Ashish Tulsian:     Hi. Welcome to Restrocast. Today my guest is Dan Mesches. He’s the CEO of Sprinkles. Dan has done almost everything that a restaurateur believes they need to do in life, right from working in other restaurant groups to building his own, exiting to a private equity and then getting back on the saddle to help scale, run other brands. A lot of insights on not only how to scale brands, but the power of compassion and care for not only what you do, but also for the people you work with. A lot more on this podcast. Enjoy. 

Welcome to Restrocast. Thank you for doing this. Really excited to know your journey and we’ll, we’ll dive straight in. 

Dan Mesches:   Perfect. 

Ashish Tulsian:   You know, I’ve been a restaurateur and that was an accidental one. I thought restaurant is the easiest business on earth. You know, I never saw restaurant owners at the restaurants. I saw somebody else managing somebody else cooking, somebody else coming and eating. I thought, this must be the coolest business on Earth. And I fell in only to discover the other side of it. My belief is that nobody in the right state of mind enters the restaurant industry or rather not, definitely not by choice. Yeah. 23 years plus for you. What’s what’s the story here, where it all started?

Dan Mesches:      You know, you know that we have similar beginnings probably on this and you’re right. Listen, you look at it and you go, This is simple, but the truth is simple is hard, right? Few variables that blow up into a million variables. So it’s tough for me. I went to college and grad school for a totally different field. Always worked my way through in the business. In fact, I grew up in the Hudson Valley in New York, a little bit north of Manhattan by the Culinary Institute. My parents would always tell me, You love food. You should do this. Probably the reason why I said, no, I’m not going to do that. But when it was all said and done and I was like. 

Ashish Tulsian:     Like rebellion.

Dan Mesches:       That absolute rebellion, you know, when it was all said and done, I loved it. And then I looked back and it was hard for me to put together the pieces. I just thought, Oh, I like it. I’m passionate. I want to do something I’m passionate for. But if I really look back and it’s like, this was my path. My grandparents on both sides are immigrants, one side on Russia, one side on Italy and not a lot of money and food really meant something, right? And it not only was about nourishment, but it was status. It was everything. And so when I was a kid, I spent a lot of time with my Italian grandmother who would take me out in the fields and say, let’s pick this and let’s pick them. I mean, do we have to let’s just go to the grocery store like everybody else?

And what I didn’t realize at the time, that that was really a base for my future. And when she would say things to me like the tomatoes don’t taste like they used to, or this lamb doesn’t have flavor. As a kid, what are you talking about? You know, and and obviously we found that with mass farming there, there is that issue. And so through all of that, that really imprinted on me and really changed what I was going to do for my career, obviously, and also led me on on my path.

Ashish Tulsian:     Interesting. So. So. So you went to the culinary school or you…

Dan Mesches:       I did not. I went to undergraduate school for political science and grad school for international relations. And but always just whether it was working in a restaurant, a bar, a cook, a bouncer, whatever, short order. Those were all the things that I did. And I realized, wow, this makes me happy. And it’s hard. I mean, we listen, we all have friends, and some of them are passionate of what they do. And you can have great conversations and some of them aren’t. And and I’d hate to go through life not being passionate about what I do.

Ashish Tulsian:   Absolutely. I’m going to double click on that later in the conversation. But but where it all started, like what was the first job at the restaurant post? I mean, I’m not talking on the part time pieces, but then you know what is real first restaurant experience?

Dan Mesches:   Sure. The real experience, besides all the part time jobs from when I was high in high school leading up to it, I was back in New York rewriting my thesis, and I talked to some guys that had a new restaurant, and I said, look, I need a job while I’m doing this. And they said, the only job we have is a cocktail waitress. I said, Well, I can I can do that. I can I can sling cocktails. And two weeks later, I was GM of their new location. Wow. So that was that was my start. I realized and I learned a lot working for an independent. And you really learned about cash on an everyday basis and the pressure behind that. But for me, I knew if I really want to make this my career, I had to move on from there to a large company and understand the corporate side of things. So a couple of years after doing that, I was recruited to move to Washington, D. C. for Marriott. It was in there a restaurant group, and one knew it was a restaurant group, a Marriott. It was polished, casual and a lot of different concepts. So I was very fortunate. 

Ashish Tulsian:   That was that was when you were not really, you know, from hotel management or, you know, from from a formal education background like for to get into the Marriott, what was it about? 

Dan Mesches:    So I was recruited by someone who is now my mentor. I’ve been fortunate. I’ve had great mentors in my career. So I was recruited to be an assistant manager in the restaurants and come there my first day. I remember my first day of training was peeling shrimp for 14 hours, you know, and I loved it. And from there I did. That’s where I learned the structure. And not just the restaurant business, but the business of restaurants. I was fortunate. I got to go through a series of buyouts. I got to work with a bunch of different companies without having to go to another company and, you know, at a young age had a lot of responsibility, probably more than I should have been given at the time and had about half the country and for this group and realized that although I really enjoyed it and it was great..

Ashish Tulsian:  That was Star Restaurants Group.

Dan Mesches:   You know, that was that was before that. This was a company that got bought out few times. It was Gilbert/Robinson in the beginning which created Houlihan’s. I wasn’t on that side. It was specialty concepts and then just grew from there. And the way that management buyout and we led the company called Creative Restaurant Management. But what I realized that is I was learning a lot, but I really needed to go someplace else to learn more. So it’s fortunate. There was one company that I wanted to really work for in the U. S. and that was Lettuce Entertain You based out of Chicago, and they were starting to open on the East Coast. And I was fortunate I got hired for that to help open up the East Coast, moved to Manhattan. My wife and I, we didn’t have kids at the time and had a great experience working in Manhattan in my string of buyout stories. That division got bought out and I became VP of a group in Manhattan and had about 30 or 40 restaurants in my group.

I loved that, but really wanted to, instead of just saying I was an entrepreneur, really wanted to be one. So did move back to D. C. not that long after starting my own company Star Restaurant Group. We were very fortunate there. We had a great team, but we had from Esquire, the best new restaurant to another one was Condé Nast, one of the best known in the world to Gourmet magazine, one that had a hot new concept and on and on. But it was just a great energy with great creative people. And through that, we had everything from food trucks to bakeries to high end dining to catering, and we had a series of restaurants around the D. C. area. The last one that I did was called Potenza after my grandmother Italian with a bakery, fresh meat, pasta and wine store. So it’s fantastic. And through that, I also, we had a consulting company that just came by accident, really, and we were fortunate enough to be able to consult at our executive board level with companies like Ritz Carlton, Outback, Harley-Davidson, Delaware, North. So it just it turned into something because we weren’t blessed. We weren’t the Ivory tower guys. We were the operating people. And so we were doing restaurant concepts or RFPs or beverage programs or training programs. 

