Strong, strategic moves are vital to successful expansion in the multiconcept game, but none of it matters if you don’t have passion for your concepts. Those were the lessons shared at the recent MUFSO conference in Dalals by executives representing four dynamic multiconcept companies: Cameron Mitchell Restaurants, Front Burner Restaurants, Uncle Maddio’s Pizza Joint and Mooyah Burgers and Fries.
There are two keys to growth, said Scott Goodrich, v.p. of field operations and support for Atlanta-based Uncle Maddio’s Pizza Joint. “You have to have the food right. It has to be perfect and it has to be a ‘wow.’ But you also have to have passionate employees, passionate crew members and passion on the executive level. The passion to serve is what makes it all work. Unfortunately, in many companies it’s the general managers who are not passionate.”
To overcome that at Uncle Maddio’s, Goodrich said, 30 percent of a g.m.’s pay is based on top-line sales.
For lower-level staff, surprisingly, compensation is not the main motivator, Goodrich said. He cited a survey done a few years back that asked hourly employees in the quick-service and fast-casual sectors why they picked their employer they work for and what makes them stay. The top answer, he said, was opportunity, not compensation. The people who work for you want to know they have a future, he added. There appears to be plenty of opportunity at Maddio’s based on its plan to expand into 18 states with close to 100 stores by the end of next year.
Mooya Burgers and Fries has experienced steady, smart growth over the last seven years by taking care of its franchisees, who in turn take care of employees. Rich Hicks, president of Mooya, echoed Goodrich’s about managers. “We ask our front-line people to smile, be genuine and deliver a great experience to our employees, but we often fail as leaders to do the same for our employees,” he said.
Mooya has an exclusive relationship with Aramark to provide burgers and fries at 70 restaurants on four college campuses. Next year it plans to expand to six colleges with 100-plus operating locations. The key to it all, said Hicks, is to keep it simple for franchisees: don’t overly complicate the operating process to give them the best shot at being successful.
Randy Dewitt, the c.e.o and founder of Dallas-based Twin Peaks, concurred, but said the key to success these days is to have a “highly differentiated” concept that makes it unique.
“Anything that you’re going to create now has to be narrow and unique. The idea of mass appeal in casual dining is over,” he observed. One of the ways he differentiates Twin Peaks, a mountain-themed sports bar concept, is by operating a scratch kitchen at all of its units, which will total 68 by year’s end. “The emphasis on fresh, delicious food has to be there, and it has to be better than someone would make at home.”
Partner with the right franchisees
Dewitt, whose Front Burner Restaurants company operates six other restaurant concepts, said the key to Twin Peaks’ success is finding existing restaurant properties that have failed and remodeling them. A vast majority of its units are remodels. “Ground-up development has never been more expensive and the really good sites are typically occupied by another brand,” he noted. The real estate people in his company “stay close” to the real estate departments of larger, mature restaurant brands to quickly negotiate for units they’re closing down.
Dewitt said he will only partner with franchises who have a passion for the brand. “If someone is not into sports and doesn’t like to drink beer and hang out in a place like Twin Peaks, then they shouldn’t be in the business of being a franchisee.
Another tip for successful expansion, Dewitt observed, is to know who your customer is and use that info to select real estate. Twin Peaks, for example, is a meeting place where it’s not unusual for a table of four to have four customers who drove separately to the restaurant to watch a sporting event. Because of that, he said, it’s vital to find places that have plenty of parking.
Cameron Mitchell, the president and founder of Cameron Mitchell restaurants, said the four divisions of his Columbus-based company include a special brands division with 13 different concepts. Most of the concepts in that division will not be duplicated. And he sold two growth concepts—Mitchell’s Fish Market and Mitchell’s Steakhouse—to Ruth’s Hospitality for $92 million in 2008. Not a bad strategy for expansion.
His two biggest growth vehicles now are Ocean Prime and Rusty Bucket Tavern. Ocean Prime’s 11 locations average $7.3 million in annual sales. He likens the concept to a Capital Grille. Rusty Bucket is an upscale tavern concept with 18 locations, primarily in affluent suburbs. Mitchell’s goal is to expand that brand to 50 units over the next four or so years. Either of the brands could produce another big-time payday some day to another big company in search of a new brand to buy.
Meanwhile, Mitchell said his catering division has proven to be a cash cow as well. The “premier events” it produces generate about $10 million annually. And he added that he can no longer “resist” the temptation to get into the fast-casual arena.
Whatever Mitchell, Dewitt, Goodrich and Hicks do in the future, you can be sure it will be done with plenty of passion.