Unidentified Analyst: That’s great. Thank you for the color. I’ll pass it back
Operator: Thank you. [Operator Instructions] This question comes from the line of Todd Brooks with The Benchmark Company. Please proceed.
Todd Brooks : Hey, thanks for taking my question. I have one follow-up and then one other question. The follow-up, you talked about a focus on finding conversions for new units and how that seems to speed some of the construction time if you can go into an existing facility. Can you walk through quickly economics to open via conversion versus a new build? Just trying to think about from something that could be enhancing the return for franchisees in top and higher cost construction environment going forward?
John Peyton : Jay, why don’t you take that since 70% of your opening for conversions this year.
Jay Johns : Yes. Thanks, Todd. We do a lot of these, and there’s no one exact number to tell you. It depends what you’re converting. It depends what work needs to be done. Sometimes it has kitchen equipment left inside it. Sometimes you’re starting with new equipment depends on the amount of repairs have to be done. But I can tell you this, compared to a new build, you’re probably going to save 30%, 40% on the construction cost sometimes can be a little less, a little more than that. But it’s significantly cheaper to go in and convert an existing structure than it is to completely start from the ground up. Usually, the permitting goes a little faster. Permitting has been a problem in a lot of places around the country. They — with people going remote and not everybody works back in an office again it just – things have slowed down in trying to get approvals and trying to move paper across the desk, so to speak.
So it’s still a little bit of a challenge, but it is still faster doing the conversion to get permitting done than it is to get all the approvals for a ground-up facility. So we’ve really been advising our franchisees to look at opportunities that are out there, because there’s still quite a few and there’s more happening all the time. And for ourselves, we’ve even got a smaller prototype and that opens up even conversions of some quick service locations that have pickup windows, et cetera. So there’s a lot of things you can do with the buildings that are out there and the franchisees are becoming more and more excited about those as they see more and more results from others around them.
Todd Brooks : That’s very helpful. Thank you, Jay. And then my other question A lot of talk about value on the call and just the abundant value that both brands are focused on delivering. So there’s an offensive element. You’ve got every day, you’ve got through your LTOs, you’ve got through loyalty. How about defensively in an environment where value is becoming more of a focus for both customers and competitors, do you have a reactive value capability to kind of counterpunch when you see promotions from really close competitors that you have for both concepts? Thanks.
John Peyton: Yeah. Todd, its John, I’ll take that on behalf of both brands. Both brands plan their marketing calendar. We’re planning 2024 now, right, as you can imagine. And that includes the beverage and the food item promotions for the year. So I like your characterization of it is that, we do it offensively, based upon what we believe is necessary at a point in time, based upon our history and based upon what we expect for the future. And the answer about can we react effectively, of course, we can, right? Because we’re always looking at what our competitors do. And we’re always looking at the current market conditions. And we would and we will if we need to. But our strategy — the primary strategy for us is to focus on what we do best, tell our story from a marketing perspective and not be overly reactive to what a competitor does in any given quarter.
Todd Brooks: That’s helpful, John. Would you characterize the competitive intensity right now in the market as expected or something that you do think about maybe, okay, we need to react to a little bit.
John Peyton: You would characterize it as expected given the general consensus about the economy and the state of mind of our guests in particular.
Todd Brooks: Great. Thanks, John.
Operator: Thank you. One moment for our next question. This question comes from the line of Jake Bartlett with Truist Securities. Please proceed.
Jake Bartlett: Great. Thanks for taking my follow-ups here. Just real quickly and following up on Brian’s question earlier, Brian Vaccaro’s. He asked about the value mix. And you guys have shared this is at Applebee’s, you’ve shared in the past and last quarter, it was 19%. In the first quarter its 15%. So that’s the number I’m looking for an update on. And that’s LTOs and value-oriented menu that section.
John Peyton: Welcome back Jake.
Jake Bartlett: Thanks.
John Peyton: Do we, — so yeah, so I do recall.
Vance Chang: So you did disclose it. Yeah. It was 19% last quarter and 15% in the first quarter.
John Peyton: And do we have that for this quarter, Vance or Tony I don’t know that we have any.
Vance Chang: I don’t have it handy, John.
John Peyton: So we’ll think about that as probably.
Jake Bartlett: Got it.
