BFI - Earnings call transcript Q2 2021 | BurgerFi International, Inc.

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Operator

Good morning, everyone and thank you for participating in today's Conference Call to discuss BurgerFi's Financial Results for the Second Quarter ended June 30th, 2021.

Joining us today are BurgerFi CEO, Julio Ramirez; and CFO, Michael Rabinovitch.

Following their remarks, we'll open the call for your questions.

Before we begin today, I want to remind everyone this conference call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, , including statements relating to BurgerFi's estimates of its future business outlook, store opening plans, same store sales and restaurant operating margin growth plans, prospects or financial results.

Forward-looking statements generally can be identified by words such as anticipates, believes, estimates, expects, intends, plans, predicts, projects, will be, will continue, will likely result, and similar expressions. from based risks expectations cause and results differ are are assumptions our statements the to to in subject uncertainties, materially forward-looking on and current that actual forward-looking These statements. reflected those which could Securities discussed such file year cause limited Exchange are XXXX ended and discussed our December to those with Form on those include, Annual but XX, Factors that Report contribute in XX-K differences we could in or the other not documents to, for Commission. and the All and or forward-looking qualified attributable persons the this statements acting entirety expressly in cautionary their subsequent are press oral written to release. statements included on BurgerFi BurgerFi’s in by behalf or We by as results release required the revision statements, undertake revise of except no law. obligation publicly to to any these forward-looking

to and contain listeners reliance the these undue cautioned statements. not may following such discussion Given are on measures. place forward-looking Also, financial uncertainties, non-GAAP risks

non-GAAP will release on Now, like quarter please replay reconciliation the via For company's measures, well today's as press see at also as BurgerFi, Julio call of two provided CEO via to financial be release, telephonic link webcast and the https://www.burgerfi.com/ everyone turn replay remind to XXXX. earnings our like will I in of today. this for to that would of be website the discussion the available over Julio? Ramirez. The starting call available second the I these weeks for would

Julio Ramirez

as that, off I our financials close of be story. opportunities. and our over there, activities overview our many start some From BurgerFi everyone. quick history start highlight good with a this Shannon, and you, I'll results. you of to quarter turn join and our and business, our may today. to morning, and our happy new of second of growth with Thank can going listeners with Mike to through us I'm brief to outlook history a before walk We're With it I'll then

XX People years And of overall Fort opened immediate. in called core restaurant BurgerFi a our brand. of energy ago, ambiance the outside loved the Lauderdale first The was Lauderdale-By-The-Sea. community food, success our just the and

redefining way and enriching the tasting our prepared the by is than burgers Our more ever, lives food. the and the world on building energetic motivated highest and relevant statement experience restaurant, burger We premium served great clean mission exceptionally of ingredients best quality eco-friendly experience burger offer a highly and through team. in eats

state two are to place with brands. in design restaurants better versus and all grown locations, that We XXX XX states, that Across to Puerto emphasis restaurant an say owned our in of have home corporate franchise we locations. other countries burger Florida, of differentiates us we believe our I'm proud XX and chain we premier on Rico. the

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compressed upcycled them. parallel Navy recycled tables our are wood in XXX restaurants of Coca-Cola from example, of XXX shipping bottles, are our made For made And the communal pallets. from literally chairs

In atmosphere modern energy trendy our to love. that to consumers and low come addition, All of efficient, features contribute usage. lighting are very our electricity and fans all have these with

cheeseburger our harvested It's premium or American the feed ever. standard chemicals, BurgerFi attention by vegetarian program. antibiotics meat-based no Burger. consistent given NAE fed is raised of to to steroids, by serve. we or the Just from hormones, the signature injection. additives and, grass This raised all course, use and design, emphasis We Wagyu like naturally a beef part never has humanely antibiotics, food Angus our detail frozen. burgers CEO across on never the beef of our we XXX% place and huge The a That's

a offer in caters cut unique we beef, the industry, Spanish to the preferences. nearly beer rings from have firmly which our diversified to breaded hand and and onions, best taste believe battered. colossal onion addition everyone's menu we size, bracelet in then are I that In literally

that all fresh We locations. and offer that local potatoes far in Burbank we fries from and beer ice-cream chicken standard handcuffed concretes French cage-free frozen our in natural believe and than Idaho superior are also craft custard wine are premium, restaurants, select and

a plant-based were the option. Beyond introduce to burger we Burger Additionally, also better among customers. patty chains to have we vegetarian And our first patty

own XX Best our innovation and of the crispy a customer Recently, burger that truly more menu the ingredients, Top year one award. chain is testament all for USA including Movers VegeFi we importantly, better even XXXX. made natural award-winning Readers’ garners were up named casual of Today's in numerous XXXX we've brand that a awards Choice vegetables. and and very is Casuals' Fast top Shakers achieved that Our to the number quinoa This The in list XX fresh-cut are survey. XXX And fast engagement.

