Selling coffee and both sweet and savory pies, the Pie Hole opened in the Arts District in Downtown Los Angeles in 2011. Since, the business has added locations around the Los Angeles area, as well as two shops in Japan.
The fundamentals of running the business have changed as a result.
“It’s much easier when you have a new business that’s kind of a darling … and then you have to settle into having good unit economics,” said owner Sean Brennan.
The Pie Hole started franchising a few years ago, but its first East Coast location was unsuccessful. Meanwhile, two of Brennan’s co-founders left and the company, which has also had to adapt to a competitive environment shaped by the popularity of food delivery apps.
Brennan has complicated feelings about putting the Pie Hole on platforms like Postmates and Caviar.
“You can’t not do it, because that’s where our guests are,” he said. But the services eat into profit margins.
He is separately concerned about the Trump administration’s threats to bow out of the North American Free Trade Agreement.
“Our supply chain is deeply entrenched in North America,” Brennan said. “It’s not just Mexico, it’s Canada.”
Now though, he thinks even more about China. “I don’t order anything from China. And I don’t sell anything to China right now. “
His vendors do, however, and Brennan described them as “totally freaked out.”
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.