There's also the risk of overcompensating right.
Becoming what would have got analysis paralysis.
I think our new term has been data drunk.
Right.
Well getting two down on the data at this point.
Right.
Because you can overdo it at some point.
Welcome to restaurant 365 Presents Behind the Numbers show, where we talk
to restaurant owners and operators, chefs and CFOs, everybody
in between about what makes successful restaurants tick.
Now, before we get started, just a quick reminder.
Don't forget, like and subscribe to the show wherever you're tuning in.
And please consider leaving us a review.
It helps us bring you all of our amazing guests and conversations, as
well as continue to grow and support this incredible restaurant community of ours.
And with that, I'm your host, Rick Sweeney, and I'm Mark Cohen, and we're
excited to be here today with Troy Hooper.
Troy, tell everybody a little bit about who you are and what you do.
Well, I'm a CEO of Hop Out America.
That's the parent holding company for Pepper restaurants.
We have 560 560 restaurants
in the world as of the 30th of December, 2025.
So, yes, the couple were in 17 countries.
We're a Japanese fast casual hot plate concept.
Protein rice or protein?
Pasta and vegetables on a hot plate.
You got about six sauces to choose from.
To build it and make it your own way.
And, yeah, that's me, myself and I.
Well, let's get into sort of a big fundamental question.
We always like to start with.
So what's sort of the most important thing you think leaders should be focused on
in store operations or finance.
Like what's front of mind for you in the In the Hot Palate team right now?
Yeah, I think knowing what matters, knowing what numbers matter
the most to you and really matter the most to your business.
And we're a franchise business.
So really understanding what matters to our franchisees, the
most.
And so, you know, it obviously touches all parts, both front
and back of the house and, you know, not shying away from,
variables within labor, both front and back.
But, you know, supply chain costs and, and
waste and, and managing your, prep schedule and all those kinds
of things.
So I just think knowing what you need to know.
Right?
I think, I talked to a lot of, let's say younger,
smaller, newer, you know, emerging brand
folks.
And a lot of times, the focus isn't always on the right thing.
And so I just think really understanding your numbers and what
ranges need to be for what reason and in every area
of your business, and then really having a plan to manage
that and manage that proactively.
Right.
I think most people manage their numbers reactively.
They get their monthly report and they look back and they go, what happened?
And they try to figure out what happened.
I don't remember what happened.
Another months gone by, right?
Yeah.
Honestly.
And that's really what it does.
And so and so I think having a plan of asking yourself, what
am I looking at daily, weekly, monthly, quarterly.
How am I comparing myself to myself?
How am I comparing myself to others?
And what what am I comparing to?
What is am I comparing Tuesday to Tuesday at the same time,
and what variables are in my business?
And yeah, it gets a lot harder on seasonality too, right?
There's external factors.
But you know, once you once you have that sort of cadence, you
just have to stick to it and be consistent with it.
You're speaking our language, and I do think there's, you know, there's the risk
of not doing any of that.
And there's also the risk of overcompensating, right, becoming what
paralysis.
Or I think our new term has been data drunk.
Right.
Well, getting to in the data at this point.
Right.
Because you can overdo it at some point.
So I think you bring up a great point.
Understanding the KPIs that resonate to you and focusing just on
those rather than, you know, overwhelming yourself with.
Yeah.
So my to my point of, I think looking at the wrong numbers, I think a lot of people
overlook prep labor.
They overlook, shrink and waste.
They overlook ordering too much and too little.
So, their inventory control and inventory management
process and system is not, relevant
to their, to their sales.
Right?
And so they end up with too much or they slack too much, or they slack
too little.
Now they're 86 and man, a gas comes in and can't get
what they wanted.
When they for what they can, they might pivot in
that moment and stick with you.
You might walk out the door, but they might say, good to you.
But that moment sticks in their mind.
Oh, when I go, I can't always get what I want.
So, I think those are really important attributes to, to,
you know, KPIs, as you say, to look at.
Absolutely.
Well, let's talk about you've got everything when everybody's coming in for
You know, you you like you said, sometimes they might pivot and go for that
option.
But if you're craving that that one day and you come in and you're like, oh,
they don't have it, or it's even worse, they don't have it again.
You know, then it's kind of like the nail in the coffin when you're building up a
that's happening all the time.
Yeah.
And consistency, at the end of the day, consistency is king.
That the keywords, my favorite word in our entire industry really
matters very little.
What you do and how you do it and who you do it for.
If you're consistent, the audience will find it right and or you'll find the
them in.
But if you are inconsistent, then you're constantly changing who
your audience, who you're for.
That gets to be a real problem because and again, you say 86.
Well, next time I come in, I, I bring somebody and you have what I want.
Last time you didn't have what I want.
This time you have what I want.
But now you don't have what they want, right?
And they just see that pattern of inconsistency.
And so I think that's really the most important
metric is consistency.