this remained pipeline SWAG, innovation wagyu in the strong and of our strong to March Our spicy introduced continue first year. of we preference or burger, angus enjoy

habanero five of hot ingredients; steak burger jack sauce. to pepper candied a cheese, jalapenos, tomato wagyu to Our sweet ghost pepper course, features double charred burger bacon add a spicy the relish pack with SWAG blend and, bit of and heat, brisket sweet,

we our quarter, July. premium a our it third sales SWAG sauces make continued its chef-inspired and our item accompany to Chicken decision to menu to Sides we Cage-Free Also and success permanent rolled out Our to a start new beginning has made Fresh-Cut Tenders. wagyu burger Fried due doubled in

infused Aioli, favorite, with Honey. challenging commitment Mike? I time. I'll my for our Ghost personal fresh who Pepper the include unique fan Garlic which and during to Ranch second want commentary their now our and team sauces to our thank Our work, Truffle this the Mike additional Jalapeno especially Aioli, garlic Bacon is with quarter. and the over provide roasted will hard call turn for made Rabinovitch, CFO, performance jalapenos,

Michael Rabinovitch

everyone. morning good and Julio you, Thank

increased total quarter. $XX.X $X.X year revenue quarter second to ago XX% in compared million the to Our million

sales rate. to sales continue burger by burger, sales premium drive supported continued New for channel a SWAG the our strong same-store in can restaurant increased and quarter. in second XXXX, We systemwide improvement March introduction high digital showing a openings retention

In in delivered same-store fact, surpassing XXXX second with impressive the -- quarter, increase restaurants levels. during sales corporate owned support XX% sales an

same-store performed year million franchise XX%, very our same-store quarter second the well, XXXX locations with second Our increase period. second in in bringing Digital systemwide drove in our comparable to the fueled increasing million as sales XX% nearly the revenue quarter the to digital ago the sales performance by XXXX. XX% as half also delivery XX% overall platforms which in $XX.X $XX.X comprised systemwide sales channel compared of Systemwide in quarter. to sales the of second quarter, the flat sales increased up with the in of XX% quarter, year-over-year were that growth, compared

business, We of dining recover. are retain very the continues digital high pleased to our while to in-restaurant component such a

we quarter. later, compared to drive year discuss Restaurant invest in we'll more for technology, of Julio a in level omnichannel goal to and As operating experience were plan guest ago to expenses sales. to with $X the a satisfaction the continue million $X million quarter frictionless delivering first

controlling costs the prior change reflects ago quarter. was second quarter year was type the in the related XX% liability the income additional Our $XXX,XXX decline quarter associated to company, the attributable quarter. impact of beverage with investments compared value more million, the of along first period. being headwinds and a and growth XXXX. year improvement the than inflation the year. XX.X% initiatives the EBITDA a leveraging expense, food to recorded to was net in and restaurant as the to and attributable wage support income environment. $XXX,XXX The $XXX,XXX the interests attributable gain which occupancy expenses quarter margin shareholders compared on current The cost common the second interests Net reflects during to with to and Adjusted of was warrant to primarily in compared operating controlling of our increase foundational ago labor to to in The public which of shareholders rate labor common in compares on controls level margin $X offset and the

Moving onto sheet. balance the

cash Our $X quarter revolving line XXXX, during the locations. million of as was termination of investments XXXX. of and difference well compared XXth, on repayment December $XX.X $XX.X XXst, first XXXX as balance of in company-owned constructing credit million capital our million June restaurant the at The to reflects new

remain outlook. about and franchise the year short-term our for prospects. on onto opening new optimistic full We markets long-term plan XX XXXX. our to Moving and in existing We operated and company XX restaurants

about franchise company owned under in are XX new markets which continuing build we of three the and year-to-date, one brand various representing restaurants opened areas. new locations have over we further and construction eight as and locations and quarter, in excited of Most a currently the XX restaurants we operate the on of result, signed new currently site, are we're in leases development. second to stages those the strengths During

In end the of we date. Kitchens addition, XXXX, of with third to to XX XX quarter we're through Epic performance on encouraged of our Ghost our of Kitchens, second new by by our remain hit and which and target to and Reef partnership the track Kitchens Ghost the opened many in

And an a price looking in to results we restaurant we pressures, similar labor July. other increase result This we our pleased level costs margins price In help margins, X% recovery increase ongoing restaurant expect the with taken part points. was at seeing due to are competitive late set, recent XXX in anticipate offset of an taken designed July. increases improvement overall see basis level price in of in in it periods, and terms we in and to as we're

value. experienced XXXX before are increase. transaction June. In July through transaction trends level our sequentially fact, against levels XXXX average And same in at in as flow preliminary showing to at growth continued the continue seeing same-store price we the and locations franchise compared be are corporate both the sales to

expecting the in for to level we increase, franchise efficiency sales year, September in closed October in as arrange airports, restaurant these higher a company Given other half initiatives. to store improve periods. a we're universities, our owned of sales the due open back are to are restaurant price of still being seven the alike, and encouraged result We're temporarily XX% sales to locations margins to expected locations when level particularly of XX% the operating results and and that franchise have

capital up XXXX, for expenditures are capital of to construction. of we planning to terms restaurant primarily million $XX support In new outlay,

plans going it forward. to I'll discuss initiatives to Now, strategic send our Julio back growth Julio? and

Julio Ramirez

Thank Mike. you,

vision would Now, strategic to and talk like our the our I plans for growth about brand.

