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- [00:00]
Sam Oches
Are you a leader at an emerging restaurant chain that's ready to level up? Then create the event for emerging restaurateurs Is yous ultimate destination. This July 20th through 22nd, join your fellow restaurant entrepreneurs for three action packed days of connection, inspiration and growth. Meet potential new partners through our speed Dating Style one to one meetings and get face to face with potential investors at the Investment Summit. Keynote speakers include Netflix star Phil Rosenthal, Chipotle founders Steve Ells and Panda Express founders Andrew and Peggy Cheung. This one of a kind restaurant event is set against the stunning backdrop of Terranea Resorts California coastline and hey, bring the whole family for vacation while you're at it. By registering for Create Today, you'll unlock specially discounted prices for Disneyland. Don't miss your chance to connect, innovate and grow your business. Register for create today@create.nrn.com welcome to Takeaway with Samokus, a podcast for leaders of growing restaurant companies looking to take their businesses to the next level. In nearly two decades covering restaurants, I've gained access to some of this industry's most influential decision makers and I'm letting you in on the conversations. In today's episode, you'll hear from the founder of a Los Angeles based fast Casual about cracking the code on making healthier foods more affordable and about how franchisees can be critical to unlocking the potential of new revenue streams. Sam Pok is the founder and CEO of everytable, a health forward concept that launched a decade ago with the mission of making nutritious meals more affordable, particularly for neighborhoods that lacked access to healthier foods. Everytable made a huge splash when it launched, partly because of its unique pricing model. The brand boasts cheaper prices in lower income neighborhoods while charging more in higher income neighborhoods. Key to that strategy is its commissary kitchen model through which it sources local ingredients to produce healthy grab and go dishes that are shipped directly to its 40 plus locations. As you'll hear in this episode, Sam brings an incredibly analytical mind to this model and he's designed everytable to be a low capex high margin business in order to fully achieve its lofty goals. Sam joined the podcast to talk about how Everytable's mission has evolved over the last 10 years and about how it's perfectly positioned to bring healthier foods to lower income neighborhoods far beyond its California base. In this conversation, you will learn more about why the healthy food movement has a business model problem, why the value equation is a sliding scale that varies customer by customer and city by city, and how community driven franchisees can Be leveraged for more dependable, consistent business. If you learned something from this episode, go follow takeaway Wherever you listen to podcasts and leave some feedback, it is the best way to get these lessons into the hands of a fellow restaurant leader. Jumping now into my interview with everytable's Sam Polk. Also, don't forget to stick around after the interview as I will share my five takeaways from this discussion. Actionable insights that you can take with you on the go. Okay, I am sitting down with Sam Polk, the CEO of everytable. Sam, thanks for joining me today.
- [03:14]
Sam Polk
Yeah, thanks for having me, Sam.
- [03:16]
Sam Oches
Always love an opportunity to talk to another Sam. This is a Sam Squared podcast. Officially. Sam, you and I have known each other for a lot of years. I remember when everytable first came up. I mean, it's been. Has it been 10 years since.
- [03:29]
Sam Polk
That's right.
- [03:30]
Sam Oches
Incredible. I mean, I think a lot of people probably know your story by now because what you did was here you are this Wall street guy, you're like, I'm going to go reinvent fast food. I'm going to create this new model. You made this huge splash and it was really exciting to watch. For those who were not paying attention back then, 10 years ago, what was that model? What did you create with everytable?
- [03:50]
Sam Polk
So everytable is a model that is really designed to make healthy from scratch meals less expensive than f food. And that, you know, when we started, you know, it was basically to solve this problem of why does a McDonald's hamburgers and fries cost seven or eight bucks? Now it's a little bit more expensive. And why does, you know, a sweet green salad cost 20 bucks? You know, and, and there's a lot of reasons for that. But everytable's entire operational structure was designed to take the quality of some of these great fast casual guys like sweet green and cava, and make it affordable for everyone. And on some level, the model is pretty simple. Where, you know, most restaurants have a kitchen at every location, but every table just has a single kitchen. And for us, that's a 40,000 square foot scratch cooking kitchen where everything is made from scratch using whole food ingredients. But it's run with really military efficiency. So every day at that restaurant, we're cooking thousands upon thousands of meals and then packaging them in grab and go containers. And then we take those containers to our stores or locations that, because they don't have their own kitchen, are significantly cheaper to build and cheaper to operate than a standard restaurant. So, you know, a standard restaurant will be 2,000 square feet of space every table stores are like 700 and 800 square feet of space. Standard restaurant might cost a million and a half dollars to build, and a large part of that expense is the kitchen. But everytable stores don't have a kitchen, so they'll cost about $350,000 to build. And for franchisees and operators, I think one of the most attractive things is the labor model. Because you're not cooking, you can literally operate those stores with a single person. And so because of the efficiency of the kitchen and the efficiency of how the stores are built, you can really make incredibly high quality, large portion delicious meals, salads, wraps, breakfasts, bakery items, and sell them for really now less than the price of fast food.
- [05:57]
Sam Oches
Yeah, and I know you guys were really especially targeting like food desert type neighborhoods at the beginning there. Tell me about the progress of that mission you guys had originally.