Right.
And one of those KPIs that I think we're talking about more and more now is
Right.
And if we're if we're inconsistent, we're we're going to blow that frequency metric.
Like they're to your point, they're not going to be coming back on a regular basis
special thing that they want.
Yeah.
Look, I eat at chick fil A way too much.
Period.
End of story.
A year ago they they went from putting a chick fil
A a mile in both directions of my house to putting one
at the entrance to my neighborhood.
And so now I look at research works.
I have three within a mile.
Okay, let's just put it that way.
And this two hour is too easy.
And you know what?
Not the greatest food.
Yes.
It's good hospitality and service.
Yes, it's recognizable.
And they recognize, me as well.
That's all.
Nice.
It's like your favorite in the neighborhood coffee shop type environment.
But but it's consistency.
It's a I know I'm going to get in and out in under seven minutes.
I'm going to get exactly what I asked for every time the accuracy in the
bag is 98.9%.
They have messed it up twice in two years out of how
many orders.
But you know, the reality is it's consistency is the reason I
go to chick fil A.
It makes a lot of sense.
And let's, let's talk about some numbers that, that we might care about.
So you're obviously you're no stranger to the podcast environment.
You have your own podcast called The Pineapple Perspective.
How many episodes have you done now?
I don't track it.
I have people that do that.
I, I am I'm somewhere I'm not the only
one.
Yeah, somewhere over the hundred mark, or something like that.
But anyway, 75 to 100.
I'm right in that neighborhood.
Yeah.
And then you've you've been using restaurant 365 for how long now?
Since you guys were about 18 months old as a company.
Wow.
So I, I've been a customer of restaurant 365 through several
brands as well as our consulting practice has, recommended
or place for our 365 in a lot of, a small
and emerging brands as well over the years.
And with pepper lunch, we've been with our 365
and basically as soon as we got a point of sale system switched and turned
on, at the brand a couple of years ago.
So, yeah.
This is not a plant, by the way.
I was asked to be on the podcast now because, I appreciate, ambassador,
you're here.
I'm definitely not.
You are drinking the Kool-Aid, but I am a I
am an appreciative customer of of the service.
But, Yeah, you know, I'm very familiar.
Obviously.
And so I want to talk a little bit about a crazy number.
So.
So you said how many locations do we have internationally now?
So 560 total stores globally.
Wow.
And then looking forward what what is this aggressive growth plan you've
you've got.
Yeah.
We'll have 1161 stores or more
at the end of 2030.
So when we sit here, January 2031,
we'll have over 1100 stores and we'll
have recorded our 500 podcast, which I.
Yeah, I at least at least you got to put on the list.
Yeah.
Yes.
Yeah.
Well we have to, we have to come back and revisit that and see what that that's
That that's super exciting.
And so pepper lunch for for those of our listeners.
Right.
This is a fairly new concept to to the North American audience.
And I know you talked a little bit about sort of, how it works, but
what's, what's sort of the genesis of this story where where did this all start?
Yeah, started in Tokyo, Japan in 1994.
July 3rd, 1994.
The first store opened.
A famous, Japanese teppanyaki chef had already had
a, whole chain of, finer casual, Japanese
steakhouses.
And and, you know, he felt that, with imported
beef prices and the style of his restaurant, he really only
could serve a certain percentage of the population.
He had a limited, audience availability.
And so he wanted to make beef more accessible, and high
quality beef more accessible to the average consumer in Japan.
So he created a fast casual version of his, Japanese steakhouse,
chain, which he had several hundred of those as well.
And so he created Pepper lunch.
And within a year, he had franchised it outside of Japan,
the master license agreement outside of Japan to Suntory food and beverage.
Most people know.
Okay.
Liquor.
That's the food and beverage business.
Part of that that's on top three times.
Yeah.
And, and actually have a bottle arriving today.
Somebody who will send me some story liquor all the time.
It's pretty interesting.
Yeah.
Hopefully we get some some more here and we'll see.
And I know that sounds like a terrible thing to have happened to you.
Do you receive a all to my house?
I think for a but and I've kind of laid back like a lot
of people.
But anyway.
Yeah.
So so the chain started growing and consistently, really, truly, consistently
has grown pretty significantly 30 to 60 stores a year, almost
every year.
Over, over about a 30 year period.
It definitely took a ramp up period.
It's been in the U.S officially since 2018.
We did have five stores open between 2018 and 2019.
In the US under one master license, but the brand was sold in 2020
to a private equity group in Japan.
And, they came knocking and they wanted to see the North American Western
Hemisphere growth.
They wanted to kickstart growth, across the rest of Asia
and into Europe and other, territories.
So, over the last three years, we've been building a team
and a system and reconstituting, the business.
We bought that Suntory food and beverage business.
We bought our first and largest franchisee, the day I started was
when they they closed on that deal.
And so it gave us an infrastructure.
