The Hidden Revenue Stream Most Restaurants Overlook

(04:14) Adapting physical formats and configurations creates efficiencies and allows for better alignment with diverse markets and site constraints.
(06:21) Prioritizing local involvement as part of early planning helps build stronger community relationships and establishes trust from the outset.
(09:20) Exploring off-peak opportunities can reveal adjacent revenue streams aligned with operational strengths.
(10:09) Mastering the delivery of complex offerings at scale requires thoughtful process design and operational discipline across all units.
(12:55) Long-term resilience is often shaped by decisions made in challenging times, particularly the ability to stay committed to promising initiatives.
(14:23) Investing in system-wide technology enables improved performance tracking, streamlined labor processes and enhanced visibility across the brand.
(16:33) A centralized training and development platform supports consistent learning, employee engagement and smoother onboarding across a growing network.
(17:10) Creating a balanced work environment with predictable hours helps improve employee retention and satisfaction.
(18:39) Establishing a culture rooted in bold thinking encourages continuous improvement and reinforces alignment across franchise operators and staff.

Wisetail

Sunny Street Cafe

Mike Stasko: Each Sunny Street Cafe can be unique, can be a little different, can be crafted with the community in mind, with the owner-operator in mind. It is something that's been at our core and been a big part of our success.

Evan Melick: Welcome to Wise Tales. Today we are joined by Mike Stasko, who serves as the president of Sunny Street Cafe, a breakfast and lunch restaurant group headquartered in Columbus, Ohio. Known for its fancy pancakes, made-from-scratch classics, and family-centric atmosphere, the brand operates 22 locations with over 20 years of experience in the restaurant industry.

Mike has honed his expertise across marketing, menu development, product strategy, franchise support, and operations. His leadership has been instrumental in driving Sunny Street Cafe's growth, enhancing franchisee success, and strengthening the brand's reputation as a trusted go-to neighborhood staple for breakfast and lunch.

Mike's forward-thinking approach has propelled Sunny Street Cafe to new heights, introducing innovative menu offerings, implementing strategic growth initiatives, and bolstering the tech stack. By prioritizing operational excellence and staying attuned to evolving guest expectations, Mike ensures Sunny Street Cafe consistently delivers the warm hospitality and elevated dining experience that makes the brand a standout in the industry.

Mike, I am so honored to be joined by you today. Thank you for being on Wise Tales.

Mike Stasko: Evan, so glad to be here. Thanks for having me.

Evan Melick: So, one of the things that we talked about during the prep call, I'm really excited to dive into, is a very unique approach y'all have toward balancing the franchise personalization and maintaining core community-driven identity. Can you talk to us a little bit about what that looks like for you, how that philosophy was developed, and how that shows up in your locations?

Mike Stasko: Sure. You know, it definitely evolved over time. I think on paper, everybody would like to develop a concept that you could just stamp out. Box was the same size, the layout was the same size, and every single aspect of the operation was the same throughout locations. But that's not reality. One thing we learned pretty early on, and it's even more prevalent now, is guests really look for authenticity.

And so the idea that each Sunny Street Cafe can be unique, can be a little different, can be crafted with the community in mind, with the owner-operator in mind, is something that's been at our core and been a big part of our success. That can manifest itself in a lot of different ways, whether it's regional menu offerings, whether it's the decor in the restaurant, or the ability for somebody to put their personality into the space, so that when you walk into a Sunny Street Cafe, you know it's a Sunny Street, but it looks a little different, feels a little different. It has some unique touches, and that's served us really well. And it continues to kind of be a little wrinkle that we've added to the model as we move forward.

Evan Melick: So, I'm curious—when you say wrinkle, I'm wondering if this presents challenges that can be seen as opportunities for sure. Because when you were talking about stamping out "same, same," there are a lot of organizations that have grown to great heights, let's say, in doing "same, same." So, what types of unique opportunities does this present to you as you're looking at these new franchise rollouts?

