After working in the hospitality industry for two decades, Lauren Fernandez saw firsthand just how difficult it is for independent restaurants to scale. Fernandez’s former roles include restaurant operator, food and beverage attorney, and investor. And now, she’s stepped into a new position as founder and CEO of Full Course, a company whose mission is to make the restaurant industry more equitable and inclusive, partially through early-stage investment.
“I looked around and realized there weren’t a lot of resources for that early stage growth, to go from one unit up to 10,” says Fernandez. “There’s a ridiculous amount of capital coming into our industry, but a lot of it is backed by private equity, and they only want deals that are north of three to five million dollars, and so an insane amount of capital gets stuck at that level.”
Fernandez points out that independent operators are often left to bootstrap funding sources on their own, a process that can quickly erode equity and wear down operators to a point that’s not sustainable.
“I’ve done it, and it almost killed me,” says Fernandez. “All of these things conspire to keep a lot of really phenomenal, locally owned and operated restaurants out of the growth cycle, and the reality is, you get a lot more homogenous brands.”
With Full Course, Fernandez seeks to help a wider breadth of restaurants grow, starting with independent restaurants in the fast casual space who show signs of differentiation.
“It could be a unique cultural point of view or just a new way of doing something,” says Fernandez.
In the midst of raising its first funding round, Full Course will announce its initial clients for investment in August. But the work to grow those restaurants is already well underway.
Prior to investment in any restaurant, Full Course works with operators to optimize their business and prepare them to scale. Much of this, says Fernandez, “starts with the people”. This includes assessing the operator’s own strengths and weaknesses and coaching to help operators build out strong teams and increase retention.
“If you don’t have the team, and a good foundation, it doesn’t matter how much money we throw at you,” says Fernandez. “So many restaurants are missing these pieces, and quite frankly it manages our risk as investors”
Next steps include mapping out a five-year growth plan that leaves the operator with 51% majority control. This involves a blueprint for franchising, but also for creating multiple revenue streams, including developing retail products and opening in non-traditional locations, like airports, stadiums, hospitals, and universities.
Full Course manages the development for all growth channels, including management of site selection, contractors, and architects, plus oversight of product development components like sourcing and manufacturing. Operators who seek investment, however, must be willing to sign on to the whole package and expand in multiple directions. An initial business assessment is also required, which includes a site visit and a thorough review of areas like staffing, marketing, branding, and finances.
“Ideally we’re looking to work with brands that have over a million in top-line sales, they’re eager to grow, highly coachable, and excited to learn,” says Fernandez Fernandez. “They have to have that openness and willingness to be collaborative because this really is a partnership.”
Full Course offers custom coaching and consulting solutions to operators that aren’t a perfect investment fit. There’s also an education platform with resources and classes focused on everything from how to understand and read a profit and loss statement (P&L) to creating employee value proposition.
Fernandez welcomes independent operators to get in touch by booking a call through Full Course’s website. Full Course takes up to 12 clients per year and plans to double that in 2024. The first fund will total 20 million dollars, but Fernandez intends to scale fast. The goal for the second fund, to launch next year, is 100-plus million dollars.
“We don’t need more ice cream, pizza, burgers – at the end of the day, if you genuinely want to create diversity, equity, and inclusion in our industry, you have to put your money behind these brands that are really reflective of what the cultural pulse of this country looks like,” says Fernandez.
Grace Dickinson is a reporter at Back of House. Send tips or inquiries to firstname.lastname@example.org.
[Photo courtesy Ketut Subiyanto]