Ashish Tulsian:   And we were running that company and was like,

Dan Mesches:     Yes. So we had the restaurant side and the consulting side, which was I was CEO of both. And, and we just had a great team of people that could go back and forth between those. I sold the restaurant side in 2010 and kept the consulting and continued then to work with private equity on emerging brands, which was just a phenomenal experience. Moved from Washington, D. C. to Austin for one of those emerging brands called Hopdoddy brought that. I came aboard when the third had just opened, bought in private equity a year later, grew it to four states, took the opportunity to cash out, and then moved on to Sprinkles, where a 17 year old brand now but we we treat it like it’s brand new, brand emerging brand has a great history. The founders did a phenomenal job, but we’ve been able to kind of turn it on its head and how we we get things to our guests. So that’s the long and short of that story there. 

Ashish Tulsian:  That’s that’s phenomenal. And thank you for making it sound like a cakewalk like that. That was absolutely smooth. But I’m going to pull you back to the you know, the first one. I see this, you know, the common, you know, thing and how you stated, you know, having great mentors as well as, you know, how the first break into the restaurant space in two weeks you were a GM tells me that you’ve been high ownership. You know always you talked about that you always wanted to be an entrepreneur and you later started your own company. But I think being the GM of a restaurant are being on the management side. In the restaurant is like is probably the craziest thing everyone can do to themselves. unless that’s the that’s what they love. That’s their poison. So my question to you is how much do you relate to this aspect of just being high ownership all along in life? Is that the right characterization of? 

Dan Mesches:  Yeah, absolutely. Listen, I, due to this day, I mean, what I love most is being in the field where you feel that, right, where you feel that ownership, it’s so easy to get insulated in the office and nothing against what goes on in the office. Right. We need all that. But the truth of the matter is, the field can keep on going without the office. Right. But we can’t keep going without that. And people forget that sometimes, you know, the old tail wagging the dog. So we don’t want of course, we never want that to happen. But honestly, that’s where all the fun it’s all right. I mean, you feel the energy, right? The pulse. You know, it’s a frenetic business, you know, And it’s one of those things. It’s hard because you always feel busy no matter what, whether you accomplished things or a whole another thing in a day. But that high energy that you get out of that, that those emotional connections with your team, with your guests, those are everything. Those make, listen to me It’s on a higher level. Those make life really rich and rewarding. And they’re they’re just they make up for all the difficult parts of the business. But, you know, anyone that’s in business or whatever they happen to do, if you’re passionate about it. Right. It’s difficult. 

Ashish Tulsian:    You know, my my experience as a restaurateur and I was an accidental one. I told you, you know, I was telling you about, I, I jumped into it like, you know, like an investor. I thought, this is going to be the easiest thing and somebody else is going to take, you know, do the turnkey project for them because they’re just going to masquerade around as the owners of this this restaurant and that’ll be cool. And then and but my experience of the restaurant floor was it was absolutely crazy. And I personally I am a high ownership guy and like if I’m somewhere, It doesn’t matter whether I own the place or not I’ll own the situation. I’ll I’ll try to fix stuff. And I remember the restaurant, When I tried to do something. Actually, I was the bottleneck. There, there was a time when the staff basically requested me to get, you know, can you please take yourself outside the kitchen and please just don’t come in the way? And I you know, that was the day I realized that, oh, there is something beyond ownership. And that is, you know, this this organized chaos. You know, how do you how do you navigate that? And then the other piece was when I dealt with the end consumer. You know, and the psyche, the the psychology of end consumer, you know, how picky they can be and how ruthless that at times they can be only because they want to have a certain experience, which you promised, you know, from your brand side. I could never understand which part I loved or which part I hated. But but I’m going to put that to you. What was what is your poison? What’s .. ? 

Dan Mesches:   You know what? I, like you, It’s a tough balance. I like I love being in the dining room, talking to those guests that came in and whether it was a star athlete, a movie star, the president or the person down the street. Right there was that same energy behind making sure that when they came in, they felt like they were at home and they were spending their money. Right. They wanted to have a good time and maybe they had a bad day that day and already came in in a bad mood. Or maybe it was a special celebration and you had to make it so they would go, I’m telling my friends, and we’re coming back tomorrow. That’s that’s a great challenge. And honestly, sometimes, you probably experienced this too. One of the tough things is when someone has a problem. right, But one of the great things is going to that person that has a problem and then winning them over for life. That to me is the biggest opportunity that you can have in the business. And through all that, right, you have a team that’s doing this right. It’s not you. You know, early on, it feels like it’s you. Right? And that’s and then you realize kind of like what your staff told you. I’m in the way, I’m screwing this up. And that’s a really hard lesson. Certainly took me a while on that one. And one of my mentors, I asked him a question one time and very successful, and I said, How did you do this? Right? You’ve created these companies. You’ve been a founder, CEO, big company. How how do you run that when it’s kind of your baby and his answer backwards? Look, I’m always going to think I’m the best at things. That’s my my ego, but I’ve hired great people. I’ve got to give them an opportunity. And that really clicked with me, right? The opportunity don’t get in their way. Help mentor them, but don’t get in their way.

Ashish Tulsian:    Absolutely. And I think I think, you know, on the guests, I you know, when you when you talk about winning them over life, one thing that I found crazy from my own experience was and that was a revelation for me. I remember this was my restaurant back in India and in North Indian, the of Lentil, you know, that’s called Daal. You know, that’s a staple of most of the, you know, Indian people will have it every day for a meal. And I remember one day this customer, you know, came and he was super angry. You know. And I by chance, I entered the restaurant right at that time. I walked up to him and I said, you know, cool down. What’s wrong? I said, well, your your dish, the daal it doesn’t taste as good. I was like, Oh, And we had changed the chef, you know, two days, you know, just just before that And I tasted it And this was a better one. And I tried to convince him. I said, you know, sir, this is actually a better daal than, you know, than the previous one. And this guy shouted back at me and he said, You know what? I don’t come to your restaurant to have a better daal, I come to your restaurant, to have the same daal. And and that was a shock because that day I got another insight and I was like, oh, man, that’s true of customers and not coming to you. You know, you cannot make that experience of food better without their permission. They come to you because they imagine your food, they exactly know what to expect and you have to deliver exactly what you delivered last week or last year or last month or last day, you know, a day before. You cannot improve it. You cannot degrade it, nothing more, nothing less. What about the consistency, what’s been, you know, what what what’s been your experiences with something like this. 