Mike Stasko: A lot of different ways to answer that question. A couple that come to mind. You know, one—the size of our box varies pretty greatly. We have stores as small as 2,600 square feet all the way up to 4,600 square feet. Our sweet spot is around 3,200. But we've not necessarily seen a direct correlation with performance and the size of the box.

And here post-COVID, that's become pretty important as we look for sites, because people are trying to keep their build costs down. They're looking at smaller spaces, so being able to adapt a little bit and have the model prove that you can use a smaller space and still be successful has been quite the boon for us as we talk to folks.

To take that maybe a little more granular—when it comes to regional menu differences, we have stores that are in the South, we have stores that are in the Midwest, and everywhere in between. And we recognize that there are some culinary differences, or there are some community favorites or regional favorites that you almost gotta have. So we've worked in tandem with those stores in those regions to have specialty menus or one-off offerings that we know are still high quality, that we can execute consistently from an operational perspective, and don't get too far outside the lines of what the core of our menu is.

The challenge becomes, it can start to get out of hand a little more quickly. You lose how tightly you're monitoring food cost and, suddenly, we're not able to offer some expertise that we normally can when it comes to our core menu items, which we really fine-tooth comb.

So, some unique challenges, but also some real pluses on the other side of the coin too. You know what I mean?

Evan Melick: Mm-hmm, yeah. And one of the things I know that we've talked about before is your investment in community and how you have this community-driven approach. And it sounds like when you were talking about expectations of guests, that really flows and follows into some of your core values around community contributions and making sure your menu items are reflective of the communities where the locations are situated.

And so, how do you as an organization help new franchisees or expanding franchise opportunities embrace and implement a community-focused approach in their stores?

Mike Stasko: Yeah, you know, a few things. It definitely starts before we even do the grand opening. You know, we ask the new store operator, what's important to you, and how is your store going to support your community? And those answers can differ wildly based on people's backgrounds.

But right from jump, when we do our friends and family or VIP test run prior to opening things, there's always a partnership with a local organization, so that there can be some giveback and just some philanthropy built in right from jump. And then that trickles down into just putting together a marketing budget for the first year.

We're small. We're a family-owned company. We don't have big media spend. National media is not a thing we do. A portion of the marketing budget is just straight up, how are you supporting your local schools or your churches or civic organizations? You know, what teams are you sponsoring? Are you involved with the chamber? And those things are what we have the new store openings focus on. And those things usually continue to manifest themselves in good ways with community support and people coming in to eat your food and enjoy your service, which is really what we're trying to accomplish, right?

Evan Melick: Oh, I think that is such a telling tale. And you know, you've seen great success as you're beholden to that philosophy, and it sounds like it is definitely core of who you are and what you do. So congratulations. 22 locations is pretty fantastic to be able to invest and implement that in a really comprehensive way.

One of the things that I'm very interested in talking a little bit about is—the restaurant industry is changing significantly. And this is no secret to anyone. Whether it's rising food costs, whether it is really trying to constrain some of those operational expenditures. And so restaurants are frequently looking to innovate, looking to expand, looking to diversify. As everyone who has any kind of portfolio would attest to, right? Diversification is key to help you sort of navigate the ups and downs.

Would you talk to me a little bit about some of those diversification exercises y’all have undertaken, how that's gone for you, where you've landed, and how you're expanding?

Mike Stasko: Yes, great. I mean, I have as many skinned-knee stories as I do success stories, but I guess that's part of growth and that's part of life, yeah. But, you know, early on we recognized that as a breakfast and lunch-only concept—so we closed at 6:30 to 2:30—you know, we're paying for that box, we're paying for our real estate, rent's going 24/7, 365.