It gave us 60 more corporate stores.
So today we have 560 total stores, but we operate 130
corporate stores in three countries.
We operate every store in Singapore, China, in 60
of the 200 in Japan.
So, you know, we have a thousand employees.
We serve over 40 million plates a year.
So as a franchisor, we know what we're doing, right?
And, and we operate a big business at the same time.
We're very, very focused on our franchisees.
You know, they're still obviously the majority, 75% of the system.
And going forward will continue to be 100% of the growth of the
system.
So, we're very, very grateful.
We have franchisees with 112 stores in Indonesia.
They just resign their agreement, for another, 15
years, I believe.
And so, you know, very dedicated long term franchise
system, a growing system with a lot of new, excited, multi-unit,
multi-brand franchisees coming on in us now.
Right.
That's awesome.
That's been incredible growth.
And then what is it?
One of the newest locations was that the Hawaii location.
So we opened in Hawaii in their rocket in Hawaii is excited.
I you I won't give away exact numbers, but I can just tell you, as
of today, it's, three weeks open,
and, the numbers have been consistent every day.
And right now, it's on par to be our number one store in the United States.
It's going to rival, our very high volume Asia
stores.
If it continues on this pace.
But, yeah, Hawaii's excited.
Look, the Hawaiian, legacy culture of,
Japanese and Asian, population.
You know, immigration there and now, second and third
generation, population, you
know, the Hawaiian native culture has adopted Asian food and cuisine
and culture, at scale.
And so, it's been a very popular, opening, you know,
and, and you'll just see most people that go to that store have experienced pepper
lunch somewhere in the world because, you know, if you live in Hawaii, it's just as
easy to get to Asia as it is to get to continental U.S..
And so they're very, very familiar, obviously, with Pepper lunch as a brand.
And they're very excited to see stores open.
And by the way, that is store one of three that are going to open in the next
year and a half out of a total of ten that are going to open across
all the islands.
So, Pepper, lunch is oh, okay, big, big footprint in Hawaii.
And, and the folks there have been very excited and, and responded
very well.
Yeah, that would be if you need me to come do an onsite opening
or right, I can tell you that almost every executive and leader
management leader in this company worldwide said for
2 or 3 years, when Hawaii opens, I'm going to go, I'm going to go, I want to go, I'm
going to go.
I'm going to be there.
And I got there and nobody else showed up.
So, you know, it's it's a want, right?
But it's not a need for everybody to be there.
But I don't doubt that if you need Mark and I to be there, we will
happily fly out to Hawaii.
Every vendor.
Yeah.
As long as you pay $41.
But yeah, I know I do.
I do think a lot of our folks are going to pass through Hawaii, to
see it and experience it.
Oh, yeah.
For the next year.
Yeah.
I remember opening a restaurant, Hawaii, 25 years ago.
I was with a group and watching kids just show up from all over the country
to work there.
Just really experience it.
It was great.
It was so fun to watch.
And I know I also remember opening night, like, those people can
eat.
So is your check average like it's do you see an increase check
average in Hawaii.
Yeah.
It's it's somewhere in the neighborhood of
just just under double it.
It's wow.
It's high.
Wow.
You're in a bubble, by the way.
They also travel in larger family units, right?
No, no.
Yeah, yeah, yeah.
And we see that Utah too.
We see we see larger family units.
So you have a larger family unit, especially a multi-generational family
where, it's very common to have multiple generations, three generations in a
household, when they go out to eat, to go out together.
And so, yeah, we see larger groups, higher per person.
Check.
Higher total check average there.
Yeah.
When they go out, they like to eat and and eat.
Hi portion and quality food.
And I do remember opening a restaurant in Utah as well.
And we ran out of high chairs within the first 25 minutes.
A lot of kids.
Okay.
That's, so if you're if you're opening in Hawaii, are you time to talk to
try and I we've got some we've got some good tips for you.
Can you tell us the reason you're wanting a kids menu in a couple weeks?
Literally.
That's very smart.
It was on our radar, was on our plan.
We launched it in Asia, about a year, a little over about a
year ago.
And, you know, it was it was in our roadmap of things to get done here in the
US.
And, the need was moved up.
The priority was moved up very quickly because, again, exactly what you said,
in Utah just weren't really understanding how to feed their kids
off our regular menu, which takes a little understanding and adaptation.
I get it.
So we've launched we're launching kids menu in three weeks.
And the footprint of the store is notoriously is not they're not huge
spaces.
Right.
Well, our highest volume stores in the world are 209ft², doing
700 plates a day on par, almost 800 plus 700 on,
but then, look, those are food courts in Hong Kong and that's, that's that's high
But yeah, you know, in the US we're in inline.
No end cab, no drive thru, standard in
line concept.
We prefer 17 to 1900 square feet.
That Hawaii store is barely 1300 square feet, bursting.
But but we're very fortunate.
We get a lot of seats.
