Chad Franzen 17:42
Yeah, absolutely, wow. That’s, that’s, that is awesome. How did the name Hannah’s come about?
Florian Pfahler 17:47
It’s my daughter, Hannah. So Hannah was born in 2002 and when I wrote the business plan in 2003 into 2004 you know, I decided that Hannah is a beautiful name, you know, front, back, the same thing, three letters in the middle, two ends. Can get better than that. Very memorable and then my daughter, Ella, was born in 2004 and she doesn’t think this is funny. So I have a concept for Ella that I wanted to do in 2020 but then COVID hit, and so we shelved it, but I still want to do it, and it’s ready to go. Things are looking pretty good again. Now, business since covid ended, the last two years, this year and 23 end of 22 into 23-24 were pretty solid. And I think that if 25 holds and things don’t go crazy on the macroeconomic side, I most probably will do the Ella’s concept.
Chad Franzen 19:00
Is there a, speaking of COVID… Is there any part of your operation that changed and now is kind of still permanently changed as a result of COVID?
Florian Pfahler 19:09
Yeah. I mean, covid had a huge impact on everything, and I mentioned the first one, which was locations don’t need to be big anymore. The second thing is, obviously, the big news of this week was that Amazon said five days a week starting 25 everybody back in the office, we’ll see if they succeed, right? And the past companies tried, and employees were like, Yeah, we don’t think so. So now I think, though, considering the labor picture and considering the macroeconomic environment that we’re looking at, where people are discussing hard landing, soft landing, recession, no recession. Blah, blah, blah, blah, blah. I think that team members are a little bit more concerned about their future and about their position, and I think the leverage is ever so slightly turning over into companies. And I would not be surprised to see more of an effort for companies to say, you need to come back five days a week. We’ll see about that. I think there’s industries where that is more necessary, and there’s industries where it’s less necessary. Sorry. I think that Fridays will, for sure, stay weaker days in the week, much weaker than they used to be. And right now for us, the Friday is a permanent weekend, like our weekend starts Thursday afternoon in the sense of revenue, but our days on Monday, Monday, a little less so, but growing Tuesday, Wednesday, Thursday, bonkers, okay, and that is, that is all right, so that, besides the location size, the business just has been condensed into three days. So, and that is not necessarily a bad thing. I like the concentrated environment of Tuesday, Wednesday, Thursday, and then Friday. We are very lean, and the team actually enjoys it, because it’s like it’s an easy day. Friday, they can catch up and clean up and then they go into the weekend. And so that is the other big change from covid otherwise, in terms of people eating or habits, not really, not really, just more condensed.
Chad Franzen 21:32
So you are. You’re headed towards 20 years with Hannah’s Bretzel. What are you most proud of about that kind of journey to be there after 20 years?
