ESG Companies, Don't Lead with ESG

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Friends of Branded!

Happy Saturday and I hope you had a great week!

ESG companies, which refers to businesses that emphasize Environmental, Social and Governance (“ESG”) principles in their strategies and operations are important b/c they address the pressing global challenges while promoting sustainable and ethical business practices.

These are companies that prioritize sustainability and ethical practices and are expected to be attractive to investors as well as consumers that are looking for responsible corporate behavior.

Respect, agreed, and all the above is great!

Now the money shot and some unsolicited advice to ESG Companies looking to raise capital - don’t lead with your ESG value proposition.

Instead, lead with your business model, how you’re deliver value to your customers, how you're going to make money as a business, and most importantly, how you’re going to deliver strong returns to your investors.

AFTER, and for emphasis, only AFTER you’ve made the roadmap to delivering strong returns to your potential stakeholders clear, should you dive into the ESG component of your business.

No, I’m not in a bad mood as we kick off this weekend before the Thanksgiving Holiday and to the contrary, I’m in a great mood.

My theme for Top of the Fold this week is completely reality-based.

For Branded Hospitality, 2024 has been a year of ‘special situations’ where we both invested and helped to promote companies that are of course operator-centric, where we believe we have the potential to deliver strong returns, and each company we worked with also has a unique story to tell (value-add) about their respective position in the market.

Some of our 2024 activity includes investments into Shaquille O’Neal’s & Josh Halpern's Big Chicken (emerging QSR restaurant company), John Meadow’s LDV Hospitality , (expanding FSR restaurant company) Wigg’s Civitillo’s Starfish (food traceability), Benjamin Duvall & Brian Goldberg’s Mr Bing (East Asian Street Sauces), and now Adam Ochstein’s Fishbowl (the OG of guest engagement). You'll need to go down to the Shoutout section to learn about Fishbowl!

For avoidance of any doubt, none of the above companies represent ESG platforms and that shouldn’t remotely suggest that these aren’t great people, who care deeply about their teams, operating ethical businesses and most importantly, are all driven to deliver returns to their stakeholders.

ESG is AWESOME and as a graduate of Wesleyan University (the inspiration behind the 1994 comedy, PCU ), I place a big value on the importance of companies doing the right things for the environment and that emphasize inclusive practices.

Branded looks for and leans into companies that aspire to address environmental issues such as energy efficiency, carbon emissions, waste management, and water conservation. We believe in the importance of companies having a positive relationship with its employees, customers, and the community they serve. This includes, but isn’t limited to employee welfare & diversity, community engagement, product safety & quality, and supply chains ethics.

So, with all this enthusiasm and I dare say pride in embracing ESG companies, why am I telling ESG companies NOT to lead with this clear value-add? It’s b/c this is not what will drive capital to your company and b/c you’re not leading with the one thing that investors care most about, a return on their invested capital.

Time for a story and a second opportunity to mention Lin Manuel Miranda’s alma mater, Wesleyan!

In the very early-days of Branded’s business, we owned a seafood restaurant, and I was contacted by a Wesleyan alum that had launched a logistics & marketplace platform whose mission it was to help fish farmers by connecting them directly with restaurants. Seems like an idea worth exploring, a platform that connects fish-sellers directly with fish-buyers and cuts out the middleman (sorry, middleperson, this is a Wesleyan story). ??

CONTINUE READING HERE

This was a fun-filled and action-packed week (sounds like the preview to a movie) and I’ve got a few shoutouts to give! Yup, just a few this week!

Shoutout #1 this week goes to Branded’s newest portfolio company, the OG of guest engagement and the single best way for hospitality operators to connect with their guests, Fishbowl .

Branded was an early adopter of this B2B SaaS platform over two decades ago and we’ve been super impressed at how this company under the leadership of our friend and now partner, Mr. Adam Ochstein, along with the entire Fishbowl team, has worked to modernize its offering.

Guest engagement, personalization, and understanding your guests is one of the most important factoids that is proving to separate the winners from the losers in this fiercely competitive industry.

With Fishbowl, restaurant operators can supercharge its ROI by enhancing guest insights with its Customer Data Platform, Customer Relationship Management system and marketing automation solutions, that are built exclusively for restaurants!

Branded so respects and appreciates how Fishbowl understands restaurants. They know we make money by serving customers, but we maximize value by treating them as guests.

Fishbowl 1.0 was the OG of e-mail marketing almost 25 years ago. Fishbowl 2.0 introduced digital offers and loyalty and now Fishbowl 3.0 is helping restaurants through the power of guest data.

Fishbowl’s newly redesigned best-in-class Guest Relationship Management (“GRM”) platform has revitalized the company and positioned it for accelerated growth. The product offering now allows restaurants to personalize marketing campaigns and improve guest experiences from central repository of more than 150mm guests in its database. Not to get too granular, but Branded believes the revenue from the rollout of these new product features to new customers and its 50,000 current restaurant customers is only beginning to be realized.

