For Focus Brands, 2022 showcased what happens when a multi-year transformational journey hits on all cylinders, CEO Jim Holthouser says. 

The company, comprising Auntie Anne’s, Jamba, Cinnabon, Moe’s, Carvel, McAlister’s, and Schlotzsky’s, exceeded $3.9 billion in sales for the first time. Roughly 650 new franchise agreements were signed, more than 400 stores opened, and 4.1 million loyalty members joined across the seven chains. 

“I think primarily this is about a lot of the investments we’ve been making over the last three years beginning to bear fruit,” Holthouser says. 

The most significant difference is how the chains are structured. When Holthouser arrived three years ago, Focus was more of a holding company with seven siloed businesses. Nine if you include international and CPG segments. Now, practices are standardized throughout the portfolio, so instead of taking multiple approaches multiple times, Focus created its “One Focused Way” mindset. 

Through this lens, the brand “turned the whole marketing discipline in this company upside down and reinvented it,” Holthouser says. Restaurants still determine their budgets, creative direction, and target audiences, but media is now bought as a block instead of seven different ways. The CEO says the move unlocked new price tiers and allowed Focus to negotiate more free placements. The company also built a marketing performance analytics group and partnered with OMD, the world’s largest media agency network.

The end goal is to free more dollars to touch the consumer. 

“You’re making those dollars work harder and harder and harder,” Holthouser says. “I’m going to be honest, I’m a maniac about measurement. It’s about holding people accountable obviously, but it’s more about learning what works and learning what doesn’t. We stop what doesn’t work and you redirect the dollars in ways that do work.”

The One Focused Way mentality also pushed Focus to spend millions on bringing the purchasing arm of its supply chain in-house and rationalizing hundreds of SKUs. 

“We thought we could at least do it as well, if not better,” Holthouser says. “And what we learned during COVID is that we need to have control of those relationships, not a third party.”

A longer-term primary objective is for digital and loyalty sales to mix 50 percent in the next five years. To accomplish this, Focus is experimenting with a unified front end for its websites and apps. Holthouser compares it to designing a house with the same rooms, basement, and attic, and repeating it seven times. Then the brand moves in and adds its style, colors, and personality. The chains had website/app functions entering the pandemic, but they weren’t optimized. Some were white label, some were in-house. All had different generations and features. The CEO says the company is “pretty much starting from ground zero in terms of our digital capabilities.” 

The test began with Schlotzsky’s, which involves some customers using the current website/app, while others are diverted to an updated version. Holthouser says the sandwich chain is close to having better conversion rates on the new platform. Once that happens, more traffic will be sent over and others brands will be included. Built into that unified frontend is a suggestive selling feature that’s proven to increase average check by 3 percent. Through machine learning, factoring in such things as time of day, seasonality, and past orders, Focus wants analytical guesses on what a person may want to add to their meal. 

“It’s not one thing I can point to, but it’s really the culmination of many, many investments and changes that we’ve been making to the Focus machinery,” says Focus Brands CEO Jim Holthouser says. 

Under McAlister’s, Focus has piloted CLTV, or customer lifetime value. As Holthouser explains, it’s about using artificial intelligence to send tailored offers to individuals as opposed to sending generic messages to several customers. If a consumer hasn’t been in the store within a week, Focus wants to send a unique note that will bring them in. Once the customer returns, the company wants to send messages that will keep them coming. For some, it may be a BOGO offer. For others, it may be additional loyalty points. But Holthouser emphasizes, it’s more than dangling an offer in front of someone—it’s an ongoing, comprehensive 1:1 relationship with the guest. McAlister’s saw an incremental $2.5 million from the original test. The same function has been launched at Jamba and Moe’s. 

“These are still early days, but we’re extremely encouraged by what we’re learning, and there is still a lot more value to be unlocked as this thing gains in sophistication as more and more of the systems and the machinery get built out,” Holthouser says. “So I would say 13 months in, yeah, I’m really happy with where we are. I mean this company has delivered and people are working hard. They’re focused on it and obviously more and more of this value gets built into our plans every year. So everybody has an incentive to keep it going and get more and more of the pieces across the finish line.”

In terms of growth, particularly with the snack concepts, co-branding continues to be a significant vehicle. Focus opened more than 60 dual-branded sites in 2022, with the most popular combos being Cinnabon and Auntie Anne’s and Auntie Anne’s and Jamba.

A new collaboration between Cinnabon and Carvel, called Cinnabon Swirl, is scheduled to debut this fall. The idea is to create a bakeshop/creamery in which Cinnabon will sell its classic rolls, while Carvel will have its cones and cups. There will be crossover between the two menus, as well. Some mashups that were tested include a Center of the Rolle Sundae. 

The first location was originally scheduled for March 2023, but because of pandemic-influenced construction constraints, it’ll likely debut this fall somewhere in the west, Holthouser says. Multiple will open before the year is over. 

“This is something that works for the consumer,” says Holthouser, describing the benefits of co-brand stores. “It works for the owner, obviously works for us. From the owner stand point you’re just getting that much more mileage out of your real estate. I can cast a much wider net into the market, so to speak. Rather than selling pretzels or just cinnamon rolls, you put them together and then offer the customer a lot more.” 

Focus believes it’s cracked the code for international growth, too. Twenty-five percent of its footprint is outside the U.S., across 60 countries. Last year marked the first full 12 months of the company’s Customer Experience Center of Excellence. Based in Costa Rica, the facility uses proprietary Zoom-like technology to virtually monitor, support, and consult restaurants across the world. There’s a team of workers at the center who speak, English, Spanish, Korean, Thai, Russian, and more. Results in 2022 showed restaurants that underwent a second consultation saw about a 13 percent bump in sales.

Going forward, the company is actively looking to add another brand to its portfolio. More specifically, a mid-sized restaurant between 150-900 units. Something that’s proven to where Focus can immediately sell franchises, but not so big that it overshadows the rest of the company. Focus looked at a number of deals last year, but none met all the requirements. Holthouser says the company has “about as many fishing poles in the pond right now than we ever have,” especially with the backing of private-equity owner, Roark Capital. 

Focus believes its achievements last year will set the stage for an even bigger 2023. 

“It’s not one thing I can point to, but it’s really the culmination of many, many investments and changes that we’ve been making to the Focus machinery,” Holthouser says.