Chipotle Vet Forms Multi-Brand Platform for Rising Fast Casuals

Phil Petrilli is very much interested in being on the ground level of growth-ready fast casuals. He’s enamored with what the category brings consumers.

“I mean it's given birth to just so many terrific brands and quite honestly, so many terrific food offerings that are now available to consumers in a format that really fits the way so many dining consumers today need to interact with their food sources,” Petrilli says.

The industry veteran played a role in the rise of some of the biggest players in the space. He was a regional director for Chipotle from June 1999 to May 2012. For context, the category leader had just 16 locations when McDonald’s invested in 1998, and by the time Petrilli left, there were more than 1,300. He also worked at Noodles & Company as an executive vice president of operations from May 2012 to June 2016, during which the brand went public.

He loves it so much that in late 2020 he formed Untamed Brands, a group intending to “unlock the wildness” of emerging fast casuals and help them reach places they never imagined possible. Thus far, Untamed has taken ownership of taim, a 12-unit Mediterranean chain based in New York, New Jersey, and Maryland, and Hot Chicken Takeover, a seven-unit brand in Central and Northeast Ohio.

The company acquires these founder-led concepts and breaks down the wall they hit around five to 10 units.

“To watch how many—and it's a significant percentage—of these small brands at that size that just stall out around that five, six, seven-location unit size, or even worse, just eventually disappear, I really started to dissect why is that such a common outcome when to that point, there was some really proven points of success,” Petrilli says.

When he stepped back and looked at the bigger picture, the problem wasn’t that hard to explain. The business size and its complexity outgrows resources. He typically sees these fast casuals being run by a single founder—may be a few partners that helped start the business—and a small junior level team that tries to manage critical areas, like supply chain, real estate, human resources, and marketing. He’s observed one or two people trying do complete these tasks, not necessarily being an expert in any of them. Even if they were, there’s but so many hours in the day.

“Many, many private equity investors have tried to solve it through touting their network of advisors,” Petrilli explains. “'We have this ex-CEO from this restaurant company that’s on our advisory board, and we'll give you time with that person to pick his or her brain or the facts.'"

“But ultimately those people, great as they may be are just that—they're advisors,” he adds. “You’re going to get an hour or two of their time, maybe a quarter, maybe a month. And you're certainly probably not going to get a lot of hands-on work.”

Untamed is comprised of full-time employees that have grown restaurants at a large scale and understand pitfalls to avoid, Petrilli says. He serves as CEO, and he’s joined by a CFO, COO, chief development officer, head of brand marketing, and head of supply chain. Each of them bring experience from the fast-casual segment, including Chipotle, Nando’s Restaurant Group, Einstein Bros. Bagels, Le Pain Quotidien, and Panera.

The company purchased taim around the beginning of 2021 and bought Hot Chicken Takeover during the final week of that same year. Combined, the brands operate 19 locations, and by the end of 2023, the goal is to reach 35 stores. The bulk of those units will be taim just because Untamed has owned the concept longer, which means there’s been more time to build the real estate pipeline. Petrilli says growth will level out between the two chains in 2024.

Hot Chicken Takeover

Hot Chicken Takeover's sandwich.

taim

A bowl from taim.

taim

A picture inside taim's restaurant in College Park, Maryland.

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A takeout bag showing taim's new branding.

In December, taim released a new restaurant design that switched the brand from a darker, colder feel to brighter colors and textures, reminiscent of what travelers would encounter throughout the Mediterranean region. Locations are mostly urban and between 300 to 1,000 square feet, but with this new look, taim will put a bigger emphasis on the suburbs with 1,600-1,800 square feet.

Additionally, the brand plans to open its first airport locations in the summer to provide on-the-go customers with food that’s “quick and isn't going to put them into a food coma before they have to travel for the next five to six hours.” The chain allows guests to customize, with either a bowl, pita, or salad as the base. Petrilli says taim is capable of reaching 100 units throughout the Washington, D.C., and Tri-State markets.

Hot Chicken Takeover stores are usually around 2,000 square feet with more dine-in business than taim. It also translates well to nontraditional outlets, with stations in Lower.com Field in Columbus, Ohio, the home of MLS franchise the Columbus Crew, and Ohio Stadium, which houses Ohio State’s football team.

Petrilli views it as a brand fit for franchising because of its simple operations and menu; guests can choose among tenders, thighs, drumsticks, wings, boneless, sandwiches, nuggets, or the whole bird, along with only four sides. The CEO also notes, “there's no place in the United States that fried chicken doesn't work, but there's plenty of places in the United States that we, as the ownership team, are not going to be able to get to any time soon." The idea is to have franchise infrastructure in place before 2023 ends. Untamed would continue to open company-owned locations while franchising kicked off. Petrilli believes there’s room for 80-100 Hot Chicken Takeover units inside Ohio’s borders, let alone new markets.

One of the biggest learnings for Untamed has been deciding what to homogenize among multiple brands and what to keep separate. The company spent most of 2021 determining the ideal tech stack for taim in terms of POS, online ordering, labor management, and food management and making sure these platforms could talk to each other. And one of the first things Untamed did when it acquired Hot Chicken Takeover was to implement these same tools.

“There's things like supply chain and purchasing that you begin to move over and insurance and all the boring stuff that people don't really want to think about,” Petrilli says. “But the beauty of the boring stuff is that you find significant dollars when you are able to overnight have a level of economy of scale that affords you more purchasing power and competitive power. And then you turn those dollars back into investing in better real estate, better benefits for people, higher quality ingredients—those types of things that propel these brands and businesses forward.”

Petrilli thinks Untamed can go far with taim and Hot Chicken Takeover, but the company’s original quest was to own more than two. A portfolio of three to four concepts within the next five years is the ideal range. Petrilli is attracted to the drive-thru coffee segment because of its smaller square footage yet high throughput, and the Mexican fast-casual category.

The next chains also have to match geographically. Untamed isn’t interested in owning another chain based in New York or Ohio. If it's the right brand that shows all the right characteristics and the right size and in the right place in the U.S., Untamed will explore it.

“We'll almost take a look at anything because the part of the beauty of this multi-brand strategy is that none of these brands in and of themselves have to be able to get to thousands of locations for this to become a really meaningful and positively impacting company,” Petrilli says. “So if there's somebody out there doing something really unique that's demonstrating that a lot of people are digging it, loving it, we'd love to take a closer look at what's going on in those businesses today too.”