Dan Mesches:   Yeah, very similar. Listen, Consistency is everything, right? You’re right. And people are going to remember how they think they had it no matter what. But but the hardest part is our products change, right? And so how do you make that consistent when maybe the tomatoes aren’t quite as ripe or the meat is a little more sinewy or whatever happens? And that’s where you really have to work with your team and train that team to have the right to within the framework, make sure that we’re we’re still hitting on that. It’s, it’s incredibly difficult to do that. And, you know, but I think this whole story on this starts with training starts with giving people a reason to to work in that environment. Being proud to work in that environment. Because, you know, we talked about that should be simple, right? Hot food, hot cold food, cold, friendly in a clean environment. That sounds like that. That’s really simple. Well, remember, you’re starting with that every day. It’s new every day. Not a lot of businesses start brand new every day. And that means the variables that could go make it go one way or another are just they’re almost uncountable in a day. They’re infinite. So what what makes that work? It’s the culture that you create. It’s making the folks that are in there proud of it. And even if, you know, as sometimes happens, often happens in the restaurant business, that job is a starting point along the way for people. And something else. Still, how can you make them in a be in a place where they know I’ll do whatever it takes? I really care.

Ashish Tulsian:   But but if I if I jump to the current, present day and you know last I think that’s more than a couple of years actually people in the restaurant space, you know, mostly it’s a pit stop. It’s a side hustle. And not only in the front of the house, but even, you know, in the back of the house as well. Plus loyalties, you know, our I would not really say that they’re not there anymore, but I think way less than, you know, probably a couple of decades before. And how do you maintain that? You know, I know that you know, that’s why food is pre-prepared. That’s why a frozen food. That’s why you know, that’s why a lot of central kitchen and whatnot. But what’s what’s happening with with that side, you know, to maintain the culture. 

Dan Mesches:    kgYeah. And listen, you’re absolutely right. And it’s really difficult. But to me it’s and we talked about this some but it’s about the emotional connection to the folks. Right. And true, honest emotional connection that people can feel and know that you not only believe in what you’re doing, but you believe in them. It’s not a magic formula, you know, It’s about encouraging people to be their best. It doesn’t always work perfectly. We’re human beings, all right. But that pride level is everything. And sure, making sure that there’s a phenomenal training on that, making sure that the recipes are 100% correct, making sure that, you know, the facility is in great shape because a lot of times in restaurants, we ask people to do things in facilities that are not up to snuff. Right. And that kills morale in a heartbeat. So it’s so many pieces of it. But the great news, at least for me, is it’s common sense. Listen, I’m not the smartest guy around, you know, but I have common sense. Right. At least I think I do most of the time. And common sense gets you to that. You know, what is the base, what we do at Sprinkles and in our restaurant concept technique, we have something called four legs and a stool. All right. And we said, how do we get people from the spare past to see things the same way? Not really easy. So we use the model of a stool because you pull out one leg and that stool is going to fall. So we have a emotional connection to the team and guests. We have phenomenal product and we have sparkling clean and well-maintained environment, right? So we have those four legs. And if you have those, yeah, everybody’s going to have an idea, a different idea. Maybe my ten is your eight or whatever it is, but at least we’re talking the same language. And I think that’s so key with folks.

Ashish Tulsian:    And how do you how do you percolate that emotional connect to the last mile, like down to the bottom? 

Dan Mesches:     Yeah, I think there’s a lot of important things. And in that, you know, there’s all this management terms like skip level management and all that kind of thing, but those things really work. Yeah, yeah. It’s you have to be out there, you have to talk to people and it’s not just talking to your VP or your regional or your GM, it’s talking to the line cook or the dishwasher, the folks making the food right. The really the most important people out there. And by the way, if if you haven’t had a dishwasher walk out on you on a Friday night, then you don’t know how important they really are. Right. Every time that would happen to be. I just had bought a new pair of shoes. Know. But it’s it’s put in your heart when one of my mentors said to me, you know what? You got to put your heart on the table. And that’s really what it’s about. And it’s being sincere in that. So these are not rocket scientist lessons, but they’re hard. They’re really hard. The amount of emotional energy it takes, you know, with your GM, you would see, you know, a GM goes home emotionally tired, but almost more physically tired. Right. Just with that frenetic pace we’re talking about. I think as you go on in your career and it’s not about your physical actions as much, it’s about your mental actions and how you talk to people, what you do and what you portray. You should be going home mentally exhausted instead of physically exhausted. I think people forget that sometimes. 

Ashish Tulsian: No, I think, true You know, but but I still believe that the last mile like percolation of that energy, you know, to the bottom most, you know, it’s it’s difficult. But if if a brand can actually do that that’s you know that just changes you know, because at the end of the day, you know, I was talking to someone and and they asked me that, you know, given we are in the restaurant tech space, so people keep on asking us different questions. And then one day this gentleman asked me that what’s a best loyalty program? You know, that can be that that I can subscribe to for my restaurant. And I was like, your staff is like, no, no. I mean, I mean, the app was like, no, no. The problem is that, you know, your customer loyalty is tied down to your staff treating them right and all the loyalty points they’re going to earn on it, you know, on the transactions is actually deciding. So, you know, and that’s actually because I when I look back, I see I keep going back to the same restaurants, you know, where bartender, you know, server even like right at the entrance if I’m greeted well, you know, I know this is like, you know, I have a feeling of belonging and that gets me going, you know, most of the times, eight or ten times, you know, two times I can I can experiment with something else. So so percolation of that energy to the bottom is magic.