We we're 13 50ft² in Hawaii, and we have 44
seats inside, so, so we can get a lot.
We don't need a large footprint for the kitchen because we're not cooking.
We have no ranges in ovens.
We're not we're not sourcing what I think about that.
Yeah.
We have no prep labor, no prep product.
Everything comes prepped in by our purveyors for us and so,
our kitchens are, you know, as a result, a
lot smaller scale, and we can we can also be flexible with the size and
shape of the kitchen so we can squeeze a lot into a small
space, you know, that was dictated by the best space
available in that area.
But, you know, we are we are trying to be north of, 1718
hundred square feet, on average.
And I'm like, it's like 1417 or so.
Okay.
That with that, with that part kind of explain behind the concept.
And then I mean like do you guys have like your own proprietary
like induction plates and like the plates themselves.
So I just kind of talk about that just a little because it's so much different than
Yeah, we're lucky.
Our founding owner, chef, was a bit of an inventor, and
he created a, technology, an induction unit, a high
temperature on demand induction unit.
What that means is it's induction cooking or induction heating element, but
it's high energy on demand.
We store energy in a in an amplifier box.
We fire that by pushing a button.
And in 74 seconds, that hot plate, an iron proprietary iron
plate, goes from room temperature to 500°F 270°C
in 74 seconds.
And it stays over 200 degrees for about 30 minutes.
And so you can actually cook on the plate.
And it was every bite is hot.
You have to blow on every bite.
If you stir your food, every bite is very, very hot.
So that's a proprietary system.
It allows for high throughput, high volume.
Like I said, in Hong Kong, we have many most stores in Hong
Kong are doing north of 700 covers a day.
Just stop and think about that.
If you're a regular operator listening to this show, when
the US average is 350 to 380 covers a day for
a casual, fast casual concept, you know, fast food does higher throughput.
But, but yeah, we're on demand.
So we you place your order, we take all of the clean, high
quality raw ingredients, put them on this iron plate, put the sauces
or accouterment on there, and we send it out to you and you cook it on your
plate at the table.
So if you're familiar with, Korean, barbecue or Japanese
yakiniku, it's very similar to that.
But you don't have a cooking element in the center of the table.
You don't have ventilation at the table.
The plate itself that you eat from is the cooking instrument as
well.
So, you know, unique concept allows through for high volume, high
throughput.
But our biggest thing is we have no prep and no culinary labor in the building.
And so you expect every ingredient from our purveyors,
to be consistent and be provided to us the way we need it so we
can just weigh and assemble.
We just portion and assemble a very, very tight spec
on every ingredient and every spice and resource that we use is very,
very, very tight portion spec.
And we do that very quickly and consistently and get it out to you.
So if you're if you're in line and there's not an order in front of you, you're going
three minutes.
Our average ticket time is about 4.5 minutes,
in most cases.
And I'll tell you, like grand opening at ASU, Grand opening in Hawaii,
we had ticket time sub seven minutes.
And so you can get most of our guests.
Our average turnover is 24 minutes from order to out
the door.
So from the time you place your order at our kiosk with our hospitality host and
you walk out the doors on average 24 minutes, I did
some fun math.
The original 500 degrees 700 covers 350,000
degrees of cooking powder every single day.
I'm here for 140.
Yeah, it's all over.
Yeah, yeah, yeah.
And so I have to imagine, as a first time guest, this is probably a bit
like what is happening.
It is absolutely what's going on.
You know, if you've been to a pepper lunch before or not, you walk in with the
menu board, look at the gas.
That's why we have a hospitality host, right.
So when you walk in we have this greeter ambassador that welcomes you as you if
been here before, if you have, what do you like.
Oh, I always get the same thing.
This is what I get.
And, you know, we try to do a little suggestive selling and it really do
Not about the upsell.
In that case, it's really about, hey, have you ever put onions on it?
Have you ever put mushrooms on?
Our CEO's favorite is the, is the dried garlic chips, you know, but
put some garlic chips on that thing.
Order it with double butter.
Double market.
So it's not butter.
It's margarine.
We call it the base.
Whatever you want to call it, order it with double secret pepper
margarine.
That's really where the secret sauce of the flavor comes from, but.
Okay.
Yeah.
So our hospitals, if you've not been there before.
Oh, great.
Welcome.
We're glad you're here.
Let me just tell you a little bit about it, and we can break it down very simply.
You have six categories of entrees.
It's protein, rice and veg.
Unless you're a vegetarian or vegan, we can accommodate that with tofu for a
protein or all vegetables.
Right.
But we're basically protein rice and veg.
We're meat centric.
If you've never been here before, our jumbo beef pepper rice is where you want
Here's a couple link link secrets.
Put that garlic chip on there.
Double up on the sauce.
And and then when we bring it to the table, we will do the same
thing when we bring it to the table.
You've not been here before.
Let us show you how to do the folding, the incorporation.