- [06:07]
Sam Polk
Yeah, well, the mission has remained the same from the very beginning. And that's really in every table in every community in the country. And so that's both food deserts where we have about 50% of our stores. And so these are neighborhoods like Compton, Watts, South Los Angeles, Inglewood locations where before every table, and even now, there's really no other options except for us, where you can get fresh, delicious prepared food at truly affordable prices. And then the other 50% of our stores are in middle income and even sometimes affluent communities. So you, we have a store in Berkeley, we have a store in Santa Monica, West Hollywood, etc. And the key for us is to offer value at all of our locations, but we also offer different prices. So in Compton and South Los Angeles, a meal might cost you seven bucks and that same meal in West Hollywood might cost you 850 or 9 bucks. And the key is that it's profitable in every location and value to everybody. But it's also an inclusive system where everybody can have access to healthy food.
- [07:13]
Sam Oches
I mean, that idea alone, that sort of sliding scale of price, I mean, that was so revolutionary when you came out and you, you put that model out there. I could see, especially now in the age of social media, I could see people probably being a little grumpy about it in some of the locations where maybe they're paying a little bit more. How do you think customers have embraced that idea?
- [07:33]
Sam Polk
Well, I think the thing that's clear, I think in the beginning people assumed that we would do okay, $4 in South LA and $20. But the actual, the price disparity is not that much different. And it's certainly not enough a, to get upset about. But another sort of comment that we would get is, well, people are going to drive, you know, from Beverly Hills to Englewood to get meals. And I think, you know, we both know that nobody's driving anywhere more than 10 minutes to get a meal, you know, certainly not to save $2 on that same meal.
- [08:05]
Sam Oches
Yeah, sure. Tell me about how much this has grown now. I mean, you guys have a couple, you have dozens of locations now, right?
- [08:11]
Sam Polk
Yeah, we're. We're 40 plus and on our way to 50 this year. And most of those, actually all of those right now throughout California. So we're in Los Angeles, Orange County, San Diego, and now Northern California, Berkeley. We're opening a store in Richmond, we're opening a store in San Francisco. And then we've also got some business going on in Phoenix, which I'll tell you about our food service business. And so we're going to be opening stores in Phoenix as well.
- [08:37]
Sam Oches
That's exciting. Well, and I mean, it seems like obviously your growth model sort of necessitates clustering around a commissary kitchen. So it seems like that that model sort of necessitates filling out a market before you expand beyond that market too much. But then also, I imagine being in California, you've got this huge advantage of just the incredible agriculture there. Tell me about sort of that, the advantage that you've had growing, especially in Southern California.
- [09:01]
Sam Polk
Yeah, well, I mean, for sure, having direct access to basically the nation's farms has been wonderful for us. I think your second point about the regional growth is true, but one of the really interesting things, Sam, that has developed in our strategy is that when we started, I probably thought we would need 20 some kitchens, but now I think we only need two. And so our kitchen in Southern California has capacity for hundreds, if not thousands of stores. And the reason that we can do that is both because we have really good just in time logistics, but also we're increasingly using map packaging to extend the shelf life of our meals so that, you know, they'll last many days. And so we think that we'll need one kitchen in California, one kitchen in Chicago or somewhere in the Midwest, and that will allow us to cover the entire country.
- [09:53]
Sam Oches
Does that also require building out a little bit more of a unique supply chain for everytable stores versus other restaurants?
- [10:01]
Sam Polk
Yes and no. Like, I think it's going to be slightly different in the Midwest and everytable likes to source locally. At the same time, we're going to be like so many restaurants where the truth is there's so much great produce produced in California that it's hard to ignore that the key difference for every table is that we own our own distribution. So we basically just need to get produce and meat from farms to our kitchen and then at the kitchen we produce everything and then we self distribute to our stores. So it's actually sort of easier than for example, needing to work with the distributor.
- [10:36]
Sam Oches
Gotcha. All right, so you mentioned the Phoenix growth. I mean, I know one of the things you guys have done over 10 years is you've really diversified the service model here to create more access points for every table meals. Tell me about that diversification.
- [10:49]
Sam Polk
Well, I think that's one of the most interesting things and especially sort of from a franchisee perspective. So one of the things we learned is like building this capability to make really good healthy meals for really low prices also opened up to us the potential of entering these extreme extremely large and extremely hard to navigate food service categories. So things like serving K through 12 schools and serving senior nutrition, which is often known as meals on wheels and serving medically tailored meals and serving homeless shelters and what we've really built, and I think this is one of the most exciting things about everytable is this ability to have the stores serve not only as retail outlets but also as distribution centers for those food service businesses. So I'll give you an example. Like one of everytable's great and very profitable but also mission aligned business lines is homeless shelters. So imagine you have a homeless shelter that's two miles from one of your stores. Well, that homeless shelter might have 40 beds and if they have 40 beds, they need to feed those folks breakfast, lunch and dinner. They probably don't have a big kitchen staff, they probably don't have a lot of money. But because of our operational efficiency, we can make incredibly delicious meals that the folks staying there love. We can sell it to the homeless shelter for five or six dollars and we can heat up 50 breakfasts at our store and send it over and then 50 lunches and send it over and 50 dinners. And so if you imagine that from the homeless shelter's perspective, it's an incredible deal. And if you imagine it from a franchisees perspective, imagine having a business where you have your whole retail business, but you also have 4,120 meals that you have effectively years long contracts to fulfill every day. So it's really building this very powerful low labor, low capex model that has a ton of different revenue streams throughout flowing through those store locations.