Dan Mesches:    Absolutely. I mean, and, and, you know, it comes in so many ways. And it’s interesting, you talked about loyalty programs and I agree it’s with your staff and it’s listening to them. You know, listen, we have 401K that we contribute in great health plans and vacation and sick pay and you name it. Right. And we should. That’s our responsibility. But guess what? Some of the favorite things are. It’s their cupcake card at Sprinkles that they get for free cupcakes every day for a 22 year old. Right. That’s forget about the 401k and the health plan and all that kind of thing. It’s that. And we also have something called daily pay, right? So they can get their money on a daily basis or a large percentage of it. And, you know, until I really looked at it from their eyes, I didn’t see that. I thought. But no, let’s talk about the health plan and the dental and all that kind of thing. And we still do. But but let’s really walk in their shoes to figure that out. 

Ashish Tulsian:   What is one thing that just, you know, just just like a disproportionate insight You got? Can you double click on that that cupcake card thing.

Dan Mesches:    Yeah. I mean, listen, I think what I think I always forget sometimes is right because I’m just me walking into a place, Right? I’m just thinking a guy that comes in and said science stuff you sometimes forget in your career what that means for people to do that. Right. Because hopefully we don’t have a swollen head and we’re not just thinking we’re the greatest thing walking in the door. But I think all of us sometimes forget about bad energy and what that really means. And on the other side of the coin, how if you do it and you don’t do it right and you’re on the phone the whole time, you’re not connected, you’re not present, how much that can hurt things. And that’s been big to me, big from a family perspective to write those kinds of things about being present. And if you can be present with your team when you’re out there, the connections are thirty-fold of What I could have imagined they would be.

Ashish Tulsian:   How often are you on the ground? Like, you know, you’re visiting and talking to people on the ground? Read the stories.

Dan Mesches:    Yeah, that’s a great question. And it it depends. With the pandemic, you know, our bakeries were open and so we made sure that because we want to keep everyone safe, but I made sure I was traveling constantly. I mean, because if people have to be out there working, we better be out. In the field. And it’s my most fun thing to do. So I’m on the road a lot. I’m, you know, the 190 odd a year or whatever person on the road or more. And this year, this year it’s only been about ten nights so far. But we’re we’re, we’re early or the beginning of March. So often is the answer. Try not to let the restaurant, the business of restaurants get in the way of restaurant business and be in there.

Ashish Tulsian:   But what is it like like you you’re like you have a schedule or they know or is it like a surprise visit? And what do you what do you do when you’re there? Like, I just want to give me a view in a day.

Dan Mesches:     Yeah. I don’t I don’t do surprise visits. I want these to be positive visits. Right. And we have a team of people that are checking, make sure things are right and all that I want. I’m there for face contact and time. 

Ashish Tulsian:   So you’re not you’re not the, you know, the auditor or the or the surprise check or the police. 

Dan Mesches:    Oh, listen, I’ll see things and we’ll talk about those things and I’ll talk to the people when I’m on the ground about those things because I don’t want it to come back to them. Right? I want you to hear it from me, but I want them to know. I want I want it to be a positive experience. I was just in L. A. and so one day I was I spent the day driving around with our area director for L. A. and getting real time with her and talking things through and then visiting those bakeries and talking to the folks there. And then then the next day I went to bakeries on my own and just pop and say, hi, you know, shake hands, always eat cupcakes, always taste cupcakes. Tough part of the job, you know, tough board and maybe on the diet. But hey, that’s what we sell besides hospitality. So make sure people see that we’re doing that because you know, that’s one of the other tough parts about our business. We sell millions and millions and millions of cupcakes here. Everyone of them has to be good enough to be in a white tablecloth restaurant right? Well, you know, standards are high at white tablecloth restaurants. And we believe that our that our product does that. So it it’s we put a lot into it.

Ashish Tulsian: So how do you keep a tab on, you know, how let’s say a store is performing and and by that I mean is you know one I think the topline sales I call it the poor leading indicator especially in the restaurants case because you don’t know when you’re going down because your sales may still be going before they take a dip customer feedback, you know, it’s happening all around. What’s your way of listening to the customer feedback? And once you do that, what’s your way of responding to that customer? 

Dan Mesches: Sure. We’re very active in our engagement with our guests and let’s take first on the complaint side of that. So when we we get that, whether it’s an email or whether it’s calling our guest services or it’s on social media that goes out, that doesn’t get hit, that goes out, and all of our senior team is on that, whether it’s a what some people might think is small or something large, we make sure and the amount of time we spend on that between operations and marketing and myself and training is huge. So it it probably any complaint can end up being 10-10 total hours. People are 20 or 30 because…

Ashish Tulsian: So you’re actively listening, social media. Actively listening. This like, like what kind of turnaround time are you looking at? Like somebody tweets something, something. 

Dan Mesches: We try to do everything immediately. Like, you know, our team is on call in the evening for that. And, you know, we’re looking at things at 9:00 or 10:00 at night. I give everybody a little bit of a break after 10:00, maybe we answer the next morning. But our team is so great that that often.

Ashish Tulsian: But would you like to talk about like, What’s the structure like? You know, probably you know for a restauranteur Yeah. How does how does that management of listening? Especially social media it’s wild you know one of the channels can you can you? 

Dan Mesches: Sure. So we do it through a few different ways on that. So the old way was mostly through our guest services and we have people on the phones 16 hours a day, I think, since we’re in different time zones. So there’s that and there’s that voice to listen to. Obviously, there’s email that guest Services is monitoring also, again, social media and whether that’s Tik Tok or Facebook or Instagram or Twitter that’s constantly being monitored and people are always on call for monitoring that and on call means doesn’t mean that your phone’s a little ways away and you you check it every 5 hours. It means you’re you’re on it. Yeah. You know, we still want people to have a life, right? So we rotate that and we give them an opportunity. And then there’s the feedback that comes in directly to the bakery. And that all percolates to a central Excel sheet. Now, we deal with these individually, like I said, on a minute by minute basis. Fortunately, we’re not swamped with them, but our heart, our guests really know our product and they’re passionate and they’re going to let us know if it’s not quite what they think. And we appreciate that. So then then, no, we do a weekly Excel spreadsheet on that so we can look at our patterns and see what’s happened and, you know, is it? Did someone say something’s dry? You know, our product is fresh baked daily. You know, we start again every day, so. Oh, well, guess what? The heat. It was cold there. The heat just turned on. And and now we’ve got to be a little bit more careful in our baking. So. So we look at it to that…..

Ashish Tulsian: But but what’s the response? Is it is a is the free cupcakes is it is a reformed is it is it something else do somebody gets on a call each time? What’s? What’s happening? 

