In this episode of Behind the Numbers, hosts Marc Cohen and Rich Sweeney sit down with longtime restaurant and hospitality executive Philip Gay—whose resume includes California Pizza Kitchen, Paperchase, and the formation of ES Capital—to unpack how restaurants can scale sustainably in a fast-changing environment. Drawing on more than four decades of industry experience, Philip brings insight into what hasn’t changed (like the need for happy employees) and what absolutely has (like the role of AI and SaaS platforms in operations).
Whether you’re running a single-unit concept or managing dozens of franchise locations, this conversation offers a grounded look at the numbers and decisions that drive real growth.
Philip Gay wastes no time getting to the heart of what matters most: the employee experience. With decades of experience leading restaurant brands and financial operations, he reminds listeners that some truths in hospitality are timeless.
“Happy employee leads to happy guests, which leads to happy profits… They spend more time at work than they do at home. It’s their second home.”
Philip shares that even today, operators who prioritize working conditions—like functional equipment, a clean environment, and food quality—see better outcomes across the board. He draws a direct line between employee satisfaction and profit, stressing that despite changing tech and trends, this has remained the constant thread since the 1980s.
Listeners might assume ES Capital’s rapid QSR growth was a quick success, but Philip makes it clear: this was a carefully considered move, years in the making.
“Everyone thinks it was an overnight success, but we’d actually been looking for about five plus years before that.”
The goal was to build a restaurant group that combined financial expertise with operational excellence. That meant identifying tier-one franchises with aligned leadership, healthy unit economics, and a strong roadmap. Interestingly, ES Capital focused its growth outside of California—a decision driven by the complexity and cost of operating in that market.
Philip’s long-standing relationships with John Kaufman and Tim Foley also played a critical role. Together, they brought decades of combined experience to the table, proving that in restaurant growth, people and preparation matter just as much as funding.
Philip recalls a time when “restaurant technology” was almost a contradiction. In the ‘80s and ‘90s, operators struggled to stitch together siloed systems with armies of accountants. Fast forward to today, and tools like Restaurant365 have flipped the script.
“R365… built it from the people side, as well as from the technology side. Every conference I go to, I’m impressed with the DNA of the people—they’re excited to sell software.”
He emphasizes that good software doesn’t just automate tasks—it supports the people who use it. With the rise of AI, there’s concern about job loss, but Philip offers a different view: AI will enable employees to do more of the work that matters, not less.
“AI isn’t going to replace people. People are going to get replaced by other people using AI.”
One of the most practical takeaways from the episode is Philip’s emphasis on shift-level scorecards. While quarterly reporting may work for franchises at a macro level, frontline teams benefit from more immediate feedback.
“At the end of the day, you almost want a scorecard on a shift or a daily basis. Did you do great? Did you not do great?”
He recalls how early Shake Shack locations shared a percentage of daily revenue with their staff at the end of each shift—a gesture that created both instant feedback and camaraderie. Whether or not operators take it that far, Philip stresses the value of celebrating wins, not just pointing out mistakes. It’s about daily communication that reinforces what good looks like.
As the conversation turns toward consumer engagement, Philip makes a compelling case that little gestures still go a long way. He shares a personal story about dining at a restaurant and receiving a handwritten thank-you note the next day—one that mentioned his wife by name.
“I was blown away… I thought it was AI. Turns out it was a staff member who personally wrote that note.”
While this kind of gesture might not scale as-is, Philip and Rich agree that AI can help bridge the gap—allowing restaurants to automate personalization while preserving the spirit of hospitality. Technology, when used right, doesn’t dilute the guest experience—it enhances it.
Beyond operations, Philip is committed to helping employees grow professionally. At Paperchase, he’s building systems that support both client success and team advancement. With private equity backing and a renewed focus on infrastructure, the company is expanding its reach while encouraging internal entrepreneurship.
“Tell me what career growth you want… At IS, we have a ‘learn to earn’ mindset. If you want to grow, learn. And as you learn, you’ll earn more.”
This isn’t just a philosophy—it’s a business model. Investing in talent helps companies scale sustainably. It also creates a culture where employees feel seen, heard, and supported in the long term.
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