If you’re in a volume-based enterprise, such as in a restaurant or retail, you’ve got to be ready for challenges and business when they come. In this episode,Â Flix BrewhouseÂ COOÂ Matthew Baizer, gives a little sneak peek on the different sides of running this business. Bringing his experience from being Director of Franchise Operations of Real Mex Restaurants, Vice President and later CEO of Zao Noodle Bar. He shares some insight on strategies for managing people in the restaurant space. He gives knowledge of the importance and relation of scalability and technology from the COO standpoint.
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Matthew is the Chief Operating Officer of Flix Brewhouse. Matthew came to Flix from Real Mex Restaurants, where he was the Director of Franchise Operations for Chevysâ€™ 24 store franchise operation, as well as a region of five company-owned stores, including its Times Square flagship location. His franchise and company stores represented a combined $78 million of system-wide sales. Prior, he was Regional Director of Operations for Chevys with city responsibility for San Francisco, Sacramento, Las Vegas and Phoenix. From 2000 to 2004, Matthew was a Vice President of operation for Zao Noodle Bar. Itâ€™s a unique Pan-Asian restaurant concept that grew to ten locations in four markets plus two license outlets on the West Coast. In 2004, he became the President and CEO of Zao, where he remained until 2010. Matthew is a food service â€œliferâ€ and he is a 1990 graduate from Cornell University of hospitality with concentrations in food and beverage management. Matthew, Welcome to The Second in Command podcast.
Thank you for having me. I appreciate it.
I didn’t notice that you were a Cornell grad. I would have been partying at Cornell when you were there.
Yeah, I went to school in Ottawa, Ontario. Ottawa was about four hours north of Cornell. There was a bar. There. What’s the bar at Cornell that’s underground? It looks like a bunker or something.
A little pub. It was a stone wall, tiny, a small underground bar at Cornell on campus. Does that ring a bell?
It does not, unfortunately. I spent a long time there and part of my story is that I owned a bar in college town adjacent to the campus.
Iâ€™m sure it was on campus. I don’t know if that would make sense. I can picture it down the hill from where all the fraternities wouldâ€™ve been where it was.
You’re thinking of the Chapter House.
It could be.
It was a pub down the hill right in the row fraternities. It sadly got lost to a fire years ago.
Did it felt like it was underground?
It had the dungeon feel.
That would have been the place. I was a part of a group called Acacia Fraternity. We opened up the fraternity in Ottawa. Weâ€™re the first fraternity ever in the city. We used to come down to party at Cornell. I remember calling some sorority house trying to track this girl down and I didn’t even have the right name but they still connected me with the girl.
We had to do things a little differently back then and where to find people.
There was no Facebook. I loved your campus, what a beautiful campus to go.
It was a wonderful time of my life. Cornell is a big part of what shaped me. I have three children. My middle child is a senior in high school. We had a chance to take a college tour and I got to take them back to Ithaca and relive the glory for 24 hours or so.
It’s such a beautiful campus. Where did you grow up? You weren’t from Ithaca. Itâ€™s a small town.
I grew up in Los Angeles. I was born and raised on the west side of Los Angeles and got my start in this business selling hot dogs on the beach.
Los Angeles to Ithaca, that’s a long way from home. My oldest son starts university and we’re taking him away to check him into a residence. I can’t imagine the angst your parents must have checking you into Cornell.
That’s the thing, they didnâ€™t. They said, â€œYou’re good. You’ve got all your stuff arranged. We’ll wait until parentsâ€™ weekend to come.â€ They got there in the middle of October when it was a rather interesting period of my life.
They kicked you out the door and got you on the plane.
They did, don’t let it hit you on the way out, but what doesn’t kill you makes you stronger.
I’ve been in the franchising world as well for a long time with a number of franchising groups, but none were in the restaurant space. I’ve always been enamored with the restaurant industry and the complexity of it too. Itâ€™s complicated with cash, inventory, employees and turnover and so much competition and fickle customers. It’s an amazingly complicated industry.