Dan Mesches: Yeah. So it certainly depends you know if if people complain about a product, we’re going to look at that very closely and we’re happy to refund that. And give them a chance to come back. I mean, the whole thing is to win them back, right? So we have that. And sometimes they just want someone to listen to through this and that. If we’re great active listeners and we’re sincere, that handles anything most of the time.

Ashish Tulsian: But who who’s vested with this part and I’m asking this question because you know that that really becomes a problem at times that, you know, whether this power is vested centrally, whether it’s of the store? Of the manager?  Is it? 

Dan Mesches: Is it’s across the board. If you’re an hourly employee and someone comes in and and has an issue, we expect you to take care of that person. We give you a license to take care of that person. If you’re uncomfortable with that and we can bring it to someone else. But no, we we feel good about our culture. We feel good about giving people at all levels that responsibility. We want to make sure we we view it so we know what’s going on so we can see long term trends and whether it’s about a new product or a flavor, we want that feedback. We also have a system. We use input on a daily basis. 

Ashish Tulsian: Nice. Yeah, and. Shout out to vladeck and team. Although they sold to Crunchtime. 

Dan Mesches: Yeah

Ashish Tulsian: And Vladeck has has walked home very very happy. Yes but you’re great. 

Dan Mesches: Yeah. And they’ve been one of our great partners in this and so we’re really able to whether it’s from our our mind check that we do twice a day and we take pictures or comments. We have a flow of information that backs all this up. Also. 

Ashish Tulsian: Brilliant, I think, I think that’s great. You know, Thank you for bringing that up. If you guys using input tells me that, you know, anyway, you’re pretty tech and data oriented. You know what I also saw at Sprinkles, you are looking at different form factors off of business as well. You you would love to know what kind of bakeries are dispensing is happening apart from having stores.

Dan Mesches: Yeah, great question. I mean, what we’ve really done is take our our model where most times there’s not a lot of there had been a lot of preorders and now we want to make it very frictionless and make it easy for folks that we’ve done some different things, some of which the founders did and maybe language for a little while and some of which we we started from fresh with it with the start of COVID. But for us now, we have remodeled all our bakeries. Actually, I think we have to live where we make it much easier to walk in, much easier to pick up your preorder. whether you did that through our app or whether you did it on our Shopify site. 

Ashish Tulsian: Or is it like an ordered ahead, preorder. ahead. 

Dan Mesches: Correct. So in the old days when you ordered ahead, we really defeated the whole purpose of that because you still had to go ask someone for your order. You already had to wait in line behind people. Now we have custom shelving built in so that can people can come pick it up. We also made preorders a little more difficult before. Now, if you want your picture on our cupcake, well, we don’t have to resize anything. You just just use your phone and take a picture of that. And now instead of and we still have a human being if you want to order from human being. But we have through we work with byte, they’re another great partner brand and a team and we now have integrated those into our counter in our remodels and we have 97% adoption rate for people to go in and do and use that the humans are there to help you, but it’s just frictionless for people. And then we have our ATMs, and our ATMs actually are having their 11th anniversary last week. 

Ashish Tulsian: Oh, wow.

Dan Mesches: Yeah, it’s been big. And we have two different types. We have those on our brick and mortar that are. 

Ashish Tulsian: These are like shops in shops, somebody else’s store or.

Dan Mesches: No, these are in well, they’re both. The first model is our own attached to our brick and mortar. You know, they take up 80 square feet and we have great sales in their Instagram moments. The other that you’ll see is we work with a third party on logistics and actually sell them wholesale called Pango. And those are the ones that you’ll see at airports, college campuses and nontraditional.

Ashish Tulsian: Propango?

Dan Mesches: Propango. They’ve been another fantastic partner that that we’ve had in here. And the airport in Las Vegas, you’ll you’ll see we have three machines there. So we have over 50 of those across the US and probably we’ll have 80 to 100 by the end of this year. So another way to get it to guests, we hope one day to make it that you could also pick up your cupcakes remotely at an ATM nowhere near a bakery. So your pre order would be there waiting. 

Ashish Tulsian: I’m just wondering, so, you know, if you can if you’re doing this, ATMs dispensing cupcakes when somebody orders on DoorDash, is the DoorDasher going to the nearest ATM, getting the cupcakes out in that delivery? 

Dan Mesches: Not yet. Not yet. But that would be the great thing. What we try to do, by the way, to make it easier for the deliveries in our bakeries that we have rooms, we try and make a separate pick up area for them so they’re not behind the guest that doesn’t quite know where they’re going and they’re in a hurry and we don’t want to slow down their day. So that’s worked pretty well so far.

Ashish Tulsian: Mhm. Yeah. That’s, that’s, that’s one big problem Everybody is dealing with, you know, almost everywhere. But, are you really able to solve it at every store? 

Dan Mesches: Yeah. We feel pretty good about it. I mean listen our, our bakeries aren’t that big so it’s not perfect and we’re learning through these remodels, but overall we feel like it’s worked quite well. We get great comments from guests and it’s allowed us to figure out for our new bakeries that we’re building it. Our next opening is coming up in Irvine, California, at the Spectrum Center. What we need to do and they’re simple things. You know, when the founders first made the concept, the idea was to have one door and have a line, right? Because the lines are popular now. People are are not big fans of lines are big fans of like frictionless. So let’s make sure we develop like there’s always at least two doors for people to get you. Now, let’s make sure there’s that room for that shelving so people can pick up and make their day easy. Cupcakes are fun, right? They’re supposed to make you happy. Let’s make sure that the pick up of that it doesn’t put you off in a bad mood.

Ashish Tulsian: I was talking to, you know, one one thing that I need to tell you about Sprinkles is that I was talking to this bakery chain in Saudi Arabia, in Riyadh. And, you know, when I was talking to them and they said, hey, we had the first cupcake chain in Saudi Arabia, I said, all right. And who do you think is like, you know, somebody who you are like? And they said, oh, have you been to Sprinkles? You know, think of us as Sprinkles of Saudi Arabia. I was like, oh, wow, that’s that’s a big one. That’s…

Dan Mesches: Wow. I thank you for telling me that. That’s great. Listen, we have a huge brand. It’s much beyond what our footprint is, even though our footprint is across the United States, We’re we’re just 24 locations, plus the 50 ATMs at this point. Now, we will be much more soon. We do have an LOI signed LOI for Korea, Malaysia and Singapore. Oh, wow. Yeah, we’re talking in Canada right now. We’re talking across the globe right now. We are first domestic franchise was opened in December and right outside of Salt Lake City. 