So that was a little heartburn early on in the game. We explored ways to utilize those after-hours parts of the day. Whether that was renting the space out for private events, we did a short, expensive stint into dinner. We tested that in a market for some time, developed a standalone dinner menu that also went with the breakfast/lunch menu, and found out pretty quickly that that just wasn't at our core. That's not what we were about. Our employee base got thinned out. We lost the quality-of-life aspect that really makes our concept special. And we were competing with folks that were not in our wheelhouse.

So, long story short, we got out of the dinner game really quickly.

Mike Stasko : And you know, then it dawned on us that catering could be our third daypart, or our "quote-unquote" dinner daypart. So we spent a lot of time developing the catering program specifically for breakfast and lunch. You know, we knew lunch was an opportunity, but we thought breakfast had some serious white space.

I think I mentioned to you before, when you think about breakfast catering, you think bagels, you think continental breakfast, maybe donuts. But to be able to do hot breakfast well was not something that people were doing. And that's served us really well. It's been just an absolute beast of a growth platform for our restaurants.

And I guess just as importantly, it fit in seamlessly with what we were doing. We didn't add a lot of SKUs. We weren't adding a ton of labor. And we developed the menu in tandem with what we were doing in store, so it became second nature. Happy to talk a lot more about that if you want, but catering has really become our innovation tactic, if you will, to add another revenue stream.

Evan Melick: So what I really like about this story is, number one, the creativity. Innovation is oftentimes born out of necessity. And when we look at diversification, we often think about sort of this horizontal type expansion for innovation—whether it's moving into dinner or any of those things. But that creates its own challenges. You're competing against different, very entrenched restaurants in the dinner space, all of those things that you mentioned.

But we don't often hear stories of sort of that vertical innovation—the depth and doubling down on your core assets. And I'm a huge fan of looking at what you do best, which is, you know, your breakfast. And my gosh, those pancakes look wonderful.

But to be able to capitalize on that core strength that your organization has—I think that's something we don't always think about as innovation. And so that's why I really wanted to highlight that story, because it is really an expansion of what you already do well.

Mike Stasko: And it sounds so simple in retrospect. You know, it's like, well, it was right there in front of you. But it's not simple to execute. Sometimes you have those aha moments. But just to talk a little bit more about that—we were doing well.

COVID hit, and we thought catering might go away forever. Who would ever do a buffet again? If you can harken back to that time, you know, nobody was in the office. And it ground down to basically a halt. And we were challenged with, you know, what do we do with our catering infrastructure? Do our directors and our catering managers stay on board or not?

We kept everybody on board, and we kept the faith. And sure enough, post-COVID, everybody's getting back into office, and companies are now trying to attract people to come into office—hybrid or full-time. And the sales are just through the roof because of it. So we were really positioned well from that development early on and then kind of sticking with it through some of the tough times so that we could be here right now, kind of telling the success story to all your listeners.

Evan Melick: I mean, overnight success years in the making, right? That's oftentimes how it happens. One of the things I do want to ask a little bit about is—you're scaling quickly, you're growing quickly. Whether it's the diversification into catering and really doubling down on those efforts, or continuing to expand locations, what types of tools and systems do you as an organization find incredibly helpful as you scale? And how do you ensure that your franchisees are set up for success from literally day one of groundbreaking?

Mike Stasko: Man, I have a lot of answers to that. I would say, first and foremost, we own half the restaurants in the system. So we have skin in the game. And when we make investments into new technology stack or put new systems in place, we ask the question—how is that gonna look in terms of the unit-level economics? Are we adding expense just because it's bright and shiny and new? Or is there provable ROI here? Is there something that's gonna help retain guests or improve profitability?

So I think that lens helps us make better decisions in terms of being a franchisor. That said, I think one of the biggest wins has been standardizing POS for us. We launched system-wide with Toast in Q4 of last year. We were a little splintered on that front before, and that’s just been a huge win. Everything from just the improved hardware and technology to be able to do things tableside and reduce the labor.

