Freshii CEO says expansion still coming
CALGARY The CEO of healthy fast-food chain Freshii says bottlenecks in new markets, delays from major franchise operators and the setback at outlets in Target stores combined to force the company's revised growth outlook late last month.
Speaking at a small business conference in Calgary Thursday, Matthew Corrin said the combination meant fewer outlets could open this year, but that the stores are still going ahead.
“As a fast-growing company, we learned things that we didn’t have the benefit of a year ago that caused additional bottlenecks in opening those stores,” Corrin said.
On Sept. 26, Freshii revised down expected store openings for the year to between 90 and 95 from 150 to 160, and total expected stores open by the end of 2019 from at least 810 to 730 stores.
But Corrin says the stores are still on their way.
“It wasn’t a matter of if those stores opened, but when,” he said. “For all intents and purposes, nothing at all changed in the business.”
Permitting and construction delays, along with slower than expected timelines for major franchise operators, pushed store opening timelines from the expected nine months to twelve, he said.
“Every city we go into has a different permitting timeline, different landlords for the most part, different general contractors.”
Corrin said the company has made numerous new hires this year, and changed some policies to help store roll-outs and that the timing is now back to nine months — but not in time to recover the store opening numbers for this year.
He said the company’s decision to end an 18-outlet pilot with Target, because a lack of foot traffic at the retailer, also cut into net growth numbers.
The revised growth outlook sent the company’s stock, which only listed in an IPO in January, down by a third.
“I’m the biggest shareholder by a long shot. My family and I own 30 per cent of the company. And so, as you can imagine, I am personally disappointed in the share price,” Corrin said.
But he said he no longer looks at the daily stock price, and is focused on continuing to adapt to changing markets and pressures.
Corrin said companies that scale fast, that grow ahead of inflation and that cultivate a culture where employees are more productive and passionate can better adapt to changes like the minimum wage increases rolling out in several provinces.
“When you bring all that together, your minimum wage issue becomes way more defendable than your competition,” he said. “So that’s why we sleep well at night.”