- [12:56]
Sam Oches
That's, I mean it's Fascinating. I imagine the sort measuring top line in this business is sort of tricky. I mean, how do you do that with all these different revenue streams, but also revenue streams such as a homeless shelter where you're not trying to crank up the price. Some of this is a little bit more altruistic, I imagine.
- [13:13]
Sam Polk
Well, not. I mean, first of all, I think the elegance of Everytable's model is that there is total alignment between the profitability and the mission. And so what I mean is that we, we architected the entire cost structure of the business so that we can be profitable at five or six dollars. And so I guarantee you that we will sell meals to that homeless shelter for as much money as we possibly can. The issue is that homeless shelters are not going to be able to spend more than five or six dollars. And so that means that folks like all of the fast, casual guys, they can't compete for that homeless shelter business, but we can. And when you say that revenue is hard to track, actually from a franchisee perspective, it's not. Because the way we do it is that every. Every meal that is, that flows through your store, whether that's, you know, you're selling it for through retail to a customer. You've got a subscriber who gets a weekly delivery, you've got a homeless shelter, you've got a school where you deliver meals to that school. That all goes into the revenue of the store. And then all Everytable does is we take our royalty and the marketing expense off of that.
- [14:29]
Sam Oches
You mentioned franchising. Tell me about, at what point did franchising become a part of this business? Why does franchising work with the model?
- [14:36]
Sam Polk
Yeah, it's a great question. And for us, franchising was this incredible solution for a couple of reasons. So we love franchising just like companies that franchise do because of really two reasons. One, somebody else is putting up the capital and doing the hiring. And two, you've got people that unlock that entrepreneurial spirit. And we believe that that leads to better customer service. The third thing for Everytable was that, you know, because you could only have a single person manage a store, there wasn't really a path to management for store workers. And we didn't like that. We're all about sort of empowering and lifting folks up. And so you've got somebody that's making 17 bucks an hour and then 22 bucks an hour, and then one in a thousand can be ahead of operations, but there's really no pathway up. And so we had a choice between, you know, Going for example, the Cold Stone creamery route where it's like your first job and you're a college person working. But instead we wanted to go franchise to be like, you can come in here and start, or you can be a traditional franchisee that just buys this and then you could build a business as big as your ambitions allow out.
- [15:46]
Sam Oches
And the franchisee, what do they own? They're not owning the commissary kitchen, right?
- [15:51]
Sam Polk
No, they own what. All they own is that store. So they're building that store and they're operating that store and they can do that store or they can do 2 or 10 or 50 if they want to.
- [16:02]
Sam Oches
I gotcha. But then they work into the system that revolves around the commissary kitchen. So ideally these in existing markets.
- [16:10]
Sam Polk
Yeah, that's right. And, and they, we basically provide them all of the food and we sell it to them at, at great prices. We also get a lot of the big deals that go through their store, so things like K through 12, things like homeless shelters, et cetera. But what's really interesting is that you have this great symbiosis between the franchisees and everytable. And what I mean is, you know, imagine you have like a one or two unit franchisee. They're not going to be or often are not able to do the hundred page RFPs that you need to win these big deals. But what they do have is they have relationships and a presence in the community. So oftentimes we're going to get franchisees being like, I talked to this person at this school and they want to talk to you and they send us the lead, we convert the lead and then they get that revenue for the entirety that we have that contract. So it really, it really, I think it's actually a really interesting sort of franchise model because on an operational side it's actually much less intensive than you know, starting a Burger King or running a kfc. You can literally do it with one person and it's really just retail sales. But on the other hand it, it is very helpful if you are somebody that is deeply involved in your community and has a web of relationships. And then you can really, there's almost like multiple different ways that you can expand your business either by doing, we haven't even talked about it, but some of our other sort of lines, which is like group ordering for offices and subscription and catering, etc. As well as homeless shelters, schools, hospitals. So it really in a lot of ways is sort of like a new franchise model that first of all is really accessible because the build out cost is so low and the operations are so easy. I think it opens up the door to people who may not have a lifetime of experience operating restaurants, but still want to own their own everytable store. And because it costs so little, it's so cheap to start a franchise.
- [18:14]
Sam Oches
Yeah, it's fascinating because every franchisor will tell you, oh, communities are important to us. We want to recruit a franchisee with roots in the community. But your model necessitates that because your franchisee is very much the ambassador for everytable. But because your model is so diversified and succeeds in all of these new channels, the franchisees are the ones that are going to root out those opportunities so they become a lot more critical to the success of the everytable business, I think.
- [18:40]
Sam Polk
Well, on some level it's really like however you want to do it. Like if you wanted to, you know, open an everytable store and just focus on a great customer experience and turning your regular customers into subscribers, which are much higher value to you for a long time, you can absolutely do that and the economics work. But if you want to focus on that and you want to try to get some big deals in the community, then I mean we have stores that are, you know, $300,000 build outs and multimillion dollar AUV is because those folks have really worked to, you know, create a web of revenue. And because everytable's meals, these like fresh made prepared meals, it's really a versatile thing. It's like you want, you want that in your home, you want that in your office, you want it for your kids at school, your food insecure seniors want it for their medically tailored meals and their senior nutrition. I mean it's really, it's really a much more versatile product than, you know, a burger and fries.