Florian Pfahler 21:44
I mean, it’s been, look, this is, it’s a very competitive business, you know, I think that to have had the opportunity to steer this brand and this company through all the challenges that were thrown at us over the years, I think is something to be proud of. To be still standing up a covid is something to be proud of from we had first the financial crisis back in 2007-08, the gluten free trend came in, 12 11, 12 13, we got through that. Then came the online ordering trend, which really turned the whole industry upside down. But you know, before online ordering, I knew that if I open a location in downtown Chicago, I will most probably own three block rate at the three block radios around me for high end sandwiches. That customer comes to me when they want a sandwich that was very predictable when online ordering happened, any business that made a food in Chicago became your competitor. Even 20 miles away, people didn’t care. They get it delivered, you know, the door dashes of the world then promised like for low delivery fees, and suddenly you had a whole range of competitors. It’s settled by now. And it’s like you, you know that, but in the beginning it was a challenge. And then, of course, when covid happened, all bets were off. So it was like always over the 20 years that we’re going at next year, it was always macroeconomic trends from the outside that threw a real big challenge at us. It has never been anything that happened on the inside. We never had a food issue or E coli or the salmonella or anything like that. And so I’m at this point, after looking back and looking at what my team and my brand has gone through, I think we can say, Bring it on. I don’t see, I see what else can happen that that we wouldn’t be able to survive. But I got to say one word here about the team. I am lucky to have my head of operations just had his 16th haniversary. We call them haniversaries. And my GM over at our Franklin location, he’s been with us for 17 years. The GM over at the Randolph location has been with us for 11-12 years. We have hourly team members who’ve worked with us for more than 10 years. We really focus on soft skills and on creating an environment that is supportive and and and understanding, and maybe that’s my European roots. I don’t know what it is. We offer unlimited vacation. We don’t do vacation days. We don’t do that. We appeal to the grown up in everybody we I force everybody to take two weeks vacation in a row once a year. Yeah, it’s important. I think, you know, I think we tend to forget that this is a temporary deal on this planet for us. And as much as working hard is the thing, I think it is important also to to step away and and not work and see the planet and do something that you enjoy, and then come back and I think it increased our productivity. But it also. Increased our the team loyalty, because they think it’s a really good deal and it’s fair. And I when they’re here, they work hard and, and so I think that is really just mutually beneficial and, and I’m, you know, the team is very proud of it, and I’m very proud of it, and we created a really tight little family running this business.
Chad Franzen 25:37
Do you think that that kind of, that team centered culture — where people enjoy working there — do you think that translates to the customer?
Florian Pfahler 25:44
One gazillion percent. I can’t emphasize that enough. Look, I’m gone a lot. I’m not in the operation, and I’m lucky, because I trust my team, the Dream Team trusts me. I’m a man of my word. I say what I do and I mean what I say. And they know that, they know they can rely on me. I created a very reliable work environment and they appreciate that. And I think that kind of, you know, engaging a fun environment with great customer feedback coming to us that they can be proud of, and are celebrating milestones. So we celebrate a lot. I take my team out probably four or five, six times a year. And when I say I take them out, it’s not fast food out. We go to, like, sit down restaurants of chefs that we work with, and, and we have a real meal and a real splurge and, and it’s fun and they, you know, so it’s, it’s mutual appreciation. I really believe that the tea takes care of the customer and the customer takes care of the business. And me, I need to keep the bird’s eye view to keep that process going. And that’s my role, and, and, and I need to equip the team with the technology or the knowledge or the tools to succeed in making the customer really happy, so that we repeat business. And I think you don’t stay in business for 20 years unless you do something right. And I think we got probably 90% right, and the 10% we need to work on.
Chad Franzen 27:18
So I have one more question for you. But first, I know you have, you have three locations in the Chicago area. Tell me how people can find out more about Hannah’s Bretzel.
Florian Pfahler 27:27
