WEBVTT

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RACHELLE AKUFFO: Taking a
look at Cava shares now.

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Currently, trading at about $43
as it started its IPO today.

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Open trading at $42.

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That's 91% above its IPO price.

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That's after making
its public debut

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this morning as we
mentioned that originally

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pricing at $22 a share.

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Let's get to "Yahoo
Finance's" Brooke

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DiPalma on the floor of
the New York Stock Exchange

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for more on this.

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Hey Brooke.

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BROOKE DIPALMA: Good
morning, Rachelle.

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I'm here with Brett Schulman,
Cava co-founder and CEO.

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Such an exciting day for you.

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Congratulations on the IPO.

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First, break down what this
day means for you personally.

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And has it surpassed your
expectations, so far?

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BRETT SCHULMAN: Thanks, Brooke.

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Thanks for having me.

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It's been an amazing day.

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It's an incredible validation
of all the hard work

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our team has put into the
business the last 12 years

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to help get us to this point.

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And that this is the next
beginning of the next chapter

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in our journey.

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BROOKE DIPALMA: And right now,
we're trading at $43 a share.

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Are you concerned that the
valuation here is a bit too

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high and that
expectations are now

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way too high for the company?

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BRETT SCHULMAN: Well, I
told the team last night,

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we're not going to focus
on the daily stock price.

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Markets go up.

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Markets go down.

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We're focused on the same thing
we've been since we started,

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which is our long-term vision
of defining the Mediterranean

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category and bringing
the Mediterranean way to

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communities across the country.

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BROOKE DIPALMA: Now, let's talk
about the way that you started.

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Back in 2011, you opened up
that first fast casual concept.

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I think one of your
co-founders called

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it a chef casual concept.

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What was one of the
biggest challenges

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that you face to get to this
point you are right now?

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BRETT SCHULMAN: I like to say
scaling restaurants is hard.

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It's not like scaling
SaaS software.

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It takes a lot of great
people and great talent.

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And so really developing
our restaurant team leaders

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and building our team out
to scale this business,

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we focused on our
culture and our mission

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to bring heart, health,
and humanity to food.

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And when we do that,
we get great people

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on board that deliver that great
food and great hospitality.

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And help us get to
where we are today.

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BROOKE DIPALMA: Now, Brett,
I read through your S-1.

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When do you think that
Cava will turn profitable?

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BRETT SCHULMAN: So we're
focused on our long-term growth.

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We've got a tremendous unit
economic profit engine.

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We saw in Q1 alone, we
generated $50 million

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at the restaurant level.

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That's compared to $91
million all of last year.

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So very healthy margins
at the restaurant level.

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And that's the lifeblood,
the oxygen of our business.

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And we've invested in
significant infrastructure

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over the years, whether
that's our manufacturing

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infrastructure or
digital infrastructure,

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or all the new restaurants we've
opened over the last few years.

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And all of that is now
flowing into the business

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and really creating great
tailwinds on that path.

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BROOKE DIPALMA: Let's talk
about that growth plan.

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Right now, you're
at 263 You plan

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to open or have 1,000 locations
in less than a decade.

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How do you get there?

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BRETT SCHULMAN: So we get
there with the great team

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I talked about, the
infrastructure I talked about.

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We operate in 22 states in the
District of Columbia today.

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That means there's 26
states in the Continental US

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we're not operating in today.

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So there's tremendous
growth opportunity

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within our existing footprint.

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And all those new markets
were not in like Chicago,

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where we're going to
open next year, and start

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our entry into the Midwest.

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BROOKE DIPALMA: Now,
speaking of Chicago,

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one of your competitors,
Sweetgreen, just open

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up an automation inside.

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They're using robots.

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We've also heard from
Wendy's, from McDonald's using

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voice ordering technology.

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Can we expect Cava to
have AI and automation

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in a future restaurant design?

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BRETT SCHULMAN: Well, we think
there's a lot of opportunity

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within AI specifically.

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When you think about
predictive labor scheduling,

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predictive ordering,
prep that can really

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do the trick of making it
easier for our team members

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to run a great Cava, and
deliver that great food

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and that great hospitality.

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That's when things are
working well for us.

