Firepie Investor Update

Greetings, Firepie Investors! I hope everyone is safe and healthy.

Since completing our funding round in early May it has been a whirlwind, and I just wanted to send along an update, and thank you all for your patience.

Thank you

Our funding round exceeded our expectations on so many levels. The fact that we were able to raise money during a global pandemic was a miracle. Our customers were also the majority of participants in our funding. This speaks volumes about our amazing customers and our brand. Thank you Firepie customers and everyone for joining us!

Your investment thus far enabled us to:

• Migrate our website to a faster (150% improved loading time) and more reliable platform which should amplify our ROI on our advertising spend and increase customer acquisition efforts. (Completed)
• Do comprehensive analysis and optimization of our analytics for customer data and advertising using developers to automate. (Completed and measuring)
• Continue improving our unit economics with new and better technology to enable more automation and efficiency. (In process)
• Potentially secure an opportunity for rapid expansion with additional locations at a low cost. (In process)
• Continue to add value to our community, customers, and team. (Ongoing)

Where we are

In a world of increasing un­predictability, one thing remains clear: people love great pizza, fast. It is fortunate that the Firepie business model—pickup or rapid delivery only—has been agile enough to remain operating in a shelter in place environment as we continue to navigate our city’s important and evolving public safety directives. 

Both our digital ordering systems and increased marketing spend have resulted in stable revenue.

Firepie has not, unfortunately, been unscathed by this global pandemic.

1. Revenue

Our revenue has taken a hit due to a number of factors. Even with our increased marketing, the shuttles that used to drop off employees near us around dinner time have stopped. We estimate that these shuttles brought 10% to 15% of our walkup business and this revenue has since disappeared and may not return until Q1 or Q2 of 2021.

Our operating hours have also been reduced by 7% during shelter-in-place. In June we also faced a temporary citywide curfew for several days further reducing operating hours during peak times creating additional downward pressure on revenue.

April revenue was $77k compared to $101k in 2019

May revenue was $76K compared to $80k in 2019

June revenue was $81k compared to $84kin 2019

In normal circumstances, with no variable changes and our increased marketing efforts, we would be seeing increased revenue compared to last year with estimated numbers of $90k to $100k a month in May and June respectively.

With this said, considering a recent article in EaterSF estimating a 91% drop in restaurant sales in San Francsco since March, Firepie is not experincing this.

1. Increased expense

The expenses of payroll, food costs, and our advanced safety measures have substantially increased during this pandemic.

Cheese prices (our largest food cost) have increased by 15% - 20%.

Other food products, in general, have increased by 7% to 10%.

Firepie is paying an additional $1 per hour (We call this COVID-Pay) to the entire team during shelter-in-place and for two weeks after it ends. It is the right thing to do. They wholly deserve this as they continue to show up every day adding value to our community.

We have also initiated early raises of 1.5% -3% for much of our long-term team members to compete with the federal unemployment subsidy of $600 plus regular state unemployment per week as this benefit far exceeds what team members make.

To date, we have invested approximately $7000 in personal protection equipment to ensure the safety of our team and our customers and we will continue to do so. Firepie provides PPE not only to our team members but also to their families, which goes further in keeping everyone safe.

The cost of gloves and other important safety products alone has almost doubled since the pandemic started.

Where we are going

Safety

My highest responsibility is the health and safety of our team, their families, and our customers. This commitment mitigates risk to their health and keeps the business operating. We were early adopters of advanced safety protocols—including providing PPE for our staff as well as their families early on—and have appreciated the cooperation of our customers in wearing masks when interacting with Firepie. We are also using UVC light for air and surface sterilization. We are happy to report that the team remains healthy!

Community

We are thankful for not only being able to serve our communities delicious Firepie but also give back to the surrounding neighborhoods, in which many of our team live. 

We constantly strive to uphold our culture of kindness, creativity, equality, and excellence.

We were able to demonstrate this by:

• Closing our store on June 3rd so that our team members could safely (Following City Health Directives) participate in our historical city-wide student-lead demonstration for social justice.
• Supporting the most impactful social justice organizations. Black Lives Matter, NAACP Legal Defense Fund, and the Equal Justice Initiative. 
• For the families hardest hit in our neighborhood, providing a special free cheese pizza to kids when they walk up and say the words "Kids cheese pizza please"  (it has two kinds of cheese, no basil (Many of our younger customers are opposed to anything green on a pizza), and a mild sauce. They seem to love it.
• Providing free pizza and major discounts for the hardworking ICU unit in the hospital across the street (CPMC Mission / Bernal Campus) from us
• Supporting the education nonprofit 826 Valencia through our annual partnership.

Growth

We continue to increase our marketing efforts and grow our customer base. I expect to see the results of these efforts begin to materialize this month which I am looking forward to highlighting in the next update. 

We also have an opportunity to expand our San Francisco footprint to cover 1/3 of the city through the acquisition of another business, which I hope to cover details in the next update as well if our discussions are successful.

New Advisor

I am excited to share that Ike Shehadeh of Ike’s Sandwiches (78 locations) will be joining Firepie as an advisor. 
Founder of Ike’s Love & Sandwiches, Ike has grown a massive cult following with over 75 stores across 5 different states. I had been trying to meet Ike for three years and finally had a chance to connect with him at the Fast Casual Executive Summit in 2019 in Austin TX! He knows our brand and will be assisting me in navigating the process of expansion.

In summary

Thank you again for your continued support in these unprecedented and difficult times as we strive to not just provide the Firepie Brand Experience and find ways to grow the business, but also to aid the members of our community hit hardest by this pandemic and do our part to further social equality. You are all playing a critical part.

I will send out another update likely in early Q4, but if you’d like more frequent updates, you can reach out to me as needed.