Thatâ€™s all of the above. The difference between us and retail is we manufacture on site. Thatâ€™s essentially the biggest difference. In the retail world, you’re dealing with shrinkage of inventory and skews. In the restaurant world, you’re dealing with live manufacturing. There are all sorts of various raw materials that all have various inputs, in other words, recipes. There are challenges day in and day out. That’s one of the things that I fell in love with. It’s never boring. There is always something interesting going on. Secondarily, it’s an instant gratification business. It’s one of those things that you can make a tweak or a change. You could put a special one for a day, whatever it is and be able to get instant feedback from your customers.
You can split-test fast and your customer return, you’re standing there talking to them, right?
Absolutely. A lot of people don’t have that advantage.
Tell us a little bit about the restaurant business that you’re in, Flix Entertainment and Brewhouse. Tell us a bit about that so we understand it and then we’ll dive into some of your learning throughout the years.
Flix Entertainment is the manager of the holding company if you will. The concept is Flix Brewhouse, just by itself. Flix is the first of its kind and the only brewery and first-run cinema in the United States. These are complex large operations. Every single one of our buildings is about 40,000 square feet. They have anywhere from eight or nine screens to them, showing first-run movie products and there is full-blown service at every single seat in every single Flix. The experience isn’t one where you are in our pub. You use that as the restaurant and then you go into a movie theater.
You watch the movie and they’re separate things that you do. Ours is a combined all-in-one experience. You could use our pub as a restaurant as well. When you get to Flix, you are sitting down in your seat. You have a server that is going to come, take your order and tell you how we do Flix. We have a little bit of a twist because dine and cinema isn’t new in this country. What is different is that we have a working microbrewery and every single one of our locations that makes anywhere from eight to twelve Flix beers on tap at any given time.
That takes the complexity level up a notch too. I’m originally Canadian. For me, the whole going to a movie and watching a first-run movie and having great food delivered to me was completely new until about several years ago when I started spending half my time down in Phoenix, Arizona. I was dumbfounded that it was legit. It was great food and I was sitting there having a good experience. I was in these comfortable chairs. I think back with the drive-ins were like when I was growing up and they sucked. I’m sitting in your car and where we progressed. What have you learned from running Flix and the whole breweries that the rest of our readers can pull into their businesses? What do you think you pulled?
There are all sorts of things. It’s such a complex operation. There are things related to the dining and cinema industry that I’ve learned. I’ll go through a little bit of all but Iâ€™ll split them into categories. There’s the microbrewing industry, which is different. There’s the movie industry, which I knew nothing about. It’s a multi-state operation too. These aren’t things where you have multiples in each city. Weâ€™re opening location number eight in six states. You’re not taking somebody from across town and shipping them over there for the day in terms of management or to be able to solve that problem. These are complex operations that require a lot of planning.
The key to all of it is that my life revolves around strategic planning, daily planning, tactical planning. Iâ€™m running fifteen, sixteen, seventeen of these things in my head every single day. Iâ€™m trying to make scalable decisions that will work for us. That’s what we need to do. Instant management profitability is important. Also, having the foresight to know how the decisions you make are going to affect you three, four, five years from now. That is a big challenge because you’ve got constant changing environments, regulations, laws and technology. One of the biggest decisions that we have to make is related to technology. It has a lot to do across all industries. I’ll give you a good example with airlines started putting in TVs and monitors at the seats. Somebody came along, I think Southwest was first to go, â€œBring your device entertainment,â€ right?
You’re right. They never took advantage.
If you think about that, do you want to go out and retrofit every single seat to travel if youâ€™re in an airplane? You want to do something that’s scalable, such as a solution like that where you can bring your device and have entertainment that way. We’re faced with those same kinds of issues. We have logistical issues and infrastructure issues in terms of the technology backbone. It’s important that we make the right decision about capital, related to how the experience the user journey for us is going to be impacted as well soon. Thereâ€™re so many different areas we can talk about.
