Nick Mitrossilis, the founder of The Yiros Shop, reached a fork in the road with his business just five years into a sharp growth trajectory as the popular eatery expanded beyond his original expectations of running just a handful of outlets.
Having started with a single shop in Brisbane's James Street precinct in 2015, the outbreak of the pandemic was a defining moment for the young entrepreneur who pulled together all he had learned and is now on track to nearly doubling the chain's footprint in Southeast Queensland next year.
Mitrossilis, winner of the Hospitality & Tourism category of the 2022 Brisbane Young Entrepreneur Awards, is planning to add another eight new locations to the rapidly expanding business which so far has been largely built on a company-owned model.
It was at the end of his first few years in business that Mitrossilis knew he needed to get the formula right if he was to continue growing, including a back-office that could help him scale up the business with a focus on introducing the latest technology and improving customer experience.
He also had to do so without compromising on the quality of the product that helped him build such a loyal customer base.
“When we started, our plan was just to open three stores,” Mitrossilis tells Business News Australia.
“It was about four or five years in that we really started looking at key areas of the business to ensure we were on the right path to sustainable growth. If you don’t get your key cogs right with the basics such as labour and cost of goods, then your business doesn’t work.”
Mitrossilis says the popularity of The Yiros Shop offering saw him open his second store in just eight months, and within two years the network had grown to five.
Lessons learned from growing pains
“People really loved our food, but we did start to see some cracks in the armour where we weren’t consistent in some locations. We ended up engaging secret shoppers to help us look at the business more closely. Since then, we have been building a brand rather than a small business.”
The Yiros Shop currently has 12 stores in its network, including two drive-thru locations, with only two stores run as franchise operations. Mitrossilis plans to add another eight over the next year after recently beefing up his head-office support operations to handle as many as 30 stores. More drive-thrus are in the mix as opportunities for sites arise.
The young entrepreneur began his business journey after moving to Brisbane from Sydney and finding a dearth of quality yiros – a popular Greek take-away he points out should not be mistaken for a late-night kebab.
“This is traditional Greek fast food and we’ve given it the standards it needs,” he says.
“It starts with the bread, the tzatziki sauce, which we make in house in our own factory, as well as onions and tomatoes. We use real meats and put the chips inside, which is the traditional way of doing it in Greece. It’s really simple but it’s the quality of the product that stand out – real food that people appreciate and can taste the difference.
“We’ve never changed what we’ve done from day one. We have spent a lot of time and effort on marketing and our brand image, but it’s always been about the consistency of our products.”
Sharpening up the business with vertical integration
This consistency has been enhanced by The Yiros Shop establishing its own wholesale production facility that supplies its restaurants with about 20 per cent of the cost of goods sold.
Trading under the Midas Mediterranean brand, the production arm has been able to consolidate the input from four previous suppliers by manufacturing the tzatziki, vegetable patties and pita breads used by The Yiros Shop network.
“We plan to consolidate three more suppliers into our factory over the next year to supply over 65 per cent of our products to our restaurants,” says Mitrossilis.
“This will give us more control over our supply chain and control the cost of goods sold to our restaurants. It also helps cutback on mistakes in ordering from so many suppliers and reduces back-end paperwork for each restaurant.
“As we grow, this will help us control our costs to our stores and really make sure we have supply of our essential ingredients.”
The Yiros Shop has also stepped up its focus on in-store technology to improve the customer experience and to drive efficiencies - a move that was accelerated by COVID lockdowns.
“We signed up with Uber Eats, driving our delivery market, and then just before COVID hit we had our own app. We have since refined that and switched up our point-of-sale software with ordering kiosks in stores. That has been a big focus for us really – a pullback from face-to-face ordering.
“It’s an expensive process to buy the hardware, the resources it takes to build it and get it right for our system, but the benefits have been massive.”
Would you like loukoumades with that?
Growing the menu offering is also driving solid gains in group revenue, with stores up between 20 and 40 per cent on the same time last year.
New additions to The Yiros Shop menu include a vegan offering ‘to ensure we are inclusive and have an offering for everyone’. Mitrossilis this year also introduced a dessert menu, initially traditional Greek honey donuts, baklava and almond shortbreads with plans to expand its offering over time.
“That’s been a big boost for us. We’ve never had a dessert offering and now people can come to us to get a complete meal. With our breakfast offering we now cover the whole day - breakfast, lunch and dinner.”
Rising food costs remain a pressure point for the food sector, but even with supply chain issues and the cost of goods going up, Mitrossilis says The Yiros Shop has been able to manage these challenges while maintaining product quality.
“We aren’t super cheap, but you pay for what you get. It’s about giving people what they want, because customers are smarter than ever these days. They are spoilt for choice with food, and they gladly pay extra for something good.”
Locking in capacity, eschewing aggressive expansion
Pulling the backroom operations of the business together with the opening of a dedicated head office two years ago has been pivotal to Mitrossilis’ expansion plans for The Yiros Shop.
“Before that we were working from my house, when there were only about four of us in the business,” he says.
“Now we have 14 head office staff with people in every department and we have been reinvesting all of our profits back into this machine that can run our business which now has about 350 people across our stores.
“We could have pushed harder in the past couple of years, but we’ve been really focused on building a back end that is going to withstand 50 or 100 outlets.
“What we have now can support about 30 locations before we need to add to our current head office. We might be a bit top-heavy right now, but I’d rather have it this way because it will make the process of growing a lot smoother.”
The Yiros Shop plans to continue expanding in Southeast Queensland over the next two years, utlising its local resources and existing supply chains, before looking elsewhere.
“There’s definitely an appetite for expanding interstate and we will eventually go there, but we need to be comfortable to ensure the time is right to make that move,” says Mitrossilis.
Franchising remains part of the strategy but Mitrossilis treads a conservative path there.
“The beauty of franchising is that we have someone in the store that’s their baby. They’re looking after it. Our managers do the same, but it’s a different kind of love when they have skin in the game.
“We could have had more franchise stores, but we are very cautious about who we bring on board. I always see franchisees as business partners because I have to work with them for years.
“A business like ours is always about its people. Because we started off a little shop that we worked in every single day, we know what it’s like to be a team member, so we have always wanted everyone to have a safe work environment.
“It’s been one of the biggest focuses from the beginning. Even though we didn’t have a lot of resources early on, our staff were happy, and they wanted to come along for the ride. That’s how we plan to continue growing our business.”
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