- [19:42]
Sam Oches
Sure, yeah. I want to talk about your potential growth. But before that, I think getting back to sort of the idea of the evolution of the Everytable business over the last 10 years, because when you started this business 10 years ago, there was no Covid, there was no TikTok, there was no slop bowl, you know, there was no all of these things like, you know, it was just such a different time in a lot of different ways. Obviously every table still fits this moment very, very well. But I'm curious, as things like obviously Covid happened, but especially you had a lot more fast, casual competitors jump into the bowl space. You've seen a lot of growth in the salad category to the point where people got really cynical about that AI or that slop bowl mentality. But then again TikTok and Instagram and the way they can really tell the everytable story, those have taken off. How have some of these factors either helped or hurt the everytable cause over the last 10 years?
- [20:36]
Sam Polk
Yeah, I mean, I think the biggest thing for us was Covid and if it wasn't for Covid, we would have never. Because our stores got shut down and our smart fridges effectively got shut down because they were in offices and people stopped going to the office. We had to pivot and learn this food service market. And so that both helped us learn the market and then when stores came back, helped us figure out how to sort of like put them together. I think the other thing to your question that's really interesting is that, and this is something I'm, I guess both sad and happy about is that despite all of the proliferation of salad places and despite the ever growing focus on healthy food and Maha and making sure that there's healthy food in our schools, the truth is that there are incredibly few organizations that have figured out how to sell healthy food at below fast food prices profitably. And so I'm sad because the problem still exists, but I also understand why that is. And the reason I believe is because it's so hard and takes a lot of capital to build a 40,000 square foot kitchen and learn how to operate it efficiently and then build these small footprint stores and then augment them with food service, et cetera. And so it has really taken us a long time to sort of like figure out this model, but I think it's the model that works. And so you're, you know, wanted to potentially segue into growth potential. And the thing about everytable is like we've spent now a decade sort of optimizing and optimizing this box, this store box to be low capex, high revenue, high margin, very diversified, very good and easy for franchisees. And we've also spent a lot of time building this kitchen into to the capacity and safety and technology that it has. And so now there's really no limit to the scale that we can get. And so it's basically like you know, in to your point, in the west region, which is where our kitchen operates now, all over California, potentially Oregon, Washington, Idaho, Las Vegas, Nevada, Arizona, all of those are open to us. And all somebody has to do is spend $350,000, build this small footprint store and then we turn on our marketing and food service machine and they get to work in the community and you can grow and Grow and grow.
- [23:02]
Sam Oches
Yeah, it's fascinating. I mean, when I think about something like sweetgreen. Not to pick on sweetgreen, but, you know, when Sweet Green came out, I
- [23:08]
Sam Polk
love those guys, by the way. I think they were, like, an incredible vanguard and still do an incredible job. And honestly, I'm not doing a lot of investing these days, but I think that stock is too cheap, you know?
- [23:18]
Sam Oches
Yeah, well. And they paved the way for so many fast casuals to come. Right. They set this expectation, I think, for what a lot of fast casuals could be in. In a good way. And regardless of what's going on now, you know, they really disrupted, I think, the fast casual category broadly. But I think about, you know, the fast casual boom of the early 2010s. There was this very much sort of flashy, must be in big urban area, high walking traffic, nice new development. You know, there was that kind of mentality. You know, you just mentioned Idaho, and no disrespect to Idaho, but it's like, you know, back then, nobody's looking at Idaho for growth, but, I mean, you see what you're doing at every table as an everyman's food. And I think that, you know, a lot of fast casual probably would have told you that we were looking at the more, you know, white collar, higher income. So tell me why this can work for all people of all walks and all types?
- [24:11]
Sam Polk
Well, I think not only do I have to, like, sell you on that, like, one, you know, group that we have a tremendous amount of respect and appreciation for and even envy of sometimes is like, kava, like, kava really has done a great job with, like, whole, real food, large portions, craveable, and a pretty darn good value. Not quite as good as every table value, but really good. I think Chipotle did that as well. And so I think the key is that everywhere in America, people want good food. They want to feel healthy. Especially now with this GLP boom. More and more, they want to make sure they've got their macros, et cetera. So it's true that people want health, and they want the health to taste good, but they also don't want to spend a ton of money. And so, like, that's the whole thing that we wanted to solve with everytable is like, it's almost like, you know, you talked about TikTok. Like, cooking has become so big on TikTok. People love cooking. The issue is that they can't do it all the time. It just takes too much time. And so before you were either Faced with this choice of like an expensive restaurant or processed fast food, but now you can get effectively home cooked meals for seven bucks that are honestly probably better than you could cook it. And you don't have to clean, you don't have to shop, you don't have to do anything. And so I think that that's going to work in every community in the country.
- [25:29]
Sam Oches
Yeah, I mean, the $7 price point. Look, today we got news that Subway's rolling out a new value menu at $5 price point and less. And that's Subway. I mean, Subway is the main purveyor of value, I think in the QSR space. McDonald's can't even get under $7 these days. I mean, that is a really difficult price point to maintain profit about profitability in the traditional restaurant model. So it feels like again, now you're. You guys seem really primed for this moment. Because if I were to overlay this on 2011 when it was like everybody wanted value because we were going through the recession and people wanted value, but they were not going to skimp on quality, suddenly where you could find the intersection of those two things, that's where you wanted to go. It feels like you didn't create this moment, but you're in a great position that you could probably capitalize on it.
