Freshii CEO calls it quits (for real this time)
The company’s stock price had nosedived, so in a conference call with financial analysts in 2019, Freshii CEO and founder Matthew Corrin offered a moment of introspection and a promise for renewal at the troubled public company.
“The skills that allowed me to lead the brand to where we got are different from the skills required to get us where we want to be,” Corrin acknowledged that May.
Then he gave his solution: “So, in short, I fired myself. I then rehired myself as a new CEO.”
The comments were far from surprising for the audacious entrepreneur who transformed a nondescript salad bar in downtown Toronto into a behemoth fast-food chain with hundreds of locations in more than a dozen countries.
But on Wednesday, Corrin left the
C-suite for real. Freshii announced Corrin’s departure in a press release after markets closed, adding that Daniel Haroun, the company’s chief financial officer, will take over as chief executive effective immediately.
While Corrin’s departure marks the end of a 17-year stint at Freshii’s helm, the founder isn’t going far.
Corrin will become the company’s executive chair, and he told investors that he intends “to maintain my significant shareholdings in Freshii, be our biggest brand champion, and our most loyal guest — for the long term.”
Since founding Freshii in 2005, Corrin has been the singular face of the nascent food chain — a brazenly ambitious figure who brought healthy burrito bowls to a market dominated by greasy burger franchises with decades more experience.
But judging by investor sentiment, the new position may be a better fit for an executive whose brash managerial style attracted controversy and lawsuits while spooking shareholders.
Among several instances of turbulence since Freshii’s inception — a faltering stock price, a series of disappointing earnings and a legal fight with Yogen Früz, to name a few — the latest came as recently as last month when the Star found that the company had launched a program to outsource cashier services to call centre workers in Nicaragua for below Ontario’s minimum wage.
Corrin did not respond to the Star’s interview request for this story, but following the story on Freshii’s virtual cashiers, he wrote, “Didn’t agree with the narrative, but, always appreciate a buzzworthy and polarizing piece of journalism.”
Following Wednesday’s announcement, which was accompanied by first-quarter earnings that saw revenue rise from $3.7 million a year ago to $9.6 million today, an analyst told Bloomberg: “The CEO change may help bring back some investor confidence, and the change is at the right time.”
Corrin, who grew up in Winnipeg, opened Freshii at a time when cheap and healthy eats were rare among quick-service restaurants.
Between the McDonald’s and Burger Kings of the world, Corrin — a Western University grad with a penchant for marketing — saw an opportunity to sell the public on affordable lunchtime offerings that didn’t come with stomach cramps.
With some financial help from his parents, he launched the first location under the name Lettuce Eatery. Like many Silicon Valley startups of the time, he aspired to make something that was more than just a business — the idea had to change the way people lived.
Corrin sought to build Freshii into a multinational franchise, and by the time of its initial public offering on the Toronto Stock Exchange in 2017, the company had 250 locations around the world.
But while Freshii blossomed into a ubiquitous storefront — its locations virtually impossible to miss on main streets and in office building cafeterias — it struggled to live up to its lofty goals.
Freshii raised $125 million for its IPO, promising to double its location count in the following years.
But a series of disappointing sales performances ensued and the company had trouble expanding at the pace it wanted.
By last December, the company had 343 stores in North America, below its targets (the company does not disclose the number of stores it has outside the continent but says they represent a small fraction of overall revenue).
Since the IPO, investors had become weary of the company’s overzealous growth strategy.
As of Wednesday, Freshii’s share price was down almost 87 per cent since its debut on the stock exchange.
Corrin’s approach was reflective of the founderitis common among many successful entrepreneurs: bold but unpredictable, imaginative but frustrating for investors.
In leaving the top post at Freshii, the founder whose fingerprints are all over the business will now have to sit on the sidelines while an executive of a more traditional mould (Haroun’s held positions at Restaurant Brands International and Walmart) takes over.
That won’t be easy.
“Since starting Freshii, I have literally done it all,” he told the Toronto Stock Exchange when the company went public.