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    Under New Ownership, LYFE Kitchen Lives On

  • Former franchisees have transformed the brand.

    Web Exclusive April 29, 2019 By Rachel Taylor
    LYFE Kitchen
    The healthy eating craze has hit an all-time high, and LYFE is ready to capitalize.

    Once thought to be the Whole Foods of fast food, LYFE Kitchen had big plans for nationwide growth. But after closures and sales, only three locations survive in Chicago.

    But those remaining spots are thriving, says Emily Paulsen, director of marketing and sales at L3 Hospitality. Before becoming full owners of the brand, L3 Hospitality was LYFE’s only franchisees—with three locations in Chicago.

    L3 Hospitality’s co-founders traveled to California when the first location opened and fell in love with the brand.

    The first LYFE Kitchen was located in health-conscious Palo Alto, California. After using that store as an incubator for two years, a second unit opened in Culver City in 2013. The concept then expanded in California and moved into Texas, New York, Colorado, Nevada, and Illinois.

    Carlisle Corp. acquired a minority stake in LYFE Kitchen in 2014 and bought the brand two years later. In 2014, it had 15 restaurants scattered across Nevada, California, Illinois, and Texas. It shuttered four in late 2017.

    Last year, Carlisle Corp. parted ways with the brand and L3 Hospitality became the owners in September 2018.

    While other LYFE locations were closing, the brand was doing well in Chicago, Paulsen says.

    “It’s interesting being the only franchisee, we never thought the brand was dying for us here in Chicago,” she says. “It wasn't really like we needed to, you know, swoop in and save the day and turn around a really tragic concept or tragic location. We had never felt that here in Chicago.”

    The first LYFE franchise location opened about five years ago and the health-focused brand built up a loyal following across its three locations. Same-store sales for the restaurants and catering business have continued to go up, Paulsen says.

    By having this history with the brand, L3 Hospitality was confident the transition to become full owners would be successful.

    “For us we were really excited to have the opportunity to really own the brand completely,” Paulsen says. “Working for an organization where you're the only franchisee and there's one franchisor, it's not quite the same resources and things available to you like there would be if you were at a Wendy’s or something where they have 6,000 franchise locations. We had a handful [of locations]. And we'd actually been exploring the opportunity to fully own the LYFE Kitchen brand for a while. So it was nothing but good news for us to have that chance at the end of last year.”

    After becoming the owners of the LYFE Kitchen brand, L3 Hospitality embraced and improved on the philosophies the company was built on.

    LYFE, which is an acronym for “Love Your Food Every Day,” was started by a team that included two former McDonald’s executives—Mike Roberts, its former global president, and Mike Donahue, the ex-chief of corporate communications of McDonald’s U.S. arm. Stephen Sidwell, a former executive at Gardein, a plant-protein food producer, was the other team member. The “fresh casual” chain touted a menu where every dish came under 600 calories with less than 1,000 milligrams of sodium. The locations also featured indoor herb gardens and wine on tap.

    LYFE Kitchen
    The spring menu also features Buffalo Cauliflower tacos as a vegan and vegetarian option.

    No longer under the eye of a corporate control, the former franchisees have been able to make improvements to the menu, website, and online ordering platforms. The Chicago locations were already doing things a little differently and now have even more freedom to develop the brand to its full potential.

    Paulsen and the team at L3 built a new website on a completely new platform. The branding was outdated and the imagery didn’t reflect what the Chicago locations were offering.

    “This is the most exciting part of becoming a full owners of the brand for me, as a marketing person,” Paulsen says. “ With all digital assets we just did not have any control over or access to as a franchisee. The website, it was just really tired from my perspective.”

    With competition continually growing in the fast-casual and fresh-casual segment, if LYFE wanted to stay relevant these changes were at the top of the to-do list, Paulsen says.

    She adds having corporate partners did have some benefits. LYFE’s former owners built out the framework for an app and online ordering. “But it never went to the finish line,” Paulsen says.

    L3 has taken those existing frameworks and updated the branding to match the new website, which was more colorful and current.

    “It was really important as soon as we became the sole owners to make it much more reflective of who LYFE Kitchen is here in Chicago and where we're going,” Paulsen says.

    Food photography plays a major role in the new branding. With each new seasonal menu change, the website updates.

    “We wanted to not only establish ourselves as a Chicago local business but really define what makes LYFE Kitchen special with our amazing food that tastes great and makes you feel great,” Paulsen says. “Getting that message out there was really important to do on the website.”

    Diving into delivery

    As a micro-chain, getting into online ordering and delivery can be expensive, but it’s a necessary part to maintain that competitive edge. Off-premises sales continue to rise and demand isn’t going away anytime soon, Paulsen says.

    Even with old technology, customers were using the LYFE Kitchen app.

    “It’s important to provide an amazing digital experience to the guest,” Paulsen says. “Whether they're ordering on their phone or ordering on a website, we really have been working hard to upgrade those assets and really perfect them for the guests.”

    Customers can order LYFE Kitchen through third-party services, like UberEats and Grubhub, but Paulsen doesn’t want that to become the norm. Partnering with these services was a go-between solution when corporate controlled online assets.

