The landscape of plant-based fast food is becoming increasingly littered with the bodies of concepts that didn’t make it or have founders looking for an exit ramp.
But the Los Angeles-based Hart House has big growth plans for 2024, and now is eyeing some of those players as potential acquisition targets.
Hart House debuted in 2022 with a streamlined menu of plant-based burgers, fries/tots and shakes—along with a very interesting approach to labor, but more on that later.
Now with four units open in the Los Angeles area, CEO and founding partner Andy Hooper said the chain plans to add another four to six units this year, probably in California. Leases are signed for the next two, with one in LA County and another in Orange County to the south.
The next potential markets are the Washington, D.C. metro area and Atlanta.
But growth may also come in the form of an acquisition, in the same way that plant-based competitor Next Level Burger recently acquired the struggling Veggie Grill chain.
Hooper said the company is looking at a number of potential targets, restaurants that guests might already know as a source for plant-based fare.
“I am 100% ear to the ground, consistently looking at and evaluating whether some of the small or regional folks that are out there today, that might be undercapitalized, under branded—kind of in this weird upside-down scenario, from an investment perspective—that represents opportunities for Hart House to grow,” he said.
But the fundamental goal would be to find real estate that could be converted to a Hart House, not to take on another brand, he said.
And that’s because he believes Hart House has a superpower.
“The whole point of this is Kevin’s unfair advantage as such a giant, larger-than-life brand megaphone,” said Hooper.
Hart, known for so many movies, from “Jumanji” to “Ride Along,” owns about 25% of Hart House. He is also a prolific entrepreneur involved with many other businesses, in addition to his full-time job as a celebrity.
Hooper likes to note that the actor has more social media followers than McDonald’s, Burger King, Wendy’s and Chick-fil-A combined. And when he posts, fans pay attention.
In addition to unit growth, Hart House is also looking to expand in other ways this year.
The chain has launched a related entity called Hart Foods that will bring the proprietary crispy (plant-based) chicken, as well as its shake base, to CPG channels, both as grocery products and as branded foodservice products for schools, hospitals and other outlets.
The beef analogs created by Impossible Foods and Beyond Meat may have opened doors for plant-based fast food more broadly, but it’s the chicken analog products that have white space, contends Hooper. At Hart House, the crispy (plant-based) chicken sandwich is a top seller.
And non-dairy shakes also offer a tremendous opportunity, he said. Non-dairy products represent about 5% of the total dairy market, where plant-based meat analogs only represent roughly 1% of the total meat market, so it’s a bigger hill to climb.
“And there are a lot more folks that are lactose intolerant or looking to reduce dairy that may not have any other dietary changes or restrictions,” Hooper said.
The Hart Foods division will be led by Hart House COO Bridget Siegel, who, like Hooper, worked previously with the Washington, D.C.-based &pizza. He calls her a “unicorn human being” because she has a background in manufacturing, operations and culinary.
Because Hart already has various products in retail—like the VitaHustle protein powder, available in Walmart and other stores—the new Hart Foods already has some connections in the CPG world.
“We’ve got relationships with retailers that kind of shortchange the process,” said Hooper. “We don’t have to go through the normal channels of, kind of, fighting our way through it.”
Meanwhile, the Hart House restaurants are still evolving with various formats. In addition to traditional restaurants, there’s a drive-thru format (in Hollywood) and one near the USC campus that’s designed for off-premise with no dine-in.
Hooper declined to share sales results so far. He said sales increased 350% last year, but that includes the growth from one to three units, so it doesn’t reveal much.
One thing Hooper can brag about, however, is that Hart House has annualized turnover at the hourly worker level of only about 50%, which is unheard of in the fast-food world.
That’s in part because Hart House has a base wage of between $19 and $22 per hour, well above the minimum wage of $16.90 in Los Angeles County.
In addition, the chain offers a comprehensive package of benefits—from healthcare to a savings plan and 401K, both with employer contributions.
Team members also get discounts on things like Spotify or Netflix subscriptions. And recently the chain partnered with an organization that offers free student loan debt restructuring, which can help workers reduce their monthly student loan payments.
In April, a new $20 per hour fast food minimum wage goes into effect across California, which essentially takes away some of that higher-wage differentiator for Hart House, Hooper said.
Pointing to a Chick-fil-A directly across the street from the Hart House in Hollywood, he said that competitor now pays about $18.50 per hour, but when the state fast food wage increases to at least $20 per hour, that Chick-fil-A will be in the same ballpark as Hart House.
That means Hart House may need to emphasize all the other benefits that make a job at the plant-based chain attractive.
Looking at the plant-based fast-food landscape, Hooper said there are various reasons why some have failed. Veggie Grill, for example, had a menu that was too big and overwhelming for the average flexitarian eater. (Even Veggie Grill founder T.K. Pillan said the plant-based trend was over hyped.)
In promoting the need to eat more plants, some advocates have vilified meat eaters. But Hooper said Hart House doesn’t try to shame people into eating less meat, and only about half of guests identify as plant-based eaters.
Neither Hart, nor Hooper, are vegans. They just believe American consumers are looking for opportunities to remove meat and dairy from their diet, and Hart House makes that easy—and relatively affordable, with burgers starting around $8.99.
Fundamentally, Hooper said it’s affirming that the brand is being accepted simply because “the food is delicious, the service is outstanding, the restaurants are clean and safe—all the things that make a restaurant work at the end of the day. Oh, and by the way, the food is also plant-based.”