- [26:20]
Sam Polk
Yeah, I mean, I think that is for sure true. And thank you for saying that. It is an incredible moment with the focus on whole foods and the change of the nutrition pyramid and everything like that. I think the thing that we did sort of, I think have good foresight on is how the unit economics and pricing of everytable would be able to continually improve. And I think Subway is sort of a good example. Like Subway, by the way, is like, we're such a huge fan of Subway and one of the reasons we think there can be so many everytable stores is we see Subway, which is low capex and low opex and you know, and they are able to have, or were able to have 13,000 stores. Maybe now it's 9,000 stores. But it's clearly a great operational model. Now the two differences with every table is that our operations are actually simpler and our build out is actually simpler. So we're sort of more efficient on the store level. But the other thing is that because we're producing these meals at our central kitchen. And so every time you open a new everytable store, you get the thing that Subway gets, which is sort of supply chain efficiency. Obviously, if you're getting more volume, you can buy ingredients cheaper but you also get this massive labor efficiency. So in the kitchen, we have this incredible team that is literally, it's like Navy seals making these foods and supported by technology, et cetera. And when you go from, you know, hundreds of thousands of meals a week to millions of meals a week, the labor cost per meal drops dramatically. And so over time, everytable is going to be able to keep pricing low while driving our margin for our franchisees and for our kitchen as well.
- [28:01]
Sam Oches
Yeah. Going back to the distribution part of this, the access points that everytable can provide to communities for healthier, more valuable meals, I think about COVID and I think what happened during COVID was of course, the very quick innovation that by necessity had to happen with technology. And what you ended up seeing kind of as the result of that was ghost kitchens. And so then the natural evolution of once we got into ghost kitchens was suddenly everywhere could be an access point for food that you didn't need a storefront, you didn't need that billboard, you just needed that food to be available to get to the customer via delivery, pickup or whatever that was. Obviously we saw the ghost kitchen thing kind of fizzle, but strands of it remain. And I think what again that moment really taught us is this idea of technology opening up new access points, I think was an unlock for a lot of brands. Is that true of every table? Do you find, like, there's a lot more opportunity for every table? Access via vending machines, non traditional locations, even just, you know, via digital ordering, having the ability for customers to get quick access to everytable. How has that all changed? What does it look like today?
- [29:14]
Sam Polk
Well, I mean, maybe one place to start is like, I always thought the sort of like cloud kitchens philosophy was a little bit flawed and basically for two reasons, which is one, like the. The idea that access points were an issue was I just didn't think true is like there's commercial real estate available everywhere. Now what is true that cloud Kitchens offers you as a restaurant entrepreneur is the ability to like start producing food for a lot less money than you could start a restaurant for. That's definitely true. But of course there was the limitation of the fact that that restaurant becomes a billboard and people walk in and people has all those businesses. And then the second part of it was that, well, it saves you a lot on startup costs, but you still have to not only pay the underlying rent of the cloud kitchen, but then you have to pay the rent to the people that build out the cloud kitchen just like you would in WeWork. And so if you go to. And we look at this all the time. If you go to rent a cloud kitchen, it's sometimes more expensive to rent that 300 square foot space than it would be for us to rent an 800 square foot space that has a retail footprint, etc. So that sort of never made sense to me. But I do think to your point, the ability to sort of capitalize on influencers and digital access and the amount of advertising that we can spend on digital side to acquire customers is, you know, completely revolutionary. And so we have like, I do think that the marketing model for restaurants is moving from these sort of like, you know, brand and sort of like, like food launch centered arenas to who can really set up the best growth machine to acquire customers the most efficiently. And I think that's a development that we're, we're harnessing pretty well.
- [31:01]
Sam Oches
Sure. All right, so community involvement. We talked about the fact that your franchisees are really essential to that engagement within the community. Unpack that sort of community activation a little bit more. Because not only is it important for your franchisees to find points of distribution and to build out these relationships, but I imagine too there must be some educational component here. I mean, you want to bring about more change than simply here's healthy food at a low price. What does that overall community relationship look like for each of your locations?
- [31:32]
Sam Polk
Yeah, well, I'll tell you, sort of our view on education was actually sort of not to spend a lot of time on it. And what I mean is that we sort of looked at the, our sort of like nation's food history in this moment that we're in is this sort of like historical aberration. And what I mean is that, you know, for hundreds and thousands of millennia, you know, people have been cooking and eating food and over time, cuisines have developed that are delicious and healthy by nature because they were made from scratch. It's only been in the last 60 years that we started making, you know, Cheetos and Pop Tarts and all of these things that are both delicious, but if you effectively fatal. And so we just said, hey, we know that there's demand for healthy scratch cooked meals. We just need to show them what it looks like to cook that and what those meals are. And you can see that on our Instagram. It's like, these are good scratch made meals. We just came out with these stacked enchiladas that I just had for lunch that is like these incredible rice, incredible beans, and these delicious chicken enchiladas. It's like, who doesn't want that, it sort of sells itself. But in terms of the community involvement, I think the thing that we've endeavored to do for our franchisees is offer them the ability to drive value to almost any customer. And here's what I mean is you've got a person coming in off the street and they buy lunch and they say, oh, this was really good. And you can say to that customer a couple of things like, hey, do you want to subscribe? That means you just agree to get a weekly order and you get 10% off and double rewards points. People do that. That's a locked in customer for a long time. Or you could say, do you work in an office nearby? What do you guys do for lunch? What if we offered you a group ordering service where you could get hot meals delivered to your office for seven bucks and everybody could choose their own? We do that. You also have schools in the neighborhood, so we can offer that same group ordering service to the schools, but we also have a menu of k through 12 meals. So you can go to that school and say, hey, what are your kids eating? And a lot of schools will say, well, our kids are eating these taquitos and chips with nachos. And we don't feel good about it. We say, oh, well, we've got a great menu for you. And same with senior nutrition. Same with homeless shelters. So I think the ideal franchisee, to your point is somebody that cares deeply about their community and is extremely social and able to connect with people. And if they can do that, everytable offers a valuable service that, that they, that the people they talk to will want to be a part of.