Our first experience. guest the priority remains

As laser-focused with order can our Guests digital choose our optimized the and when and their on and providers the want remain we order own fantastic a app, order guests our seamless digital in that guests off Further, our dining we solutions the mobile where meal. and on have through can ordering marketplace. focused providing experience delivery have food. we premise website, delivery with rooms tasting to as reopened, remain dining, pickup through they third-party have BurgerFi from largest BurgerFi so

grow Ghost Kitchens of only outside developed to our the form brand in various the ecosystems we in Additionally, U.S. delivery in have our across existing of and markets, markets

are brand providing in investments, added visibility gain us where U.S., across excited a opportunity. not helping all recognition and certain have these And business opportunities, require to of of to Kitchen unique strategy into our currently integrity does growth how physical currently allows ways This forefront a entrance core the as Ghost we of new The the we We presence. without restaurant. while understand kitchens and new of of any which strategy can don't We upfront test cost markets our building Ghost awareness and XX the where using capital outside as franchise more are over opening to marketing importantly, owned markets fixed are company in restaurants. build we and development growing. we're operating us have large or well at be brand Kitchens this

as working is Officer our on we're Another a Marketing driven and consumers multi-channel data engagement our we're increase our profitability. features, improve guest to among more leveraging technology To deeper loyalty, where Goodhew, dive experience, XXXX further and recognition on our order. when Officer, choosing ultimately our the with as and Technology be of will new and to fast consumer development And experience. By we our and as a our mobile way Florida new excited focused well customer With provide experience our Karl we refined and and upgraded with Gonzalez the Chief better continued presence refinement omnichannel approach experience through burger looking we our with delivery we're as locations. innovative Chief capabilities. the They Henry application customers focused currently brand of their focused our have across our building Linking technology services, our payment to out presence drive sales improve our is year into want foundation, are strategy, will we're leader a casual where Southeast. have Florida, in consumer XX marketing, confident they be category. where the developed dominant a strong have increase we upgraded in that and

strategies as Going others, restaurant we in of clusters Maryland and Nashville to already the of both Virginia, the up New Carolinas, forward, great the want work Eastern in expansion as cities, and the we feel We franchise company operate Tampa, with well. along develop Southeast, DC, way From restaurants Philadelphia, our suburbs York. Washington, seaboard. to we and Jacksonville, build such our have Atlanta, owned potential, and in

restaurants seaboard, a all regions, coast. the presence, along east by moving the the up our can and Mid-Atlantic connect strong Northeast So, Southeastern to we creating

in, other deals potential well Puerto location. deep the the capitalized, to pursue retail geography restaurants if our but to Rico multiunit our partners have to markets have in restaurant to they We good in they performing a plans franchise markets criteria, cultural like opportunities. and for and only of and have these rigorous opportunities, most with importantly, be Southwest Looking intend Midwest, already U.S. do fit third high open business we and meet want international experience, be company. franchise our their we knowledge Addressing in

six as the America, with Eastern partners potential Saudi there and where Earlier in COVID. potential come years believe continue this signed had to I XX multiunit a province over Latin franchise open great experience the conversations of out restaurants Arabia. of we we also year, of is Kingdom in We deal of

this With as is The BurgerFi, opportunities call the exciting is year. of truly across in first expected differentiated our is fourth open to please Shannon, brand and the we time open up globe. quarter truly growth an restaurant This the significant at see questions. for that,

Operator

[Operator with Saleh you, Thank Peter BTIG. from first Our Instructions] comes sir. question

open. Your line is

Peter Saleh

expecting of to XX already Good bit morning, Ghost sales guys color this But royalty on just year, and the first I these expected opened I talk ask thanks year-to-date CapEx you believe a know you wanted is many the type this but on can these are and there's these there as all to in quarter. know I said Kitchens, on morning. units? and well? least at call to your open maybe part, no you to for of the the rate have garner, third the what that I a of little about advertising volumes out contribution of do you XX

