Maria Rivera has plenty of industry experience to recognize potential. The former Krispy Kreme president has also held roles with TGI Fridays, Logan’s Roadhouse, Darden Restaurants and The Walt Disney Company. So when she was asked to consider leading a fledgling and relatively unknown concept called Smalls Sliders out of Baton Rouge, La., she was skeptical, but intrigued.
Once she tried the product, she was sold. The now-CEO of Smalls has ambitious plans to lead the growth of this brand — a 2019 spin off of Walk-On’s Sports Bistreaux and backed by 10 Point Capital (which also invests in Tropical Smoothie Cafe and Slim Chickens) — from its current six locations to over 400 locations via franchising. The company expects to open up to 15 new locations this year, including its first outside of Louisiana to confirm proof of concept. To support its growth, the company just relocated its headquarters from Baton Rouge to Atlanta.
“Atlanta is the growth mecca for franchise environments. And our [10 Point Capital private equity] happens to be there along with some of its other brands. The city has incredible access to talent and that is what we are investing in first,” Rivera said. “For us, moving to Atlanta is a no-brainer.”
Of course, such growth also requires sound unit economics, demand and, for Smalls Sliders, committed franchisees. On the franchisee front, the company has nine groups signed to open about 65 new units. Rivera expects the company to expand into an emerging brand by Q1 2024 and accelerate from there.
“The first 40 locations matter. We think we’ll be comfortable opening 20-30 locations a year by year two,” Rivera said.
Driving that confidence is the unit economics piece. Smalls Sliders is able to create efficiencies from its modular building, which Rivera calls “groundbreaking and life changing.”
“Modular has a play in the next couple of years in this industry. It’s an attractive proposition,” she said.
The company has secured vendor partners that build these “cans,” which are about 840 square feet, and then those cans are delivered to the real estate pad, fresh and ready for an opening a few weeks later.
“I’m not going to tell you we don’t have challenges in this environment because we do. What we don’t have are the challenges that traditional brick-and-mortars have — materials costs, construction delays, etc.,” Rivera said. “And in these can units, we know our labor hovers between 17-20%, which is incredible because we’re controlling the costs within our four walls and keeping them manageable.”
Smalls Sliders is not as insulated on cost of goods, as the company uses premium beef for its products. That said, the menu is small and focused — cheeseburger sliders, fries, milkshakes, drinks — and is expected to stay that way. Additionally, the company is decoupling its supply chain from Walk-On’s and putting a supply chain team in place to buy its products further out and hedge and “make sure we’re keeping our costs consistent and bringing them down.”
Rivera also notes that there are challenges that come with trying to plant a flag in an intense burger category, but she’s confident Smalls Sliders has enough differentiation to stand out and succeed.
“We have something unique. We’re not trying to be In-N-Out. We’re not trying to be Shake Shack. They have unique positionings. We are focused on being a disruptive burger place where you can enjoy cheeseburger sliders in an alternative dining experience (drive-thru and walk-up only) that welcomes everyone just as they are,” she said. “I don’t subscribe to this category being saturated. There is room for everyone to play.”
Notably, Smalls Sliders is very much trying to appeal to younger consumers — Gen Z, specifically — as it expands. Rivera said the brand is striving to be “Instagrammable,” “punchy,” “clever” and “in your face.” The company’s final pieces — a full website redesign, an app, a CRM platform — should support this goal and are expected to be in place by the end of the first quarter. From there, it’s full speed ahead.
“This is a journey, not a destination. This is where discipline comes into play. We have to stay pure, relevant. We have to stay in listening mode,” Rivera said. “Our aspiration is very big, but it’s do-able given our current momentum. We’ll be having different conversations about this brand three years from now.”
Contact Alicia Kelso at [email protected]