Hey Hot Potatoes,

Welcome to the latest edition of the Hot Potato Newsletter! Hope you're all crushing it this week… I’ve just returned from a magical week celebrating my birthday in Tenerife, basking in the Spanish sun and I feel pumped!

This week, I dove deep into an American phenomenon that transformed from a backyard pandemic project into a celebrity-backed empire conquering the $3 billion US bagel market. We're talking about Pop Up Bagels - the Connecticut startup that evolved from a home kitchen with a backyard pickup window into a bagel empire backed by Paul Rudd, Michael Phelps and JJ Watt while maintaining the authentic craft that made them special.

What fascinated me most? They cracked the code on something every food entrepreneur dreams about: creating viral organic demand without traditional marketing, then scaling authenticity without sacrificing quality. While competitors chase operational complexity with sandwiches, salads and café environments, Pop Up Bagels built their entire empire on a single philosophy: simplicity executed perfectly and somehow made it work at extraordinary speed.

The numbers are absolutely staggering: $8 million raised across multiple funding rounds, 300 franchise locations signed with fewer than 15 franchise partners, and some individual stores generating up to $5 million annually. They're achieving 18% profit margins in an industry where most operators struggle to hit double digits. Not bad for a company that started when its founder switched from sourdough to bagels because Connecticut summers were too hot.

Here’s the thing, they deliberately reject traditional bagel shop operations - no slicing, no toasting, no sandwiches and customers are queuing around blocks for it. Ready to discover how Pop Up bagels have revolutionised an industry?

In today’s email: From Backyard Window to Celebrity-Backed Empire: The Pop Up Bagels Formula

Read Time: Approx 5 mins

How Summer Heat and Too Much Free Time Created a National Sensation

Source: US Chamber / NRN / Restaurant Business Online

Adam Goldberg never intended to revolutionise the bagel industry. The Connecticut entrepreneur was running a flood mitigation business when lockdown struck in 2020. Like millions trapped at home, he and his cousin Jeff Lewis started baking but they quickly tired of the sourdough trend that dominated TikTok.

Key Points:

• The moment that changed everything: "It was a random Wednesday or Thursday, and we were like, I think it's too hot to make sourdough," Goldberg recalled. "Let's try bagels." With no food industry experience whatsoever, he began experimenting with flour, water, yeast and salt, creating something unexpectedly special.

• The backyard pickup window that sparked demand: Goldberg started giving bagels away to friends and neighbours through his backyard window. The response was overwhelming. "The bagels were just so much better than anything we felt that we can get anywhere else," he explained. Friends became customers, customers became subscribers and not-so-close friends started messaging asking why they weren't getting bagels.

• From charity project to legitimate business: What began as weekend baking sessions evolved into a fundraiser fighting childhood hunger. Local food bloggers crowned them "the best bagel in Connecticut" before Goldberg had sold a single one commercially. A chef friend with commercial kitchen access suggested they test selling them properly and the rest became history.

• The unusual founder profile advantage: "The closest thing I can find to people listening to me sing was making bagels and watching with smiles on their faces as they ate them," Goldberg said. His background outside hospitality became an asset, he questioned every bagel shop convention because he didn't know the "rules" he was supposed to follow.

The Anti-Deli Strategy & Pre-Order Model Revolutionising Bagel Economics

Source: Fast Company / Boston Globe

Pop Up Bagels successfully challenges every traditional bagel shop assumption while building a business model that solves the industry's hardest problems: demand forecasting, waste reduction and cash flow management.

Key Points:

• The hot bagel revolution: While competitors traditionally bake in the morning then toast for customers, Pop Up serves bagels piping hot straight from the oven. This logistically challenging approach requires precise demand forecasting and continuous baking but creates an experience competitors simply cannot replicate.

• Menu simplicity as competitive advantage: Five bagel varieties (plain, sesame, poppy, salt, everything), two standard cream cheeses (plain, scallion), plus weekly rotating "schmears". No sandwiches. No salads. No slicing or toasting. This simple approach allows them to operate with just 15 employees versus the 40-50 typically required, while achieving $22 average order value.

• The ‘Grip, Rip and Dip’ phenomenon: Pop Up didn't invent this eating method, they discovered customers naturally ripping their bagels and dipping them in cream cheese from their cars. Goldberg trademarked the behaviour and built an entire brand positioning around it. This organic ritual became their signature marketing tool, generating millions of TikTok views without paid advertising.