Michael Rabinovitch

include and a with From Ghost license agreement our Thanks. Peter. morning, royalty Good for don't contribution. Kitchens contribution, brand the partners brand a our

their efforts similar license X.X% marketing of primarily on the very to which done sales. the So, range are -- between is by of them. structure royalty done to And our franchisees, fee those X.X% and

lot centers a lot -- in want that as share, for work terms some rely are to to do Kitchens, you are to hope some on a to because they in be obviously, them, back Ghost of some we a still and only we estimates, would Kitchens, think early be is open but happening remind have others a so guide location. we're that being development. we'd would. very want journey the where location kitchen know, I do and Ghost that high And scenarios. this. seeing But of are, a we it on in, we as as the on at we these work very, oldest get there's happening. not to delivery very volumes than In going it's you're I or to market year those we urban We depending phenomenon the what back per They in point on revenue a our also just our see empirical with initial we're revenue And lower by it's data kitchen. about not think what franchise we'll different we of now, the projection able on

Having So, that results initiative very that we're going a very the encouraged for that, new think very of the in us. to this is interesting by some being we're patient. said seeing locations. And initial we're be strategic we

Julio Ramirez

only where I have to we our -- And the in are is thing to about markets in would our brick-and-mortar. bit a add that shifted that Kitchens -- strategically of we've happen Reef XX%

have, Epic for urban in the areas brick-and-mortar brick-and-mortar in of some -- and where but Reef might the So, more suburbs. doing we we we're suburbs. in example, have And

are out where have markets brick-and-mortar. XX% brand to markets we're don't other where The we trying in

So, versus XX-XX it's not. in about brick-and-mortar areas

Michael Rabinovitch

in ending days. one we or here Peter, openings two through openings, new of June, only Ghosts period open. the the XX we terms in new Most of then, And think the of of happened I last the had -- volume volume have

So, period quarter. in a heavy in third we're with the them here very launch

Peter Saleh

restaurant a helpful. bit was with help basis XX% has Great. XXX the but about level I margins? improved just quarter, know about Can Very talk the about pricing. points of we little there in

drive First, -- seeing you a on in similar I Are can just comment -- little a the similar margin, to franchisees are little can level you think other elaborate pricing? guys initiatives talk those? margin? taking a And they are that improvement restaurant mentioned also bit also a bit helping level of to you

Michael Rabinovitch

Sure.

with at from The a the margin second is the has of the end that from statement. start prospective happened the improvement very we quarter. That prices me price. the -- Let expect taking from increase price

the in going quarter So, quarter third or we not forward. the magnitude see really to expect reflect results that the would second flow-through and

margin. lift, that's supported of than something more that's a current prospective rather the So

And to own their our we've the the with have and of with according have Second, right that gathered intelligence engaged actively to done we expect and strategies. that What suit has though individual trade our markets them. shared the side, them, very own And followed majority continue. a showing have their been is each available will for we've them franchise them areas. team of more their we opportunity price that's them data franchisees on the on

Peter Saleh

I'll just along. questions two more then pass and my on And end Excellent. -- it

relative Are number on loyalty details be they of sort an those maybe spend to on program you how Do loyalty any the traditional they the program, the or customers? customers the and customers loyalty update how us program, frequent? On can perform give of more, within they helpful? more behave would

Michael Rabinovitch

is question. That Yeah. a good

an that I on think developing KPIs area it's we're right now. we where were our at

I about think thoughtfully we want year have in versus able good be on a where them, from to handle we they've come speak to but last pre-COVID.

to ready we about in data to the So, future. talking those we're not yet expect be points, but

Peter Saleh

Understood.

then, guys us out you the help bit going on are putting little agreement? And forward? what you agreements the typically fees any capital or corporate for fees, can Okay. a is licensed upfront franchised just charge all that work this to you Are an licensing international, internationally,

Michael Rabinovitch

the Arabia word Peter, normal a say difficult was that because couple, right? to Saudi we this We have have is Yeah. really year. a signed earlier

have a of a ago. years franchisee Kuwait in We that couple was signed also

to more not by market. drives upfront it And has a have think depend contribution, very So, we're the several been local -- franchise fee thousand the a the that there charged units in they is think, historically The than and million. been half that very typical larger isn't charging. that's brand couple range that much marketing hundred of but it's And of seen, but really ours. driven It's the there's really facts a fund a there we've to on how a lot requirements, I does is open rate a There royalty can they fee normal. many circumstances.

to any and with Your set capital, question economics, is kind we corporate because franchisee. no. corporate very about overhead it capital little the the through don't for up overhead lot of corporate reimbursement of We support supported mechanisms any invest a

Julio Ramirez

and add years Eastern and have great XX with spent previous only would Europe. contacts, thing in business my both Western company over we -- the I conversation the with is, And international and are America Peter, particularly the Latin in having I --

we with. want the interests because we I countries And the so, principle don't don't locked agreements visit working able at see of we the of conversations. were and move my the down basic once hit potential, Look we market. to that XXX the talking off -- having until we to relationships is franchise Many the be the organization COVID. with of sign any the are And great ground dealing and we're are contacts to infection but running, definitely we're

Peter Saleh

very right. Thank you All much.