Let us show you how to stir fry food on your own.
Tap in plate and and that way you get that comfortable experience.
And I can just tell you, most guests who come for the first time return within
weeks, bring a guest with them.
And then they say to us, the first time I had
no idea it was really good, but this time was so much better
because they felt comfortable adding on all the mixes and things that you
can do.
You know, we're not unlike a ramen concept in that way.
You walk in and you decide we're having chicken, pork, beef, vegetable.
Right.
Am I having to cancel the pork ramen?
Great.
It comes with a couple of things.
I'm going to add fresh garlic.
I'm going to add garlic oil or I'm going to add broccoli.
I'm gonna add asparagus.
We're very much similar in that respect in in stylistics.
That makes a lot of sense.
And so you've been there since store one in North America.
I'm not.
So store one opened in 2018.
We had two stores open when I got here with one franchisee.
We today have ten open.
We have 13 under physical construction.
We have just under 30 leases signed and moving quickly.
We will open, expecting to open around 18
stores in North America this year.
And that number will essentially double every year going forward based on the
commitments we already have.
We have 120 stores already sold in the United States.
We are going after Canada.
Canada is ready to go.
We have some great leads and potential partners in the pipeline
that we're talking to now in Canada.
And then, we are we are in the early stages of development,
infrastructure set up and development for Brazil in the next year or
so.
We're looking to go to, Europe in the next year or so as well.
So, yeah, expanding both rapidly in the United States.
Right now, we're in eight states, coming with stores under construction.
And that will continue to expand with some new deals coming this year.
And then, obviously the new countries I mentioned as well.
And so so you come in obviously with the goal of scalability first and
foremost.
Right.
How do we build this thing?
Tech stack is obviously critical to what you do right.
Yeah.
So that was our 365.
Just an immediate it sounded like a no brainer.
Yeah I'll say this and this.
This comes from my consulting background is that you have your
bag of tricks.
You have your tools.
Now, I like my toolbox to have a lot of tools in it.
I like to know what all of my options are because not every
solution fits every system.
And by the way, there's, there's scale.
There's there's there's there's timing, right.
This comes down to, artistry for us.
365 might be amazing, but it might not be amazing for somebody
with 2 or 3 stores.
Right?
Or 5 or 7 stores.
I don't wherever the break is for that person, to be a cost
barrier could be some overlap with other technology.
Having to decide, do I consolidate?
I move over to one or, you know, do I drop another?
And so for me, yes, I have my list, I
have my relationships.
And of course it comes with experience.
If you have experience with a tool, a technology, a platform, a group of people,
then then you know what's going to happen.
You know what to expect.
It's not the unknown, right?
Many things in technology, when you buy, buy by
salesperson, I love you.
You're amazing.
But it's like starting all over again, right?
It's a whole new experience.
And so if you haven't gone through that before, you know, it may not be
as smooth as you were sold or told or hoped it would be.
And so, I look at every scenario very
specifically to that.
The need of the business at that stage of the business.
Now, do I think you should have multiple places
in a 5 or 7 year period?
No.
No offense to my friends who have gone through that.
Nobody's perfect.
It started with somebody else, and now we're toast.
So so we we went through it as well.
Hard lesson to learn.
It is you do you make decisions based on what you know at the time
and when circumstances change.
But.
Yeah.
So so for me, our 365 is always at the top of the top three.
Four things in the list.
But it has to fit.
It has to fit that brand and that system for their goals
at that time.
And and luckily we're able to make that work.
And, you know, just, the I was going to say just seeing the way
that the relationship that we've gotten to have from, you know, when you guys
were coming on all the way through Craig and I was showing up at the co-sponsored,
pickleball tournament and and our 365, like, you can't get rid of us.
That's the.
And now we're like, oh, no, please, everybody.
It's all over the place.
Our marketing team went crazy with it, but, you know, and then and then just kind
build and see as you guys have been growing and expanding and getting to talk
the different kind of facets of the groups as they're as they're growing out.
It's been awesome to see.
And I think part of that really came from, you know, that standardization of the tech
really trying to find tools that can expand across as you guys grow.
Yeah.
Look.
And when we talk about our 365, we mandate
the operating platform so that our franchisees have the
tools we think they need, but so that we also have the tool to help
manage our franchisees and support them and know what's going on in their
To look, we have a very robust supply chain management, system
at Pepper lunch.
We we have a global supply chain, self- managed
system.
We import a lot of proprietary ingredients, products and equipment
like the induction unit we talked about.
And so we have to have visibility and forecast ability if you
want that pepper paste, which is our pepper garlic margarine or
our, our six sauces, we got to know how much you're going through of it.
Not in a lagging indicator of 45 days
after we get our royalty reports, right.
Like we've got to know in the moment.
And so not only watching consumption, but also looking at the changes
in your business.
So we can predict that.
So, you know, we mandate that.
