Q2 2022 One Group Hospitality Inc Earnings Call
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Greetings and welcome to the One Group Second Quarter 2002 Earnings Conference Call. At this time all participants are in the Sonali mode.
A brief question and answer will follow the formal presentation. Whenever the question is asked in the beginning, you will ask a question of pressing star or their one. Ask a star then to to remove your stuff from the list.
As a reminder, this conference call is being recorded.
And now let's turn crowns cover it's over your host today, Tyler Lloyd. Please go ahead.
Thank you operator and hello everyone.
Before we begin our formal remarks, let me remind you that part of our discussion today will include forward looking statements.
These forward-looking statements are not guarantees of future performance and you should not place undue reliance on them.
These statements are also subject to numerous recent uncertainty that could cause actual results to different material from what we expect.
Please also note that these forward-looking statements reflect our opinion only as the date of this call. We undertake no obligation to revise or publicly release any revisions of these forward-looking statements in light of new information or future events.
We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future offered results in financial conditions.
During today's call, we will discuss certain non-gape financial measures, which we believe can be useful in evaluating our performance.
However, the presentation of these measures or other information should not be considered an isolation or as a substitute for results prepared in accordance with GAP. For reconciliations of these measures such as adjusted EBITDA, adjusted net income, restaurant operating profits, comparable sales, and total food and beverage sales that own, managed, and licensed unit to GAAP measures , along with the discussion of why we consider these measures useful, please hear earnings release issued today.
With that I'd like to turn the call over to Manny Hilario. Manny?
Thank you, Tyler, and hello, everyone. We sincerely appreciate you joining us today and for your interest in the one group.
Our focus on strong operational execution, innovative culinary offerings, and vibe dining continues to resonate with our guests.
And I'm extremely pleased with our top line business performance during the second quarter.
despite the ongoing challenges facing our industry.
I thank our entire team for these results and for providing our guests with exceptional and unforgettable, boundless experiences, each and every dog. And I'm unforgettable, boundless experiences, each and every dog.
The strong-cells momentum with experience in the first quarter contained it into the second quarter.
Our total revenue grew nearly 15% to $81.1 million when compared to the prior second quarter.
Our comparable sales continue to be among the best in the rest of the industry.
Confirulated comparable sales increased 12.8% consisting of an increase of 19.8% at SDK and a 3.7% increase at Cone of Road.
Impressively, and also among the bust of their industry, when compared to 2019, a pre-pandemic base year, consolidated comparable sales increased 53.5% consisting of an increase of 81.9% at SDK, and a 27.6% increase of Coneblow. And a 27.6% increase of Coneblow.
Our second quarter US average weekly sales were equally impressive at $331,000 for SDK compared to $288,000 in the same period in 2021.
And 107,000 are going to grow compared to 103,000 in the same period in 2021.
We are also pleased with delivering over $4 million in net income and $10.4 million in adjusted EVA dial for the quarter.
Since before the pandemic, we embarked on a mission to diversify ourselves mix away from being heavily focused on corporate and event-driven business. in our theory to a simple design and incorporate its worth in which, given Trump's vision in value, it is difficult tobalance their legacy and gdzie not to proceed and explain it becomes the most pursuing way to manufacture and maintain benefit of food. Then, the efforts are still being produced within of in business.
Instead, we have been strategically capturing the special occasion business, which includes date nights, holidays, ladies night out, branch happy hours and other social occasions.
This strategy continues to pay dividends as reflected in our industry leading results. The
However, after two years of limited corporate gatherings, we are now seeing group events and conventions return and we have been able to capture that demand.
In addition, we continue to build our caring capabilities and believe that private events and caring offer tremendous opportunities for the brands. There are also us, but we've been using to build our ?? offer tremendous opportunities for the brands.
We're also focused our attention on creating incredible value offerings for both SDK and on the DB throne. and it's going to grow.
This allows us to expose our brands to new guests at approachable price points.
Guests can remember us for their celebratory occasions and come back and join us in our dining rooms.
It also allows us to capture demand during times and underage access capacity.
At both rounds, we are currently running several value-driven programs such as our weekday power launch, midweek date night promotions, pre-theater menus, and several takeout and delivery specials. Alright, thanks so much.
For the more, we continue to leverage the important branch state part with bottomless mimosas and on U369 Happy Hour Manual. On U369 Happy Hour Manual.