Michael Rabinovitch

Peter. you, Thank

Operator

Our Please next Yannello Capital. Jay proceed. with from comes question Skyden

James Yannello

guys. morning, Good

we public, people are good going Just a to and coming family over to I there, call kind connoisseurs, my public? daughters love my going see background are then are ago, location and decade your burger really and So, public? of is, Delray you was this visited who numbers When you in when with thrilled guys asking fell you here.

particularly Thank So, position, from I question, on but -- depressed? side a the sales, John at to the she's some contribution if comment And any, can when come brought table? have others date, you. I you was Rosatti what after. few you a the with then Another all as large this stock Stewart's Martha to questions. to bullish on quick comment Can

Michael Rabinovitch

Okay.

shareholders, our strategies may to wouldn't or comment be. hypothesize the us it any of of appropriate for be their On individual sales what

when. say what I terms more But that's with. shareholder, And they I a do not to if so, why, have have -- there. in they're publicly engaged They unfortunately, that selling they're do of don't and -- the report something significant to just requirements we're

question, the On respond. let I'll second Julio

Julio Ramirez

very Yeah. Thank you much.

we've And call board our you actually members every all actually one -- with what done are They -- one, meetings like, us. a we First board first along of we looks innovation and have the topic proud can stuff very up and yesterday, not I in of the one of had in engaged but can our have had skills. of you I tell set Ophir proud members Martha, our board and three have we with glad a had members board tell Martha -- particular we're very every that that have Chairman. very brought to you I'm Martha, of Sternberg, to We're with other Stewart. all, And past, menu with to great her, would the that one thinking. collaborated time. our of the lot great say future, a I've a -- believe strategies, it's we fruits two plans sharing with are her and going in get all, own out of the have and of we're stuff I that on a it's planning relationship we've over

very us. excited working about we're So, her with

James Yannello

Okay. York, Northeast, maybe strategy seems I give know I was in the term a us Can organization? the much that don't of medium the it there if you company, -- your realized but COVID, don't Northeast the is related, what obviously stronger if focus been franchise is didn't now Jersey, but help. given I push an know Northeast long-term stumbling a have New right is to a and backpedaling. public you're in New the word, and parts early then to in

Julio Ramirez

certainly the still York. you this, And already mentioned like here, places presence that before Philadelphia, I we presence grow the And has we seaboard, say suburbs in want tell of would question. have got I Great when think New we presence Northeast. I and Eastern a brand, we a to had in DC, a

that. in very are we interested So,

City, a have a our think is multifaceted, operate lot think brand Manhattan there, only is fit the them has I of Long but looking very I today. New New at we one side Jersey, our not don't where surround but York places in Hudson, strategy boroughs look New some like Again, Island, we that the across York. the Plains, in White well of would that west

slightly we're the the and of we -- looking location, an an shifted area. right decisions, exclusive above the we the have inexpensive at at and we So, the right want you not definitely we've actually not know, We brokers as with the place operator. make that to we're right Northeast is But are the use. of do looking one actually group and only some with recently all deal

And actively in the at so, opportunities and Northeast. company we're both looking franchise

Michael Rabinovitch

And leases more New I development include and signed this of next handful and store's area. Oceania plan throughout York locations do current open think pipeline, year, to a our than for including Connecticut, year

a is there that So, growth region. in

James Yannello

are absolutely tell about to because are someone That's with Okay. the fruit real say good is Shack, your in French would relatives I you your superior superior. the wildly Julio, onion best. can I wildly your rings. time. Northeast, commented among I the you guys on French guys just that five coated others, with fries with serving the fries. them hear quickly, it's that keeps with they're biggest not as to fresh you rivals not challenge fresh. best find They garbage is that And because them your with

what So as crunchy too of is the and Kitchens with going launch Thank in fries? of the them. or challenge on challenge them? want early And don't you're the what operating -- is question forward crispy ramble French at is I Ghost But biggest going long serving it's Ghost here, to last know performance you. the back seeing to Kitchens. your I

Julio Ramirez

Okay.

them. let couple there, me them You heard two-parts take throw so of a as I

recipes company coated me, a even all, I company, reframe French and four in and from of previous trust French First the in between can of -- it have, fries, on, fries, challenge one if just different skin had biggest little my the bit. we we and any is advantage -- fries everything -- that everything

the quite bit summer as I us been we're the the it promoting One premium things French is -- have. for And sauces that get on speak a the that's that products actually one our fries. all thought could of The different that because reality put sauce only people of particular we a our with lot product. you sauces the is have, including all you think we fries we the in of helps can battle