Ashish Tulsian: Congratulations. That’s awesome. 

Dan Mesches: Thank you. Thank you. Yeah, and many more to come this year. By the end of this year, we’ll probably have signed up for 50 to 100 new bakeries. So that’s very exciting for us. 

Ashish Tulsian: You keep on, you know, you keep on I mean, you’re continually mentioning founders at Sprinkle and you partnered with them for three years. 

Dan Mesches: Yeah, I came on board six years ago. Our private equity company, Karp Reilly came aboard in 2012. 

Ashish Tulsian: Why did you why did you partner with them? Let’s let’s talk a little bit about What did the founders do? And why you are here?

Dan Mesches: Yeah, So, you know, the founders got involved with private equity before I came onboard. So that was in place. I came, though, because, one, I’m very I only want to do things like as we talked about earlier that we’re passionate about. Right. And and a brand that I believe is best in brand and that’s what Sprinkles is. So and by the way and I was consulting on a project in 2007 and I was out there and I was out in L. A. and a friend of mine said, you got to go see this place. They always have a line, and that happened to be Sprinkles. So it was in it, you know, it was part of me and I didn’t know it. And then Karp Reilly invested in the company 2012 and they’re a fantastic Pete Furman and some folks are very entrepreneurial and I always wanted to work with. So the stars all aligned. And was it…. 

Ashish Tulsian: I mean, private equity is private equity. I don’t know what private equity entrepreneurial means, honestly, because I feel that there is a mandate of that money. There are money managers who need to deliver something. And while I mean, I don’t really paint them in like a black and white of being ruthless or being kind, I believe that the money has a mandate and their job is to you know, put founders on the part to make sense out of that money. What do you mean? 

Dan Mesches: Listen, I don’t disagree with you on the mission. At the end of the day. I mean, we’re all here to make money, too, right? I mean, so but, you know, I’ve been fortunate to work with a lot of great private equity company. Large ones like Catterton was fantastic or smaller, more boutique like Karp Reilly they doesn’t have the some of the same mandates as far as when a fund ends or whatever it happens to be. So that can allow them to be a little bit more entrepreneurial. I mean, you know, to be fair, there have been large ones that are entrepreneurial, but the smaller, I think, the easier that is. So in the fact that they’ve decided to hold the brand for this long tells you about their belief in it.

Ashish Tulsian: So when you say entrepreneurial, you mean What? Are they more risk takers? Are they more flexible?

Dan Mesches: I think I think a combination thereof, certainly more flexible. I think risk comes easier in that when it’s your money on it, you know, so I do think it’s a combination. But for me, at the end of the day, all of this is, Am I in an environment where I can work with great people? And create a great brand? or take a great brand and bring it to the next level? And, you know, Sprinkles certainly was a great brand. It’s funny because right at one point cupcakes were the hottest thing out there. So they’re not right. They haven’t been for a while. That’s a great thing for us because it’s an opportunity to bring people back. And we’ve had we’ve seen positive comps, sales, same store sales for four years now. And who doesn’t want a good cupcake, right? Who doesn’t want something makes you happy? And by the way, that’s allowed us to also expand our brand to cookies, to cakes, to we we rolled out many chocolates and large chocolates last year. We’ve got we rolled out baking mix last year. We had cupcake mix before that allowed us to build a DTC channel, which we launched during COVID, but fortunately had all the work done pre-COVID just by luck on that. So and build a CPG line. So that’s where some of that entrepreneurial spirit is… 

Dan Mesches: So, so you know, where are the you know, what part of the business now or what’s a focus of founders, you know, at Sprinkles? and what’s your focus as a partner in their growth? Yeah. So our founders, Charles and Candace Nelson, sit on the board and do not have day to day involvement are always there if we need them always there for a question. But but they, they’ve gone on to to other things. Yeah. 

Ashish Tulsian: You know you, you worked at somebody else’s restaurants then you started your own, Sold that. Then you worked with private equity, taking some of these brands, you know, bigger. As an entrepreneur, we see that so many times. And this is a question, you know, personally keeps me awake and keeps bugging me as well, that, you know, entrepreneurs make their products, they build the companies, they create that soul. But then there are times when they’re not able to really take it, you know, bake. And then somebody comes in from outside, sees that product differently, you know, and unlocks the scale and and boom, the same thing, which was, you know, still small becomes, you know, probably 10X running 100X.

What’s been your learning? What’s you know, and if you’re talking to a restaurateur, you know , a passionate founder who is still trying to figure it out, where’s that unlock, What have you learned about that?

Dan Mesches: A lot. I’ll tell you what, here’s some of the best advice I’d ever been given by a business partner of mine. And he said, love your business, but don’t fall in love with your business. And I think that’s one of the biggest founder problems, right? It is their child. And then because of that, sometimes you make maybe irrational decisions. And that that to me is one of the biggest lessons I can give to those folks. 

Ashish Tulsian: But then but then what’s? I mean, when you’re making that decision, how do you know which one is irrational and which one is rational? 

Dan Mesches: Listen, how do you know in life? What’s something rational and irrational, right? In your private life or whatever it happens to be? You’re not always right on that. But I. I think if you can really dissect the decision, say, am I doing this for you? Go, Is this really right for long term growth? Is this because I want to be right? Is this because I have an unrealistic view of what can happen? All those things that can happen with falling in love with something, That, that’s what you’ve got to take it down. Not easy. All right. So but it’s really a soul searching thing to do. And then the other part of that is right, knowing yourself well enough to know when it’s time to bring in those other folks that can do that. There’s very few people in life that we’ve found that can take a brand from founder to CEO of a billion dollar or multi billion dollar company or whatever it is. There’s a few famous ones we can think of out there, but pretty few and far between. 

Ashish Tulsian: Mmm. Hmm. But what’s that, in your experience, Right for example, of Sprinkles today or I don’t know if you if you want to take an example or anecdote from your previous ones, what was that one thing that you could see, because you were dispassionately looking at the problem, you were disconnected with that loving or falling in love with the brand, but loving the brand v/s you know, probably somebody who was who grew up with the brand, could not really see like, what is that? Can you share some unlock moments where, you know, something either was deprecated or something was added and like changed the face of the brand or the fate of the brand? 

