A people-first approach has set up the country’s second-largest restaurant group for further growth.
As difficult as it might be to picture, less than five years ago, the concepts in Inspire Brands’ portfolio were operating as five separate and distinct companies. It’s now the U.S.’ second-largest restaurant conglomerate (behind Yum! Brands) with a global footprint of 31,700 restaurants and $30 billion in system sales.
Arby’s Restaurant Group closed a $2.9 billion deal for Buffalo Wild Wings in February 2018 and created the organization, which would be headed up by Arby’s CEO Paul Brown, previously hired by Roark Capital (the entity backing Inspire) from Hilton Worldwide. Brown always carried an intriguing resume to the role because his background offered a potential peek into what might be to come.
Brown, in the winter of 2018, following the BWW sale, sat down with The Wall Street Journal and outlined a path that didn’t look all that different from how Hilton Hotels & Resorts structured its empire. Essentially, the idea was to create a suite of brands that span multiple occasions, up and down the spectrum, and to capture more visits from the same customer. So Inspire could keep guests across dayparts, price points, and interest levels over time.
Meanwhile, all of this would get benefit from a center of shared leverage and power, like a hotel entity (Hilton uses one loyalty program for its properties, for instance). Independent chains pulling from a center of excellence, or creating value from within a multi-branded arrangement. Inspire promised to become a group that capitalizes on the benefits of scale not just to save cost, but also to enable outside investments in long-term growth initiatives.
One example being the fact Inspire’s concepts today are supported by a supply chain that collectively manages more than $7.7 billion in purchasing annually, including sourcing, procurement, distribution, commodity management, and demand planning for Buffalo Wild Wings, Jimmy John’s, Sonic, and all international restaurants. This arm is labeled Inspire Supply Chain. Then, Arby’s U.S. supply chain is served by ARCOP, Inc., and its membership is comprised of both franchised and company-owned restaurants. Dunkin’ U.S. is serviced by National DCP, LLC (NDCP).
“Inspire’s shared supply chain, working in partnership with ARCOP and NDCP, enables our brands to share best practices and investments across the Inspire family to improve the quality of our menu items and enhance the way we serve our guests,” Christopher Held, chief supply officer at Inspire, said in a statement.
But broadly, Inspire’s vision cascaded to eight areas: human resources, finance, legal, IT, development, communications, customer personalization and insight, and media (there’s an in-house operated site called Inspire Stories that shares news and updates, similar to Starbucks).
Brown told the WSJ Inspire expected to buy “no more than 10 chains,” with systemwide sales between $1 billion–$4.5 billion each, and the company would look at adding a mix of franchise- and company-owned concepts. And again, diversity of offering and differentiation would be the banner, but with a nod to how the brands complement and can benefit one another.
Here’s what’s happened:
February 2018: Buffalo Wild Wings is purchased for $2.9 billion, setting everything in motion (Rusty Taco was part of the BWW move as well):
Vitals (year-end 2021, domestic):
Buffalo Wild Wings
December 2019: Inspire acquires Sonic Drive-In for $2.3 billion.
Inspire purchases Jimmy John’s. This deal was unique given Roark bought a majority stake in 2016. At the time, the sandwich brand was valued at roughly $2.3 billion when Roark’s stake included a minority share in the brand owned by private-equity firm Weston Presidio. By acquiring Jimmy John’s (for an undisclosed amount) Inspire essentially transferred the business from one Roark entity to another. The chain changed hands but ultimately remained under the control of Roark.
In its biggest blockbuster, Inspire brought Dunkin’ and Baskin-Robbins into the fold for $11.3 billion. The deal was the highest-dollar acquisition since 3G Capital LP, Burger King Worldwide Inc., acquired Tim Hortons for $12.64 billion in August 2014. Panera Bread is next at $7.5 billion, a price paid by JAB Holdings in 2017.
More recently, Inspire released its first “Inaugural Good Citizens Report” to share progress and aspirations headed into the future. As mentioned, a headliner being the notion it has ballooned in a hurry. Inspire presently directs more than 650,000 corporate and franchise team members across 70 global markets. The company is 93 percent franchised and collected north of $7 billion in digital sales alone.
The company-franchise split:
Buffalo Wild Wings
Inspire last year expanded its franchise base by more than 5 percent, year-over-year, or 3,400 total franchises systemwide. The chain’s $30 billion in sales represented a double-digit year-over-year increase as expansion upped in Asia, the Middle East, and Latin America.
The company produced U.S. digital sales growth over 35 percent versus 2020 to $6 billion-plus—good for more than 20 percent of domestic system sales. The company also surpassed $1 billion in sales via third-party marketplaces.
Across the company, to the earlier point of leveraging scale and diversification, Inspire’s loyalty user base hiked to nearly 50 million members.