I efficiencies truly on We that. helps Profitality think is which It's fries. phase our We're our And quality is actually constant provide that the middle one in it again, even we else exactly of sauces. that us in [ph] thanks work industry. a the to the improving operations. things what But is an of do to thing with have is, So, world-class for again of hired in a challenge the and company they'll can called be better the kitchen looking a special challenge. two biggest fry, at

there As a lot have would a challenge. you is of fries help sauce a pointed we it our that quite out but have love learned bit, fans out, that and the

but far we that I in Kitchens refocusing -- think a large would a player in with I Reef areas Epic, have which Kitchens, couple working refocusing Reef, Reef where Ghost As them brick-and-mortar. is of on say as the things, and space, opening particularly

Again, little areas I think that's a where the known have seeing is uplift. brick-and-mortar, of sales we early helped because we're bit better there. days us. And brand in

think big I that that's shifts of the made. So, we one

think -- meeting we at now executional work, growth a I almost and that get both that Reef as products by people all like -- the second all accident but is, the There issues. us, at do the and are the the is one with meeting top, really that pizza just with can we our group easier. delivered have tackling

provide working channel experience No great make tougher, quality we use, sorry. matter what a is Ours but you we're have you a hard product. to what little sure --

James Yannello

luck. on Thank guys. so you much. I am Good extremely bullish

Michael Rabinovitch

you. Thank

Operator

Capital. Point proceed. Our from with Please Lion next question comes Chandra

Dan Chandra

to the guys. Hi. the XX you It's Can that Chandra. I given You was the remainder you've to openings for already. mentioned store actually stores, opened Dan it speak of year? eight number Congratulations of XX guess,

about you to talk stores? XX the between the the franchise corporate and more for that's second half. So split XX Can

Julio Ramirez

corporate we literally two under have four the Yes, open nine construction, Yes. as five speak. you. first already can. franchise, we They're We and Dan, quarters. thank to

bring another And in seven are be that already believe have four by are that which in we have under that construction August that permitting, with We would then, well. be XX. about us XXrd, got and the permitted of days. to four we've holidays, typically in restaurants build -- permitted XX as stages to leases And even will of we the our in

the the numbers. we XX end in growing, the two I -- XX that in a had, will operators XX In both -- on great was hit The the we previous side were weeks. which of add day a our ran that. the let that U.S., best the XX focused we development, company where comment. We make we With holidays, very or can at performance restaurants, let's restaurants in operators unit my up We're believe year. total me American, end single can years believe Latin company being,

them. And We're have restaurants. and are a a franchise team is will crew good one restaurant we're situation labor, with them, And ago amazing XX on us going in target name very this environment using construction, up have with every we help of focused those have open construction we'll with company five have again, following a we an with to to there. on hit one challenges of here them. this companies our And go company For XX, construction feat. from challenges year the COVID get you XX the the on a on, different to

Michael Rabinovitch

because The execution of, process. the franchisees XX XX lot And and that to, the Dan, of -- working through we're XX going their managing the are ones XX control that The over directly the is the of GCs. XX. controlling doesn't with and a are they're the it spoke total GCs Julio have timing comprise to -- the where just we the accompany that

have more the regard. a the in we XX to It's or -- in XX. open franchisee in will So, will they comes open a January? little December from fluid That range range of that bit

get that total, November and they between going see an to almost and company the in even terms think of stores I we're split their that get -- provided franchisees open December. In do

Dan Chandra

talk when X,XXX you I said, right? will stores that believe that that But And the you. to you on answer. stuff think construction, then, relates the based this helpful. Thank is is I know That's guess, development open had really had you you, -- that all that's we about you to what and

Michael Rabinovitch

Yeah. That's That would. there beyond signed correct. for And leases that then through April. in January openings additional

Dan Chandra

Great.

question. and Can my next the was question. thinking? that speak So pipeline for what you're to you last XXXX My

Michael Rabinovitch

over leases. little XX about Well, too signed early right to do it's get What now a for have specific. us is comfortable we're talking we

if the eight included so you already in about think that And opened not XX. eights the we've

pipeline opening a quarter be position what our franchisees. lease for store We'll have between to in So, a plans XXXX. our talk in we us are do signed better and about next

Julio Ramirez

pipeline restaurants very big we have folks remember multiunit you've sales, call. and have company would December. opened development -- much signing now, estate public we in as add what additional that, franchise Eastern The We in That's et we We seen I operators, that messaged think for in restaurants on our experienced cetera. us is Dan, franchise focus seaboard, be adding resources I And started And last in and went going -- experience the that. in as to are we're real I actually in going January. on got Dan side, have February. opening result, the a the

XXXX. pipeline. Operations So, to we my we're now, Chief resource for building to bringing help Esposito, that us Jim focused but That's what Officer, in on are

Dan Chandra

for That's Great. me. Best luck. of it Thanks.