I want to go to all of them. Iâ€™m curious on the brewery side. Do you wholesale any of your beer to bars or pubs outside or youâ€™re just serving it at your Flix Brewhouse location?
A little bit of both. We do have certain markets where needless to say beer is a regulated industry. There are different rules related to distribution into different areas that we operate in. In some places, itâ€™s simple for us to be able to distribute the beer and have it on tap in various locations. We sell it at retail only within our own four walls. In other words, we sell it for consumption in house as well as to go in the format of 32-ounce Crowler cans. Outside, you’ll find us in some taprooms in the various cities where we operate in with some other partners that have wanted to have a couple of Flix handles.
You’re operating seventeen locations in how many states? Is it six or eight states?
We operate eight. I’m running the business model plan for that though. Number eight is scheduled to open in El Paso, Texas. We already have two others in Texas. Our original one is in Round Rock, north of Austin. One is in Little Elm, Texas north of Dallas. We have three in the state of Texas and then we’ve got Madison, Wisconsin, Carmel, Indiana, Des Moines, Iowa, Albuquerque, New Mexico and Chandler, Arizona.
Why go into multiple states? Is the plan to saturate states like Texas and have eight, ten, twenty locations?
No, you don’t have the population density within a market for dining and cinema for us to be able to do that. It’s nice to be able to own a market but you have a limited audience size for various movies. That’s the other thing. This is a side note, my customer changes every single week, like most people. That’s tough to say that it never repeats. Think about my past life in just general casual dining. You could look out into the dining room on a Saturday night and you would generally see the same customer over and over again. Theyâ€™re demographically the same. The person that’s going to come to see IT Chapter 2, the horror film is not the same person that is coming to see Frozen 2.
I went to two back-to-back concerts in Vancouver Canada, several years ago. One night, I went and saw Eric Clapton. I was the youngest person in the audience. Everybody was 55 plus. The next night, I went to Alanis Morissette and I was the oldest person in the audience and everybody was 28. I’m like, â€œWeird.â€ Iâ€™m in exact same arena with completely different demographics.
You are and the concessions that those folks are selling you at that particular concert are completely different. That mix will change based on those two events.
Do you change up your food then or do you have to keep it consistent and hope that it works?
A little bit of both. We change up the food in terms of a limited-time offering menu that is generally circulating movies. We made an offering for The Lion King, which was a punch type beverage and then we did a dessert for that one. We’ll do a pizza for Teenage Mutant Ninja Turtles, all sorts of different things based on what the movie is. There will be some limited time offerings associated with particular content that was designed to appeal to that crowd. The menu itself is diversified enough to have some offering for everyone so that we can maintain consistency in that area.
How do you navigate all the state regulations? You touched on the complexity of that. I built some companies that were multi-state but I didn’t have to work on the legal side. You guys are dealing with a ton of legal issues.
We are, and it is something that we have to monitor carefully. We do have an in-house Senior Vice President of real estate construction who is a reformed lawyer. He also dabbles in keeping us on pace related to regulation as well. When he feels like practicing law, he gets involved in that, but it is challenging.
Are you doing any acquisitions or are these all greenfield? I imagine theyâ€™re all greenfield.
Theyâ€™re all greenfield at the moment. That’s one of the reasons why we’ve particularly stayed in the South and the Midwest. Cinema dining is a concept that is accessible to folks in that area. We can keep our prices reasonable. Not going to the bigger cities on the coast where the pricing structure is a little bit higher has been a working model for us that worked well. There’s the accessibility to location and real estate that is better throughout the area. We’re operating in some of the overbuilt places.
When you rattled off some of the cities and states, you’re in. You’re almost in secondary cities and secondary markets. That was Walmartâ€™s strategy. Walmart for the first 50 years, they were in the tertiary cities. They didn’t even go to the secondary markets let alone primary until 50, 60 years in.
