Today’s fast paced lifestyles are making fast-casual restaurants more popular than ever; and Noodles & Company is no exception. Founded in 1995, this less than 20-year-old restaurant chain has grown revenues to over $350M by focusing on a simple idea the founder had after spending time in New York City. If you’ve ever been to New York you know the variety and options are endless. Asian, American, Thai, Mediterranean. You name it. There will be a restaurant that serves one particular type of cuisine, but what if everyone you’re dining with wants something different? Realizing there would always be a winner and a loser in this situation, Noodles & Company set out to combine all these flavors under one roof, starting with the most popular noodle dishes from around the world. Since then, Noodles & Company has evolved and now offers their guests even more options including soups, sandwiches, salads, etc. All of which can be customized to meet the specific needs of their guests.
With a Noodles & Company restaurant right in our backyard, the National Center for the Middle Market sat down with President and Chief Operating Officer, Keith Kinsey, to learn how this growing restaurant chain got started and what middle market executives and students can learn from its success.
Q. What would you say Noodles & Company does better than anyone else in the industry?
A. One of the keys to success in the fast-casual business is the ability to source the freshest ingredients, provide a broad array of choices that can be customized on demand and do it all in a timely manner. That’s really what separates Noodles & Company from others in the industry. We pride ourselves on having the freshest ingredients and making sure each guest’s dish looks exactly like the picture on the menu.
Q. Over the past several years Noodles & Company has experienced steady, double-digit revenue growth, which by our standards, classifies them as a “Middle Market Growth Champion.” What factors would you say have been instrumental to that growth?
A. The core of any business is its people. Over the years we’ve really made sure we have the organizational structure to support our growth whether it’s the individuals who run our restaurants or support them through functions like human resources, construction or real estate. You can have the best strategy for growth but without the right team behind you, achieving those strategic goals and sustaining them is impossible.
The second factor that has really contributed to Noodles & Company’s success is our ability to source the right sites for our restaurants. We know where to find our guests and the right locations for our restaurants, which comes down to a deep understanding of the specific elements in our business and where they will work best. When we are looking for a new location to open a restaurant, we make sure we have the right type of day time and night time population, like our restaurant near Ohio State. We have the student base but also the right mix of retail stores around it to attract the guests who will be most interested in our food. Attention to detail is key and making sure you check off all those boxes: people, customers, real estate and even the capital piece. That’s where companies like GE Capital come in by making sure you have wherewithal to grow.
Q. Maintaining the culture is a huge challenge for middle market companies, especially those undergoing periods of significant growth. How would you describe Noodles & Company’s culture and how do you maintain it?
A. Not unlike other middle market companies, Noodles & Company places a strong emphasis on our core product. In the restaurant industry it just happens to be food so the first thing we do is make sure we always keep our people focused on the food. I think one of the beautiful things about Noodles & Company is when you go into our restaurants the individuals working there are really foodies. They care about food and what they are selling. They want to understand the different ingredients that go into each dish and really have a passion for food.
We also place a strong emphasis on serving others and make sure the individuals in our restaurants find value in that, whether it’s delivering dishes to tables, refilling drinks or helping a family with their little ones. For us it’s having people that care about serving others with purpose. At the end of the day our employees should feel good about the food they served, the people they interacted with and the service they provided to their guests.
It’s definitely a challenge but going to the restaurants and spending time with the teams, especially when we are rolling out new items, allows us to interact and help them understand the mission and values behind the organization. We also have a company-wide summit every two years for all of our managers where we come together to talk about our culture, the future of the business and what new culinary innovations are on the horizon.
With just over 8,000 employees, 700 salaried and 7,400 hourly employees, it comes down to communication. We make sure our employees have the same vision upper level management has for the company which is what you would do in any family.
Q. How do you gather customer insights and translate those into Noodles & Company’s strategy?
A. We do a couple different things. First, we have over 900,000 people who are part of our e-club. They are loyal guests who really want to see us succeed. We communicate with them one or two times a month but the dialogue goes both ways. Their feedback is really where we get our base data as to what’s going on and what our guests are expecting.
We also encourage our guests to tell us about their visit and collect their feedback on our website, noodles.com, which is particularly valuable when we are rolling out a new dish or an item available for a limited time. We also teach our teams to gather feedback while guests are still in the restaurant. If the shift supervisor or manager notices, for example, someone is shoving their mushrooms to the side, we teach them to go up to the customer and talk to them and find out what’s wrong. Then, what’s great about our culture is we will fix any issues right then and there. That’s our dish guarantee.
Last but not least we have a really, really, strong culinary/marketing team that focuses on the trends, in the industry and in total, and how we can apply those to Noodles & Company.
Those four different pieces help us stay on trend but also consistent and relevant to our guests.
Q. What investments are you making in innovation?
A. For people, we do it through training, leveraging videos and new technologies.
On the guest side, we do it through our online ordering system. It’s one of the most effective ways for a guest to order because it’s almost as if they have a register at their fingertips. Our iPhone app is so strong you can literally customize whatever you want, set the day and time you want to pick it up and skip the line by going to a dedicated register for takeout. We really value innovation that puts control in the guest’s hands.
We also work with our suppliers on developing new dishes to ensure the best taste, texture and flavor profile, whether it is finding the best gluten free noodles or ensuring the freshest vegetables. Working with our suppliers also allows us to leverage seasonal ingredients in unique ways to provide innovative dishes that are available for a limited time.
For us there is food innovation, which I mentioned, equipment innovation, which allows us to provide faster service without losing the quality of our food, and also service innovation, which ensures our guest have the best experience possible.
Q. What are some advantages of working at a middle market business?
A. One advantage is the flexibility. You typically have a smaller core team, which gets together more frequently and, as a result, can make and execute decisions quickly. The second is opportunity. For example, in the restaurant industry that first period of time when you are running a restaurant is challenging but the skills you learn can be applied within any business. You can go on to manage multiple restaurants, a region, or go into specific functional departments of the business like marketing, IT, finance or construction. The opportunity for an individual that has the drive and skill set to learn is phenomenal in the middle market, especially because so many of the companies are growing. So I’d say because of the growth, because of the opportunities and the fact you can make an impact quickly.
Q. What advice do you have for other middle market executives who are looking to grow their business?
A. I think, especially for middle market companies, it’s about making sure your organization is ready to grow. Really make sure you have the structure in place that will allow you to take care of where you are today but also where you want to go. Make sure it not only aligns from a people and capital perspective but also from any other resources you may need to fulfill that 3 year strategy. As I mentioned previously, communication is key. Make sure you have the people in place to execute the strategy but most importantly make sure they understand what success looks like at each point along the road. Take time to reassess what you just did and learn from it but always keep focus on that 3 year plan.
Q. What’s the next big thing for Noodles & Company?
A. Right now we have so much opportunity to expand into new neighborhoods across the country. We have about 400 restaurants now, so our focus is really on continuing to grow. We feel very comfortable with the idea of getting that number of locations up to 2,500 in the future. We will remain focused on continuing to build strong teams, delivering the best dishes possible and staying relevant to a broad customer base.