Throughout the second quarter, we captured the men for holidays without promoting around Easter, Mother's Day and Father's Day at Konopro, has decayed.
As a result of these efforts, we achieved some record breaking sales during these holidays.
Now turning our focus to development, we have an exciting pipeline of growth for both copy-owned and manage our license deals this year. And manage our license deals this year. And manage our license deals this year.
consisting of 9 new SDK corner grills and F&B venues.
In July , we open our first of three virtual locations to a licensed deal with reef kitchens in Austin, Texas. The first time we open our first virtual location in the early morning. We're going to open our first virtual location. In July , we open our first virtual location. In July , we open our first virtual location.
Yes, in Austin, can now enjoy the delivery of select menu items from award winning, and dining concepts, gonna grow and bow young.
This partnership enables us to further expand and capture a new consumer base with limited capital investments.
For the remainder of the year, we're going to open two company-owned SDK locations, one in Dallas and one in San Francisco. One in Dallas and one in San Francisco.
A managed SDK in Stratford, London, UK.
3 copy-owned cone of rolls, 1 in reverting, 1 in Columbus, and last but not least in Paradise Arizona.
And finally, we plan to open two additional license units in partnership with these kitchens, which will provide takeout and delivery only offerings in my corner broiled and volume passets. And finally, we plan to open two additional license units in partnership with these kitchens. And finally, we plan to open two additional license units
As we have wrong stated, we are early in our growth strategy with significant, white space ahead. We are excited about our long-term opportunity as we believe our units deliver best-to-class returns. As we believe our units deliver best-to-class returns.
For new restaurants, we're targeting between 40 and 50 percent ROIs for new company-owned SDKs and company-owned corner grills.
You foresee a total adjustable market for at least 400 restaurants, including 200 SDK restaurants globally, and at least 200 cone of rolls domestically. And at least 200 cone of rolls domestically.
Moving out to the current cost environment, as you are aware, we are currently in a period of historically high inflation across that industry. so
That said, on police they were able to deliver cost of goods sold at 25.8%, only slightly higher than the first quarter.
We were able to accomplish those through product mix engineering.
Selling high-imagine additive check items such as stopings, and sides, and committing to our beverage and bar programs. Selling high-imagine additive check items
Turning to labor, we've seen noticeable increases in average wage year-to-year in both manager and hourly workforces.
In addition, we have made investments to hire, to train, and reaching the best out in the industry. In addition, we have made investments to hire, and reaching the best out in the industry.
And we believe these strategies have allowed us to keep the significant market share with CAPTUR.
We're committed to remaining fully staff in order to support our new unit growth and sales driving initiatives.
Lastly, we have taken modest price increases this year.
With our strength traffic performance during the second quarter, along with our great value proposition for both plans, we believe we have significant pricing power and will strategically pick some price increases in the back half of the year. And the back half of the year. And the back half of the year.
To conclude, our team is doing a fantastic job providing our guests exceptional and unforgettable and unsuspecting experiences.
Ultimately, our focus on operations and data de-execution has proven effective in translating to a striking arrow.
And we plan to continue our current trajectory of industry leading capital sales.
discipline cross management and new store development.
Now I'll turn the call back to Tyler.
Thank you, Betty.
Let me start by discussing our second quarter of the angels in greater detail.
Second quarter total gap revenues were 81.1 million.
Increasing 14.6% from 70.8 million for the same quarter last year.
Included in our total revenue is our own restaurant that revenue of 76.9 million, which increased 13.4% from 67.8 million for the same quarter last year.
The increase in revenue is primarily attributable to strong sales and momentum resulting from the execution of our sales initiative along with the opening of new units.
Domestic consolidated comparable sales increased 12.8% for the quarter compared to 2021.
For STK, comparable sales increased 19.8% vs. 2021, and Kona Grille comparable sales increased 3.7% vs. 2021.
For the 2019 domestic consolidated comparable sales, increased 53.5%, SDK comparable sales increased 81.9%, and ConaGrow comparable sales increased 27.6%. For the 2019 domestic consolidated
Management, license, and incentives revenues were $4.2 million, increasing 44.1% from $2.9 million in the second quarter of 2021.
This increase is primarily the result of the strong execution of our sales initiatives, capacity restrictions being lifted, and an increase in the number of venues.
