“It’s time for new flavors at the table,” said Lauren Fernandez.
Her company, Full Course, raises money and channels it to small restaurant operators — usually one to three units, sometimes as many as five — to help them grow into the sorts of businesses that private equity firms want to invest in.
She and her team also teach the operators to develop new revenue streams, including opening in non-traditional locations such as colleges or airports, developing retail products and franchising, while also helping them to put systems in place that will improve efficiency and create a more motivated and satisfied workforce.
A former general counsel for Focus Brands and an operator of 11 Chicken Salad Chick locations, Fernandez has extensive background in operations, branding and marketing, and yet when she opened eight restaurants in fewer than two years it was almost more than she could take.
“It was really awesome. I loved my job, I loved being in the field, but it almost broke me,” she said.
How much harder must it be, she thought, for small operators, often immigrants, women or minorities, who don’t know what potential there is for growth in foodservice.
“Private equity firms … are flooding our industry with capital,” Fernandez said, but you need to reach a particular size and profitability — a private margin of around $3 million, she said — to get their attention.
The restaurateurs getting that capital today don’t reflect the full range of culinary variety that the United States has to offer, she added.
“There’s a lot of capital coming into this industry, and it tends to promote really homogenous food — stuff that’s whitewashed and doesn’t really truly reflect the cultural diversity, and all kinds of diversity, in this country,” she said.
Expanding the sorts of foods that are available on a larger scale is part of her mission.
“I have a very bold agenda to find and be as diverse and inclusive as we can with where we place capital,” Fernandez said. “We’re going to make a difference because the brands that are being fed from Full Course into the larger equity system for coast-to-coast growth are going to reflect the cultural fabric of this country, whether they’re run by women or minorities or immigrants, whatever the case may be.”
Full Course raises $20 million for every five to seven clients, taking a minority stake in each company while getting it ready to expand and then exiting within around five years.
Ideally, part of getting those companies ready is getting them to focus on their people, Fernandez said, adding that the pandemic has taught many restaurant operators in the industry how important their workers are, “which I hope will awaken folks to the idea of paying more sustainable wages, bonuses and benefits to the folks who are dedicated to this industry and in service of people.”
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Contact Bret Thorn at [email protected]
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