We sit down with Andrew Gruel, founder and executive chef of burgeoning seafood franchise Slapfish, to talk marine biology, a real estate revolution, and what lies beyond the currently murky shores for the restaurant industry.
Interview by Kieran McLoone, deputy editor for Global Franchise
KM: We should probably start by talking about COVID-19, so could you tell me a little about how the ongoing crisis is impacting the Slapfish brand?
AG: Coronavirus has impacted us probably similarly to how it’s impacted the majority of retail. We’ve got 25 locations across the U.S. and each market is a little bit different, but those that we feel we can continue pushing forward with delivery and pickup, we’re doing so. Some locations have shut down, just given where they are in malls or areas where there are usually large gatherings of people and delivery isn’t a strong option.
It’s really interesting because a lot of our stores are not doing as poorly as we’re seeing across the whole industry. Some of our stores are only down 15 or 20 per cent, and we’re picking up all the sales based on just delivery.
When I look for the connections or the common denominator across those stores, it’s all of our stores that have independent, one- or two-unit franchise operators who have always run it as part of the community and neighborhood. We’re seeing the communities rally around them.
That being said, it’s really tough. There’s been a huge amount of layoffs across the organization, unfortunately; both on the franchisor side, and on our store side. We’re just trying to be creative right now: we’re introducing a lot of different dishes through delivery and take-out.
Because schools are closed seven days a week, we’re doing kids-eat-free any day, any time. And then all of the first responders – police officers, fire departments – they eat for free, no matter what.
“Because schools are closed seven days a week, we’re doing kids-eat-free any day, any time”
KM: Let’s go on a bit of a retrospective. What was the journey from starting as a food truck, and then transitioning into a multi-unit, brick-and-mortar franchise concept?
AG: We started as a food truck with the goal of scaling it into a multi-unit franchise opportunity, but I’ll back up even before that. I’ve been in restaurants, hospitality, hotels – mainly on the culinary side but also on the business side – for my whole life. When the economy crashed in 2008, I was in a restaurant company at the time, and they downsized very similarly to what we’re doing now, and I took it as an opportunity to follow through on a passion project of mine.
I was really into ocean conservation. If I wasn’t a chef and I had any clue about science, I might’ve been a marine biologist. Non-profits were still open and money was flowing in that space, so I took a position with an aquarium out here in California promoting sustainable seafood, well-managed seafood, and really just with the goal of increasing the consumption of the right kinds of seafood. I did it by approaching chefs and foodservice operators, because it’s something like 80 or 85 per cent of seafood, at least in the U.S., is served in restaurants.
I started this program that connected me to fishermen and aquacultural operations and conservationists, and that really stitched me into the seafood community very closely. It was from there that the genesis of Slapfish came about.
I realized that there’s this huge void in the culinary space when it comes to seafood. On one end of the spectrum, you’ve got your fast-food, greasy fried fish sticks. On the other end, you have fine dining and white tablecloth. But if you want good seafood, there was nothing in that sweet spot in the middle. Like we were seeing with the better burger and better pizza brands, that industry was popping off coming out of the recession.
Fast-forward to 2011. I put together the business plan and the idea but at that time, and with the economy, going to somebody and trying to raise half a million dollars for a brick-and-mortar with just an idea on the back of a napkin without high net worth was just laughable.
So I leveraged myself out, took the max out on all of my credit cards, and I went and essentially borrowed a food truck from a lot. I went to a guy and said, “hey, give me your food truck for a week,” and then I connected with all of the local fisherman I’d been working with and started serving lobster rolls and fish tacos off the food truck. I did all the traditional things – tweeting out my location and connecting with the organization and community that I’d built through that seafood program – and we went from one to three food trucks over about six months.
As the weather started to get worse in California, I knew I had to make the transition from food truck to brick-and-mortar right away. I was on a mad-dash hunt in October of 2011 to try and find a brick-and-mortar location, turnkey, that I could buy from somebody and flip into our first Slapfish location.
KM: What’s the story behind the brand’s unique name?
AG: I love onomatopoeia, and we’ve got fish so fresh it’ll slap you. The real truth behind the story, though, is that I started the brand under a different name – a horrible, trite name. I was the cook, baker, and candlestick maker, so when we were on the food truck I was breaking down all of the fish. I remember one day, one of my other cooks was just slacking, and jokingly, I took a fish I had and slapped him in the back of the head with it!
I kept telling everybody that story, about how I slapped him and he’s laughing, and then he slapped me; after telling that story 20 times, there was a eureka moment when it started to ring in my head: the Slapfish idea.
“I remember one day, one of my other cooks was just slacking, and jokingly, I took a fish I had and slapped him in the back of the head with it!”
KM: So after those domestic brick-and-mortar locations, you’re now operating in London as of 2019. What did the steps to that look like?
AG: Before that, we actually did open a location in 2013 in Dubai. We had a partner in Dubai who bought the brand with an attempt to relicense the brand into the market. In Dubai in 2013, restaurant brands were being snatched up. We had a very wealthy partner who took on the brand alongside others.
It was a beautiful location and actually very successful, by numbers, but the partner lost his interest in the restaurant industry. So he ended up flipping it and turning it into a local seafood joint.
As much as we were disappointed and we had a large growth plan through the Middle East, it was still a great learning experience for us to learn how to translate the brand into an international market. We put that on the shelf as a goal, and as we were growing domestically as a franchise, we were always thinking about what the next market we could translate Slapfish to internationally.
