In recent years, GoTo Foods has undergone significant expansion, with notable growth in its portfolio that includes popular brands like Moe’s Southwest Grill, Schlotzsky’s, Auntie Anne’s, and Cinnabon.
In 2023, the company reported impressive retail sales of $5.7 billion.
The following year marked a milestone as McAlister’s Deli became the first brand within the GoTo Foods family to achieve annual sales of $1 billion.
Looking ahead, the company has ambitious plans for further growth.
In 2024, GoTo Foods signed over 1,100 franchise agreements, with nearly half of them located internationally.
Adding to this expansion, the company recently introduced its first original concept called Cinnabon Swirl, which offers a unique twist on classic treats from Carvel and Cinnabon.
Whereas GoTo Foods acquired its existing brands, Cinnabon Swirl represents a fresh creation that reflects the company’s innovative spirit.
The company’s CEO, Holthouser, recently shared insights into GoTo Foods’ evolution and its strategies for navigating the current market landscape.
Adapting to Changing Retail Environments
The American retail landscape, particularly shopping malls, has faced significant challenges in recent years.
Increased online shopping and the pandemic-related shutdowns have taken a toll on foot traffic to mall-based businesses.
While many lower-tier malls have shuttered, shopping center visits have started to recover.
Data from location analytics firm Placer.ai indicates that mall visits were down nearly 30% in Q1 2021 compared to Q1 2019, but this decline shrank to just 5% by Q1 2024.
Despite this rebound, Holthouser emphasizes that developers are not rushing to construct new malls.
As a response, GoTo Foods has been exploring innovative ways to position its mall-centric brands outside of traditional food courts.
However, the transition is complex.
For example, the average gross sales of an Auntie Anne’s outlet do not always justify the high rents associated with standalone locations, according to Holthouser.
A solution to this issue lies in co-branding, where two restaurant brands share a single kitchen and offer a combined menu.
This strategy has proven effective, as it allows franchise owners to maximize profitability by presenting a broader array of food options to consumers in the same physical space.
Holthouser notes, “That’s really where you find all the economic unlocks for the owner.
With two products to sell in the same real estate, the owner can cast a much wider net into the market.”
GoTo Foods has successfully utilized co-branding to extend the reach of regional brands such as Jamba and Carvel into new markets.
Last year, the company completed more than 300 co-brand deals, facilitating brand growth across the nation.
Marketer and Georgia Tech professor Tim Halloran underscores the importance of accessibility in the food and beverage sector.
He explains, “The more locations that a brand can have that are nontraditional, the better.
So when they have a choice, it’s easy for them to get to you.
This sentiment reflects GoTo Foods’ commitment to enhancing customer access to its various brands.
Fostering Customer Loyalty
In addition to expanding its physical presence, GoTo Foods is focusing on enhancing customer loyalty.
The company started with 5 million loyalty members across its seven brands in 2020 and aims to increase that number to over 30 million by the end of the year.
Loyalty programs are intended not just to create awareness but to encourage repeat visits and increased spending from existing customers.
GoTo Foods is innovating the loyalty experience by integrating it more directly into restaurant operations.
For instance, at McAlister’s Deli, loyalty members receive distinct order cards that differentiate them from regular customers.
Store managers and cashiers recognize these members, allowing them to provide personalized greetings and rewards, such as complimentary cookies, optimizing the customer experience.
According to Holthouser, such initiatives can lead to notable improvements in customer satisfaction, with increases of about four to five points once these strategies were implemented.
Moreover, GoTo Foods has modernized the mobile apps for its brands, streamlining them under a single core platform that allows for quicker updates and new functionalities.
This strategic integration reduces development costs for future brands and enhances overall efficiency.
Holthouser emphasizes, “That’s how we give the brand so much more than they could ever hope to get on their own.
Said in another way: that’s how we are leveraging scale in a big way.
Expanding Globally
GoTo Foods is also focusing on international expansion, with a rapidly growing arm outside the U.S.
The company has made significant strides in this area, signing 599 international agreements in 2024 alone.
Approximately one-third of GoTo Foods’ annual sales are derived from international markets, and two-thirds of the restaurants in its pipeline are set to open outside of the U.S.
With over 2,100 units across more than 65 countries and territories, Holthouser believes that GoTo Foods is evolving into a global company.
However, international locations are not simple reproductions of U.S. outlets.
Each brand must go through a comprehensive analysis of local customer preferences to tailor offerings appropriately.
For example, Cinnabon rolls in the U.S. may be topped with pecans, while in the Middle East, they feature pistachios instead.
Similarly, Moe’s locations in certain global markets may not utilize the same assembly-line service model found in the U.S., with some locations even providing margaritas—a rarity in American Moe’s restaurants.
This adaptive strategy is crucial in an increasingly interconnected world, according to Halloran, as it enhances brand engagement with consumers who are likely already familiar with the brand through social media and the internet.
Navigating Economic Challenges
Nonetheless, GoTo Foods faces challenges, including inflation, supply chain disruptions, and uncertainties surrounding tariffs imposed during the Trump administration.
According to a statement from the National Restaurant Association in April, businesses face concerns that tariffs will increase food and packaging costs while complicating product availability and pricing for consumers.
Holthouser asserts that the company is closely monitoring these tariffs and will adapt as necessary.
He emphasizes the importance of contingency plans, stating, “Particularly [in] this industry, you always have a plan B.
If you can’t get a product from Mexico or whatever, in most cases, we have a plan B.”
Franchisees have the autonomy to set prices but receive guidance from the company to ensure competitive positioning.
Holthouser cautions that overshooting prices can hurt demand and negatively impact customers’ perception of value.
In his words, “You don’t win very long in business when you’re disappointing customers.”
As GoTo Foods continues to innovate, expand, and adapt to the marketplace, it remains dedicated to delivering quality experiences that resonate with consumers around the world.
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