Laying the foundation
Five years ago, Brees and Landry were on an airplane heading to the grand opening of a new Walk-On’s location. That’s when Landry laid out his vision for a sliders-themed restaurant.
“The idea started with the fact that sliders were one of the best selling items on the menu,” Brees says. “Brandon told me, ‘I think we’ve got something there. We could open up a sliders concept that has a really simple menu, but let’s take it to the next level with these repurposed shipping containers as the look and feel of the brand.’”
Brees jumped on the opportunity to help build something from the ground up. He came on board as an initial investor and put up the capital for the proof-of-concept restaurant, rounding out a team of entrepreneurs that also included Landry’s nephew, Jacob Dugas, and LSU professor Scott Fargason.
The team built Smalls with franchisees in mind. It’s all about keeping things simple and focused, starting with the limited menu centered around the namesake product. Customers choose from four combos, including one, two, three, or four sliders–made with premium beef and proprietary sauces–paired with fries, drinks, and milkshakes.
“We have less than 10 food ingredients in the restaurant, where a lot of quick-service restaurants have several hundred ingredients that they have to manage,” says chief development officer Richard Leveille. “Operators are really excited about that.”
Operators also are excited about the brand’s modular design. The shipping containers are equipped with walk-up windows, drive-thru lanes, and outdoor patios in lieu of indoor dining rooms. They operate with around half of the labor typically required in an average quick-service restaurant, and routine expenses like utilities and dumpster requirements are lower.
One of the biggest advantages of housing a brand in a shipping container is real estate flexibility since the footprint only requires around half an acre of land.
“There are companies out there that are well-capitalized and have great concepts, but they’ve been slow to grow in certain markets because they’re picky on real estate,” Leveille says. “We have to be picky, too, but most concepts can’t fit on half an acre, so our competition for real estate isn’t the traditional quick-service segment.”
The cans also enable faster speed to market. They’re manufactured, permitted, and pre-inspected in Florida before being shipped across the country and dropped on an outparcel. Leveille says the process shaves anywhere from three to eight weeks off the typical construction schedule.
Opening the floodgates
Smalls opened its first can in September 2019 in Baton Rouge, not far from the original Walk-On’s restaurant. Since then, it’s grown to nine units throughout the state as of mid-July. Brees says the units are consistently outperforming expectations, opening “anywhere from $65,000 to $85,000 a week.” The system is tracking a solid AUV of over $2 million.
“When we started, we were thinking that if we could just do around $1.3 million in sales, we’d have a really good business,” he says. “All of the sudden, our average units are doing over $2 million. We’re really honing in on the unit economics piece. Could we push that to $2.5 million? Could we push that to $3 million?”
Smalls was built with a certain level of transactions in mind, but the first few cans quickly blew past those projections. And while the brand isn’t dealing with the same overhead expenses as its peer set, it’s still taking steps to make the four-wall economic model as strong as possible. The team is continually looking for opportunities to improve operations and unlock efficiencies with an eye toward increasing throughput and further reducing costs.
The first unit had one grill and one drive-thru lane, but subsequent locations have multiple stations and two lanes to better meet demand. Smalls experimented with the placement of its drive-thru menu board and how it communicates with employees inside the can. It landed on a model where workers take orders outside face-to-face instead of through a speaker. The company also has worked to decouple its supply chain from Walk-On’s and procure products further out in advance.
“We’re hyper-focused on operations, on systems, and on getting the build-out costs as low as we can,” Brees says. “We’re developing extremely strong vendor relationships and making these units and the business model as profitable as possible. We’re looking at all of those things on a daily basis and continuing to refine even more as the days go by.”