    “Especially in a city like this, especially in the winter, so many people want to order delivery and have things brought to them,” Paulsen says. “ We signed on with those third parties so that we could at least have that option for guests.”

    Like taking control of digital assets, the company wants to control the delivery experience from start to finish. By taking a hands-on approach, LYFE Kitchen can touch every part of the process instead of leaving it up to someone else. There is complete visibility of the order, Paulsen says.

    “For smaller chains, [delivery] is a challenge,” she says. “ But if a cookie is missing or if a delivery driver gets lost like we can easily ... solve those issues, for the guests much more quickly.”

    At the end of April, the LYFE Kitchen mobile app is getting a facelift. Guests can use the app to earn points for its loyalty program, which has also been reworked. Using her knowledge from working with the old version of the app, Paulsen helped develop the new platform to reflect what customers want when it comes to rewards. Every dollar spent earns a point and, after hitting different thresholds, diners can receive cash back and discounts to use on any order.  

    “We have totally changed the way the point structure works to make it better for the guest based on complaints and questions that I have received from customers over the last three years,” she says. “After that mobile app update gets pushed to all consumers we’ll finally be there I think.”

    Transforming the Menu

    The healthy eating craze has hit an all-time high, Paulsen says, and restaurants across the country are shifting to seasonal menus with fresh ingredients. Since opening five years ago in Chicago, the success of LYFE Kitchen proves the wellness trend isn’t just a coastal thing.

    “I don't think that the Midwest is so much just a meat and potatoes kind of place anymore,” she says.

    Chef Marco Behenna has been on the L3 team for more than two and a half years. After the transition, Behenna took the original LYFE Kitchen menu, elevated the flavors, and created the cuisine L3 Hospitality truly represents, Paulsen says.

    “People are really interested in food trends, eating new things, and learning about what kind of food or food combinations are good for the body,” Paulsen says.

    Behenna tries to use as many local vendors as possible. LYFE Kitchen is a small business so it makes sense for it to work with other small businesses.

    “If you're shipping something from California or from the East Coast there’s transit time,” Paulsen says. “Not only is that worst for the environment, by the time the produce hits your kitchen it’s already been off the vine for a few days.”

    While the quality is better, smaller vendors tend to specialize in specific products. Instead of one national supplier, Paulsen has to manage multiple vendors, which can be time consuming and more difficult to track.

    “Other chains might work with one supplier that is sourcing from all over the country or even all over the globe,” she says. “But they only have one point of contact. It's just a little bit more challenging logistically to manage that sourcing and ordering when you're working with several local vendors. But we think it’s worth it.”

    LYFE Kitchen has an advantage as a micro-chain to add LTO specials that sometimes aren’t even on the seasonal menu. These specials are tested as a chalkboard item and if they’re a hit with guests, the company adds it to all locations and online.

    Right now, the seasonal offering features halloumi cheese as a meal add-on or in a special bowl. The spring menu also features Buffalo Cauliflower tacos as a vegan and vegetarian option.

    Picking up on the smoothie craze, LYFE Kitchen also added five smoothies and a line of boosters, like adaptogens, protein powder, and CBD oil.

    The Future of LYFE

    With many other cuisines and a large foodie crowd, Chicago is a great setting for the LYFE brand, Paulsen says.

    It’s too soon for the brand to announce a growth strategy, but that doesn’t mean it’s not on the minds of L3 Hospitality. Paulsen is excited about where LYFE Kitchen is going.

    LYFE Kitchen
    LYFE's new beverage program includes five new smoothies and a line of boosters, like adaptogens, protein powder, and CBD oil.

    “We are so happy with the way LYFE Kitchen has grown here in Chicago and we definitely are interested in ways to continue to expand within the Chicago market,” Paulsen says. “We want to evolve the brand and come up with new ways to bring LYFE Kitchen to the community. I'm not sure what that will look like. But we are definitely ready to explore some new opportunities.”

    In the same fashion as the digital assets, the existing locations are getting their own refresh. Once limited by the restrictions of a franchisee/franchisor relationship, the brand can now fully modernize and reflect the new feel of the website and menu.   

    “I think any restaurant needs to constantly be updating and making the furniture feel fresh and making the color scheme feel fresh,” Paulsen says. “Now that we do have this refreshed branding and the opportunity to make things a little bit more playful and casual and fun, we're definitely doing facelifts like that in all of the restaurants.”

    Each location has its own personality and fits into the neighborhood where it’s located. Even with updates, each store will continue to be its own thing, Paulsen says. L3 Hospitality has the flexibility to use different light fixtures and hang fresh art in each location. The corporate controlled days of having uniformity are gone.

    Through the process of updating restaurants, the company went into each location and studied how units performed. L3 asked customers questions and observed everything from what door they used to enter the restaurant to where people were waiting in line and if guests could easily find a pickup order. The restaurant modifications also included expanding grab-and-go areas and building out the bakery and pastry selections.

    “We’re really trying to make all of our upgrades not only aesthetically pleasing, but have them really makes sense for the guests and just enhance the experience at each individual restaurant,” Paulsen says.