- [34:03]
Sam Oches
Yeah. When I think about all of this, I mean, I think to myself, gosh, this model makes too much sense. I mean, you, you've really kind of hacked the, the restaurant development model to find a way to ensure that you can keep prices low but also maintain profitability. It sounds like it makes so much sense, but I imagine there are some hurdles here. I mean, imagine there are some challenges to this model. What are those kind of the bigger things that are keeping you up at night and preventing you from really making this really fly?
- [34:32]
Sam Polk
Well, I. So it's a great question. And let me tell you how I think about us versus restaurants. Like, on. On one level, restaurants are much simpler because how you start out is you build a restaurant and that you sort of know how to do that. And if your brand and your food sort of works, then you say, okay, that's working. I'm going to open another. And Another, and I'm basically just replicating the same machine. Whereas every table had. We had to make a forecast and a vision that said, okay, well, we're going to do the same thing with stores. And we've got those stores are under the same laws that restaurants are, which is like, do you have enough sales? Do you have enough return on invested capital and do you have enough margin to keep getting investment for those? So we had to do that, but then we also had to invest in building and learning how to run a scratch kitchen, and we had to run. Invest in our own logistics. And then over time, for these food service sales, we had to invest in building a sales team and a marketing operation and a sales team that worked together. And so the truth is, like, we've raised a bunch of capital. We've spent a lot of time sort of like perfecting this. And you really had to, you know, have somebody that was able to convince people of that vision and then execute against that vision, which requires, you know, as, you know, operations are incredibly hard. Not only are store operations hard, kitchen operations are hard, fresh food manufacturing is hard, logistics are hard, sales are hard. And you got to do all of that together in a really vertically integrated way. And so that's everytable is really this sort of like, almost like very ambitious sort of statement that says it is theory. Here's the theory that you can get here, but here's all the things you have to execute along the way. And I. All I can tell you is that if we execute this along the way, and I think we're doing a pretty good job, then the end result is a food business, a vertically integrated omnichannel food business that can. That can be the largest restaurant company in the country, can have more locations than anybody. But a lot has to go right, and a lot has to be executed extremely well in order to make that true.
- [36:39]
Sam Oches
Yeah. We started this conversation talking about your mission. And I'm curious, I mean, again, when you came into this business, you know, your goal was to be very disruptive for. For what had been done in the past and what could be done. I'm curious, you know, do you feel like you've succeeded at that mission? And how have you kind of moved that mission further?
- [37:01]
Sam Polk
Yeah, I mean, I think the short answer is yes. And it's. Honestly, it's one of the things that I'm really proud of is I walk into everytable Watts and I walk into everytable Compton, and just seeing people like, walk in, walk out, it's just part of their Daily lives. And that is so thrilling to me that that was like, like it was almost like, you know, at the time we started, I don't know if that you could call this racist or just uneducated, but there was a lot of folks that would say, is there demand for underserved food, good healthy food and underserved communities? And I think we have sort of like definitively answered that question as yes. And you know, so I'm very proud of that. And then second, when I started, I was just not aware of all of these massive prepared food markets. But you know, as you know, like a common saying is like, if you take all the school cafeterias in America and treat them like a restaurant, it's the largest restaurant chain in America and there's billions of dollars. Like, one thing our government has done a great job of is saying, hey, we don't want any seniors who may be too old to work but don't have a lot of money. We don't want them to go hungry. So they passed the Older Americans Act. So there's this huge infrastructure to provide food to those seniors now. There's this whole huge world into medically tailored meals. And it's sort of to your point, it's like the world is saying like, we are doing a lot of feeding for people. Let's make this healthy. And so everytable was able to take our original architecture of this central kitchen and then add these vertical, these channels onto it to I think, sort of like really evolve and amplify our mission over time.
- [38:31]
Sam Oches
That's great.
- [38:31]
Sam Polk
And then the other thing, by the way, is the franchisees, like, like, how exciting. And by the way, think about this as like in a world in AI where people are getting disrupted out of their jobs, there's all this vast worry, you know, that now there's an entry level franchise that doesn't cost a lot and doesn't require a lot of experience and you get the same benefit that I have, which is like, hey, I can work on this for a long time and I can make a lot of money and improve my community and do something good for the world, I think it's a great offering as well.
- [38:59]
Sam Oches
Well, yeah, for sure. I mean, when I think of, when I think of restaurants or any company that's trying to bring significant disruption, you know, I've covered this industry 17 years and I've seen it a lot, which is you often have these businesses that, you know, kind of aim here and over time you start to see them bring their aim down and they pivot and they change and they come down here and, and frankly, when we were, you know, pulling this conversation together and I was looking into every table, I'm like, well, good for them. They really maintained what they were 10 years ago. I was, I, no, no disrespect, but I was a little surprised because I'm like, you guys were really aimed high, but you've, you kind of stuck the landing in some ways.
