The lobster roll business LobsterCraft has seen exponential growth over the past 10 years, expanded from a one-man food truck business to a franchise with its eyes on global markets.
LobsterCraft was founded in 2012 by Mike Harden, a former Coast Guard captain and commercial lobster fisherman in Norwalk. Harden”™s food truck business morphed into a Darien brick-and-mortar location in 2014, but that closed after two years. In 2018, he opened another location in Fairfield behind a podiatrist”™s office ”” Harden”™s 180-square-foot kitchen was initially planned to provide support for the food truck.
“But people started knocking on the door,” Harden recalled. “I started selling rolls right out of the little kitchen, and the whole retail idea was sort of born from that almost necessity.”
Harden began to build a following in Fairfield through his signature product, the Coastal, which is a traditional hot buttered lobster roll native to Connecticut ”” a contrast to the cold mayo rolls often found in Maine. Crucial to the lobster roll business”™ success was its adherence to simplicity ”” the Coastal is composed of bread, butter and lobster with only a dash of secret seasoning across the top.
The business was doing well enough, though there were some problem areas. Chief among them was the issue of seasonality that prevented LobsterCraft from being a year-round business. Being situated initially in the northeast, Harden had little choice but to open in the summer and close up shop during the winter.
“Now that we have such a great team, we figured out how to stay open all year,” Harden said.
LobsterCraft”™s operations took a hit when the pandemic came around in 2020. The biggest consequence was the loss of employees, leaving about 30 people in the team, albeit loyal and eager to work for the business. And while food remained reasonably available during this time, items such as napkins and forks were hard to come by, causing LobsterCraft to adopt a strategy of flexibility.
“I remember we kept telling each other to just be flexible and let”™s figure it out,” Harden said. “I think we are coming out of this ahead of the game and much more knowledgeable.”
Today, supply chain issues appear to be dwindling for the business, though prices remain an issue.
“The prices have all gone up,” Harden said, “but supply itself, I think we”™re starting to see a lot more steady stuff. Our biggest problem was the substituting of things that we really wanted, and that”™s waning off now.”
In 2020, Harden was joined in his business by his friend Tom Gordon.
“I”™ve watched Mike build and sustain LobsterCraft as a one-man band for a number of years,” said Gordon, the company”™s investor relationships director. “It was something I personally loved eating, but I also saw some promise in expanding it.”
Harden and Gordon began to envision a franchise operation. They have expanded in Connecticut with locations in Greenwich and West Hartford, and have already opened sites in Florida and Rhode Island, with expansion plans for California and Nevada. Harden and Gordon also have eyes on the global markets.
In addition to opening more restaurants, they have worked to make LobsterCraft a wholesale distributor of lobster, providing supply both to its own locations and to other restaurants and distributors, as well as providing products such as lobster roll kits and soups to retailers.
“We always envisioned our ability to leverage access to lobster through Mike”™s contacts in the industry,” Gordon said. “That vertical integration I think was as important as the corporately run stores that we were envisioning opening.”
To help accomplish their vision for financial expansion, Harden and Gordon got in touch with Connecticut-based CPA firm FML, which helped put together a pitch deck and structure the convertible note for LobsterCraft. Most of the investors during the first valuation raise were family and friends, with industry contacts also in the mix.
“LobsterCraft was looking to raise capital and expand their presence here in Connecticut and also explore other options for the business,” said Julie Gionfriddo, director of advisory services at FML. “Tom has relationships in the business, as does Mike, so there were some investors who were more strategic-type investors who know the restaurant business, who really operate a business in that space and were interested in helping to fund and lend their expertise to LobsterCraft.”
The first raise was a success thanks to LobsterCraft”™s proven track record for producing quality lobster rolls and its future plans for expansion and vertical integration winning over investors.
“The raise itself was oversubscribed, which I found incredibly heartening,” Gordon said. “I think it speaks to the quality of the product. Mike”™s product has won regional and national awards since he launched it.”
FML continues to provide its services to LobsterCraft in accounting and taxes and, crucially, preparing for another pitch to investors.
“Right now, we”™re actually helping them put together that next-round investor communication,” Gionfriddo said. “We”™ll continue to help them in any way that they need to support their growth.”