That gives us the ability to be the big fish in town. It’s exciting. Itâ€™s entertainment. It may be something that hadn’t come to one of those cities before. The next one that we’re going to be opening is going to be in Oklahoma City, Oklahoma. We will be the first cinema dining operation to open in the entire state of Oklahoma.
I haven’t done the full demographic check or the full research check for you, but I don’t think there’s any that I know of in Canada, certainly not in Vancouver or the West Coast. Don’t come to Vancouver. It’s too expensive with our property up here. We had one that opened that turned into an adult-only cinema because of our strange laws. They serve alcohol and you’re not allowed in if you’re a kid under eighteen because there’s alcohol being served, which is dumb.
That was one of the things that we had to work on getting changed in the state of Oklahoma for us to be able to pave the way for this upcoming opening.
Tell me about the staffing side of your business and what we can learn. You have to staff an awful lot of Gen Y and Gen Z. Is turnover still an issue in the restaurant space?
It has always been an issue. We’ve done some innovative things to combat that. Before we get there, sometimes the way turnover works in our industry is a benefit for Flix because the movie calendar releases exactly when people are out of school and at vacation time. We have a lot of seasonal workforce that helps us out. That makes this a little bit easier than maybe some of your more traditional food and beverage restaurant employers out there. One of the good things is that we have to measure turnover a little bit differently as well. Those seasonal workers shouldn’t count when they come back to work for us four times in a year. At Thanksgiving break at winter break, spring break and summertime, you can come back to Flix four times a year if you’re a student working somewhere else.
For us, there’s a core component of our workforce that is full-time and with us all the time. That’s the real turnover piece that we need to measure and work on. We’ve done some innovative things. The first thing we did was something that we approached that we felt was pretty dynamic for the food and beverage industry specifically. We came up with a system called achievement-based compensation. If you are an hourly team member, many places in the restaurant industry don’t give hourly team member raises at all, particularly on the service side as opposed to the kitchen and cook side. If you are with us, you can come to work for us if you learn a new skill because we have all sorts of advanced learnings that we will offer you. The minute you have been certified in that skill, you get more money. You’re driving your income as opposed to waiting for an annual review or for us to notice that you need a raise or those things.
I was a part of an organization years ago called College Pro Painters. It was where I learned how to run a business. I learned franchising at College Pro Painters. We had 800 franchisees every year who were university and college students. They had a model where you had to drive the learning yourself. If you got certain certifications, you could move to the next level. There are two things you did. One is you talked about the certifications and not just taking the course, but you’re certified in it. Secondly, you’re tying it into their compensation. How does this certification work for you guys?
For us as an example, in the kitchen we would do what’s called the station master. A station master badge and achievement is when you’ve mastered two or more stations. You’re initially hired to cook at a station, whether it’s a pizza or pantry or something like that. As soon as you move, you go two or more and then you demonstrate proficiency and a certain amount of solo hours. Itâ€™s like trying to become a pilot, although a little bit different. You, at that point in time, will achieve the certification and there is someone to validate your work. You become certified to be able to be a station master. You get a pin and get a raise. It worked well because there’s no income cap at Flix. You can do all sorts of different things, whether it’s stationmaster, to becoming a kitchen supervisor, to becoming an assistant kitchen manager, to a kitchen manager. Our first kitchen manager to general manager transition just happened. We promoted somebody to be a general manager from one of our kitchen managers.
I have a friend here in Vancouver. Andrew. He started with a company called Cactus Club. He was a waiter. He moved from a waiter to a general manager, a shift manager to a general manager, to an area manager. Now, he one of three owners in the Cactus Club restaurant chain and bank, which is a couple of hundred-million-dollar business. He makes more money than Sinatra and all of his neighbors put together. He started as a manager and it was the same thing, they found somebody, groomed them and kept growing them. Itâ€™s such a smart model to care about people and not tie compensation to the roll but to also their certification and the growth that they have.