Dan Mesches: Yeah, I mean, I think that comes in a few different buckets on that. And one very important point is growth, right? and real estate selection. And I think the problem that a lot of founders make on real estate selection is that they’re in love with the brand and they believe everyone’s going to be in love with that brand. And so you might take an offbeat location, say it’s okay, the brand can can handle it. Right. And there’s been, I think more businesses have probably been killed by, you know, that third location that everybody thinks is going to be great. But then dupes the company because we’re not in it because either you’re not being smart about it or you’re looking at it with that passion intensity, that being in love with the brand comes with that you have to look at a little bit. I think the other part of it is, is not wanting to change, right? Because we do have to change with time. Yeah, it doesn’t mean that we don’t make the product just as great. It doesn’t mean any of that. But nothing stands still, especially now. And I think that’s been a mistake. I’ve certainly made it as a founder with things where, no, this is exactly it has to be and we’re not changing that. And and, you know, a lot of times that’s fine. But if you don’t truly look at it, if you don’t truly examine it, you’re doing yourself and your investors a disservice. 

Ashish Tulsian: Absolutely. I think that that’s true. I think and change is difficult, you know, especially when you’re you know, when are right by being by not changing, you know, it’s really, you know, not that simple to say, hey, now is the right time to change. But on that I think COVID, you know last last couple of years challenged notions of change or whether the change is good or bad quite you know quite far and wide. And from our vantage point, you know at Retroworks we we look at 55 plus countries, you know, on the ground. And I can tell you that COVID brought change almost everywhere on the earth. It doesn’t matter what geography you were in, what market you were in. People, businesses change. Brands change the change how they serve, you know, especially dine-in restaurants. And so many restaurants used to say, hey, once food leaves this door, this is not our food anymore. You know, those are the ones who brought the most change. What’s your view on how it is changing right now? Because the way I look at it, I still feel it’s all transient. How are, what’s your view? 

Dan Mesches: Yeah, No, I tell you, I think I think it is with the change, as you said, has accelerated. I think there’s there’s some opposing forces. Right. Because as the world is about, quote unquote, the normal right, there’s people that also want things to be the way they were just before. Yeah. And so there’s that. Right. 

Ashish Tulsian: I want paper menus. I want physical menus though I’m the, I’m the tech company but. 

Dan Mesches: But but you’re absolutely right you know and when you see people fumbling with their phone or whatever it is, it can be frustrating for you as a restaurateur. So there’s that. And where do we take a step back when it’s smart, even though it’s going to cost us X more dollars a year to do that? And how long are we going to fight against that? But at the same time, how are we going to also keep our minds open? For instance, I was talking to our team this morning about with the difficult in labor shortage, this was in our restaurant concept picnic. We at our outdoor if the patios that were having trouble getting enough people that work do we make those QR codes out there as in more full service inside and do we really look at those scenarios? Because you know, when it’s not working the other way. So how is this going to continue to grow and how how can we keep the human element by that? Back to the emotional connection in this and how can we make decisions that are, you know, aren’t just short term business related? I mean, during COVID, we were able to make a lot of short term business decisions, so we knew people were going to be more flexible in that because of the state of the world. Now we’ve got to look more at long term and people are struggling with that now. We can’t raise prices as much as before, no matter what is going on with location inflation or the price of eggs. I mean, so what else can we do that’s smart. The easy stuff is taken on and so I think we’re still juggling with that. We’re juggling where tech fits in. 

Ashish Tulsian: What are what other brands in the market you know, not necessarily, of course, competition, but let’s say in general in food service, you admire, you know, because they are adapting to change quite well. Or you look at them and say, these guys are beast like they…

Dan Mesches: Yeah. Listen, I think there’s examples large and small, right? I mean, it’s interesting. You know, you look at Chipotle, right? And I think that they had done a good job putting themselves in the right place before this. Right. With the changes that were made in the company. But it’s just amazing when you look at it now at a difficult economy, how because they stuck to their roots and quality of product, and people don’t feel bad at a higher income about trading down to that they don’t see it as going down to see right they are they are spending maybe the same amount money but in a different kind of environment. I think they’ve done a phenomenal job with that and, you know, and have guided their way through the landmines on that quite well. And then I think, you know, there’s a lot of little entrepreneurs small out there that I love looking at. Right. What what is their next thing? What are they taking? What are they doing with the current … 

Ashish Tulsian: Any any mention? Where do you feel that have, you know, have done a good job, at change or. 

Dan Mesches: Yeah, I mean, I think a lot of companies have done a good job on starting to build platforms, right. You can. This is on a large scale. But it’s interesting, right, with McDonald’s in their experiment with Krispy Kreme and how that’s grown. And we’re actually doing something like that right now with a brand called Tim Streets, which is Austin based on where we’re selling our cupcakes in their locations throughout Austin. And we’re looking at how we’re going to expand that across the country. So I think those things, you know, it’s funny, restaurant tours are funny folks, you know, and a lot of times in the past it was, well, I’m not going to, I’m not going to help other restaurant folks. They’re going to take people away from me. I think that one of the greatest changes now and you see this with small companies in particular, is, you know, we’re banding together. And I don’t just mean with the restaurant association things we’ve done before and all those are great things to do. But but really, no, how are we going to help each other’s business? And that that’s quite a shift from what it used to be ten years ago.

Ashish Tulsian: You see more much more collaboration and open to ideas. 

Dan Mesches: Absolutely. And you know, I’m glad you brought up collabs because we we do do those all the time. And what makes business fun, whether it’s with Lexus that we had a great collab with, you know not a restaurant company a December to remember or Bobbi Brown we’ve got coming up a cupcake or a chocolate promo to a bunch more. I can’t really. 

Ashish Tulsian: Have you thought of putting your your your products on other restaurants dessert menu?

Dan Mesches: Yeah we have and actually we’re talking to some companies about that right now cupcakes. It’s a little bit difficult baked fresh daily right, you know but as I said, we do have a chocolate line. We do have some other things that we have our red velvet brownies that are fantastic. And we have a new product that we did for Lexus called Red Velvet Truffles. And so we’ll be rolling those out later this year, too.

Ashish Tulsian: Interesting. Then you’re you’re visiting MURTEC That’s a multi-unit restaurant technology conference. What’s the motivation there? And, you know, how are you guys looking at tech Sprinkles and Picnic both? What’s your view on that? 