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BROOKE DIPALMA: And you're
investing heavily in digital.

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I believe more than 50% growth
in digital sales last year.

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How does that customer
change in terms of how much

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they're purchasing, and
just how much potential

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there is in a digital consumer?

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BRETT SCHULMAN: We do
see a 27% higher check

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average in the digital channel.

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But what we try to do
is create basically

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a multichannel platform, where
you can choose the channel

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you want to engage with us on.

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Because if it's
an urban consumer

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or a suburban consumer, a young
single or a family that needs

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that may be very
different, so we want

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to basically put the control
in your hands to say,

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I want to engage.

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And I want a digital order and
pick up off the shelf of Cava.

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Or I want to come
in with my family

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and sit down in the dining
room and eat a meal.

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Or I want to come in my car
and pick up my order out of one

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of our drive-thru
pickup lanes, which

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we now have 20 oven growing.

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BROOKE DIPALMA: And
addition to that, right now,

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inflation is the name of the
game, especially when it comes

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to not just Cava,
your food products,

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but also when it comes to
American consumers choosing

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where they're going to go.

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What customer do you attract?

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And how do you get maybe
that McDonald's customer

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that's looking for
value to try out Cava?

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BRETT SCHULMAN: Well,
there's two things, Brooke.

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There's the fact that our
food has an incredibly broad

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appeal and diverse appeal.

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When you look at
our gender mix, 55%

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female, 45% male,
great generational mix,

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and great income mix.

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We're able to compete down
income brackets because

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of our value proposition.

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And one thing we did to lean
in to that value proposition,

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I talked about
that infrastructure

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we've invested in
over the years.

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That now allows us to really
leverage into in the business

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and not have to raise price as
much as maybe some of our peers

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have.

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So last year, less than 5% in
restaurant pricing, even as we

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expanded restaurant
level margins.

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so really trying to put our
best foot forward to our guests

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and make sure we can invite
everyone to our table.

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BROOKE DIPALMA:
And can customers

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expect another price increase
to happen later on this year,

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perhaps next year?

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BRETT SCHULMAN: We have
no planned price increases

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for the remainder of the year.

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BROOKE DIPALMA: And
in addition to that,

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we're also seeing
companies go in terms

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of drive-thru concepts, engage
with customers a different way.

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When you think about your
feature store footprint

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and you think about
the size, of course,

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that's a bigger footprint.

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Does it come at a higher cost?

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And are you worried about that?

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BRETT SCHULMAN: We have seen
some developmental inflationary

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costs the last few years.

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But that's embedded
in our model.

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We have a core format that we
create derivations of, again,

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to meet the needs of the guests
in that specific trade area,

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whether it's one of
our drive-thru lanes,

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whether it's a unit
here in Manhattan that

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has no seats in the dining
room, and multiple digital order

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make lines, or a restaurant
in the suburb that

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has 80 seats in the restaurant.

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BROOKE DIPALMA: And
lastly, CPG is something

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that you guys started with.

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You had your dips
and your spreads

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available at 650 locations,
including Whole Foods.

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How big is that business today?

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And do you plan to
scale it after this IPO?

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BRETT SCHULMAN:
It's a very small

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piece of the business today.

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A lot of our
manufacturing capacity

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goes to support the
growth of our restaurants.

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But there is that
option in the future

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that if we think that there's
opportunity there to lean

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into it, and we have the
bandwidth as an organization,

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we have a lot of restaurants
open, that's there for us

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to go after in the long term.

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BROOKE DIPALMA: And
Brett, I have to ask.

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Is roasted red pepper
hummus and crazy feta

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are still your go-to sides?

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BRETT SCHULMAN: You've got
to get a scoop of crazy feta

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no matter what bowl
you order at Cava.

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BROOKE DIPALMA: Wonderful.

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Crazy feta is my favorite too.

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Brett Schulman, Cava
co-founder and CEO.

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Thank you so much.

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Back to you, Rachelle.

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BRETT SCHULMAN: Thanks, Brooke.

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RACHELLE AKUFFO: All right.

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A big thank you to our
very own Brooke DiPalma

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there who was
joined there by Cava

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CEO Brett Schulman on the floor
of the New York Stock Exchange.

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Thank you to you both.