Owned restaurant cost of sales as a percentage of owned restaurant net revenue increased 50 basis points to 25.8% in the second quarter of 2022 compared to 25.3% in the prior year primarily due to increased product costs and partially offset by operational and menu management initiatives.
Owned restaurant operating expenses as a percentage of own restaurant net revenue increased 550 basis points to 57.6% in the second quarter of 2022, from 52.1% in the second quarter of 2021, primarily due to consolidated average wage increases.
We are particularly pleased this quarter with the restaurant operating profit of 21.9% at SDK during this very challenging environment.
On a total reported basis, general and administrative expenses were $7.3 million compared to $6.1 million in the prior year.
The increase was attributable to the increased professional fees and increased travel expenses due to rising hotel and airfare costs.
When adjusting for stock based compensation, adjusted general and administrative expenses were $6.4 million in the second quarter of 2022 last year.
We incurred approximately $0.2 million of direct costs related to COVID-19 during the second quarter.
COVID-19-related expenses are composed primarily of sanitation, supply, and safety precautions taken to prevent this spread of COVID-19.
This compared to 1.1 million.
a similar cause last year.
Interest expense was 0.4 million in the second quarter of 2022 compared to 1.2 million in the second quarter of 2021.
The decrease was driven by lower average outstanding balances and lower interest rates driven by the Recenancing Work Credit Facility in August of 2021.
The income tax expense was 0.9 million in the second quarter of 2022 compared to 1 million for the second quarter of 2021.
Our 2022 annualized effective tax rate is estimated at 19 percent. The tax rate is estimated at 19 percent. The tax rate is estimated at 19 percent.
Net income attributable to the one group hospitality Inc. Was 4.3M or 13 cents net income per share. Compared to a net income of 13.89 in the 2nd quarter of 2021. Or 41 cents net income per share.
When adjusting for COVID-19 related expenses and other non-recurring expenses and gains, a just net income of $4.9 million or $0.15 a just a net income per share, compared to an adjusted net income of $6.5 million in the second quarter of 2021 or $0.19 but just a net income per share.
Adjusted even up for the second quarter, a turvable to the one group hot fatality.
was 10.4 million compared to 12.9 million in the second quarter of 2021.
We have included a reconciliation of adjusted EBITDA in the tables in our second quarter 2022 earnings release.
I will now turn the call back to Manning.
Thank you, Tyler, and thank you all for your time today.
Let me conclude by saying that our business remains very solid despite the obvious headlines.
We are in the early stages of our long-term growth strategy as we continue to build a portfolio of high-volume, high-margin brands with compelling returns.
Above all, I'm grateful to all of our teammates who bring our mission.
Two lives every day to be the best Russian in every market where we operate.
They do this by delivering exceptional and unforgettable guest experiences to every guest, every time.
I also would like to thank our customers for their visit and continue to return to our restaurants. I also would like to thank our customers for their visit and continue to return to our restaurants. I also would like to thank our customers for their visit and continue to return to our restaurants. I also would like to thank our customers for their visit and continue to return to our restaurants. restaurants.
so that they can enjoy the highly differentiated vibe dining experiences that they have been craving.
We appreciate everyone joining us on today's call.
Tyler and I are happy to answer any questions that you may have. Does anyone else have a question about taking care of Tad and can you, um uh. Up. What happened to.
Yes, thank you. At this time, we will begin the question and answer session. What's your question you repressed star that you want on your touch on a phone?
If you're using a speaker phone, please pick up your hands up before pressing the keys.
To try a question please press star then 2.
At this time, we will pause momentarily to assemble the roster.
And the first question comes from the co-miller with Piper Sandler.
Thank you. Good afternoon. Super update. Just a couple quick questions. The first one, very high level. How is Europe ? How are you managing through? What are you seeing with consumer trends? How are things coming along?
I mean, this is many, by the way. So Nicole, I mean, our blood and stores continue to do well. I mean, we have not seen a major slowdown, but there's clearly a lot more noise in Europe in general economy. So there's definitely lots of noise. We really haven't felt any significant impact out there, but that doesn't mean that that won't change any time since there's a lot of noise in the market.
Looking at MLI, is up quarter over quarter dollars or, well, I guess year over year for sure. Sorry, I don't have the quarter over quarter in front of me, but there's more units who operate in MLI as well. I was just kind of trying to figure out.
any padaron there.
Oh no, we have to fix this.
Yeah, we haven't seen any significant difference, but as a matter of fact, it held up pretty well in the second quarter. So, but again, there's just a lot of noise out there right now and we'll go through it.
