, the culture is different, the menu is different, the laws, the equipment. Sometimes there’s an armed guard standing at the back of the door because it’s in the heart of Mexico. And sometimes there’s a full liquor and that wasn’t the case at Hooters. And sometimes, like in China, it’s a family restaurant, believe it or not. And so all the shifts that I had to experience with a team I’ve never managed, that feedback from those teams was like water weathering rock. Because when I did not lead effectively, it was obvious. Nothing made up for it. And when I did lead effectively, it was obvious. And so all that feedback allowed me to accelerate my leadership capabilities at a much faster rate than most people who are kind of like in a common gig with a common team and everybody gets to know each other, so you don’t really have to get that much better that faster at things. I think those were the formative moments or dynamics that led to a stronger, sort of showing up as a leader on a regular basis.
[Josh Kopel]
Which also led to the bowling alley strategy, right?
[Kat Cole]
Yeah. I’m not a good bowler. I’m one of those people that can do the leg behind and look really cool with the pose, but it just goes all over the place. But it’s the visual that came to mind when I started thinking about growth and growing teams and growing businesses and growing brands and making a lot of mistakes. Because usually being the youngest one, I was also comfortable moving pretty fast without all the resources that are typically required, which means I had an unusual amount of wins and an unusual amount of mistakes. And that taught me to think of growth as throwing the bowling ball right square down the middle of the alley, hitting a strike. That’s what I’m going for at all times. But what I’m also going for is staying out of the gutter. Like, I won’t hit a strike every time, but man, if I could put bumpers in the gutters in the bowling alley, I could really go farther faster because it’s just going to ping along instead of like “boop!” over in the side.
[Kat Cole]
And so I realize that there were two forces at play, two things I needed to tell myself and my teams, two mantras that could be the bumpers in the bowling alley. One was if we don’t, the competition will, or if I don’t, someone else will. It’s just this realization, this reminder to have a fire in the belly, the competitive spirit, and maybe the consideration of, well, if I don’t do this, someone else will. Maybe where I land is cool. Let them do it. But at least I’m acknowledging that when someone else hires the person I didn’t, launches the product I didn’t, buys the company I didn’t, that I at least understood that that was a threat. At the same time, I gave myself a counterbalancing mantra, which is … Because the first one is like say yes to everything, do everything, like go, go, go.
[Kat Cole]
The other side is just because I can do something, does not mean I should. And that is the countermeasure. That is about discipline, respecting limited resources, fiduciary responsibility. But if I only listen to that, I’ll never innovate, I’ll never do anything, I’ll just sit in my comfy little corner and wilt away as a person or as a business. And if I only say yes to everything, I’ll drive us like a race car into the wall. And so those are the two areas I’m trying to stay out of in their extremes. And then using those mantras as a way to kind of create a healthy tension to push myself, my companies or businesses forward.
[Josh Kopel]
The first time I saw you speak was at a iNEO event. I’m a member. It’s an entrepreneurial organization.
[Kat Cole]
Great organization.
[Josh Kopel]
Great organization.
[Kat Cole]
Yeah.
[Josh Kopel]
I’ve learned so much from them. And I learned a lot from you in that speech. As a corporate executive, what lessons do you have to impart to entrepreneurs? And then as a corporate executive in the food space, right, what did someone that operates a five billion-dollar food and beverage company have to impart to an independent restaurant owner?
[Kat Cole]
A lot, but I’ll say what I have to impart is done with great humility because I also greatly respect the differences. I mean, certainly there are common themes that have to do with psychology, consumer psychology in particular, teams, team building, culture. There are certain things that are size agnostic. And if you get good at them, they’re only more important and more powerful when you’re big or I could argue, they’re more noticeable if you get them wrong if you’re small. And so the lessons I have to impart are in that bucket, where I can say with confidence, I know this is true from where I sit. It is even more true, or similarly true for you and here’s why. And those are things such as, stay close to the customer. And so of course the bigger you are, the harder that is. But I’ve seen independent restaurateur and small business owners when they hit their early growth patch, get more focused on culinary innovation or marketing and PR, and very quickly move away from how close they were to that customer and that restaurant when they only had one.
[Kat Cole]
The same is true for founders, tech founders, product founders. Most of them are obsessed with the customer at the beginning, rightly so because you can’t survive without being obsessed with that customer. You don’t have enough. But very quickly, some can move away from that. And sometimes they have enough tailwind that unfortunately for them, they don’t learn the lesson until it’s very expensive because they’ve been moving away from the customer while what they started is still successful enough to carry them. But then when they actually need to be closer to the customer, they’re super far away intellectually, culturally in terms of how they structure their company, how they make their decisions, et cetera.