But my point is we don't mandate the accounting software.
We only have a couple of our franchisees using the accounting solution for our
three.
But it's a phenomenal solution.
We use it as a brand.
We're using it on our side as a brand to manage our brand business as well.
But but but we don't mandate it because our franchisees,
many or most of them are multi unit, multi brand.
And so they may already have systems in place.
They already have teams in place or they have, you know, infrastructure around
how they manage their finances and their banking and their reporting.
And so I can't tell them they have to change their accounting system across
four brands to or have a separate one for my brand.
So that was a optionality we put in the system initially.
But yeah.
So it's again it's not always one shoe fits right
well.
And if I'm backing into the KPIs you were talking about at the beginning,
labor, controlling spend, controlling, you know, inventory.
Absolutely.
But this one our franchisees to be profitable.
Yeah.
By the way that's a franchise or that just said that we want
our franchisees to there are franchisees or businesses out
there that don't give a damn if your franchisees are profitable.
They care about top line, right?
But that's not success.
Success is profit equals investment.
Profit equals renewal.
Profit equals expansion of territory.
A new store is and it motivates people to move quicker in those
things.
Right.
And so we want our franchisees to be profitable for God's sake.
So we want to help them.
And when we see things that there are opportunities to help them with data
analytics, reporting, operational insights, technology
insights, we are constantly in their stores trying
to help them adopt these things.
And understand them better so they can have more efficiency and optimize
their performance and ultimately make more money.
Love that.
Well, so yes, super
critical.
And so it sounds like the last three years have been pretty transformative for your
organization.
But what are we what are we looking at for 2026, other than the growth we've been
about?
What's the next big initiative with Pepper lunch.
Yeah.
So we're able to settle in now to some things that we have to do as
a franchisor.
And our franchisees are excited.
We're going to get on a cadence of launching multiple logos.
We did one in the latter half of last year.
That was our first sale to you in the US and Asia.
We're pumping out promotions and AES at scale right across
17 countries.
We have centralized, system over there that helps support that.
We're now implementing that here in the US.
So, we have, some new folks coming on board.
We have some support coming over to Asia, this month as well.
So you'll see, 3 to 4 aes a year coming out
from us.
You'll see some value promotions coming out from us.
We'll continue on menu innovation as far as the what
we call the grand menu, the fixed menu, evaluation
and analytics and adjusting of that.
We have our first value promotion coming out, in a few days.
Depending on when this comes out, it could still be out.
We're going to increase our base, low, priced
beef pepper rice dish.
Our entry level addition to the brand.
We're going to increase our portion of that and decrease the price of it.
So 20% more beef for 20% less cost.
So that's, you know, you're gonna be able to get beef pepper rice at 1099.
So we're going to be able to offer that value entry point promotion for our
customers.
For the first time.
I mentioned earlier, we launched a kids menu.
We are we are in the latter stages of, our, our native
app development.
So we're going to have our okay, consumer app and
loyalty program coming out this year.
We're working behind the scenes on other systems for our franchisees, like
a VR training system.
So a hands on haptic, AI adaptive, VR
training system for our franchisees, to, to make sure
that their employees, when they hire employees and managers and things, that
getting the reps and repetition and experience they need and that they're
getting the coaching they need for accuracy because for us, accuracy plus
speed, you know, plus hospitality distancing.
Yeah we've got to work there.
So yeah.
So we have a lot on our plate to consistently work
on.
But you know, and opening stores and really focusing on the success of our
existing stores as they open and making sure that, that
we're in there and we're supporting them, and we're making sure they have everything
they need to, to be successful.
Well that's awesome.
I really love to hear that.
You know, your, your, your first value promotion that's coming out is really
taking it back to your roots of, you know, that was how the whole thing
got started, right?
Like trying to provide the, beef, option that
that's a really great product at an affordable price.
And that's you guys kind of taking your taking it back to your roots for, for
that, you know, so many people now are always on the hunt for a deal and a
and something that's great and tasty.
So I think it's awesome you guys bring that out for.
But yeah, yeah, look at the macroeconomic reality.
We've waited as long as we could.
Right.
We have eaten tariffs, for, for a year
basically.
Almost.
And and not passed that through to our franchisees,
therefore not to our guests.
We have, taken, a 3% price increase
in the last 18 months.
The average brand took an 8% price increase in 2024, and
many continued to take a price increase in 25.
We have not done that.
And, so so we're very sensitive to the consumer.
We want to be consistent for them, predictable for them and their wallet.
And so we want to basically, like you said, go back to our roots
and make sure that our consumers can get into a pepper lunch,
for, let's just call it under $13 with, entree and
a drink and you'll see bundling.
We're going to test some bundling as well.
Right.
We want people to experience our sides.
We want them to experience our desserts when on experience our beverage program
with Pepsi, doctor Pepper Cure Egg and Tractor Beverage, which is
our organic Fresca.