And then this is just very curious about seasonality. So everybody knows how 3Q flows seasonally. Just any general comment outside of seasonal patterns you want us to consider, that would mostly be on store level margin. But at the same time, you know, 4Q becomes a big part of the year. And it's just so fascinating how you're holding on to all of these different types of customers at different occasions.
So can you talk us through the scenario analysis, or I should say planning maybe you're doing for the fourth quarter, you know, good holiday, neutral holiday, bad holiday, how are you kind of wrapping your minds around what may come?
Yeah, so it's a very good question. So for the fourth quarter, two things to consider. Number one is events. And we're actually starting to see a pretty decent amount of fourth quarter events, particularly in December . So I would say that that's actually a good leading indicator. And then relative to us.
In the fourth quarter, if you think about December last year, you know, we did have the beginning of Omnicron, so we actually think that relative on the lap, actually the fourth quarter is a good lap for us. So I would say that we have a good comparative or lap to go against, and I think that the leading indicator on events is actually very good for the fourth quarter right now.
But again, remember last year we only saw the rebounding, a slight rebounding on event. So that's why the pipeline relative to last year in events looks way better than we had last year. And events looks way better than we had last year.
And just the last one, the way you talked about the promotions you're running, you know, and offering both affordable options and just a total value proposition, how are you slicing and dicing your consumer data these days and what is it telling you, meaning, is there something happening?
it could be any, you know, which way, you know, by income, by geography. What are you seeing underlying these strong trends, please?
Yeah, so I mean, so we do see a very positive trend at happy hour. We did launch our three, six, nine price point happy hour. So we are seeing a lot of velocity in the earlier time periods. But then also interesting enough, because we do have pretty good amount of high end consumers, our high end products, you know, continue to extremely well, as a matter of fact, they were doing so well that we decided to extend.
our wide-repromotion to the whole month of July . So we definitely see value bringing people in there. So we're marketing values. If you look at our digital marketing, so we're utilizing the value messaging to drive people in, but interesting enough, particularly SDK, we have seen a pretty large intent by consumers to trade up. So I would say that that consumer is holding up frankly rather well. And then, you know, chronic growth.
Obviously, the demographics are a little bit, maybe not as high-end as SDK relative to household income. But there we have supplemented our value messaging with a $7.99 cheeseburger for lunch, and that's doing extremely well. But what we saw there, though, is although we're offering a low entry price point on the cheeseburger, we have a $5 French fry option and...
they can option and the take rates on those is actually extremely high. So we are actually seeing the consumers, although they are coming in for the low price points, I think that in-store we are doing a nice job of trading them up. So again, it's interesting, and by the way, the value that we have is everyday value. We have always been committed to value, but as we have always said in the past is that if need be, we would switch our marketing to value which is what we are doing right now is really promoting.
The entry price points, but I'll tell you right now. I do see customers coming in for that But they're actually going to the regular price points when they get to the restaurant
I have not seen any material trends where people are actually trading down taking less items on the menu.
So in conclusion, now that you have a more normalized comp because they've just been through the roof, can you talk about what price is in there? And then I think you're counting entrees, at least on the SDK side, right, for comp. Can you talk to however you're calculating transaction traffic entree essentially to understand that measure?
Yeah, I mean we used actually both – we used measures of checks and we also used measure of heads or entrees for SDKs. We actually used both and we were both in SDK as well as corner grill. So the metrics held up pretty well. What am I thinking from a trend perspective is that –
You know, really the metric that we use is a three year stack looking against 2019, which is our base here and making sure that we're holding up. So as you probably saw from the press release is that that's kind of our health metric, if you will, at least for a couple more quarters until we get to more normalize. I'm not really sure there's such a thing as a normalized pump anymore, but we look at that baseline as a way of giving us some level of assurance as to how the business is doing. Relative to price, we have very little price.
in both SDK and Cone of Royal, almost insignificant. We held up from taking more price in the second quarter because we wanted to measure how transactions and how consumers were behaving. We're now a little bit more confident that we can take advantage of our pricing power and we're taking price this quarter at Cone of Royal and we may do some minor touch ups at SDK, but we do believe that there is actually room of pricing for us in the third quarter. I should actually help our...
our margins significantly, particularly at Coneblow.
Thank you very much.