It’s worked well for us. Our team members have embraced it and it’s become part of our culture, which is a key because people start talking about ABC. That’s why we call it ABC, Achievement Based Compensation. People start talking about it from day one. It becomes part of the fabric of what we do in terms of what certifications you’ve gotten and what you’ve been able to achieve to be able to move ahead continually.
Your executive team, your leadership team, did they get trained on some of those frontline roles as well? Did they learn how to run the pizza section or they sit and sell tickets or bag popcorn?
Some yes, some no, and we put everybody who comes into the organization through some level of team member functional training in the positions in our cinemas. We have some working understanding of what our folks do. Any disconnect between what we do in our head office and what happens in the field is damaging. We’ve got to be to the point where our folks who are here to support what happens out in the field understand what happens that they can help do that support. Operate things in a vacuum without understanding how it’s impacting field operations is a dangerous game. We make everybody who’s going to work through a supporting role in our operation go through actual closing, even folks that we hire. If we hire an accounting clerk, weâ€™ll send them out not so much to work pizza, but they’ll stand in the kitchen and watch food coming off the line for a couple of hours. They’ll be going to do closings to be able to understand what the administrative side of the job is. How do we record for cash and the other things that we’re dealing with in the units? Itâ€™s so that they truly have a good understanding of what goes on.
It’s important that you do those frontlines. I remember the day I came in to start at 1-800-GOT-JUNK? and itâ€™s one of my first days there as a COO. I was out hauling junk and I had the uniform. I had such a massive amount of empathy for the crew and for our customers. One day I was standing and I had to do one of our marketing. We were waving at traffic. We are sign spinning. I remember standing there wearing a blue wig and waving at traffic and this buddy of mine, John Murphy drove by in his Ferrari honking the horn. I’m like, â€œWhat has happened to me that I’m standing here spinning signs?â€ I remembered going, â€œIt works.â€ When the guy in the Ferrari sees people spinning signs, he’s going to remember the brand. Guerrilla marketing became a huge part of our culture because the leadership team saw that it all worked. We didn’t remove ourselves from the front line.
We hired a Director of Marketing. He was a real brand evangelist for Flix. Not only was he an experienced guy, but he also loves the concept. He was one of the first customers that we ever served when the original Flix opened. When he got here, all he could think of was, â€œWhat it is that we could do better?â€ He had experienced it from a customer standpoint. He wanted to drive sales to the highest possible level as generally marketing people do. He went in, guns blazing and realized that he was driving the business too hard versus what our team can handle. It was an important lesson for him as well that, â€œWe need to do this in steps so that we can get the team ready to handle that level of volume that we have.â€ He realized that good marketing could kill a bad business.
It amplifies the bad business quickly.
You talked about planning as being one of your core. Itâ€™s planning around strategy, locations, and scalability. Walk us through some of your methodologies related to planning. It’s good timing because we have our COO Alliance event. We run the only network of its kind in the world for Second in Commands. The theme of our event is reverse engineering planning and strategy. Iâ€™m curious as to what you use at Flix and in prior businesses related to those areas.
Let’s talk short-term before we talk about long-term because we are a pretty cyclical business in terms of the ebb and flow of volume. Labor Day weekend is not a weekend for the movies. Hollywood will release the movie that is thought to be the fourth or fifth highest-grossing film of 2019 in IT chapter 2. We need to go from 0 to 60 in no time flat and be ready to do that. That’s where the short-term challenge comes into play. We’re also weekend loaded, particularly during the school year. We relax too much on Monday and Tuesday. Friday and Saturday are going to be challenging.
