Scoville Hot Chicken - The Questionable Acquisition

August 2022 to September 2022 – Research & Acquisition

Why did you get involved with the brand?

I was actively looking to purchase a restaurant to help out myself and my family members to increase our own personal cash flow. The other issue I was facing is that my family members that want to have the business have no formal qualifications and as a result this limited the number of businesses that we could enter into.

Fortunately I encountered the owner of the Scoville Hot Chicken restaurant when we were visiting the Norcross, Georgia location. She then proceeded to tell me that she was interested in selling two of her four locations. We set up a meeting for the following week on August 11th 2022 where I spoke with a few of her employees as well as another co-owner of the stores.

This is where I learned quite a few things of which:

What sales channels exist?

At Scoville Hot Chicken there are multiple sales channels which we could grow.

Many of the sales channels themselves were not updated since 2019, or 2020. My initial goal is to increase profitability and figure out ways to reduce our Cost of Goods Sold (COGS), which at this time were closer to 40% of our most expensive item on the menu which was our Chicken Breast Sandwich.

What marketing channels exist for Scoville?

Marketing Channels for Scoville Hot Chicken

in the beginnning of Scoville there was decent marketing done but then the marketing totally died out after a year. Only one post a month or so became the norm and no hype was being built for the brand.

Marketing is an interesting topic, as it can take multiple different forms, you can have traditional print media, such as flyers, door cards, brochures, even TV & Radio Ads, or you could venture into the Social Media Landscape where all your ads and presence is digitally on the web for you to consume.

Our initial strategy was to utilize social media as the cost per acquiring a thousand eyeballs and getting the attention of people is quite a bit more cost effective. In reality what happened was that we printed out one-thousand flyers and started distributing these all over places where we had some form of influence to increase sales. This turned out to be quite a bit more costly as it would cost us $0.19/flyer plus the time for me or someone else to distribute flyers. The benefit we found of this kind of marketing was that the conversion was very close to 50%, letting us believe that if we were to continue on this path that it would reduce in efficacy over time.

Facebook and Instagram advertising on the other hand we could effectively spend close to $5 to reach about one-thousand people which would result in a cost of $.005/person. Meaning for $0.19/flyer I could reach effectively 38 people. This was phenomenal for a few reasons, it drives traffic to my own page, it creates awareness, and increases my reach so there are more benefits but it could potentially take longer to convert a person.

October 2022 – Halloween, Acquisition Complete & Learning the Business

In our first month of operations we learned so much in terms of how the internal systems of the business function. Ordering was all completed through US Foods, as we needed to get a reputable supplier to make sure that we were in compliance with the Department of Health (DPH).

15th of October we began doing our marketing campaign via FB and Instagram and we began to see our instore sales stabilize.

Uber Sales Day by Day for October

Isn’t in interesting, when you compare the last period vs the current period it seems that 9% increase occurred during the end of the month during Halloween. I suppose this makes sense, no advertising was being done on Uber at this moment in time.

Uber Sales by Hour

Without advertising a majority of our orders were coming on Sunday nights in the month of October for Uber.

November 2022 – Month 2, Thanksgiving

In our second month of operations we faced a large issue with Uber transferring over accounts from the previous owners to us. which is why you see zero sales for the first four days of November. If we had those first four days our December, and November may have been exactly the same.

Uber Sales Day by Day for November

Our sales vs October shot up roughly 60%, the reason we suspect is simply because of the heavy marketing we pushed throughout the month of October although it wasn’t geared towards Uber.

Sales by Hour

In November our ordering times changed quite dramatically vs October. In October it seemed all of it was concentrated Sunday evening, but now it seemed to have spread across the board with Saturday, Friday, Wednesday, and Monday evening absorbing far more sales.

December 2022 – Christmas & New Years Eve

This is where we finally get into the groove of things and our systems are in place. We finally don’t have issues ordering from US Foods. We implement a few sales on Uber to test and expand market share. We suspect not many places are utilizing 3rd Party delivery services. One of the other things we implemented was higher pricing on Uber, & Grubhub because of the huge fees they take up front 24% and 33% respectively. Yes they will take more but if it makes your business grow and eventually turn customers into die hard fans it has to be implemented and must be part of my strategy to grow the business.

We also started doing advertising on Uber before Christmas and after Christmas before New Years Eve.

Uber Sales Day by Day for December

Our overall sales were down by 5% on Uber but what was interesting is that instore sales went up by $10,000 which was a big boost to us as we needed it in order to make our final acquisition payment for Norcross

Sales by Hour

What makes this even more confusing is that each month prior you can see sales by hour fluctuate, which means we could not accurately forecast when we would have a higher amount of sales on Uber.

2022 End of Year Recap & Q4

Uber Orders Month by Month Trend

Uber sales throughout the months have progressively increased, November and December sales were flat. Overall sales have increased and its been a blessing to learn so much in the three months we’ve had the business.

Uber Sales by Hour

Its interesting to see that most of our busy hours tend to be during the morning and night of every day during the middle of the day we find that there is large variability per day.

To7 (Takeout 7 Orders) for the Year