Well, obviously, go to the website hannahsbretzel.com you know, we also have an Instagram @hannasbretzel. You can find us on there too. Yeah, we have three locations. We used to have seven in 2020 actually, the plan was to expand into Washington, DC, and the goal after that was, shortly thereafter, to head to Denver. That, of course, was all mixed by that virus. Amazing what a little virus can do, huh? And, and so, yeah, think about it, teeny Bitsy and and so, you know, we had to close a lot of locations because there was no other choice. And so we’re down to three. We’re closing a location over at 400 North LaSalle in October. That is our last really large legacy location of 3,500 square feet. We just don’t need that size anymore. We don’t need to pay the rent, we don’t need to have the operating expenses we can do with 1/3 the size. And we’re relocating that location into the Merchandise Mart. I don’t know if you’re familiar with the Merchandise Mart, but it’s a rather large building, and we will operate in there a location that is 1/3 the size of 400 North La Salle location at a fraction of the rent that we pay at La Salle Street. And that is really the way to go. So that’s just a block away. So we’re going to work very hard in the next four weeks on convincing all of our customers at LaSalle Street in the future to go one block over to meet us there, but then we’re back at three. Now, once the march is opened, we will study opportunities to possibly add back locations in 25 and 26 my goal would be to be back at about seven to eight locations by 2026, but that has to be handled very, very carefully in the market that we’re in. You know, the downtown market, you know, is still under, under pressure. Retail vacancies are high. Office occupancies stuck in the mid 50s, on average, 60, 65% on Tuesday, Wednesday, Thursday. Some cities reach 70% on those three days, but we’re nowhere near 80-90% that might change in the future. Who knows? Right? I think it will probably be city to city and company to company. So then the option is to go ex urban or go Suburban. And I think for me, those things are not obvious, so we will look carefully to make an investment that makes sense, and that means small and ideally formal restaurants with a build out infrastructure, where we just need to do cosmetics to open up to keep the investment rather low and. Uh, it’s back to nine. It’s back to 2005, a small space. Go in, make it look good, open, and hopefully it works. And you will make numbers. And number one criteria for making numbers is that the rent is that the rent gives confidence. So I’m saying that because I, in the past, signed leases where the rent was 1718, grand. That requires a solid performance. I wouldn’t do that today. There’s no way. So it needs to be low rent, probably with a percentage component, so that you can go into like with confidence, into a location that you can make numbers work and be there for the long term, become part of the community.
Chad Franzen 30:59
Sounds good. Sounds very good. Yeah, my last question for you, when, when you need to grab lunch on the go and you go to Hannah’s brutal, do you have like a go-to combination of items or item of choice?
Florian Pfahler 31:13
Yeah. I mean, I, I love, I love our soups. Surprisingly, I say that right now with Oktoberfest inspired kale white bean soup with Neiman ranch bratwurst and the Neman Ranch is an amazing product. And then I’m a huge fan of the sandwiches. I love the presa Ola, which I think it’s a northern Italian cured beef. It’s it’s an amazing flavor. It’s one of the best sandwiches, the Marisol, which was created by Jason ham from dulu cafe. For us, we do chef series sandwiches, where we collaborate with chefs. They create a sandwich. We sell the sandwich, we donate 10% of revenue, not profits, revenue, to a community organization of the Chef’s Choice pilot light was for Chef Jason Hammel. We just did one with Paul Kahan. We donated 25% of revenue from that sandwich. Jason Hamel, sandwich was the Marisol outstanding. It made our permanent menu. And the salmon sandwich, I think the salmon is really phenomenal. All our sandwiches are really, I think, interesting in the flavor. And that is really what we focus on, clean ingredients, flavor, surprisingly low in calorie counts, surprisingly low in sodium count, all the Nutritionals on the website. It’s all very transparent. And obviously, if anybody ever has a question, they can email us at catering@huntersbretts.com, and we’re always there. We do a lot of catering business model have the opportunity to mention that we’ve been a downtown caterer for all Chicago companies across the board for a long time, and it’s been probably 40% of our business by now. And we’re very proud of that. So yeah, so those are my things to go to, and if I have a sweet tooth, obviously, the chocolate brownie we make. It’s a triple chocolate brownie with organic chocolate. It’s all organic. We make it in house. There’s no crap in it. And I love that one. Oh, may I mention the chocolate chip cookie while I’m at it? Okay, of course.
Chad Franzen 33:31
Okay. Well, sounds fantastic. It’s not. I’m ready for lunch. It’s only 8:40 a.m. here. Go for it. Hey, hey, Florian, it was, it was great to talk to you today. Thank you so much for joining me, and really appreciate all of your time, your insights and giving me the opportunity.
Florian Pfahler 33:48
It’s been a real pleasure. And if there’s anybody has a follow up question, they can reach us catering@hannahsbretzel.com
Chad Franzen 33:54
Okay, awesome. Thanks so much, Florian.
Florian Pfahler 33:56
Thank you.
Chad Franzen 33:57
So long everybody.
Outro 33:59
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