Technology in The Fast Casual and Restaurant Industry
Anand Gala, managing partner of Gala Investments, shared insights into his investment strategies in the restaurant industry during a podcast at the Prosper Forum. With a background rooted in franchising and operations, Gala's approach to investing is shaped by hands-on experience and a deep understanding of the challenges faced by multi-unit businesses.
Gala Investments focuses on what they call "adolescent franchisors" - brands with 25 to 250 units that have proven their concept but may be struggling to break through to the next level. The firm looks for opportunities where they can apply their expertise to rejuvenate franchisee-focused businesses. Gala emphasized the importance of finding the right partners rather than just chasing the biggest check, stressing the value of alignment in goals and vision.
In discussing technology investments, Gala highlighted the need for practical solutions that address fundamental operational needs. He cautioned against the "tsunami of technology" overwhelming operators, emphasizing that basic tools for labor scheduling, forecasting, and inventory management can yield significant improvements in profitability. Gala stressed the importance of mastering these fundamentals before pursuing more advanced technological solutions.
When evaluating potential investments, Gala places a high value on leadership qualities, particularly the willingness to change and adapt. He looks for self-aware leaders who are open to mentorship and eager to learn. Gala's investment strategy is characterized by patience, with no set timeline for returns and a focus on long-term value creation rather than rapid growth or quick exits.
Gala shared insights into some of their current investments, including Proper Food, Dillas Quesadillas, and Mutt's Burger. He discussed the challenges and strategies involved in transitioning fast-casual concepts to drive-thru models, emphasizing the importance of maintaining food quality while improving speed of service.
Throughout the conversation, Gala emphasized the importance of building sustainable, profitable businesses rather than chasing rapid growth or inflated valuations. He advocated for a measured approach to expansion and technology adoption, focusing on creating value through operational excellence and strategic partnerships.
