Andrew Guy has been in the business for more than 30 years and knows it inside out. Mark Wingett finds out what it takes to succeed in a sector that is becoming tougher in which to make your mark.
With 36 years in the eating and drinking-out sector, it is no wonder that Andrew Guy, the chief executive of Ed’s Easy Diner, has an encyclopedic knowledge of brands, people and trends, which he has put to good use in turning his latest business into one of the UK’s leading growth brands.
First, a sobering thought for all aspiring operators from someone who has been there and got the T-shirt on a number of occasions: “These days things that used to make you stand apart, all they do now is entitle you to be in the race,” says Guy.
“I say to our teams, great hamburger and all the trouble we go to make it, the décor, the music, all the effort we put in to get things right, think of it as a 100m race. All that we are doing is entitling us to be on the start line. That is not going to win the race for us. If we don’t do all those things we are not even entitled to be involved.
“And then it is up to the other, less tangible things, which include great service and building name and reputation, to determine how we do in that race.”
Ed’s – with 34 sites in its core business, and trading well, with another 20 lined up to open before the end of the year, plus talks on a Middle East launch at an advanced stage – is very much in the race.
The success of the 1950s-influenced burger chain saw it top the AlixPartners Growth Tracker last year, while this year’s performance cemented its position in the higher echelons of the tracker at number three behind BrewDog and Bill’s, with a three-year CAGR of 108.5%.
Late last year, the company, which believes there is potential to operate up to 150 sites in the UK, appointed advisers to investigate its financing options, with a sale process targeted for the final quarter of this year. Unsurprisingly, this has led to speculation regarding the group’s future, Guy is quick to shoot down rumours of a deal with The Restaurant Group (TRG) and any plans for an IPO.
He says: “Some folk came from the City to discuss that option. I have been there before and you have to take a long view. Our board is of a certain age and you have to remember that the float isn’t the be all and end all, you have to float it and build it.
“Even if you have a successful brand and the float goes well, you must have a few years to let it blossom, if the City allows you to. We don’t have the inclination to do that.”
Therefore, private equity is in pole position to aid the next stage of the group’s development but, as Guy admits, the board is of a certain age and surely new owners would feel happier with some new blood being immersed into the company’s culture. There can’t be many better mentors to work under than Guy, who says: “We are certainly at a point to have a conversation around succession planning. That’s not a cue for head hunters to get in touch because they do already. Most of the people that get introduced to me have already worked under me before! We will start getting into that situation very shortly.”
It is obvious that Guy and the business won’t be rushed on either its investment decision or bringing new expertise on board, especially with such an ambitious openings target still to hit.
He points out that business has been good since the turn of the year. “It has followed the usual pattern, nice steady run into Christmas, January good for nothing, but isn’t that always true? However, what has been remarkable is that our regional stores have held up well.”
While everyone else is fighting to get a foothold regionally, Ed’s is well down the track in this particular race. Guys says: “Diner number seven was in Cardiff, that was the leap. We were already with Intu in Lakeside and it offered us a great site in St David’s. That was a landmark moment, is it going to travel? Will it work outside of London? Now, of course, it is a rarity we do anything in London. We will only do London if it is opportunistic.”
Of the 20 or so restaurants the company will open this year, four or five are with a new landlord, the rest are with established partners. Guy says: “They are coming to us and saying ‘do you want to look at this site?’ The guys at TRG are right when they say that if you have a good, trusting relationship with landlords and developers, half the battle is won for expansion.
“As you expand across the country, there are two things that help drive that; one is when you have reached a point when your name is ubiquitous, for example Frankie & Benny’s, which will open its 250th site this year, where your reputation proceeds you. The brief I got when the concept was created was to do three! The other is you are doing something where it is immediately obvious what you are. I remember years ago, Phillip Kaye saying to me ‘Andrew, never sell anything you have to explain’.
The thing about Ed’s is you don’t have to explain what a diner is.
“On top of those two things, you also have to make sure you have the right product. We have our burgers delivered fresh overnight to all our sites, whether it is Plymouth or Aberdeen. You have to do that and do it well, but even that is not an exception, because everyone is doing the same thing to the same high level.”
Focus for expansion will be on the group’s core brand, despite it operating a number of stands and concessions. Guy says: “They are great for brand awareness and make some money but we have learned that we need to put them fairly close to a ‘mothership’ diner. We tried them as stand-alones but the costs were too high, you can’t afford a manager just to do milkshakes, so we don’t count them in the numbers and we won’t do too many more of them.”
Guy admits it will be quite a task for his team to do the 20/21 openings this year, but say they are “up for it”. “There are some fantastic young people working for us at present,” he says. “They do it all on energy. We pick our openings teams from our management team. We don’t have an openings team, because they get stale and cynical, and everyone else feels excluded. We have a blend, you have to have that local connection. I can’t keep up with all the people we have in training, but I make a point of trying to introduce myself to all of them.”
The tireless Guy is too modest to admit it, but Ed’s currently owns the diner space in the UK and there are no signs that it is set to relinquish that position any time soon.
As he says: “We are in among the big brands and we are holding our own.”