[Kat Cole]
So that mantra, stay close to the customer, stay crazy, crazy close to the transaction. Because the people who are closest to the action, know what the right thing to do is long before the leader makes the decision. I learned this as a waitress. And it is way more true from the multibillion-dollar company executives seat, but it is still true for the person who is a team of one, as a marketer who’s founding their own agency, or the person who’s a team of three who’s making, I don’t know, mayonnaise and selling it to people. It’s just true and that the farther away from the customer you get, the more vulnerable your business is to competitive threats of the next person who’s close to the customer. So that obsession is something I impart regularly.
[Kat Cole]
And I really poke when people say, “Oh, yeah, yeah, yeah, I know what’s going on with my customer.” I will start asking questions, “Well, what does this mean in their life? And what does it mean for the … Who is your customer? Everyone.” No, that’s actually not possible. If you try to talk to everyone, you’re not going to really hit the bullseye with anyone. And so, who’s your target? So that’s a big one that translates.
[Kat Cole]
Another one is this concept of, don’t forget where we came from but don’t let it solely define us. How are we using what we hear from the customer and the employee. They’re the ones closest to the transaction, depending on the business. How are we using what we learned by staying close, to stay true to our roots, but not let our roots be our jail. And so that is true in all sizes of business. What’s the innovation? What’s the pivot? What’s the evolution? What are you learning, adapting? Maybe it’s just, you change the portion size by two ounces. Maybe it’s what you call a product, now that you’re talking to your customers, is actually limiting receptivity and trial. And so you learn a little, you name it something different, and you’re not obsessed with just protecting that old name.
[Kat Cole]
I could go on and on, but those are two lessons that from where I sit are still incredibly true, that I actually learned from my teeny tiny single-unit days that are versions of advice that I give to founders, entrepreneurs, and even small business owners.
[Josh Kopel]
What pivots have you guys made at Focus Brands that you think would be valuable lessons for independent restaurant owners?
[Kat Cole]
I remember early on, maybe seven years ago, I’ve always stayed close to the tech community, much closer than others in my industry, and that was more noticeable back then. And I remember when I came to our CEO and I was the president of Cinnabon and I was commuting between Atlanta and New York. I was an early beta user of Uber because it was only in a few cities back then. And I saw this thing called Postmates, which existed before DoorDash or Uber, before Uber was ever even touching food. And I came back to Focus and I said, “I don’t think it’s going to be big right now, but we had better sign up with this food delivery company to figure it out. Because when it gets big, we don’t want to be at the beginning of that journey.” And we were the first multi-brand and first national company to sign up with Postmates, at least that I’m aware of, that I knew of publicly. Because that was in 2004, I think.
[Josh Kopel]
Wow.
[Kat Cole]
I could be wrong. I’ve got to go back and look at my picture. I have a picture of me with the first Auntie Anne’s ever delivered by Postmates in New York in front of the Ace Hotel with the bike rider in the back. It wasn’t a full pivot of the business model, but it was a big leap of faith because it did not add any revenue or profit. They were only in 16 cities and half of our brands were in malls. It was one of those things where I came back and just said, “Humor me.” And there were some franchisees who were already on to this and who were serious believers, and who were willing to sign the agreements even though the commission rates were cuckoo for Cocoa Puffs high, like so crazy.
[Josh Kopel]
Yeah.
[Kat Cole]
Still are, but even were more so back then. But they were willing to try it and it was so incremental. It wasn’t threatening at the time. And so that was a big one, that was a big shift that felt like it was an experiment not needed, but it was absolutely needed then because we were mid-cap companies and it allowed us to be far ahead of the game as this became far more common with other big players in the market, and we can ramp up our capabilities in a way that put our franchisees at a bit of an advantage.
[Kat Cole]
Another pivot, maybe the one I talk about the most or one of the ones I’m most well-known for is part of the strategy of turning around Cinnabon out of the recession was really leaning into the multichannel model of having Cinnabon products in grocery stores and on other restaurant chains’ menus. That was big for a brand that at that time was 25% licensing these products that are in grocery, mostly Pillsbury at the time. So, 75% franchise around the world; malls, airports, et cetera. Today, it is literally the opposite. It is 30% brick-and-mortar franchise and still growing, by the way. That’s not as a result of one shrinking and the other just taking its place, they have both skyrocketed. But the total market for grocery, for other restaurants is so much bigger than locations in malls or airports.