We met a great partner in the States who was from the U.K., who was interested in taking Slapfish into the U.K. That relationship really developed, and has resulted in our first beta test location in Camden. We’re looking at other locations throughout the U.K. and want to continue growing internationally now that we’ve hopped over the pond.
KM: From the more operational side of things, do franchisees have control over their supply chain, and how they procure seafood?
AG: There are two parts to it. They do rely on us because that’s really a lot of our secret sauce and that’s where I spend a lot of my time: meeting fisherman, going to aquaculture operations, and contracting with the fishermen and creating those strong relationships that we leverage into our supply chain. We’ll actually buy in bulk a huge proportion of our fish, and we can then distribute that throughout our franchise system.
But also on a local level, we do have relationships with docks throughout the United States where our franchisees can call up the docks or the brokers, and order whatever they want that’s wild, local U.S. seafood. We don’t allow our franchisees to just go rouge and buy whatever seafood they want, but we give them a framework of sustainability in which they can operate.
Here in the U.S., we have a strong fisheries management program, so we can essentially accredit our seafood. So if our franchisees want to get four or five species from their local waters through this network that we’ve given them access to? They can go ahead and do that.
The beauty of our menu is that you can exchange and interchange and plug and play different fish into different dishes. So when you come into a Slapfish, you’ll have a list of all the available seafood; one day I can pick black sea bass caught off the coast of Massachusetts for my taco, or if I want to have Californian rock fish on my fish sandwich, I might be offered that in Southern California.
For a lot of our items that are our static menu items, 60 to 70 per cent of that are those seafood species that are coming in from the relationships we created, dropped into the franchisees’ distributor. So it’s a healthy mix of: if you don’t want to be creative then you can just get exactly what we’ve told you to, but if you want to play in with a lot of different local fish, you can do that.
KM: Sustainability seems like a real backbone for the brand; what other aspects appeal from both a consumer and a franchisee perspective?
AG: Sustainability is huge, and we’re also a real community-driven franchise. For us, when it comes to the control that the franchisee has, we want a lot of franchisees who are going to control their own market and their own stores in terms of working within and with their local community.
To the point about ‘do they have the opportunity to bring in their own fish?’, we don’t really have many black and white answers, so it’s not always a yes and no. We have a ton of franchisees who bring us new opportunities; whether it’s products, vendors, community ideas, marketing ideas, relationships. We let them beta test them and about 50 per cent of the time, we take those ideas and weave them into the franchise enterprise.
We’re at a young, exciting stage right now where we’re looking for young franchisees who are active and creative, and are willing to work within our growing structure from an ideas perspective and an execution perspective. That’s another pillar of our brand right now that’s really exciting: I don’t mean young in the sense of age, but young in the sense of entrepreneurialism. If you want to drive a vision within an existing framework, then we’re the franchise to do that within.
“I think there’s going to be major opportunity to take second- or third-generation spaces for pennies on the dollar and turn them into goldmines”
KM: What does your ideal franchisee look like right now?
AG: Number one, they’ve got to appreciate and understand the brand from a seafood perspective. It’s not a turnkey, plug-and-play brand. They need to know it, eat it, breathe it, sleep it – really get into the brand DNA. Understand the ‘why’ behind everything we do.
We can usually pick up on that throughout the first discovery days. Once we get through that, we get to questions like ‘How are you operating the brand?’ and ‘Who’s operating it?’. We’re really looking for operators that are willing to get in and work the brand. Be creative. Be reactionary, flexible. A year ago I could never have described the scenario that we’re living in now, but I’m looking at our franchise partners and some of the ways that they’re navigating through this crisis that we’re in, and I’m so proud of the partners that we’ve picked. I’m so proud of the ways that they’re dealing with these issues rather than throwing their hands up and saying ‘handle it’ to us. Given the financial situation right now, I know that there’s a lot of brands that are doing that.
We’re looking for people who want to act like an independent operator but still operate within the framework of a franchise system. There are certain qualifications from a financial perspective and a goals perspective, and those things need to be aligned.
KM: And is franchise recruitment still a focus for Slapfish, amidst everything happening with the industry as a result of COVID-19?
AG: It’s certainly a focus. Call me crazy, but I look at situations like this and try to pick out the opportunities. I think that there’s going to be major opportunities when we come out of the other side of this in so many different arenas. From a real estate perspective, from a franchisee perspective, from a product perspective, and from a marketing perspective.
Part of this is also a clean-out. I don’t want to say that in a negative way, but let’s look at it from a real estate perspective: landlords were just so incredible arrogant the past few years. There was no relief, exorbitant prices, and they weren’t working with us in partnerships.
They were just getting stronger and stronger or just flipping properties and you’re dealing with a faceless landlord. That’s not going to be the case anymore. I think there’s going to be major opportunity to take second- or third-generation spaces for pennies on the dollar and turn them into goldmines.
We as a franchisor are all about that. We’re not going to say, ‘you’ve got to have this 1,800 square-foot shell and then invest $600,000 to do the perfect model.’ We’re scrappy. If we can back into an existing 1,200 square-foot space that has a kitchen and a hood, and slap up some Slapfish branding and put lipstick on there for $75,000, then let’s do it.
That’s where I’m excited from a franchising perspective; it is for all of us to pick out some of the major opportunities coming out the other side of this.