What happens is that we go through this routine we develop related to the planning of a week and it doesn’t change. It changes when in terms of what we have for content or what we expect for volume, but we have to do that analysis. We analyze the movie schedule, whatâ€™s staying, what’s going, what we forecast every single screen that we are going to have by a show every single day. If a screen holds 100 people, were going to forecast that there’s going to be twelve in there on a Tuesday afternoon. On Saturday afternoon, there’s going to be 98. We have to allocate resources and labor. We figure out the product mix for that particular genre of film, what it’s going to look like so that we’re prepared to handle that level of business.
We have all sorts of tools that we’ve created related to the planning that goes on week by week to be able to be ready for those challenges and that business when it comes. That’s the short-term side of it. The long-term side of it is the part that I have to live in my head constantly. You got to think about, â€œWhat are the chess pieces to be able to handle a six-state operation in terms of the people side in particular?â€ What works for business long-term? I talked a little bit about things that are scalable particularly in the area of technology. How are we doing the people development side? I did day workshop here in Austin. It was one of those types of things where you work on wicked goal thing, a huge problem. I went in with one particular problem. It was a sales challenge related to one of our locations. I realized that that was a complete waste of my time. That wasn’t what my big challenge was going to be for the organization.
The big challenge was, â€œHow do we grow this team and have them ready to be able to perform at the pace that we’re going to be opening these units?â€ I developed a program that we call Next (Wo)Man Up. That way, if itâ€™s a woman or man, whoever the necessary person that we need is, weâ€™re making sure that they are up for the challenge. They have the development they need when we need them. Thatâ€™s the key. It’s easy for me to go in and say, â€œJohn, you’re promoted,â€ but it’s not easy for me to be able to have everybody ready at the right time. The right size of the organization and not having a bunch of people who are ready to move to the next level.
We don’t have the availability to be able to move them along in their development. If I have eight general managers or assistant general managers that are ready to be general managers, that’s great, but I’m not going to have eight units to put them in the next six months. I have to make sure that we have the team ready to go on the right date at the right time. I’m never caught off guard in terms of a possible turnover incident. I don’t have somebody ready to go to step up to consistently meet the operational challenges of the business.
How do you keep those people engaged when you’re not quite ready to move them into a general manager role but you know it’s probably coming in nine months? Do you tell them?
You do. In our particular case, we developed a mentor program. We’ve got folks that are working with one of our established general managers to be ready. I even told some of my guys that when we put them and paired them in the same unit, â€œYour job is to sit in the corner and drink coffee. Read the newspaper Mr. General Manager. I want your understudy running this business so that we can ensure that he or she is ready to take the challenge to the next level.â€ It becomes to the point where that general manager is doing nothing but coaching that performance. That’s how we do it to make sure that we have people ready. If we don’t put them into the situation, they won’t be.
It’s tough because you want to be recruiting and growing people from within, but then you don’t want to get them so skilled that they leave and go somewhere else. Also, as the company accelerates in growth, you need to hire ahead of that curve.
We do challenges, incentives, all sorts of things to ensure that we lower that turnover. We’ve been successful in doing so. The growth has spoken for itself. In my time here, we’ve gone from one to eight. These are big operations. Itâ€™s not like you can pop them up quick. We’ve already got four that are in various stages of construction. People see the growth and they know it’s coming. They also realize that these are involved businesses. Youâ€™re running them when youâ€™re a four walls general manager. You’ve got to worry about movies. You’ve got to worry about team members. There are 200 team members a location. You’ve got to worry about making sure that your beers are brewing properly. The inventory is right and all these other things. It’s a big challenge. Being able to pass some of those things off to the folks that we need to develop and get them ready to the next level in small bite-size pieces has been an effective strategy.
To get a scope or a sense of the scope, approximately how many employees do you have at each location?
Thatâ€™s anywhere from 150 to about 190.
If people think that there are only five or seven people running around, theyâ€™re completely missing it. 150 to 190 employees per location, how many would you have roughly on a shift, 30 to 50?