The company opened more than 1,400 units in 2021, including over 500 U.S. franchise-led stores and 800 locations outside the country.
And the growth has spread out:
Buffalo Wild Wings
One place this puzzle comes together is Inspire’s Alliance Kitchen, which opened in 2021 as the first ghost kitchen operated by a multi-brand restaurant company. Located in Inspire’s Atlanta backyard, it offers menu items from Arby’s, Buffalo Wild Wings, Jimmy John’s, and Sonic. The company said the design reduces labor needs by 54 percent, square footage by 19 percent, equipment costs by 45 percent, and energy consumption by more than 50 percent (compared to five stand-alone restaurants). Customers can order meals via a brand’s online ordering platform or a preferred third-party delivery app. The meals are delivered by third-party drivers or picked up by guests at Alliance Kitchen.
Inspire’s Innovation Center has also stirred future models. IBIC enables teams to test and fine-tune tech aimed at addressing ongoing challenges. In 2021, Inspire and Miso Robotics announced Flippy Wings, a robotic chicken wing frying solution that reduces human touch points.
Inspire today has support centers in Atlanta, Boston, Champaign, Dubai, and Oklahoma City.
Inspire’s Alliance Kitchen is a first-of-its-kind ghost kitchen setup.
To the people
Also in 2021, Inspire launched what it termed the “People First Inspire” platform, which broke down cross four buckets—new team member recruitment; upward mobility in operations; career path opportunities in its support centers; and good citizens in communities, or efforts to foster inclusion and diversity beyond the four walls. All of the pillars feature executive sponsors (chief people officer Melissa Strait, Buffalo Wild Wings president Lyle Tick, Sonic president and limited-service category head Claudia San Pedro, and Inspire chief communications and ESG officer Christopher Fuller, respectively).
With recruitment, Inspire has engaged firms that specialize in diversity hiring and partnered with organizations and learning institutions to broaden access to diverse candidates, the company says. It also boasts a referral program in an effort to have current employees aid continual recruitment.
Since 2014 (at Arby’s then), the company has deployed a “Brand Champ” program “designed to help inspire and empower team members to deliver on the brand purpose, set actionable goals, and explore how they can make a difference in the lives of others.” Going back in time, an example of this was when, during training, Arby’s appointed ambassadors to lead discussions on how every role, from backline to the fryer, could elicit “smiles for employees and guests from their workstation.” There was a B.L.A.S.T. Guest Recovery model that sought to recover satisfaction following an inaccurate order. Standing for Believe, Listen, Apologize, Solve, Thank, employees were advised to not question or argue with the guests, to be empathetic and considerate, to solve the problem for the guest, and apologize and to thank the guest for bringing it to the employee’s attention.
Brand Champ’s roots really began during Arby’s mid-2010s comeback. In 2015, the chain’s customer service score, per the ACSI index, was well below industry averages. But in the next year, it jumped 8 percent. Arby’s said at the time nine out of 10 visitors reported increased customer satisfaction over a two-year period—a stretch that coincided with 23 consecutive quarters of same-store sales growth.
And Brand Champ was a catalyst, executives claimed. In late 2013, Arby’s put a rebranding effort on hold to focus on better preparing employees. It launched the training program and, from early 2014 to 2016, saw Arby’s Team Member Engagement Survey scores increase by 87 percent.
Arby’s hosted Brand Champ events, like this one in NYC, where it would put on a three-and-a-half hour training program that included everything from future goals to meat sourcing and understanding the “fast-crafted” approach Arby’s adopted in its turnaround. Key, however, was the continual goal of trying to explaining reasoning behind corporate decisions versus just spouting policy and expecting compliance.
A third of Brand Champ centered on setting goals and asking employees to talk about their life plans. Additionally, explaining throughout the process how the brand would support them en route.
Since Brand Champ’s 2014 introduction, more than 400,000 company and franchise employees have participated in the proprietary, purpose-driven workshop.
Some other ideas
Inspire has built out a LEAD (learn, experience, assess, and develop) Training Platform as well over the years.
It has a “Flight School” for GMs that includes topics such as time management, communication, leadership, and developing others.
“Inspire U” also works with GMs on long-term growth. It develops skills and behaviors beyond day-to-day job responsibilities, the company says, such as situational leadership, developing talent, and building culture, as well as concepts like finance and marketing. Inspire GMs have participated in more than 62,000 hours of Inspire U training since the program arrived in 2015.
“Elevate” is another training platform Inspire created to prepare multi-unit restaurant leaders for more responsibility and career growth. The multi-session program provides professional development in advanced management and leadership skills such as communicating a vision, strategic thinking, and finance.
The Director Development Program offers learning, group case study presentations around several components of Inspire’s business, as well as leadership development.
Inspire said these initiatives have led to tangible results. For instance, 73 percent of the Buffalo Wild Wings shift managers who participated have been promoted, and 40 percent of its assistant GMs/department managers have been, too.