Dan Mesches: Sure. I mean, crucial, right? We have totally changed our tech stack in the last few years. We talked a little bit about some of our our partners that we worked with on that. And there’s many more in there, whether it’s wisely or. Narrator or Klaviyo and, you know, all of those kind of things that we can do to take advantage of the rich amount of data that’s coming to us, not invasive data, but just data so that we can do better and we can bring across all of our different platforms where we’re separate. So we didn’t know who was using the ATM, we didn’t really know who was using the website. We didn’t know who was walking in and coming online and or just walking often. Now we have a bridge across that. Now we’re trying to learn, though, how we can serve those folks better. So that’s an important reason to be here. You know, we as a company, it was born with ideas like personalization before people did it and like the ATM and those kind of got stagnant for a while. We went in and rebuilt all that and our Daniel Legh-Page, our VP of IT has done just a phenomenal job at that. And so that’s why I’m here. I’m speaking also, I don’t know what I can add to all those brilliant tech folks out there, but I want to also be able to walk the hall and learn a little bit more where really right now to us, we’re at our infancy with AI and whether that’s on menu suggestions or whether that’s on in how we want to take in our guest service phone answering tree, that for us is really our next step as we work together with all these other partners. 

Ashish Tulsian: Great. And I’m actually looking forward to catch up with you on the floor, you know, to to to discuss more on especially your international plans. I think that’s exciting. Singapore, Korea, you know, that’s going to stay with me. But what would be your advice to a budding restaurateur or people in the foodservice industry, especially on the management side who are building brands? How are you looking, and I’m asking for that advice from both perspectives. One few lessons from, you know, your years of work in this and two when you’re looking at life, you know, forward from here, how the industries are moving, shifting what probably the future of restaurants is not going to be similar to, you know, how the past was. Probably the cycles are shifting. You know, all the all the teams are not going to be asked. And the are probably processes and systems are going to, you know, take over, you know, the human side. Do you see this dissonance? And if not, if yes, what will be the lessons on both sides? If not, what would be the three lessons that you would want to share? 

Dan Mesches: That’s a lot of questions. Yeah. You know, listen. On the first one. My my lesson to folks that are early in this business is, you know, be here if you have a passion to be here, if you’re not something else, use it for your stepping stone, but find something else. You kind of talked about it earlier, but if you don’t love this business, you’re going to hate this business. And who wants to spend life doing that? Right? And it should be something that we’re we’re happy to do, as difficult as it is. So to me that that’s what I would say to folks as far as how things are going to change? and what this business is going to be, yes, it’s going to continue to change. There will be more automation for sure in in what we do. Believe me, we’d love to be able to figure out how to frost a cupcake better through automation, but I don’t think they can ever do. I don’t think at this point with our style, we’re at a point where, you know, they can do better than our phenomenal teams are doing right now. But but there are the other things and the things we’re talking about that will make it easier for folks. And I think the other part of it is how can we make it a better environment for the people that work for and with us, you know, and whether that’s a dishwasher the baker, the froster or the associate up front, the managers, what can we do so that their job is easier? It’s a hard life, right? Hospitality is hard and it’s hard emotionally. And with dealing with folks that, you know, have a certain expectation that you want to deliver. And it’s hard physically. So what can we do to make their life better? Not to eliminate people, which a lot of people think of this is to eliminate people. No. How can we take those same folks, keep them, make their job easier? And I do think that’s going to be key as we see whether it’s a push for a four day workweek, which is difficult in a seven day a week business or whatever it happens to be. So let’s make sure we’re all not the diners that sit there and go, well, I had to walk 30 miles to school on ten feet of snow. Let’s figure out how we can continue doing better for our teams. 

Ashish Tulsian: Absolutely. And my last question will be, especially because you talked about passion. What about work life balance? 

Dan Mesches: Yeah. Work life balance is always a tough one in my advice on that one is something that I can say because I didn’t do a good job. I haven’t done a good job and I think. 

Ashish Tulsian: Could you have? 

Dan Mesches: I could have done better. So for me and this is whether it’s with, you know, a partner or kids or your family or your dog, whatever it happens to be, Listen for me, I always tried to be there. Those special moments, the soccer game, the school play, whatever it was. But what I didn’t do well was be present. Right. And if you’re going to take the time to do it, be present. Don’t be underneath the bleachers with your cell phone or whatever it happens to be. Don’t be at an anniversary dinner, you know, in the hallway on your phone. Yeah, exactly. Texting whatever it happens to be. That’s hard. But I do think that you become a better manager and a better person if you can do those things, because the people around you feel that. And frankly, that gives license to the people you work with to do that too, and make sure they have that life lesson. We ask a lot of people, let’s make sure we can do our best to give them a good life outside of work

Ashish Tulsian: Dan, that was brilliant. My last question will be, what’s your favorite cupcake? 

Dan Mesches: Well, you know, had to. Yeah, Yeah. I mean, it’s like asking who my favorite child is, so I got to be careful there. Hannah. Sophie, there is no favorite. But I do have to say, I love our Triple Cinnamon. That’s great. And we just changed the recipe on that. So our cinnamon there is powdered , it’s a liquid, so it’s even more moist. But we do phenomenal LTOs… And Charles Craig, our VP of Culinary, Justin Murakami, VP of Ops, and Michelle Wong, our CMO, are, you know, we love going over this stuff together, but we’ve done some great ones like Flaming Hot Cheetos, which is a phenomenal cupcake. Phenomenal cupcake. Right now we have got a really good one, kind of a birthday cupcake for Fat Fit Fun. That’s phenomenal. And we’ve got a great matcha one coming up. So I love the old favorites. Can’t go wrong with the Red velvet any time but but always look out for those LTOs that we’re doing. 

Ashish Tulsian: That is super. You’ve given me a list of cupcakes to go. Dan, pleasure. It was an absolute pleasure talking to you. I love that. You know, there’s so much to learn. One observation that I had in this conversation was that I think you have you’ve done so much, so well that that in your own characterization of some of those things as, oh, you need to do you actually talk about you know, you talked about so many things in a very matter of fact way as if they were like the easiest things to do. So all I can say is, you know, this is inspiring for me to do my job so well that it starts looking as easy as you make it sound like. 

Dan Mesches: Well, that’s very nice of you to say and thank you. Thanks for allowing me to share all that. It feels good. 

Ashish Tulsian: Thank you. 

Dan Mesches: Thank you.