Focus Brands has a new name and a new way of doing business, CEO Jim Holthouser announced on Tuesday.
The Atlanta-based company is changing its name to GoTo Foods. It’s the final stage in a transformation that has been unfolding over four years for the parent of Auntie Anne’s, Cinnabon, Carvel, Jamba, McAlister’s Deli, Schlotzsky’s and Moe’s Southwest Grill.
GoTo Foods will still be home to the family of seven franchise brands that have been operated and franchised by Focus Brands, said Holthouser at the company’s biennial Global Conference in Las Vegas.
But the new name is designed to signal the company’s new positioning as a “platform business”—one that has been reinvented to operate more efficiently and to boost franchisee profitability.
The transformation sets the stage for brand acquisitions that could significantly grow the family of brands under the GoTo Foods umbrella, said Holthouser.
It is also designed to grease the wheels for franchise growth both domestically and overseas. Of about 3,000 projects currently in the pipeline, about two thirds are outside the U.S.
“This is a very different company with far more capabilities, and, the way I think of it, a far brighter future,” Holthouser said in an exclusive interview to preview Tuesday’s announcement.
CEO Jim Holthouser unveiled the new name at the biennial meeting of franchisees in Las Vegas. | Photo courtesy of GoTo Foods.
First Focus
Focus Brands Inc. was founded in 2004 when Atlanta-based private-equity firm Roark Capital Group acquired Cinnabon and Seattle’s Best Coffee from what was then AFC Enterprises for $21 million. The two brands were combined with the ice cream brand Carvel, which Roark had picked up in 2001. Between the three brands, Focus Brands initially operated or franchised about 1,200 outlets.
Over the years, four more brands were added to the Focus Brands family, which now includes more than 6,700 mostly franchised outlets generating about $4.2 billion in annual sales from restaurants, ice cream shops and bakeries in all 50 states and more than 60 countries. In 2023 alone, nearly 400 outlets were added.
Focus Brands also has a growing licensing business that adds another $1.5 billion in sales, either through licensed nontraditional outlets, for example, or CPG products like frozen Cinnabon rolls or Carvel ice cream in grocery stores.
Roark, of course, has added significantly to its restaurant industry holdings beyond Focus Brands. The investment firm’s portfolio also includes Inspire Brands, which acquired Dunkin’ Brands in 2020 for $11.3 billion. Last year, Roark agreed to buy the massive Subway chain in a still-pending deal that will likely be one of the largest restaurant chain acquisitions of all time.
When Holthouser joined Focus Brands as CEO in 2020, he said the company was more of a “legal entity,” with seven different verticals, along with a licensing business and an international business, he said. They were essentially operating as largely independent businesses.
Each brand, for example, previously had its own website and app, said Holthouser, “But they weren’t that effective. That’s partly because all seven brands had to go out and figure out how to be digital experts.”
Since then, however, the company has been taking big steps to shift operations to one larger platform.
In 2022, for example, Focus Brands brought the purchasing arm of the supply chain in house, and rationalized hundreds of SKUs across brands. Holthouser said the company has invested $16 million in supply chain enhancements, “and we’re still not done.”
Digital platforms have been replicated across all the brands.
Holthouser said the company is “on its way” to investing $60 million in digital tech and loyalty capabilities, “building more sales-generating relationships with our 21-plus million loyalty members. Year over year, loyalty sales are up 18% and we’re adding more loyalty members than ever before, about 1.1 million every quarter.”
In a few years, he expects about half of sales to come from loyalty and digital orders.
GoTo is also bringing in a new point of sale system (in partnership with Qu) that will cross all brands, and tools like using AI for more-personalized upselling.
There’s a Guest Focus feature that provides feedback across the multiple sales channels, which has helped improve speed of service and improve satisfaction scores.
The company has been building its corporate infrastructure, with new leaders in supply chain, customer engagement, digital marketing and international development.
And, though there are still dedicated brand teams, much work is now done in “centers of excellence” that work by categories, allowing the brands to share more behind-the-scenes tools.
Now as a platform company, Holthouser said, “I can go out and get the best darn talent on the market, on loyalty or digital or ecommerce, whatever it is.”
That thinking allows the company “to afford to give much more horsepower and juice than they ever could have done on their own,” he said..
Brand duos and trios
It also assists Focus Brands’ growing emphasis on co-branding.
About 1,100 restaurants are already co-branded or co-located and the company is encouraging franchisees to combine brands in various configurations, whether Auntie Anne’s with Jamba or Auntie Anne’s/Cinnabon/Carvel.
The shared systems of a platform company make it that much easier for franchisees to add more of the group’s brands into their own operations.
“All those brands now have the same tools and the same rocket ships underpinning them,” he said. “You’re creating a far stronger value proposition for the franchisee.”
And there are opportunities, Holthouser said.
Catering, for example. Currently McAlister’s and Moe’s have a thriving catering business, for example, but Holthouser believes the other brands could bring a whole suite of catering options through GoTo Foods that cover all dayparts and meal periods.
The company could also offer one GoTo Foods gift cards that can be redeemed at any of the brands.
And down the road, once the concepts within the platform have more geographic reach, there will be the opportunity to have one loyalty program across all brands, he said. “There is great power in that, and when that day comes, it will unlock incredible value.”
Ready to buy
The restructuring now also makes it easier for the GoTo Foods to plug in new brands through acquisition. The platform is designed to support not one brand, but seven, or 10, or even 20, he said.
And acquisition has been a priority for Holthouser since Day One.
Looking to broaden the company’s geographic footprint but also to round out the flavors within the portfolio, Holthouser said he would love to add a hamburger, chicken, pizza or salad concept, for example.
“But I’m not interested in grabbing a new brand for the sake of grabbing a new brand. It has to make strategic sense,” he said.
Focus Brands held off on acquisitions over the past few years because “the market’s been a little upside down,” he said. “There was way too much money chasing way too many deals.”
But that’s starting to loosen up, and more brands appear to be coming on the market, he added.
Holthouser said he believes the repositioning as a platform company will make GoTo Foods more attractive as a buyer.
“I find a lot of owners of brands are afraid to dump their baby inside a big portfolio. They’re afraid they’re going to be swallowed up and homogenized,” he said.
But the transformation of Focus Brands has allowed the company to maintain brand distinctiveness, he said.
“We’re not growing to get bigger, we’re growing to get better,” said Holthouser. “As we gain scope and scale, as we add strength to strength, as we become smarter, more skilled and more efficient, we elevate the support and value we provide our franchisees.”
And scale is the key in a highly competitive restaurant industry, he added. “You need scale to win.”
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