When Milwaukee-based investment firm
FirstPathway Partners decided to invest in
Teriyaki Madness' local expansion, a major selling point was the option for minimal involvement in the restaurants' day-to-day operations.
That's thanks to the Denver-based chain's affiliate management company, Restaurant Sherpas, which will operate FirstPathway's five Teriyaki Madness locations
opening in southeastern Wisconsin by year's end. The first opened Tuesday at 920 S. Moorland Road in Brookfield.
Others are planned
in Wauwatosa, at 12345 W. Capitol Drive; in Germantown, at W182 N9606 Appleton Ave.; in Pewaukee, at 1390 W. Capitol Drive; and in Hales Corners at
5730 S. 108th St.
FirstPathway has raised capital for a number of hotel development projects in Milwaukee, including the Kimpton Hotel in the Third Ward, but it diversified after identifying demand for smaller deals in the local hospitality market, said executive vice president Dan Wycklendt.
"We looked for individual investment opportunities in the franchise world, and we found it hard to come by because we don't want to be sitting in and operating restaurants," said Wycklendt. "And in the franchise world, typically things are owner-operated, you pay a franchise fee, they give you some training, and you're on your way."
As part of the deal with Teriyaki Maddness, FirstPathway foots the ownership investment and Restaurant Sherpas does the rest-- opening the store, hiring the staff (usually 25 employees at each location), and managing daily operations.Â
While FirstPathway made the first move on the deal, it ended up being a match because Teriyaki Madness had already been eyeing up the Wisconsin market.
"In the midwest, for some reason, there's just a hunger for something new," said Michael Haith, chief executive officer of Teriyaki Madness. "As cliche as it sounds, people love the fact that it's something different and that it's delicious food that's healthier."
Haith purchased the company outright five years ago and has led its recent expansion, now 75 locations in 20 states with another 15 to 20 set to open this year despite the industry's recent downturn due to the ongoing COVID-19 pandemic.Â
Since May, the company has seen a 17% increase in same-store, year-over-year sales, due in large part to gradual investments in its mobile app, and integrations with third-party delivery partners and curbside and delivery service.
Haith said efforts to make the dining experience more
convenient by implementing technology prepared the company for the challenges many restaurants are grappling with now.Â
"Technology is making things less expensive, more profitable, and more convenient for the customer," he said.Â
Looking forward, there will still be a need for in-person business with customer service and engagement, Haith said, but off-premise dining will only grow.
FirstPathway Partners got lucky with its pre-pandemic investment in the chain, said Wycklendt.
"From a COVID standpoint, such a large portion of their business comes from pick-up and delivery via their app and via delivery services," he said.Â
When visiting Teriyaki Madness' Denver headquarters before signing on, Wycklendt and his team were shown how to-go orders were packaged to stay fresh and warm well after preparation and were just as tasty reheated later, unlike burgers or pizza usually.Â
"We didn't have the foresight on it clearly, but when we talked to some of the other franchisees, a lot of their sales have been up through the pandemic because more people are ordering from their homes and for pick-up," he said. "A lot of these restaurants are suffering because if you have sit-down business, people are avoiding that a little more, but things like this seem to be picking up."