You know, back in the day it was a very diner-esque model where there was a cashier up at the front. You handed somebody a receipt, they walked up, they stood in line, they paid it. You can imagine the inefficiency of that. And so to be able to change that just from an operational labor-hour practicality standpoint has been a big one.

Also on the backend, though, lots of cool things to do in terms of menu mix, in terms of just some of the backend programming we can take off people’s hands—store-level hands—and save them time. So that one’s been a huge win for us.

Evan Melick: So when you think about employee development, what is your approach to using technology to help support? Is everything hands-on in your store? Especially as we're thinking about the standardization at scale—with exceptions. I just made that up, so you don’t have to use that in your marketing materials, for sure. But recognizing your approach to community and flexibility in how the stores are built.

Mike Stasko: Sure. And I will steal that. I’ll take it as my own, but I’ll put you in the little small writing underneath it.

Evan Melick: I appreciate it. I can just take an asterisk.

Mike Stasko: Yeah, I mean, in terms of employee development, we’re about to launch a new learning management system. I will say that we’ve had some work to do in terms of how to replicate culture and make sure that training is top-notch. I think those are some growing pains that come with being a smaller company. But we’ve had great luck in terms of employee retention and development. A lot of that has to do with just the folks that are running our stores—our culture in general.

But at some point, you can’t just rely on who you are and hope that’s going to replicate itself. I do know that retention’s great because of our hours, because of the lifestyle. You can get out on a bad day at three o’clock, and you’re not grinding those late-night dinner hours or bar shifts and things like that.

So we tend to get people to come in and stay with us. And you know, we’ve got 15-year-plus anniversaries that we’re celebrating, and that’s really cool. But we realize we’ve got to get better and we need to invest in that. So we’re rolling that out this summer, and that’ll be a huge win for us just in terms of getting more efficient with our training and being able to develop people on a more clear path.

Evan Melick: And I applaud you on the retention. 15-plus years is definitely nothing to sneeze at. I’m guessing the pancakes are part of that too, because, you know, who doesn’t love to take new pancake flavors for a test drive?

Mike Stasko: Sure. You know, if your food was terrible, people would not be sticking around—I don’t care how good the money is.

Evan Melick: Right?

Mike Stasko: Getting three-stack of pancakes every now and then, right?

Evan Melick: So if anyone takes anything away from this podcast—make sure your food is good.

Mike Stasko: There we go. That’s the silver bullet.

Evan Melick: There it is right there. Thank you. One of the things I like to ask every guest as we wrap—because I think this helps give a flavor of personalization, and it’s a fun question for me—if you were to design your own custom bumper sticker… I know people don’t use bumper stickers all that often, but just roll with me here. If you were to design your own, what would it say and why?

Mike Stasko: I think it would say “Be bold.” That was advice my dad gave to me when I was young, and that stuck with me. Taking chances and not being afraid to fail and putting yourself out there—it's difficult, but it’s rewarding. It’s rewarding in business, it’s rewarding in life. Something I’m trying to pass down to the next generation too. So I think it would say “Be bold.” But I love that question. You know, I’ve heard other interviews, and it’s always interesting to hear people’s answers. I don’t know if that one’s unique or not, and I don’t even know who that’s attributed to, but I think it would say “Be bold.”

Evan Melick: I think it’s attributed to you now. And, you know, much like the “standardization with exceptions.” But I think that’s fantastic. And you talked a little bit about the skinned-knee process, right? And being bold requires us to be okay with having skinned knees and learn from those experiences. So no one has said that before. You are the first, and I appreciate that.

Mike, this was such a fantastic conversation. I am very grateful for the time you spent with us today. And best of luck on your expansion efforts. And everyone—go try the pancakes.

Mike Stasko: Indeed—chocolate lava pancakes is my personal craving right now. So, you get a big old scoop of whipped chocolate ganache on there… I mean, it definitely borderlines pancake and cake. But that’s what’s splurge-worthy about it.