- [39:38]
Sam Polk
Well, you know what, One of the things I will make this is a plug for some, some good lawyers that we had is that we incorporated as a public benefit corporation. And what that means is that like as a CEO and our board of directors, we have the same fiduciary duty that other companies do, which is to provide and grow value for their stakeholders, including their equity stakeholders. But everytable also has a like, government level, organization level fiduciary duty to our mission. And so what that means is that if investors, like a lot of the times you might have a well meaning founder who has all these good aspirations, but both the business model doesn't work to do things in underserved neighborhoods. And then investor pressure will push them to do other things. But everytable has the ability, because we're a public benefit Corp to be like, no, we actually like have made a commitment to this and it's illegal for us to not do that, you know?
- [40:37]
Sam Oches
Right. Yeah. That's good. Holds you to a higher standard for sure.
- [40:40]
Sam Polk
Yeah.
- [40:41]
Sam Oches
All right, Sam, last question for you. Considering all of this, what do the next five years look like? You and I sit down five years from now and we're like talking about the evolution of the brand for another five years. You're 15 years into it. What do you think every table can be?
- [40:56]
Sam Polk
Yeah, well, so one of the things I think a lot about is sort of like the laws of scaling like a retail location. And as I said, you basically have this law that says, you know, can you. Is. Is the investment amount that you have to put in and is the consequential revenue and the margin good? And then as you scale, can you still continue to grow those same store sales so that people want to keep investing in the brand? So that's all that we're focused on. And so for us, like the, the exciting thing for me 10 years into this is that now we have our definitive box. And our definitive box has retail sales. It's got a subscription channel, it's got an everytable at work, which is our group ordering channel, and it's got our food service channel. And so all that we are focused on is growing those over time. And if we grow those over time and if we sell a bunch of franchises, which I'm confident that we are going to be able to do, there's really no limit to how big we can get or the speed that we can get big at as long as we don't grow too fast to not be able to grow same store sales at the same time. And so for me, like I've been, this has always been sort of like a 30, 40 year plan. And I think we're in a good position and we're getting to the point where it's like now we've built the rock and it's starting to roll down the hill and it's going to start picking up speed. And I think there's going to be a time five years from now when we're opening, you know, several restaurants a week. But we just got to get there and we got to keep focusing on this box economics to do that.
- [42:32]
Sam Oches
Yeah. Well, it's exciting to watch. I'm sure we'll talk again before five years from now. But you know, good luck to you. We'll be cheering for you from here. So, Sam Polk, founder and CEO of everytable, thanks for your time.
- [42:42]
Sam Polk
Awesome. Thank you so much for having me. Sam. Good to talk to you.
- [42:46]
Sam Oches
That was my interview with everytable's Sam Polk. So what should you learn from this interview? Here are my five takeaways. My first takeaway is that the healthy food movement has a business model problem. We're at an interesting place today with healthy foods in that there is a lot more attention on this corner of the food service world than there has been in some time. You have the protein craze going on now. Fiber's suddenly big. Of course, there's the Maha movement and then through social media, just a lot more attention on what people are putting into their bodies, a lot more ideas around what constitutes a healthy diet. And that is playing out in the restaurant industry. And you see a lot of players trying to meet that demand for healthier foods. But everybody who's doing that is recognizing the same thing we've realized over and over and over again as an industry, which is that it is expensive to serve healthier foods, certainly craveable healthy foods. The problem, of course, is that healthier fresh produce especially is costly. And then when you add the labor component and all the other costs affiliated with restaurants, it means your prices for healthy foods are sort of inherently higher. You have that business model problem. You just cannot make these Two sides really kind of get in sync. Sam was a Wall street banker, you know, up to about a decade ago, and he set out to fix that, that problem. Now, I, I'm typically a little cynical with folks like Sam who think they can fix this problem, because we've seen a lot of players come and go trying to do that exact thing. How do you make healthy foods more affordable so that certainly lower income customers can access them? And there's been a lot of failures along the way. But Sam seems to have kind of struck on something here. You know, as he, he, he explains it, is that, you know, the, the code to be cracked is figuring out how to have a low capital expenditure, but then drive a high revenue and in and through that, a high margin, a high profit margin, and doing so through diversified revenue streams. That was kind of the code that he explained in this interview that makes it work. And over 10 years, it's basically working. They have over 40 locations. He said they'll close this year with 50 locations. And again, key to this model are some of the unique business practices that Sam has put into place. That leads me to my second takeaway, and that is that a streamlined kitchen opens new growth opportunities. So the kitchen is what's really key here to cracking that code, I think, because as Sam explained, the kitchen, they're able to basically build very small boxes for every table because they don't need a kitchen. When they have this commissary model, they have a couple of commissaries for their current footprint, which is primarily in California. California. And that's where they do all the production. They source the local produce, local meats. They focus their labor on those commissaries. And then they've got these very affordable to run storefronts that are serving grab and go dishes typically employed only by one person. And so that keeps the cost very, very low because they have taken the kitchen out of their locations, put it into that commissary. Now, not everybody loves the grab and go model, right? This is a little bit different than your traditional restaurant, your traditional fresh food service, because of that commissary approach to it. But I don't think anybody would claim that everytable is not a restaurant because these are restaurant level meals. They just happen to be, you know, produced and packaged at that commissary. So again, it all kind of comes down to cracking this code with healthy food served at affordable prices. Kind of comes down to the kitchen. If you have to do all the fresh food prep on site, then you're going to have higher store costs, higher labor costs, because you have more people that you have to employ in the stores, and then ultimately just higher food costs because of that supply chain and getting the foods to each of those individual stores. Everytable's model takes a lot of that away, focuses the labor on one place and it even changes the supply chain. As Sam was explaining, they direct, you know, the supply all to the commissary and then they