What makes Cava restaurants perform better? Having an assistant GM

Cava’s investments in moving more managers into leadership positions is paying off.

Reporting a stellar first quarter, Cava CEO and co-founder Brett Schulman shared some details about the fast-casual chain’s recent creation of the assistant general manager (AGM) position. It’s part of a larger Flavor Your Future initiative designed to create a deeper bench of leaders as the chain pushes toward its goal of reaching 1,000 units by 2032.

Assistant general manager impact

It’s still a work in progress, but the AGM rollout is already showing tangible results.

Schulman said during the chain’s first-quarter earnings call that restaurants with AGMs outperform those without.

The AGMs so far have been placed in restaurants with higher sales volumes. Cava hasn’t disclosed exactly how many AGMs it has, but the company said they are in more than 50% of locations, saying it’s a progressive process.

“So [we are] building out our pipeline—which that AGM investment is part of—of future leaders not only to help maintain operational integrity across all shifts, both lunch and dinner and weekends, as well as building a deeper pipeline of future leaders to open those new restaurants with operational integrity,” said Schulman during the earnings call.

Labor costs increased by about 2% during the first quarter, due to wage increases and the expansion of the AGM role. But the chain’s overall labor and related costs were 25.7% for the quarter, which was flat year over year, because it was offset by sales leverage.

Leadership and operations

Cava earlier this year hired Doug Thompson, who previously spent more than two decades with Texas Roadhouse, as chief operations officer.

Texas Roadhouse is known in the industry for its managing partner program, in which single-unit operators make a refundable deposit of $25,000 and sign a multi-year employment agreement, and they then earn their base salary plus about 10% of the restaurant’s pre-tax profits. They also have more control over operations, and it creates an ownership mindset that the company believes improves restaurant operations and keeps turnover relatively low.

(In fact, Texas Roadhouse CEO Jerry Morgan was a managing partner early in his career. So was president Gina Tobin and Mike Schmidt, head of operations.)

When asked if Cava would consider doing something similar, Schulman in an interview said he loves the idea of encouraging general managers to feel empowered to think like owner-operators. Many, he said, are running $4 million to $5 million businesses.

How Cava might do that is yet to be determined he said. There’s more to come on that front.

“We’re looking at all different ways, whether that’s through compensation structure, whether it’s through other activities, to really instill that owner-operator mentality,” he said. “Because we know how important it is. The way they run their business ultimately delivers to our overall business.”

Meanwhile, Cava, which hit 459 units after opening 20 restaurants in the first quarter, is almost halfway to its 1,000-unit goal. Expecting to open up to 77 units this year, it will pass that milestone soon.

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Lisa Jennings is a veteran restaurant industry reporter and editor who covers the fast-casual sector, independent restaurants and emerging chain concepts.