It was a wake-up call for a brand that rode fast casual’s momentum in the early 2010s to quick expansion and millions in investment. Rosenberg opened Honeygrow in 2012, just as the fast-casual category was establishing itself as a restaurant force to reckon with. While burgers and salads were especially taking off in the fast-casual format, Rosenberg—who had recently converted to a plant-based diet—decided to open a stir-fry concept that cooked customized noodles, vegetables, and proteins in a wok right in front of the customer.
Honeygrow quickly grew to 30-plus locations and by December 2017 had raised $70 million in capital.
But while the store closures may have killed the brand’s momentum, Rosenberg devised a plan to ensure the brand itself could be saved. He took a multipronged plan to his board in 2018 that tasked the company with getting out of some bad leases it had signed, reducing corporate expenses, and driving same-store net operating income (NOI).
In addition, Honeygrow renegotiated its third-party delivery fees (Rosenberg says it was a $700,000 expense in 2018 and the company couldn’t figure out if it was incremental) and rebooted its corporate culture.
“We made a lot of hires [early on] where I think people jumped in for the opportunity, which is fine, but they weren’t necessarily willing to put in the work,” Rosenberg says. “And people became more mundane. At the office, people were leaving earlier and earlier and earlier, and I'm here late watching this. There was that lack of passion and love that made it so successful for the first five years.”
Beyond all of that, Rosenberg says in-store performance was due for an improvement. He says the team started looking into its data and discovered that the average ticket time was 11–12 minutes, while order accuracy was lagging. So they revised their training procedures and encouraged some friendly competition among team members to improve performance.
“We wound up focusing so hard on speed, while maintaining quality and accuracy, that today our ticket times around 6 minutes and 30 seconds,” he says.
One year after Rosenberg’s decision to close stores, Honeygrow is back on track. He says the brand is EBITDA positive, and as of July 2019, its same-store NOI was up 55 percent. Expansion is once again in the cards; while Honeygrow will continue to open urban locations where appropriate, he says, it’s also investing in suburban growth, with stores in cities like Christiana, Delaware; Rockville, Maryland; and Pittsburgh.
And it now has the right team to drive those expansion efforts. Rosenberg says the corporate culture at Honeygrow’s Philadelphia headquarters is all in on making the fast casual a thriving national chain.
“That culture has returned, and the team truly buys into the mission and what we’re doing,” he says.
It’s a big turnaround for Honeygrow, but Rosenberg isn’t much for singing his own praises. After all, he says, it was just another bump in the long road to success.
“I love challenges. I like overcoming odds,” he says. “I like succeeding. I like watching my team win. That’s just how I'm wired.”
For more on Honeygrow’s rise and Rosenberg’s efforts to reboot the brand, listen to the latest episode of “Fast Forward” by streaming above. Access the full “Fast Forward” archive here.