distribute it themselves to their stores. This is the model they plan to scale and seems to be what is key to keeping their prices low. My third takeaway is that the value equation is a sliding scale that varies customer by customer and city by city. So one of the reasons I was really interested in speaking with Sam this year at this moment in time for the restaurant industry was because of how much value is dominating the conversation today and how much value is just this critical piece to what every table is, is doing with their model. You know, value as we've all pretty much well determined by now, you know, it's not a price point. It's not just about cheap prices. It's really again, an equation with a lot of different factors, a lot of different ingredients that go into it, including, you know, convenience and access and experience and all of these other things. But Sam is so close to this value equation because they're playing with that price point. And what I mean by the fact that the value equation is a sliding scale is you can see perfectly through everytable's model charging higher prices in certain neighborhoods and lower prices in others. And Sam said it perfectly where he said this accomplishes value for everybody because the low price point in that lower income neighborhood is value to them. And that higher price point in the higher income neighborhood is still value to them as well. And then they also distribute these healthy meals to places like homeless shelters and healthcare facilities and other places where because of that model, where they protect the low, you know, they have that low capex model with a higher margin, they're able to subsidize some very, very low prices for these other organizations. And inherently that creates value in all the places they're serving those meals as well. So again, sliding scale. And I think, you know, most of you listening out, listening to this out there are not doing a pricing structure similar to everytables where you have different prices in different neighborhoods. But I think there's something to learn here, which is that the way you approach of value must inherently be different for customers in certain communities and, and be different when it comes to, you know, the type of customers and demographics you're speaking to. Communicating that value to them is going to require a different message than one kind of monolithic message around value. So think about that, think about the differences in your customers, in the cities in which you operate, the regions which, which you, in which you operate and tailor that value message to those individual customers. My fourth takeaway is that mission driven businesses must have clear alignment with the bottom line. Now, of course, when I talk about mission driven businesses in this context, of course I'm talking about for profit, mission driven businesses, nonprofit, obviously a little bit different in how they operate. But you have a lot of for profit businesses out there and a lot of for profit restaurants out there that have big missions, big goals for, you know, tackling a variety of problems across the world, you know, social justice and things like this that people want to go and solve for, which is incredibly admirable. But often you run up against that problem, which is money. It's costly to do some of these missions. And especially in the restaurant industry, which is such a low margin industry, you don't really have a lot left over to fulfill that mission. So, so the way Sam is doing this, again, it goes back to that business model that we talked about earlier. But I just love how he framed that, that he said, you know, your profitability and your mission have to be in alignment. And the way he's made this work is he designed the everytable business to be profitable at about the $5 or $6 price point that he can sell everytable meals at $5 and $6 and be profitable at that point. And when he's profitable, that means he's able to drive this mission of getting affordable healthier foods into lower income neighborhoods. Whatever the mission is at your business, don't just be lip service. You need to be, you know, put your money where your mouth is and show up for that mission every day. Because that's the only way to authentically get customers through that mission. And the only way you're going to come across is being genuine in those efforts. In order to accomplish that mission though, you have to have that one eye on that mission and the one eye on the process profitability. Because if you're not a profitable business, there's no way you're going to accomplish your mission. They both have to be again, in alignment, as Sam said, in order to, you know, you can't have one without the other, in other words, because it will take the business down if one of those isn't working. My fifth and final takeaway is that community driven franchisees can be leveraged for more dependable, consistent business. I've talked a lot on this podcast about franchisees. Why the franchising model works for so many different businesses, why they are able to build such great community relationships because their franchisees are the boots on the ground. How if you're franchising, you need to recruit franchisees who have those relationships can be that liaison in those individual communities. We've talked a lot about that, but Sam brings such an interesting perspective to this. Because key to everytable's business is the relationships that it has with organizations like the healthcare facilities, community centers, homeless shelters, all these other places that they're trying to get healthier meals into the hands of people who need them. Those organizations are all different revenue streams for everytable, and those are all highly relational organizations. As everytable grows into new communities, it's going to require those relationships in order to get the everytable business into the hands of the people that really need it most. And so that's why Sam is really believing in this franchise model that they have, that it's a very accessible franchise model for people who maybe were unable to get in to this business before because, you know, maybe they couldn't afford to buy into a traditional franchise. Everytable really sets them up for success and then leans on those people to either tap into existing relationships with organizations in the community or build new relationships with those organizations. When it does so, everytable wins because it can bring those organizations into the system and provide these healthier meals. So point of it is, is that franchisees are more than just the smiling face behind the counter bringing great food and service to a community. They are also really your marketing boots on the ground to get out into the community and to build new revenue streams. Even if you don't have, you know, revenue streams like homeless shelters, like Sam Polk does, you might have catering, you might have, you know, other opportunities to serve your community and build revenue streams. And your franchisee or your local operator are going to be the perfect person, the perfect people to be able to do that. Those are all my takeaways for today. I hope you enjoyed this episode. Please remember to subscribe to takeaway wherever you listen to podcasts and leave some feedback. You can also email me at sam.okasforma.com thanks again and talk to you next week. Are you a leader at an emerging restaurant chain that's ready to level up, then create the event for emerging restaurateurs is your ultimate destination. 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