Thank you. And the next question comes from Nixit Yan with Bush Securities.
Thank you. So did you guys expect over 500 base points of thick and operating expenses in Q2 versus last year? And if not, where was that difference? And then just give us if we can, just some more details around what exactly. Just some more details around what exactly.
transpired in the corner for us to see that kind of an uptick in the experiences.
Yeah, so the uptake on experience, I think Tyler mentioned this on his prepared statements mostly not all associated with average wage for our lease and manager labor. That has been the pressure point relative to that line item. And then of course, we have chosen to keep our staffing at the restaurants at bar. So we've kept all our restaurants fully staffed throughout the quarter. So the pressure point there.
is the fact that we are frankly just have headcounts in our business model and the wage has gone up. So in hindsight, probably the thing that we could probably have taken out earlier was pricing, because they did not take pricing in the quarter. But no, I mean, other than the labor, there was nothing of other significance on it. Although, if you also think about it, any kind of service that,
is labor intensive like genitorial DJs and stuff like that who also have a expo to to rates that's probably where I would say the pressure was on in terms of other expense i think everything was pretty much in line with what he thought it would be
So going forward, Q3, Q4, how should we think about margin side of the incremental pricing you're taking?
So I mean, I think for a Cone of Grow, we're thinking about four to five percent on price. So they should have a substantial, and on the Cone of Grow margin. And then A, we're thinking maybe one to two points. Very select items. So I think those items will help, obviously looking at AK margin is still in new one, plus, so that one to two percent increase should put it back into the 22 frames on the margin. And then, you know, the...
the price on the grill should bring it back up to the mid double digit right kind of 14, 15.
Okay, just a final question. Can you talk about just sales trends as a quarter-published and maybe into July , and whether you've seen any kind of that in June or July ? Let's get it on the right screen. Switch to 10 vectors to 20 orgon halt the last five, and we'll see what will do in July . Bye.
I didn't see it so pro and may with the holidays, we did extremely, we saw very robust trends around the holiday. June was a different month. It wasn't so much that he was slowing down, but it was choppy, where you know, you would have some really strong days and days that weren't the songs. So it was a little bit more of a clump, you know, just choppy trend.
to the three-year trend we thought that you were allowed up pretty good. So that's kind of, you know, as I mentioned earlier, with goal is that's ultimately the trend that we see is that at three-year comp is a key from our prepared common. It's very, very strong and we continue to believe that that's going to hold up reasonably while the third quarter.
Again, visibility is kind of, you know, is the million dollar chain with all the noise and the news and stuff. So, you know, that's the big and known here. But as we've gone through, you know, the first couple weeks of the quarter, you know, things are shaping okay about the three-year trend.
Okay, thank you very much.
Thank you. And the next question comes to Smith with Lake Street Capital Markets.
Hey guys, I want to dig in just a little bit deeper as we look at the four wall margins. Can you just give us any insight, Kona Grill looked like, you know, had a tougher time on kind of restaurant level margins. Look through any puts and takes, the impact it Kona more than your SDK units. The impact it Kona more than your SDK units.
So both were impacted on wage our wage
And then the only different meaningful differential between Kona Grille and FDK is tuna, a present of quarter, a warmer, higher and tuna because of its sushi component.
uses more tubes, so I would say that that's the difference between the margins on the two blanks and again as I said on my previous answer is that we didn't take pricing and and we do plan to take pricing now, so I think that's going to bring the the corner grow March and back to the mid teens
Okay, and did I hear you ride and look at the two different consumers, the SDK customer versus the Conegrille customer. Do you see more change in behavior with inflation? I sure on that Conegrille consumer than you did on SDK.
I would say that the answer would be that the SDK consumer appetite for premium items is unchanged. So we see a tremendous amount of trade-off on the SDK. So we didn't really see any meaningful, if any, change at all. And then corner growth, we really, frankly, we have not seen any discernible, predictable trend on either trade downs or people taking less items checks.
But again, we don't see it because we're doing a tremendous amount of promoting. We have activity going into bar as you know from the three to nine. So a lot of our marking activity helps offset maybe, some of the trends. So perhaps the reason that we're going to see it has more to do with that, that we have these promotions. More so than what's really the consumers doing. Definitely a corner of the row.
Okay, and then the last question from me, and you just talk about your non-comp restaurants and how those units are permit. And how those units are permit.