Yeah, that’s on an average shift, but you’ll have well over 100 that are working on a Saturday, Sunday.
It’s insane to think about how many people you have. These are tough people to be hiring for.
They are, and we work on what are the competencies associated with what we want to have in our folks. Focusing on those six competencies ensures that we have people that are going to be aligned with our purpose. That becomes half the battle if you can get the right people and they’re all with the right mindset. It becomes a lot easier.
Can you explain something to me that I’ve never understood? Why are there nights of the week that when you’ve got a 50-seat theater, six people are sitting there? I don’t get it. It’s such a big city. How are you not always full? I don’t mean just you. Itâ€™s every movie theater in general. Are there that many other options out there?
That’s the business model. We allow for that. We understand that there’s going to be low occupancy at times, but then there’s going to be high-level occupancy times. You factor that into the model. Why that’s the case? I can’t tell you, except to say that people, at least from an American cultural standpoint are ingrained with the concept of schedule and routines. Hollywood has released films exactly in that pattern to adjust for that. In other words, this is Labor Day weekend. They’ve given up. I shouldn’t be the one criticizing the makers of the intellectual property and the content but I’m going to, briefly. That is to say that Labor Day, a three-day weekend, it’s not viewed in the American population much differently than Memorial Day. Memorial Day is a big blockbuster movie release weekend, but Labor Day is nothing. You ask, â€œWhy is that?â€ It probably has a lot to do with the fact that the disposable income goes back to school.
It makes sense.
They go out. They shop and they do other things. They go out to lunch and I don’t think that there’s a lot of time for movie necessarily. If they released content that would get people to come, you would be surprised at the number of people that weâ€™ll see. When we have major tentpole releases, weâ€™ll still see during the workweek, school week a lot of volume even during the day. It’s a matter of releasing content that resonates with the public.
Why have they not looked at in terms of supply-demand or in terms of keeping capacity? I’m going to date myself right now. I’m guessing it was 1981, where they introduced in Canada the $2 Tuesdays. It was $2 to go to the movie. Nobody went to the movie on Tuesdays. Itâ€™s like, â€œWhat the hell are you doing?â€ All of a sudden, on Tuesdays, you couldn’t get a seat at a movie theater. They were so busy for years. Why do we not do that? Why do we not offer to get them into the theater like $2 Tuesdays and $4 Wednesdays and know that they’re going to buy the food? Keep the prices high on Saturday, Sunday and Friday?
We do, but we’ve got those intellectual property owners that we are our partners in that ticket price.
They won’t allow you.
Yes, they have certain rules that we need to follow. That’s part of the partnership here in the United States film distribution business. We work within those parameters and we built those parameters into our business model.
There’s got to be a way around it. I’m such an entrepreneur where I’m looking for the side door that I can sneak into, whether it’s $10 free food on Tuesdays.
We always are. If you think about it, movies are a little bit of an antiquated business model. They haven’t moved to dynamic pricing. When Star Wars releases, the price is going to go up. When it’s six weeks old, it should go down. There should be that. If you think about from a marketing standpoint, where do you see film advertising? You see it now online and you see it on television, commercials for movies all the time. What you don’t see is marketing directly to the consumer who’s the most likely to see that film. Why is that? The keeper of the data on who’s coming to see that film is the exhibitor.
In other words, because I have reserved seating, I know who’s sitting in row C10 at any given time. I have that person’s information. Why are content producing partners, the movie studios haven’t partnered with us to be able to market there to our guests that they know has a high propensity to see that film and make it more of a partnership, I don’t particularly understand. They’d rather have blanket coverage and put a television commercial on than going out and saying, â€œFlix, let us partner with you on this film. Tell us who has come to the following ten titles? Let’s go directly to that consumer and let’s do a little project and partner with us on how to fill your seats.â€
What percentage of your people go to two movies and pay for one?
Nobody, because it’s an all reserved seat environment.
You’ve done that. That’s right.