So we want them to really be adventurous and, and try
things there as well.
So we're going to see some value promotions in addition to Altos,
which are new product, introductions, new flavor profile
introductions, as well as, bundling as well.
I would argue with the app, this is probably good timing because I would think
going to see an increase in check average, because when you can customize on
your own time, on your own screen.
Right.
We have a little proof of that.
In this past year ago, exactly a year ago, we put our first kiosk
in the US.
We had already started testing them in Asia, but when we put the, we
had every US store had had kiosk only ordering with the hospitality
host, all but with three stores, by April
of last year.
So, so we're nine months, into that experiment and our
average checkout, went up five and a half dollars.
And so.
Yeah, so, so average plea went up about $1.60
and average check went up five and a half dollars, which means they added
more to the entrees and they added more on their check like drinks
and sides.
At the time, dessert wasn't even really under consideration then.
Now that we have dessert out of Q4 last year.
So, so absolutely, you give people a chance to, relax,
review, add things, walk through
a very prescribed process of we do this, then we
add that, then we understand this, then we want that.
Would you like to add a drink?
Boom.
Now you see average plate and check go up dramatically.
And so absolutely agree Mark.
You know putting it in your hand only gives people know choice.
More freedom of time, more more less pressure
to quote order.
Right.
Hurry up because there's a line behind you.
Right.
And so I think you're right.
I think we'll see.
Online order, adoption expand dramatically.
I think we'll find new customers.
And I think our existing customers will, we'll we'll we'll be buying
more from us on a per order basis.
Absolutely.
And I mean, support for the kiosk business.
So you it's important, I think, to know you still have that hospitality person
there helping and guiding.
And I think one of the interesting things you said, is it like flipped your review,
your reviews went from being all about the food to being all about the people because
of a piece of technology, which I thought was just fascinating.
Yeah.
It was.
That was a really big surprise to me.
We knew when we were going to, when we decided to do kiosks,
and we were very cautious and careful and took a long time to decide on
our partner and our design, our, our flow, you know, our guests, journey
flow, etc. we knew it was going to be good.
Yeah, we knew it was going to help the business we knew was going to help the
But we weren't just going to remove the cashier and just put a machine out
front and say, good luck, right?
Right.
And so we're Japanese were founded in
this, dramatic sense of hospitality and the importance of
hospitality, is a really important, value
proposition for us.
And so we added this position and we hired for this position
somebody you look 150 times in a shift.
You got to be excited and welcome and, and explain this.
You you and you're right.
And so so it takes a special person to do that.
It's more like hiring an actor than it is hiring, you know, busser
or a food runner.
Right.
And so so we did that knowing that a, we wanted to give
hospitality, wanted people to feel welcome.
We wanted them to have a chance to discover and learn more about our
brand in a 1 to 1 direct, interaction.
But we also knew it gave people a chance to ask questions and get comfortable
and, and feel that sense of service.
And and boy, oh boy, have they to your point, Mark, what you're referring
to is a few months into it, about 90 days into it, we look
back on our customer sentiment, our word map.
Well, how did people describe Pepper lunch in the US before
kiosks and 90 days after kiosk?
And it was before kiosk.
We we were excited people to sizzle hot experience Instagrammable,
you know, tasty high quality
hot.
You know, all these great words about the food and the experience.
And we were like, great people get it?
They love it.
They're addicted.
It's craveable.
We talk about probability a lot 90 days, and there
isn't a word about food in our entire word map.
The top 20 things that people used to describe Pepper lunch didn't have a
word about food or experience or hotter sizzling.
It was our number one word people used to describe us today is friendliness,
friendliness, service, hospitality, care.
You know, it's it's it's a remark.
And what did we do?
We took away a cashier from across the counter, put a kiosk in
front of you.
And now we are more hospitable because of that.
And so, that, that that switch for us has really
been dramatic.
For sure.
That's so cool.
That's awesome.
It's such a thing that you see kind of the opposite for so many other brands.
They just stick a kiosk and say, go figure it out for yourself.
Instead.
You guys are using that as just a better tool for interacting with clients
and customers as they're coming in, especially those those first time folks.
Look, it's not what you do, it's how you do it.
And I won't name names, but my wife said, hey, can we take a break and
go get lunch today?
And we went to a local fast casual burger
joint.
On the way out the door, she said, oh, they have kiosks to
on the way out the door, right?
Yeah, because this brand decided to put three kiosks in
their dining room and keep the, the, the cashier
order taker at the thing.
Well, at this brand, they're really well known for letting you customize
everything.
You know, I'll have the this burger, but I want it with a chicken patio.
I want change the bread.
Very customizable and people are very comfortable with that.
And so if you ask them to just go to a machine and figure out how to
make that happen, right, order what you want.
The way you've always wanted it, it's it's going to be a learning curve.