Pnic drop pressure stars would be compound pressures, would beyond those kommers, to be
For instance, value value is doing great. So we need a $2,000 average weekly value. What does that count to the item there? I think everything else is pretty much on the count. Yeah.
All right, so no changes, but I guess as you look at new restaurants, that will give you some of the confidence in the, I think you target now 40 to 50% our lie on, on new unit. I think you target now 40 to 50% our lie on, on new unit.
I mean, the restaurants for us is really a function of the real estate. The real estate is fantastic. I think the locations that. We have planned out our a, you know, type of locations. So, I think there's a significant value in the quality of the real estate. So, I mean, if you think San Francisco, which is opening very shortly here. Uh, we're looking at, uh, you know, uh, you know, 30 mission, which is a great part of, uh, you know, San Francisco and then.
Also Dallas is a fantastic high quality real estate and River and then and Columbus Again, I would say that it gives me credence to quality of the real estate and all these places are Have very favorable indicators will inform friends in San Francisco. You stress see, you know more fisc population in the city And more population is bad than zero, which was a historical number So you start to see a lot more people in the city Um, and you just a little bit more traveling and if you go to San Francisco
will do very well for us in the next set of freshman openings.
Great, thank you guys.
Thank you.
Thank you and next question comes to JP with Rothkappel partner.
Hi guys, I appreciate you taking the questions. We could start briefly on Brian . I was just curious of what the dispersion like, is most of brunch concentrated in a couple of locations? Are you seeing activity across all the STT locations? And then kind of add love to that. How are you guys thinking about driving for their growth in that brunch segment?
Yeah, so good question. So our performance in branches is pretty even across the board. We do have some locations over in just because of where there is a think of vaguely tremendous branch on Saturdays and Sundays. But overall, I would say that it's well balanced on the day part, on the pro-resroom base then. In terms of the growth opportunity there, we still think it's significant.
And it's a matter of continuing promoting it and driving frequency with the gas. So we were so far, we've been pretty happy with how that does, seems of growth. And our lunches were actually in step one of step 10 of what we conduct program. We were looking at elevating the drink programs as some new church on Prado. So there's a lot of promoting and activities that we...
We plan to really add interest to the day part. Remembering that any program that offers quality alcohol programs is doing well with the consumers. I think I want it to fund day to go, particularly, to branches is a very high time that people are going out. So we feel pretty good. We start runaway on brunch and voting and poverty for the two things that will elevate to that day part.
Great, thank you. Just shortly as we started thinking about 2023 and without asking you to guide to anything, when we thought revenue growth, I guess, would you guys be disappointed seeing same-store flat or kind of unit growth on par with this year? Any, is there any way we should be thinking about that out in the year? Any about that out in the year?
So, I mean, at this point, just getting through the third quarter of the ability out is as you're challenging based on all the ways.
the news and everything else out there. But again, I think the way we, so every time we don't have positive prompts, which I can't really remember in a long time, since I've been around, but it's something that we obviously try to stay from, but the reality is we did during COVID, whatever the hand, they play the best we can within those circumstances of the environment. So I have very strong confidence in the team's ability to be flexible, to pivot to areas that...
are still successful within the cycles. Now again, we have different economic cycles. Not everything bad, there's some place where you could still business, the higher end consumer trading up, all kinds of other strategies. So again, it's just really being flexible, pivoting and making sure that, being stays focused on our culture of always overperforming, over indexing to the industry.
And then just one last one for you guys. You want about development clients. I know we've talked in the past inspections, municipality kind of seeing a little bit of there. Are any of your own opening kind of slipping late expected? Thank you.
Yeah, I mean, I think the jurisdictions is certainly a challenge. I think one of the other challenges in just relative to construction more recently is just mobilizing labor. I think the ability to get more laborers and just the labor is a little bit more challenging than it's been historically or as I remember it. But again, we don't see anything instrumental there. It's just, we're just going to have to be more.
more flexible and how long it could open these restaurants and build them. Obviously, FCK is our big restaurants with lighting pieces. So we just need to make sure that we give ourselves plenty of time to build projects with quality, with over driving to get that done. The balance is cost and how you get these things built up. But in general, as I mentioned, our San Francisco was pretty in its stretch to open. We have all our restraining in San Francisco this week. So.
It's looking pretty good and then Dallas is gonna come to be there after and looking pretty good in terms of where we opened that one too. So we're looking for the opening these things. Now we start the opening design.