Operator

Our with Hamilton. Please next from comes Lynn proceed. Drexel question Orenstein

Lynn Orenstein

for community. Hi, doing questions. the you and to want I the I this thank is And from so back today. all Thank Lynn to clarity help Drexel. much say you're to for you two veteran just give have

to and the on community read website. you're your -- your grow Kitchens strategic you on BurgerFi internal that as I've as Ghost how Do just also, touch is, doing identifying team important vet ESG an opportunities what And are you have your First And to Can your the to so in and you in? I on is know XXXX sales goals of far plans coming how them? for are ESG opportunities? Like, you. vision, Thank beyond? involvement? those all

Julio Ramirez

Thank you Great very questions. much.

the let of all, me address to First Ghost Kitchens. try

little based from a as Reef deal have we side, that a very we're First the from South from from longer folks Reef, with a a Ghost I development that has And worked top in with headquartered innovative top and to have we -- bit of side Florida, relationship right? with at on both marketing one of a than technology south year. geography, -- my we almost side. would couple Reef, specifically different all, departments the company have goes think Florida, happen and back been Kitchens.

the Ghost based with I the is -- franchisee different. that Ghost one, not areas. is Kitchen that's Kitchen. about in So, the does other actually Epic. like only have a is also Reef bit company classic Atlanta. restaurant a parking company, which red the not they're little talked They Epic a lot urban is a Epic into Ghost Kitchens lots, more got in a business. that technology

has at them We're and want Gotham So, do that don't third of to are the That's for exploring we example, We hear but occurred thing. And additional some -- there. with people of have a in the additional talking derivatives truly would urban them, Chicago. about them in in talk area, want actually about type we XX. with And you'll hear are stuff. formats, news restaurant yet, about to City that them. be a companies I have to Think -- Ghost I stuff at don't Ghost an you'll not and what we'll call Kitchen. of There the out Kitchens future. We're other more about quarter. other other more in forefront people of plans

of to address ESG, far I don't as Mike, some that. if want you As know

Michael Rabinovitch

in earlier, restaurants what of in. the we sustainability build our Julio's lot we're a So remarks that

mind under within on depending We a never which you strong of is our have and board, some our a And -- majority support. an also diversity, at regards, how XXX% diversity the the corporate level, diversity. a define restaurants initiative incredibly

keep as outward strategy. to in a continue ways profile more ourselves it as perspective, that forefront we we -- to way. can of those explore the next part our continue we'll explore into From And financial We year. also a

Julio Ramirez

don't can our though design there that I few think their would energy of image done, venture have. to cool -- design years our old, XX as as revised newest even even image is that say efficient the that image their that out we building, years. chains several we've with compares XX tweaks And our interesting even have in with other times there's last the version, compare our It's a I

very the a of we'll project what we're we're if more we're of we're with tweaks at Profitality, look happy the doing environment we have do we're to little it. with doing. to So, current everything very there's we've that. And and can that any happy we adapted proud But how and with some now -- being omnichannel of

Lynn Orenstein

much. so you Thank

Operator

from Our Instructions] [Operator with you. next comes Lauren proceed. question Suisse. Thank Credit Silberman Please

Lauren Silberman

question. Hey, guys. Thanks the for

on anything can across trends, in different is you markets? I on you just share sequential there So, mentioned you're July. trends And believe improvement that seeing

So, any of think seeing that heard improvement, that And from the variant any if signs you I Delta is impact what in do correctly? driving are you markets?

Michael Rabinovitch

questions. those Lauren, good are

about about comments talk made I first me the July. let So,

in June. it, end we price July. to mid that Given a the, been We made we've impact evaluating that call have what would at increase

XXXX then versus And value as our of the to June transaction volatile didn't was number XXXX. so, benchmark. a with and of looked to basis. I that we use very that looked end recover our that, was it comparing looking to and comparing where year at in a we're at going made we've Because a at XXXX, sales July comment average starting the transactions in And down on we've and want to year, the

sequentiality very transaction to June, that. which to our gone -- versus were is our the retail price and or July strong very you in average We number improvement the expect our transaction June, So, my on continues -- on impact value comment increase but and not that the sensitive increase. be is versus are would price going similar we from have transaction from of trends XXXX average would any seen up the have whether not has

And parts was open. seamed also areas your part. network. different venues to six more. areas. of The question airports very suffered that of we different a different do networks of yes, steeper the in close second they're we're parts parts as do coming will our or part network. see and And And about in franchisee was the of in of I for online, and continue different trends quite the because trends of -- franchise are second franchised located licensed Several where still sales they're in they're temporary back first encouraged seven a either back about what in because other quarter, the them Florida physically or in the, see network, quarter, recover We're for the in the some those have in recovered here good network, then, we to where strong the weren't of that there parts -- part made starting the comment and recovery a for slower

prior burger The comparative a not basis of difference. a the meaningful transaction the stores, the of had second across we're trends, but terms the not company on really into the SWAG versus quarter In year a seeing only lot itself. network impact

So, that those I answers think questions.

Julio Ramirez

the asked She's Delta about variant.

