But most of its growth came from an uncommon strategy, buying a competitor quadruple its size and converting all its locations into Kavas.

I like to say I went to bed running about 70 restaurants and woke up running over 250 restaurants.

The strategy turned Kava into the country's biggest Mediterranean restaurant chain, leaving many to compare it to where Chipotle was a decade ago.

Its success depends on how long the Mediterranean diet can remain popular.

The company says it's using lots of customer data to strategize where to open new locations.

But now that Kava can no longer rely on an acquisition to scale up, how can it continue to grow at such an ambitious pace?

Growth takes time, it's expensive, it's variable, and I think that's a little bit of coming down to reality.

This is the economics of Kava.

Kava has been rapidly expanding for years.

Kava really likes the suburbs.

They really see potential there.

And some of those communities probably don't have other Mediterranean food options or readily, you know, marketed to them options that they might seek out.

We've built a really robust real estate model that includes demographic and psychographic analysis.

And we then use mobile analytics to understand where our guests are coming from, where they're going, and then kind of create a DNA of our guest base.

And then heat map that DNA across the country to then show us where we have the highest likelihood of success.

In 2018, Kava bought Zoe's Kitchen, another chain of fast-casual Mediterranean restaurants for $300 million.

At the time, Zoe's Kitchen had 261 locations, compared to Kava's more than 70.

But Zoe's Kitchen was burning through cash.

It was a melting ice cube, and we didn't want it to turn into a puddle.

Zoe's Kitchen, Shillman said, had lost its identity, serving as a cautionary tale for Kava.

I think over time, Zoe's had lost its focus.

It had added many menu items.

I think the consumer was kind of confused as to what the brand really stood for and what their core competency is, versus at Kava, we're really about these modern Mediterranean flavors.

38 ingredients, very simple, focused operation.

Most of the new restaurants Kava opened from 2019 to 2023 came from converting existing Zoe's Kitchen locations.

This meant Kava could scale faster, and at half the cost of building new restaurants from scratch.

When we looked at Zoe's real estate portfolio, we saw many sites across the portfolio that we would love as a Kava site that we felt was really underperforming its potential.

So we felt like this would be a way to rapidly expand our brand in a part of the country we were trying to enter into, and we could do it in a much faster way than if we were trying to source these deals one by one.

Kava converted its last Zoe's Kitchen in October 2023, which means that now it has to build new locations from the ground up.

Kava is currently in 24 states, plus Washington, D.C., and it went public in June 2023.

As it looks to grow, it hopes to capitalize on the rising popularity of the Mediterranean diet, which it hopes to appeal to a broad range of customers across the country.

Right now, only 1.4% of U.S. restaurants primarily serve Mediterranean cuisine.

In its last quarterly report, Kava Group reported a net income of $6.8 million, with a restaurant-level profit margin of 25.1%.

Kava is now the largest Mediterranean-style restaurant chain in the country.

But is it the next Chipotle?

Chipotle was really taking Mexican nationwide in a very unique way.

That's an assembly-line style of creating burritos and bowls.

And Kava is seeking to take Mediterranean food nationwide with also kind of more of an assembly-line, fast-casual style of service.

But Chipotle was getting going when fast-casual really was barely a blip.

So there was a lot less competition then.

Kava has a lot more competition now.

Whether the restaurant succeeds may largely depend on whether customers continue to seek Mediterranean food.

Mediterranean has gotten a lot of good buzz, right?

It's seen as healthier.

It's good for the heart and overall body.

That said, it's still new.

Harissa, tahini, falafel.

For a lot of communities, these are still new kinds of foods.

And that's still a question mark.

Do people want to eat this day in and day out as opposed to just trying it?

As of October 2023,

Kava finished converting all Zoe's Kitchen locations into Kava's.

But it's told investors that it will continue growing its number of locations by at least 15% each year.

I think the biggest question is, can they grow in the way that they've said that they're going to for their investors and do it organically?

Now they have to open their own sites, find their own sites, make sure the sites are good, be able to afford paying for this real estate and construction costs and other costs.

It plans to open at least three restaurants in Chicago, which will be its first major foray into the Midwest.

It's targeting 47 to 50 new restaurants in 2024, with locations based on a significant amount of customer data.

I think restaurants are a blend of art and science.

And so we love the science part and understanding how do we use data to inform our decisions.

So it gives us great visibility into being able to take this brand to the 26 states we're not in today and to go broader and deeper in the 24 states we already currently operate in.

But it's a difficult time to be expanding a fast casual restaurant.

The economic slowdown has led to many restaurants struggling.

And while chain establishments are better positioned than independent ones, the market is saturated.

Despite this, Kava is planning for 15% growth in store numbers next year.

If you look at where U.S.-based restaurant chains are now,

Wingstop, which is mentioned as the big growth engine, is at something like 11%.

And I believe Kava is projecting even more.

So they have grown very quickly, and they've really promised more growth at a very high rate.

And so investors are going to be looking for those numbers every year.