Cava wants to give general managers an owner-operator mentality

Salmon will stay on the menu into spring at Cava. | Photo courtesy of Cava

Cava is beefing up its investment in general managers to give them the tools and confidence to better run multi-million-dollar operations.

The move comes amid slowing same-store sales growth for the fast-casual chain, which were up 3.1% for the third quarter. That largely reflected menu pricing and mix, with traffic only slightly positive. The cyclospora outbreak had a 150-basis-point impact, but the company remains optimistic and raised guidance for the year, projecting same-store sales will grow between 6% and 7%.

Key to achieving that growth, however, are efforts to build more of an “owner-operator” mentality among restaurant managers.

Cava has been developing its leadership bench with a program called Flavor Your Future as the fast-casual chain sets sights on reaching 1,000 units by 2032. (As of the third quarter, it’s halfway there at 500 units.)

“The restaurant industry is one of the few industries where anyone can carve a path for themselves,” said Cava CEO and Co-founder Brett Schulman. “If you have the will and develop the skill, in 24 to 36 months, you can be running a multi-million-dollar business making six figures. At Cava, our team members can build a career, not just have employment.”

But competition for GMs is growing.

Last week, for example, rival Sweetgreen unveiled a new compensation structure for Head Coaches, what that brand calls GMs, that could bring total pay to more than $200,000. Store managers at In-N-Out Burger earn that much on average, and chains like Chili’s and Chipotle are also adding manager incentives.

Cava, meanwhile, this year introduced annual long-term incentive equity grants for GMs, which Schulman said are designed to give those managers more ownership in the business.

Cava also has a program called Academy GMs, in which managers achieve a level of certification that elevates their pay, and there are additional incentives tied to GM hiring and promotions, which “recognize that great leaders do more than run strong restaurants. They build strong teams and develop the next generation of leaders,” said Schulman in the third quarter earnings call on Wednesday.

Currently, Cava has 110 restaurants with Academy GMs.

Last year, Cava also rolled out a new Assistant General Manager, or AGM, position, placing them in high-volume locations.

Restaurants with AGMs — which includes about 75% of units — outperform those without, Schulman said. In those restaurants, GM turnover is lower, which is also expected to have a long-term benefit.

Schulman said Cava is also looking at more potential changes to the short-term incentive and bonus model for GMs, but there is more to come on that.

Schulman, however, is reluctant to put a number on the potential compensation rate, like Sweetgreen, saying, “We don’t want to put a cap on it. We want to continue to raise the ceiling.”

Cava is also investing in technology to make the lives of restaurant managers a bit easier.

He said the chain has rolled out a Cava Command Center that gives managers KPI data on “a single pane of glass” showing how their restaurant is performing to targets, or against peers and across the system, for example.

“It’s helping our GMs become true business leaders and helping them have the intelligence and the insights … so they can drive greater productivity in their restaurants and ultimately participate in that value creation for themselves,” he said.

Cava is also rolling out an interface, now in 100 restaurants, that gives GMs the ability to throttle delivery, for example, or address out-of-stock ingredients without having to submit a ticket to the tech team.

“Again, we want our GMs to be business leaders,” said Schulman. “They’re running multi-million-dollar businesses. We want them to own it the right way.”

There are other ways Cava is investing in GMs. The chain now brings in restaurant managers three months before new restaurant openings to better train and prepare them.

Among those managers specifically, turnover has been reduced almost to zero, Schulman said, where before “the intensity of these openings were challenging to folks, and they weren’t lasting, either through training or were burning out a few weeks after training.”

Such investments in the key GM position increases labor costs, Schulman said, but Cava believes they will pay off.

“We’re not going to do this for the next 12 weeks,” he said. “We’re doing this for the next 12 years and beyond. And if that is an investment of 20 basis points or 30 basis points of restaurant-level margin, or some pre-opening costs in a given quarter, a given year, we’re going to do that. Because we believe it’s going to create that long-term sustainable growth and restaurant level margin expansion.”

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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.

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