[Kat Cole]
And so the licensing business, leaning into that, putting product on Burger King’s menu, now on Pizza Hut’s menu, in grocery stores, making coffee and coffee creamer, and all these other things that developed beyond the core licensed Pillsbury-Cinnabon relationship was massive. It was complicated to manage, it was emotional for the franchisees, it required a lot of strategic thought, a lot of institutional frameworks that had to be put in place, tons of mistakes. Some of the worst moments of my career were during that time, best and worst. Again, big wins, big mistakes, and big leadership lessons. And so that was a big pivot to say, franchising in our historic legacy venue is no longer our sole route to market. In fact, the others could be the same or greater. That’s a big, big, big shift.
[Josh Kopel]
Well, and that’s true for the industry overall at this point, right? When I opened my restaurant, the business plan wasn’t a one sheeter, it’s like a one-paragraph. It was, we’re going to open this restaurant, people are going to show up, they’re going to eat. And hopefully, as quickly as possible, they’re going to leave and more people will fill those places. And that’s it. One revenue stream for a multimillion-dollar business, you’re paying tens of thousands of dollars in rent every month, and you look back, I mean, it never made sense. You have to have multiple revenue streams going simultaneously.
[Kat Cole]
That’s right.
[Josh Kopel]
You have to be in the business of food.
[Kat Cole]
You know, everything that’s going on around the world is … I’ve heard everyone use the same word, it’s just been an accelerant with maybe a few exceptions. But in general, it’s been an accelerant of trends and dynamics and truths that were there buried below the surface or starting in certain markets to rear their ugly head. And this is just like the tide receding and you’re like, “Oh, shit! Look at all these sharp shells that I’ve been walking over.”
[Kat Cole]
I love it. I love it for the fact that imagine a business starting today, you know all this. You’re going to start a restaurant today, you don’t have to do it this way. But you can be enabled with low code, no code technology for an app and for loyalty programs and for delivery. You open a restaurant, if you’re really good at branding and you have some core products, I’m going to make a little grab-and-go of that for people to take home and maybe family meal so people … And maybe I’ll sell my meat by the pound if I want to. And my local Whole Foods is really drumming up local restaurant business, so I’m actually going to sell prepared meals via Whole Foods. And then the product I’m most famous for, I can actually produce out of a commercial or cloud kitchen, have a DTC business and ship it to people because they loved it, and I can do some delivery only a bit.
[Kat Cole]
Like, “pow!” right? Like, just and, and, and. And as long as that’s done in a way that elevates the brand, stays connected to its truth, and what about it is loved and magic, it can be done in a way that does not dilute the brand, but rather builds affinity and love and even a defensible moat around the brand. And it’s far more accessible to have all those revenue streams and all those channels now if someone wants to pay attention and treat it like a business.
[Josh Kopel]
This is an industry podcast and at the end of every episode, I like to give the guests an opportunity to speak directly to the audience. Do you have any words of encouragement or advice you’d like to share?
[Kat Cole]
My advice is lean into your founder’s story. People want to support people, and customers are learning that there is a human behind their restaurant. If they didn’t know it before, they really know it now. So, find ways to tell your story. Social media, any media, flyers. Remind people of the humans behind the work. It will always serve you well. And then if you’re not comfortable with technology, you need to get comfortable, but that’s okay. Find people, your son, your daughter, your kid, your waitstaff, there are people who can point you in the direction of affordable resources that will bring customers to you, help you think of creative ways to get your product to other customers. Don’t get caught up in, “Well, I’m a restaurant, I’m not a grocery store.” Yes, you are. “I’m a restaurant, I’m not a gas station. I’m not a grab-and-go.” Maybe you can be.
[Kat Cole]
I guess the advice to wrap that up outside of remembering to bring the humanity forward is the line that my mom always writes on my birthday card or a version of it, “Don’t forget where you came from. Your truth is in your roots.” And I said it earlier, “But your past is not your jail.” And don’t forget where you came from, but don’t let it solely define you. Maybe the thing that honors your past, your roots, the core of your business is in fact a very big change from where you are. And don’t look at it as a departure from the past, look at it as this really powerful branch off of your very strong tree, that might bear the most fruit of any branch coming off of your tree.
[Josh Kopel]
That’s Kat Cole, Chief Operating Officer of Focus Brands. Be sure to follow her on Twitter using the handle, KatColeATL.
[Josh Kopel]
If you want to tell us your story, hear previous episodes, check out our video content or read our weekly blog, go to JoshKopel.com. That’s J-O-S-H-K-O-P-E-L.com. Thank you so much for listening to the show. You can subscribe wherever you get your podcast. And while you’re there, please leave us a review. Special thanks to Yelp for helping us spread the word to the whole hospitality community. I’m Josh Kopel. You’ve been listening to Full Comp.
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