Shake Shack Inc. on Thursday promoted Zach Koff to be its first chief operating officer, an acknowledgement that its brand demands more attention following strong growth in recent years.
Meanwhile, the New York City-based fast-casual burger chain said CFO Jeff Uttz, who helped guide the company through its 2015 initial public offering, would retire effective in March. The company has started a search for Uttz’s replacement.
“Jeff has been such a solid partner for me and the company,” CEO Randy Garutti said told Nation’s Restaurant News. “He’s done a fantastic job of building teams and systems of financial reporting through the IPO. He’s done really well.”
Uttz has served as Shake Shack’s CFO since September 2013 and before that had been the CFO with Yard House, helping to oversee that chain’s expansion before its 2012 sale to Darden Restaurants Inc. Uttz had also held several positions with CKE Restaurants Inc. before moving over to Yard House.
Garutti said that Uttz has an opportunity to “take a step back and maybe semi-retire,” though he will be with the company for the next few months through the annual financial reporting period. “We’re excited for him,” Garutti said. “We are launching a search for a new CFO tonight.”
Koff has been overseeing operations at Shake Shack since its fourth location opened in Miami Beach, Fla., in 2010, and has held various titles over the years, including director of operations, vice president of operations and senior vice president of operations. Koff had been with Bravo Brio Restaurant Group Inc. before coming to Shake Shack.
“He’s just a rock star,” Garutti said. “He’s a good human being. He gets credit for much of our success.”
Shake Shack has grown aggressively over the years, and is among the fastest growing restaurant chains in the country, according to Nation’s Restaurant News Top 100 data. The company currently has 115 locations worldwide, including 72 in the U.S., and plans to build another 21 to 22 locations this year. Shake Shack opened 20 locations last year.
Garutti said that the company has more of a day-to-day need for a chief operating officer now who can help execute strategy. “Nobody is better to assume the role than Zach,” he said.
Koff will continue to run operations, but will also be more engaged in larger strategy and execution for the entire company and in more areas, including product launches, quality assurance and supply chain.
“It’s just time,” Garutti said. “We’re ramping up our growth in every area.”
Shake Shack has been an active company in the two years since its initial-public offering and not just from opening new units. The chain raised its workers’ pay last year in a bid to stay ahead of the curve amid rising wages and increased demand for labor.
On Thursday, the company said that it experiences “higher than expected” labor costs in the fourth quarter. The company continues to raise worker pay, including for managers. Shake Shack also instituted a regional price increase, raising prices in some markets where labor costs are higher.
Still, Garutti said, the decision to raise worker pay was a good one. “Just look at sales results,” he said — same-store sales increased 2.9 percent in the quarter ended Sept. 28, on top of 17.1 percent in the same period a year before. “We believe having the right number translates to business.”
The company also recently introduced its mobile app, which enables customers to order and pay on their mobile phone. The company started the app at New York locations and has slowly expanded it to other units since then.
“It’s been a slow roll,” Garutti said. “We have done one Shack at a time. We’ll have it a few days and then do a couple of Shacks. It’s the future of restaurants. We have to meet you where you are. The app is just a new way people can choose to partake in Shake Shack. It’s the lead of our strategy this year. We’re excited about it.”
All photos courtesy of Shake Shack
Contact Jonathan Maze at [email protected]
Follow him on Twitter at @jonathanmaze