It’s like the ballgame. You can’t do that anymore. That’s a great question because all of us did that when we were kids. We snuck around and went to multiple movies in an afternoon. Thatâ€™s how it worked.
That’s how I saw Return of the Jedi. Two people bought tickets and the rest of us snuck in three weeks after the movie released. For you and your role, you’ve been running these big organizations, but every day these are the biggest thing we’ve ever done. I’ve always said, â€œWe’re all still sixteen-year-olds dropped in adult bodies.â€ How is Matthew still growing as a leader? What are you working on in growing today?
I learn every single day. What I’m working on right now is the fact that I’m making decisions that affect a way younger workforce than I am. Running through my filter of sensibilities doesn’t always make the most sense. I’m not the person on the ground that’s executing it day in and day out for our guests. I’m not the team member that is the recipient of a lot of the decisions I make. What I’m working on personally and professionally is trying to get better at more diverse thinking, getting as much input as we can from all levels of the organization across all demographics, across all age groups and everything to be able to make good decisions. These decisions support the long-term health of the Flix team member and the Flix business and brand to keep the consumer coming back.
You’ve had a CEO role before in a franchise before. How did those roles differ for you versus being the COO in a company?
Itâ€™s very different. First of all, I work for a gentleman that is all entrepreneur. When I say all entrepreneurs, I don’t mean that negatively. Itâ€™s funny because he thinks about things differently than I do. He doesn’t understand why we can’t do certain things. Probably the other is true as well. He has certain biases towards certain things because that’s what we did when the concept was incubated. That doesn’t necessarily mean itâ€™s always the right thing to do. He doesn’t understand why we don’t still do it that way. My answer is always, â€œIt’s not as scalable.â€ I’ve learned a lot about how to sit in both seats. I love my COO role though. I work with somebody who is an entrepreneur. He challenges my thinking. At the same time, I have the freedom, knowledge, history and training to be able to drive the culture in this organization to a level that will make it successful for the foreseeable future.
Matthew, if you were to go back to your 22-year-old self, graduating Cornell and you want to give yourself some business advice or leadership advice that you know to be true now, but you wish you’d known earlier, what do you think it would be?
That’s simple. Number one, you don’t know everything. You absolutely don’t know everything and you are going to continue to learn and grow and develop forever. Learning never stops, but you lose sight of the fact that you think it does when you’re 22 because you’re out of school. Try and learn as much as I can continue to learn and be able to use that knowledge to make me richer in my intellect to make good decisions. Secondly, work on how to read not to write. I know that sounds remedial. I’ll tell you, the ability to communicate with all sorts of different people, that means different languages, different backgrounds. The words you choose so that you’re not speaking over someone or someone’s head and how you write. I write a weekly column for our entire company, which is important. You shouldn’t lose sight of how it is that you’re representing yourself and your brand to your folks because they take their cues from me.
Matthew Baizer, the COO for Flix Brewhouse, thank you very much for sharing with us on the Second in Command podcast.
You are very welcome. I appreciate it. Thank you.
Thank you very much.
About Matthew Baizer
Matt came to Flix from Real Mex Restaurants where he was the Director of Franchise Operations for Chevyâ€™s 24-store franchise operation as well as a region of five company-owned stores, including its Times Square flagship location. His franchise and company stores represented a combined $78 million of system-wide sales. Prior, he was Regional Director of Operations for Chevys, with city responsibility for San Francisco, Sacramento, Las Vegas, and Phoenix.Â
From 2000 to 2004, Matthew was the Vice President of Operations, for Zao Noodle Bar, a unique Pan-Asian restaurant concept that grew to 10 locations in four markets plus two licensed outlets on the West Coast. In 2004 he became the President and CEO of Zao where he remained until 2010.Â
Matthew is a food service â€œliferâ€. He is a 1990 graduate from the Cornell University School of Hospitality with concentrations in food and beverage management and finance.