Matthew Corrin ends 17-year stint as Freshii’s CEO

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This article was published 17/05/2022 (1259 days ago), so information in it may no longer be current.

The company’s stock price had nosedived, so in a conference call with financial analysts in 2019, Freshii CEO and founder Matthew Corrin offered a moment of introspection and a promise for renewal at the troubled public company.

“The skills that allowed me to lead the brand to where we got are different from the skills required to get us where we want to be,” Corrin acknowledged that May.

Then he gave his solution: “So, in short, I fired myself. I then rehired myself as a new CEO.”

The comments were far from surprising for the audacious Winnipeg-born entrepreneur who transformed a nondescript salad bar in downtown Toronto into a behemoth fast-food chain with hundreds of locations in more than a dozen countries.

But last week, Corrin left the C-suite for real. Freshii announced Corrin’s departure in a press release after markets closed Wednesday, adding that Daniel Haroun, the company’s chief financial officer, will take over as chief executive effective immediately.

While Corrin’s departure marks the end of a 17-year stint at Freshii’s helm, the founder isn’t going far.

Corrin will become the company’s executive chairman, and he told investors that he intends “to maintain my significant shareholdings in Freshii, be our biggest brand champion, and our most loyal guest — for the long term.”

Since founding Freshii in 2005, Corrin has been the singular face of the nascent food chain — a brazenly ambitious figure who brought healthy burrito bowls to a market dominated by greasy burger franchises with decades more experience.

But judging by investor sentiment, the new position may be a better fit for an executive whose brash managerial style attracted controversy and lawsuits while spooking shareholders.

Among several instances of turbulence since Freshii’s inception — a faltering stock price, a series of disappointing earnings and a legal fight with Yogen Früz, to name a few.

Following Wednesday’s announcement, which was accompanied by first-quarter earnings that saw revenue rise from $3.7 million a year ago to $9.6 million today, an analyst told Bloomberg: “The CEO change may help bring back some investor confidence, and the change is at the right time.”

Corrin, who grew up in Winnipeg, opened Freshii at a time when cheap and healthy eats were rare among quick-service restaurants.

Between the McDonald’s and Burger Kings of the world, Corrin — a Western University grad with a penchant for marketing — saw an opportunity to sell the public on affordable lunchtime offerings that didn’t come with stomach cramps.

With some financial help from his parents, he launched the first location under the name Lettuce Eatery. Like many Silicon Valley startups of the time, he aspired to make something that was more than just a business — the idea had to change the way people lived.

“We want to be known as the healthy fast-food leader around the world,” he once said.

Corrin sought to build Freshii into a multinational franchise, and by the time of its initial public offering on the Toronto Stock Exchange in 2017, the company had 250 locations around the world.

But while Freshii blossomed into a ubiquitous storefront — its locations virtually impossible to miss on main streets — it struggled to live up to its lofty goals.

Freshii raised $125 million for its IPO, promising to double its location count in the following years.

But a series of disappointing sales performances ensued, and the company had trouble expanding at the pace it wanted.

By last December, the company had 343 stores in North America, below its targets (the company does not disclose the number of stores it has outside the continent but says they represent a small fraction of overall revenue).

Since the IPO, investors had become weary of the company’s overzealous growth strategy.

As of Monday, Freshii’s share price was down almost 85 per cent since its debut on the stock exchange.

Part of Freshii’s initial success of luring shareholders was the conviction that Corrin brought to the business, analysts have said.

Stephen Takacsy, president of Lester Asset Management in Montreal, once told the Globe and Mail: “The guy does a phenomenal job of presenting, and they’re all great ideas. But we found it ridiculously overvalued.”

Corrin had a knack for publicity, routinely finding ways to wedge the company into the news cycle.

He showed up for television shows wearing Freshii apparel. He appeared on Dragons’ Den and starred in an episode of Undercover Boss, disguising himself as a retail worker looking for efficiencies.

He liked to write open letters to Freshii’s competitors, explaining why their days were numbered and his weren’t.

“The reality is that McDonald’s is stagnating, and your growth days are over. You are struggling with declining same-store sales, offering franchisees inadequate leadership and fumbling through your menu rather than adding healthier options,” Corrin wrote to McDonald’s in 2015.

To Subway, he openly requested a merger: “Let’s explore a partnership in which we together convert select Subway stores to Freshii restaurants in a quick, low-cost way,” he wrote in 2017.

“I didn’t start Freshii because I wanted to be a restaurateur,” Corrin told an interviewer in 2015.

“I started Freshii because I had a passion for branding and entrepreneurship.”

But some of those stunts attracted trouble.

Yogen Früz once launched a $10 million trademark lawsuit against Freshii after accusing Corrin of using false and misleading statements to promote itself. (The case was settled in 2018).

In 2010, franchise development company Fransmart LLC — which helped Freshii expand in the U.S. — sued Corrin’s company after it stopped paying them a share of its revenue under the companies’ contract terms.

Freshii was ordered to pay Fransmart more than US$500,000 with interest.

Corrin’s approach was reflective of the founderitis common among many successful entrepreneurs: bold but unpredictable, imaginative but frustrating for investors.

In leaving the top post at Freshii, the founder whose fingerprints are all over the business will now have to sit on the sidelines while an executive of a more traditional mould (Haroun has held positions at Restaurant Brands International and Walmart) takes over.

That won’t be easy.

“Since starting Freshii, I have literally done it all,” he told the Toronto Stock Exchange when the company went public.

“I opened and managed the very first restaurant, I did menu innovation. There was a time I didn’t think I could ever leave the cash register because nobody could work the cash faster than I could.”

— Toronto Star