In April, Paulo Pena became the new CEO and president of Carrols Restaurant Group, the largest Burger King franchisee in the system that owns and operates more than 1,000 stores across 23 states. Pena succeeded Dan Accordino, who retired after 50 years at the public New York-based company.
Carrols Restaurant Group retained its No. 3 rank on this year’s Franchise Times Restaurant 200 list—which ranks the biggest restaurant franchise owners in the U.S.—with approximately $1.7 billion in sales in 2021. It ended last year with 1,026 Burger Kings and 65 Popeyes stores. On August 11, Carrols announced financial results for the second quarter of 2022 and reported a 4.1 percent increase in total restaurant sales to $441.9 million, versus $424.5 million in Q2 of 2021.
Paulo Pena joined Carrols Restaurant Group as the franchisee’s new CEO on April 1.
Pena describes his first five months as a “whirlwind” spent getting to know operational leaders, managers and corporate staff, and notes that Burger King’s parent company, Restaurant Brands International, has been an “extremely supportive and collaborative partner as I have settled into my new role.”
Shortly after he started, Pena began a “listening and learning tour” and visited many of the franchise’s restaurants, seeking to better understand the business and what makes Carrols tick. He’s met hundreds of employees who have shared their ideas, concerns and suggestions for strengthening and evolving the company, he said, plus he launched a company-wide survey to gauge what Carrols is doing right and what can be improved.
“My greatest takeaway so far has been a great appreciation for the human capital we have at Carrols, and my mission will be to harness their passion, commitment and can-do attitude to drive our future success,” Pena said.
Franchise Times chatted with Pena to learn how his prior 20 years of experience at Selina, McDonald’s, Wyndham, Coca-Cola and more will help in his new role leading Carrols. Read on to hear how Pena made a mess making his first Whopper sandwich and learn what initiatives he’ll implement to drive financial performance, boost productivity and turn around underperforming restaurants.
This interview has been edited for length and clarity.
Franchise Times: Can you fill me in a little more on your background?
Paul Pena: Like many in our industry, my first job as a teenager was at a restaurant. It was in Sydney, Australia, where I grew up, and was a formative experience where I learned the value of customer service and enjoyed being part of a passionate team.
My background is in the consumer space, having worked most of my career in the hospitality and quick-service restaurant industries. I am, at heart, a people person and have always been drawn to the humanity of these industries, recognizing that success requires careful attention to the customer and employee experience.
FT: What drew you to Carrols?
P: As I considered the CEO opportunity at Carrols, I was impressed by the Company’s operational expertise. Carrols has a long history of operational excellence and routinely outperforms the U.S. Burger King system.
But I was even more moved by the fact that the Company shares my dedication to providing employees with the training and support they need to succeed and advance in their roles and build a life-long career. No one illustrates this better than Joe Hoffman, Carrols Senior Vice President of Operations. Joe started as a team member at his local Burger King in 1978. He has since worked his way up through the operations team to the highest ranks of senior management. That’s what ultimately drew me to Carrols—knowing it was a company that is committed to developing its people and helping them grow.
FT: What did you learn from your past experiences at McDonald’s, Wyndham and more? How will those experiences help you in your new role as CEO of Carrols?
P: I’ve been fortunate to have worked for several world class organizations. At Coca-Cola, I first learned the importance of being customer centric. At Starwood, I learned the power of innovation at scale and the impact that a best-in-class loyalty program can have.
At McDonald’s, I learned about brand standards and the importance of structured processes to transform an iconic brand. I also had the opportunity to help take a company known for its historic success and infuse new technology, processes and talent to create a forward-looking culture.
In my last role at Selina, I learned how to thrive in a start-up culture. I had to be agile and do more with less. I took my learnings and operational best practices from larger companies and built out an entirely new routine.
I will draw from all of these learnings in my new role. At Carrols, we are moving quickly like a startup, focusing on our customers and our employees to build loyalty and transform our company into a destination employer.
FT: Since being named CEO of Carrols on April 1st, what have you accomplished/implemented?
P: First and foremost, I made my first Whopper sandwich. I took way too long and made quite the mess, but it was delicious. My culinary challenges aside, I’ve spent my first few months visiting our restaurants and meeting and listening to employees. What has come out of my time on the road is a better understanding of where we are as a company, the skills we have, where we need to improve and the true potential of what we can achieve together.
My goal is very simple: Drive improved financial results through consistent blocking and tackling to create long-term value for our stockholders, employees and customers. To help accomplish this, I have implemented three initiatives since starting at Carrols. They are focused on raising the bar on operational excellence, especially as it relates to the guest experience; improving productivity and stemming employee turnover; and prioritizing resources to help improve our underperforming stores.
- On our first initiative—achieving operational excellence and enhancing the overall guest experience—we began by focusing on improving speed, service and food quality. To supercharge our speed of service, we launched an internal competition across all our restaurants to reward teams with the largest improvement in drive thru times. We have already seen results, reducing wait times to below 2020 and 2021 levels.
- Our second initiative focuses on enhancing productivity and reducing employee turnover by motivating and engaging our restaurant team members to bring out their very best. We have also improved staffing levels at our restaurants, permitting us to expand our hours of operations. We are now almost back to full operating hours while minimizing overtime and premium pay.
- Our third initiative aims to turn around our underperforming restaurants. We are focused on quickly identifying opportunities for improvement and mobilizing special teams to bring these restaurants up to Carrols’ operating standards using a proven playbook of best practices that are already in place at a majority of our restaurants.
We have already seen positive results since implementing these initiatives a few months ago. Externally, our guest satisfaction metric is the highest it has been in two years. This past quarter, it outperformed the U.S. Burger King system by approximately 10 percent. This is an accomplishment that we intend to build on, as satisfied customers are more likely to return to our restaurants leading to higher traffic. Internally, our poorer performing stores are reaping the benefits of shared best practices and a structured triage process that is quickly addressing weaknesses and steadily improving our overall Company performance.
FT: As the largest Burger King franchisee, how have you been involved with the overall direction of the brand?
P: Burger King has been incredibly collaborative as it works on developing a comprehensive, long-term plan to drive traffic and improve franchisee economics. Burger King’s president, Tom Curtis, and his leadership team have been partnering with their major franchisees throughout the process and using us as a sounding board. We also meet monthly to discuss problems, identify solutions and roll out new initiatives. We strongly believe in the potential of the brand and the prospects of the collaborative relationship between Burger King and its franchisees.