And so yeah, you can put a person out front, which is what I would have done,
I mean, I can't knock my own idea there, but but
but people are so accustomed to going to that and ordering their typical fast
paced custom order that nobody uses
the kiosk.
I just never see anybody using that brand's kiosk.
And so, it's not what you do, it's how you do it at the end of the day.
And I would, I would argue if they were looking at their check average buy service
type in R3 65, they would see that when they do
get an order of that kiosk, it is probably the exact same effect.
Right?
It's double what they would be getting.
You got to design it right to though.
So the customer journey flow and map has to, meet
the customer where they are, the way they order.
Right?
100%.
Yeah we do.
We talked about that.
That hard hardware is you know, building is as important as software.
Exactly.
It always got to come together and balance.
It's got to work out the right way.
With the balance and things working out the right way.
I mean, how are you seeing yourself
transform pepper lunch this year?
Like, what are you guys doing to change the restaurant space or change inside of
You know, look, I think how we look at things, how we look at loyalty,
we come out with loyalty.
Look, points for orders is 10% of the loyalty.
Customer.
You know, customer.
Infinity.
Affinity I should say, you know, journey and relationship
between a brand and the consumer.
And so, for us, we look at loyalty, we look at
offer engines very differently.
I've said this pretty loudly, off and on for the last couple of years, we our
goal is to have a 1 to 1 known relationship.
We want them to feel comfortable giving us insights and feedback.
We want to be able to know them very, very well
and be able to offer that, offer them,
what they want, where, when and how they want it.
In a very 1 to 1 personal relationship.
And so that's our goal.
Our goal is to get to a point where through all of these modalities
and all this data collection, we know them so
well that it seems obvious
and it seems intuitive, and it seems natural for them to receive
an offer, to encourage them to come back or to buy something new
or to add something to their mix or whatnot.
So, you know, that is our goal.
And so for me, it's just like everybody's doing the same
thing.
But how you look at it, what is your values?
How how do you come to the customer with your values?
How do you impart hospitality?
For us, a very different loyalty experience, a very
different marketing engine, CDP experience, on their
side is they'll experience it, very data driven, very
1 to 1.
And then and then for us, the next phase of that is gamification.
I really want people to want to come to our app and
come into our stores physically because they did something on the
app, and it gave them a reward that drove them into the store.
And so, you know, we look at that very different.
We're also coming out with an entirely new off premise program.
The technology side of that with Toast and Boxee Locker
Systems deliver Act and Boxee Locker Systems is in place and been going
great.
Our new branded packaging and our performance packaging lands in the next
month to three months.
So some of it lands this month, some of it lands later in the quarter, but
we're basically rolling out an entirely new performance packaging based,
program that focuses on the customer's experience again, how
they get their food, what condition their food's in, what temperature their food is.
And we've we've put three years of research into this.
And so again, off prem branded performance packaging,
everybody's focused on it.
Everybody's looking at it.
Everybody's rolling something out.
We think we did and looked at that very differently and through a different lens,
we think the end result is going to be very unique and very innovative for us.
And it's exciting.
Just a few things going on.
Yeah, I know we're sorry, but we got
to wrap it up.
Yes.
We we look, we we always like to end these things on a hot take.
I think for you it's this is a sizzling hot take pepper lunch 500
degree hot take on the industry.
Something you love, something you hate.
Oh.
Hot cheek.
I, I love robotics, and I want to
see more people get more serious.
Your busters should not be carrying heavy bins of heavy
plates and full liquid glassware back, across
your restaurant to the dish pit.
They should have a, support.
Robotic support, apparatus.
They're following them around, food, robotics.
We're exploring a variety of semi- automated, automated type, food
production, cooking implementations as well.
And so for me, the hot take is, I think we all need to be
thinking a lot more about automations, mechanics, robotics
in general.
And, you know, I'm not sure when
the shoe will drop on AI, but at some point, AI
is going to be more than analytics and data display.
I think it's going to become more actionable.
I think it's going to become more automated and self-driven.
And so I'm looking forward to more tools getting to that point.
Absolutely.
That was good.
Sizzling hot take.
I'm here for.
Troy Hooper, thank you so much for joining us.
You can find him on LinkedIn and you can find Pepper lunch across a bunch
of states, with even more coming soon.
So make sure you check them out and you can find them on all social media
as well as pepper lunch, restaurants, dot com.
And of course, thank you all for joining us.
We hope you have a great day, a profitable Monday wherever your restaurant may be.
And don't forget to like and subscribe to this podcast and Troy's podcast, The
Perspective.
Wherever you like to listen, you can find us on YouTube, Spotify,
Apple Podcasts, wherever you are listening, and you can follow us across
media on LinkedIn, Instagram, Facebook, and of course, you can always visit us at
restaurant three 65.com.
Troy, really appreciate the time and the and the insight.
Have a great, great evening.
Thanks guys.
Really appreciate it.
So glad to be here.
Today.