Michael Rabinovitch

it variant? our a the news. We It's in it concern. market. Delta The definitely see a concern. see We It's in

that is of haven't anything current change our reflective a We in sale seen behavior. in

Julio Ramirez

our In conservative. masks -- have the think the much of a tourists it dealing with in we're week with of XX% in not of news fluid advance that actually a ultra we've process part of one that's lot that the this in and caution, matches Floridians we're the think having end obviously to morning that though gets I just it with Mike, with. say, we we're Obviously, chains, and And just of dealing heard be to bigger come it, interest wearing the would implemented it. moved attention. Florida, are vaccinated employees had U.S. thing I I -- really any closely. it's working all and of dealing a what I navigating we're that But also number, even Florida But far, so ago. to

it. to been far, able navigate So we've

Michael Rabinovitch

at we're enjoyed from last third-party first party business. point the business when a is, as The of the And our -- digital that And business the we're a but penetration. saw a digital make a in a is and peak already COVID digital retaining XX% we it's seeing high we're COVID, the very business. a digital. Lauren, moderated party then, communities, penetration ensued, third-party we had penetration approximately and interesting of still and We've first numbers bit delivery have significant impacted that. trend trends And I'll on COVID a actually very restaurant

It believe dynamic cost But end different revenue net going a has to in us, we're So, see net-net, pickup for we it, revenue. that. obviously. result in net the it's to happy to

Julio Ramirez

pipeline. do already in one, that restaurants. U.S., the a So, in the what largest trends chain design of of -- standpoint, bigger very the about, right? from opened one them, right? learn we some the players then closely you're We restaurant drive-through piece, number because last already from And have watch the we're we all two one our talking not have So, you

only even also our a in which we're And -- not a be or it drive-through it's more doing space. at other just And looks drive-through. having would that like some pipeline drive-through, have for as something or looking what known park-through -- a chains I but that. think order We started window, a have in people digital

things. very as the best. them think and development generation look first as and second working them box. take So, adapt And at We that we we'll We we the quickly. follower thank buildings out, for we I need that And to with be one and those I need the don't at performing strategy see we're go we best trying do all lot, in are looking so. do chains that the a out fast to a well, be God. of

Michael Rabinovitch

Lauren?

Lauren Silberman

Hello? Hi.

Michael Rabinovitch

Yeah.

Lauren Silberman

Okay.

Sorry.

how I commentary any you I I investments any of you're be thinking mute. about what what And levels and seeing, on in current think half to or are that necessary would versus your labor back ask year. the -- on about wanted helpful. was about the thinking the and comments environment staffing additional you're might necessary be

Michael Rabinovitch

on definitely and the pressure, labor been stimulus of on comment for side the the a wage the this the through Julio impact of seen level. wage at let I'll have behavior pressure, us. the We more operational year, And turnover challenge it's investments.

that results. through pressure into of has our some And flowed

scarcity experience and of labor the side the of turnover it. vacancy because also We environment,

And time cause over sometimes can is level an the that what in store.

in doing that It's is and when can. month, on stabilize stimulus will one end definitely and it some the of top three we year we're hoping some best basis. challenges our the discontinued. of So, transient a month that We're later operational this weekend it's respect

Julio Ramirez

labor, we're obviously companies But different positive couple to one, going carry would Number working get a restaurant store in we The some challenge. brand. have carrying uniquely that, only we labor is our ready. I with it. got the we've a have, add, modes. had -- development many carry having qualified things thing to of we years We're in let's with it is Esposito face experience growth XX Jim while for high for

cool a have We brand.

relevant challenging the a cool for We days. And enjoy that's new brand that's people the in have a think environment. that It's I a brand working very growing. very

If think a closing positive. a that's maybe growing brand and and you restaurants, I have that's not

we our lot proud on doing discounts of a we've the on basis. battle then real done units, that the leadership we thing. think with when and team, and wonderful managers our have the job a have to system a And of management early I'm down helps ton initiatives for I suppliers, entire of got we're particular decision managers. came a our best for has HR and organization, Jim Sketchers, that share And on have stuff Copeland Secondly, we've example, general restricted going organization the Traci we're I that of have. made to secondary with obviously other we only but for in and our to a that from that And recruit department again, very the that's of differentiator it talent not board a type

this of develop some over see months. will the few you next So,

Lauren Silberman

Okay. you, Thank helpful. All guys. very

Operator

closing the now to to Mr. I'd our Thank for back over concludes At session. call question-and-answer you. this time, this like Ramirez turn remarks.

Julio Ramirez

call. third to in moment Thank forward everyone for for take year. quarter joining the look to be when a I of with thank safe. we and you, November speaking report today's want this Thank our you results to you month Shannon. We listening to

Operator

does this gentleman, teleconference. today's conclude and Ladies

this participation. You your for time. may you disconnect your lines Thank at

BurgerFi International (BFICQ) 12 Aug 212021 Q2 Earnings call transcript