A look at other platforms:
Igniting Dreams: The grant program helps employees overcome barriers to “their personal growth and success.” Recipients apply with the help of operations and field leaders. If awarded, they’re given a sponsor to provide ongoing coaching. Inspire has given about $130,000 to employees through Igniting Dreams to use for school, textbooks, purchasing laptops, vehicle deposits, and more.
Inspire boasts an internal employee relief fund supported by team members, Champions of Hope. Responding to the initial impact of COVID-19, Inspire matched all employee donations 3:1, up to $1 million. From March to December 2020, these donations enabled Champions of Hope to award more than $1.7 million across 2,100-plus grants.
Support center programs: In addition to the Inspire Mentor Program and free LinkedIn Learning access to support skill development, the company hosts leadership development workshops to foster strategic thinking and people management capabilities “crucial to an inclusive and collaborative workplace,” it says.
Leader as Coach: Inspire’s Leadership Group (ILG) participated in a five-month applied development program to enhance coaching skills. The program stressed real-time feedback (and how to deliver it), performance coaching, and long-term development planning. It was also tied to building skills that reinforce the company’s talent cycle. ILG members were asked to identify at least one mentee with whom they put their new skills into immediate practice.
Ways of Working: Inspire recently unveiled “Ally Pods,” a program geared around modeling how cross-brand, cross-functional work can benefit the company. Each team, or pod, was given a business challenge to resolve in a 90-day sprint that required prioritization, resource allocation, and business plan development for delivering multi-brand benefits.
It’s another tenet that returns to the broader view of Inspire—a resource for the collective good to pull from.
The upward mobility
Targeting development from within is hardly a Inspire priority, naturally, but it’s something the company has developed much of labor efforts around.
Nearly all of its shift managers are promoted from team member ranks. Over half of assistant managers come from shift managers. Nearly half of GMs are raised up from assistant managers. And basically all above-restaurant leaders are promoted from the restaurant level, either from one of Inspire’s brands or from other restaurant organizations.
The company’s HOPES—hospitality opportunities for people (reentering) society—program has worked with the National Restaurant Association to support special hiring programs in select communities. Inspire’s hosted hiring tours at Dunkin’ units in Boston and plans to expand the pilot program to Delaware, Illinois, and Ohio.
In Delaware, Buffalo Wild Wings franchisee group High 5 Hospitality participated in a simulated hiring event to mimic the challenges individuals face when reentering the workforce from incarceration.
Inspire also offers business resource groups sponsored by the company that are employee led. They are: Black Voices at Inspire; Champions of Women Leaders; Inspírate (promotes cultural diversity and supports the Latino/Hispanic community; Inspire P2 (for workers invested in personal and professional growth); Inspire Vets; and Pride.
Inspire’s companywide mentor program pairs mentees with mentors based on specific career development goals and encourages an impactful relationship based on trust and an understanding of professional aspirations. Inspire has a range of development resources. It recently launched a Career Services Center that provides coaching and development resources to support professional growth and career navigation
In regard to DEI, Inspire performs pay equity analyses on a frequent basis, it says. The results are valuated to understand and address any conscious or unconscious bias trends.
Other highlights from the report:
In 2021, Inspire brought together all brand food safety teams into one organization to help facilitate a unified approach to food safety.
Dunkin’ is committing to 100 percent Responsibly Sourced Coffee by 2025. The Dunkin’ Drive-To Sustainability Program is comprised of three pillars: Verification, Partnerships, and Improvement.
In 2020, Dunkin’ U.S. restaurants replaced the polystyrene cup with a new double-walled paper cup made with paperboard certified to the Sustainable Forestry Initiative Standard. The same year, it began testing an industrial compostable straw in select markets throughout the U.S. The straws are made with PHA, a material created by the fermentation of canola oil. Dunkin’ is also shifting from plastic to wooden stir-sticks across all U.S. venues.
Buffalo Wild Wings has been piloting a waste management program in roughly 30 sports bars, scaling to the full network in 2022. It is estimated this new program, Inspire says, will help reduce waste and overall usage by more than a million pounds of chicken and more than 350,000 pounds of fries annually.
In 2021, the Inspire Brands Foundation donated more than $8.8 million to youth-related causes in the U.S.
In April, Inspire launched “Good Citizens Month,” a system-wide volunteer initiative. Team members across the organization were encouraged to find opportunities to give back within their local communities.
During the company’s Open Your Heart Campaign, Inspire employees signed up for payroll deductions to provide backpacks of food each weekend to children in need. In 2021, team members provided more than 15,000 backpacks of food
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Inspire Brands' Collective Strength Fuels a Restaurant Empire – QSR magazine
A people-first approach has set up the country’s second-largest restaurant group for further growth.