It’s not lost on me that on Oct 4th, Branded invested into a company that was formed on October 4th, is pre-revenue and represents the youngest company we’ve ever gotten behind (hello Starfish ). This week we invested into a 25-year-old company, with over 50k customers that has undergone a most meaningful modernization.

Yes, 2024 has been the year of special situations, and unique opportunities that were anything other than business as usual.

That why we play this sport we love!

Welcome to the Branded Family Fishbowl and as you know, we go to the mattresses for our friends & partners!

Shoutout #2 this week goes to our friends and partners at Copia .

Yes, I believe in authenticity and intentionality and there was nothing unintentional about this week’s Top of the Fold.

When my friend and Copia’s CEO, Kimberly Smith, shared an article with me that she’s been working on, I asked if I could publish it in this week’s H^2.? I of course love having guest contributors to this newsletter, but it was Kimberly’s article that was the genesis of the Top of the Fold theme.

CONTINUE READING HERE

Branded invites readers of the?H^2?that are interested in learning more about our?portfolio companies, and?investment strategies?to become part of our?Access Hospitality Network.

LEARN MORE HERE

Featured Episode: Tiki Taco a “Hometown Hero” Scaling Up

Join Michael Schatzberg, “The Restaurant Guy,” and Jimmy Frischling, “The Finance Guy,” In our latest Hospitality Hangout episode, with Eric Knott, CEO of Tiki Taco. Eric shares how a clear vision, intentional technology, and community-first leadership have helped the brand grow while maintaining its authenticity. He discusses the importance of creating a balanced tech stack that addresses real-world challenges for guests, staff, and leadership, and weighs the benefits of integrated solutions versus all-in-one systems.

As Tiki Taco prepares to expand beyond its three Kansas City locations, Eric highlights the importance of staying true to the brand’s “taste of home” identity. He also emphasizes the key role of community support, with Tiki Taco actively donating to local schools and organizations, a practice he believes is essential for sustainable growth as the brand enters new markets. Looking ahead, Tiki Taco plans to add four to five new locations next year, staying committed to the core elements of great food, service, and atmosphere.

Tune into the episode and subscribe to our channel here: Hospitality Hangout With Eric Knott

Re-Run of the Week:

In this special Super Bowl Re-Run episode of Hospitality Hangout, Michael Schatzberg “The Restaurant Guy” and Jimmy Frischling “The Finance Guy” chat with Dave Harris, CIO/CTO at Shake Shack. We’re excited to share the news that Shake Shack is now offered on Delta flights, elevating in-flight dining with their beloved, high-quality menu items. This exciting partnership brings one of America’s most iconic fast-casual brands to the skies, offering travelers a unique culinary experience that bridges comfort and innovation.

In light of this news, we’re revisiting one of our favorite podcast episodes featuring Dave Harris, CIO & CTO of Shake Shack. In this episode, Dave delves into how Shake Shack leverages technology to enhance customer experience and streamline operations, offering insights into the brand's forward-thinking strategies. From the digital infrastructure behind Shake Shack’s success to the ways they continue to innovate in the fast-casual space, this episode is a must-listen for anyone interested in the intersection of tech and hospitality. Be sure to tune in and hear Dave's insights on the episode as Shake Shack continues to make waves in the industry.

Tune into the episode and subscribe to our channel here: Hospitality Hangout With Dave Harris

You can tune in on:

Spotify: Click Here

Apple Podcasts: Click Here

Watch on YouTube: Click Here

Are you loving the Hospitality Hangout? Let us know! Please leave us a review here !

Who Made The B List?

FIND OUT HERE

TECHNOLOGY

Don’t Lose Money: Use Minimum Deal Economics to Build a Healthy Business

By:?Seth Temko, Solutions Services Partner at Branded Hospitality Ventures

If you sell B2B software, understanding minimum deal economics is key to staying profitable. Here’s what it is, why it matters, and how to make it part of your sales strategy.

CONTINUE READING HERE

MARKETING

What Smart Restaurants Are Planning to Do in January

By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures

You know who likes salesy content? No one. No one wants to be sold. We want value, we like offers, we want increase, we need things. But no one responds well to "HEY, BUY THIS AWESOME THING NOW!"

CONTINUE READING HERE

That’s it for today!

See you next week, same bat-time, same bat-channel.

It takes a village!

Jimmy Frischling

Branded Hospitality Ventures

[email protected]

235 Park Ave South, 4th Fl | New York, NY 10003

Branded Hospitality Ventures ("Branded") is an investment and solutions platform at the intersection of foodservice, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its partners through investment, strategic counsel, and its deep industry expertise and connections.

Learn more about Branded here: Branded At-A-Glance