• The subscription insight that funded growth: Initially operating as a subscription service at $38 per dozen, Goldberg created guaranteed recurring revenue before opening physical locations. Customers who wanted weekly bagels had to subscribe because pre-orders sold out in seconds online. This model provided working capital and proof of concept without traditional investor funding initially.

From Hollywood to the NFL: How Celebrity Investors Became Brand Ambassadors

Source: Franchise Times / Entrepreneur.com

Pop Up Bagels attracted an unprecedented roster of celebrity investors who don't just write cheques - they actually work shifts, creating authentic buzz money cannot buy.

Key Points:

• The star-studded investor roster: An impressive line up that includes: Paul Rudd, Michael Phelps (23 Olympic gold medals), Michael Strahan, JJ Watt, TJ Watt, Patrick Schwarzenegger and Hollywood producer John Davis (who incubated Blaze Pizza, Wetzel's Pretzels, Dave's Hot Chicken). Financial backing came from growth equity firm Stripes (which funded Levain Bakery and Erewhon), Tastemaker Capital and Habitat Partners - meant they had good people around them.

• The unannounced celebrity shifts that broke the internet: When Paul Rudd and JJ Watt showed up unannounced to work the Greenwich Village location in 2023, customers were simultaneously surprised and delighted. No formal announcements, no PR campaign - just authentic engagement that generated massive organic social media coverage. Michael Phelps later made his own impromptu visit, taking selfies with stunned customers.

• Strategic capital deployment enabling rapid scaling: The $8 million Series B round led by Stripes in 2023, provided capital for commercial kitchens, retail expansion and crucially hiring seasoned operational leadership. This allowed Goldberg to transition from founder-operator to chief brand officer.

Scaling Without Losing Soul: The 100-Location Plan

Source: Entrepreneur Magazine / US Chamber of Commerce

Pop Up Bagels solved hospitality's hardest challenge: maintaining quality and consistency while growing exponentially fast. From pandemic hobby to 300 signed franchise locations in under five years.

Key Points:

• The seasoned operator who's scaling the dream: Tory Bartlett joined as CEO in November 2024 after helping expand Moe's Southwest Grill to 600+ locations. His expertise in franchising and multi-unit operations provides the professional infrastructure Goldberg's vision needs. "The brand has high energy, a quality product and it produces a great revenue. Every franchisee is looking for those three things," Bartlett explains.

• Regional production hubs maintaining consistency: To ensure every bagel tastes identical whether in Connecticut or California, Pop Up is building dedicated regional commissaries producing dough and schmears. Franchise locations focus purely on the final bake and customer experience removing the biggest variable in quality control.

• The local "bagel chef" empowerment model: Each location is led by a "bagel chef" with ownership and autonomy, encouraging pride, accountability and craftsmanship. Goldberg deliberately chose this title over "store manager" to elevate the role and emphasise craft over commodity.

Today we've decoded how Pop Up Bagels built a celebrity-backed bagel empire from a backyard window. I want to know: if you were building a food concept inspired by Pop Up Bagels tomorrow, what would you prioritise first? Let me know your thoughts!

Now, speaking of brands redefining industry conventions through unconventional operational models... have you noticed how the most profitable restaurants are getting smaller, not bigger? From Blank Street Coffee's 500-square-foot formats generating £2M+ annually to kiosk sites in foodhalls, operators are discovering that shrinking their footprint can have a big impact on their profits. Meanwhile, traditional restaurants struggle with 5,000+ square foot leases eating 15-20% of revenue before serving a single customer.

In our next edition, we'll explore why micro-format stores are achieving revenue per square foot 3-4x higher than traditional layouts, how prime real estate locations are becoming accessible again through radical space optimisation and whether this "smaller is more profitable" revolution represents the future of hospitality economics or just works for grab-and-go concepts. We'll break down the exact unit economics: rent costs, labour efficiency and why landlords are actually starting to prefer these micro-tenants.

Ready to discover how micro-format stores generate 3-4x more revenue per square foot? Subscribe now for our exclusive breakdown of the revenue per square foot revolution!

Bon appétit,

Max Shipman, Founder, Hot Potato

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