Nip and Tuck To keep up with competition and changing tastes, franchises are renovating their locations and changing their menus.
By Devlin Smith •
Opinions expressed by Entrepreneur contributors are their own.
After opening his first pizzeria in Sacramento, California, in 1954, Sherwood Johnson began franchising, and watched his Shakey's chain reach 500 U.S. locations within 20 years. It didn't take long, though, for the franchise to falter. Problems, including several ownership changes, led the chain to shrink down to 73 domestic locations. "My job now is to bring [Shakey's] back into prominence," says president Sean Flynn.
The path to this goal? Revamping. Shakey's has updated its look and menu to meet the needs of evening, snack and take-out customers.
Like Shakey's, many restaurant franchises are seeing the need to update different aspects of their concept. Why all this interest in change? "Change is an essential; it's the lifeblood of any retailing concept," explains Peter Dixon, senior partner with Lippincott & Margulies, a consulting firm that works with companies to create and revitalize their image. "Change is particularly inevitable in the food categories. You have to find ways to attract new customers and meet existing customers' need for something new, something different."
Even the slumping economy may serve to fuel the trend. After all, when resources are tight, making cosmetic changes can be a smart move. "It's a good time to do renovations, because the cost is a lot lower and interest rates have been cut. That makes it a bit easier to invest in capital improvements," Dixon says.
For Shakey's, this investment includes a new prototype that had to take into consideration the many building styles the company has unveiled during its nearly 50-year history. "It's easy to come up with a prototype for a new store," says Flynn, "but how do you come up with a new prototype that allows for the remodeling of several different styles of stores we've got out there to provide for consistency from one store to the next?"
Working with Archicon LC, a Phoenix-based architecture firm, Shakey's created its new prototype with brighter décor and furnishings. The units will still feature the familiar lunch buffet and game room, but the new prototype gives Shakey's the flexibility to explore inline, kiosk and express locations.
Shakey's has also added Triplets, a line of finger foods, to its menu.
Interest in reaching a new audience inspires many other franchises to revamp their systems. "Companies are constantly trying to understand customer behavior and refine their formats to best meet customer needs," says Dixon.
When Captain D's Seafood began making changes to its store design and menu, the goal was to transition the company from a quick service to fast-casual chain. Primarily this meant a move from counter service to service at customers' tables. Also, the dining room is larger. "We've basically taken the concept and looked at everything the consumer touches and made sure the concept meets that positioning as fast-casual," says Darin Harris, vice president of franchise development for the chain.
From the outside in, Captain D's has been revamped to have a warm, beachside feel. The restaurant's exterior resembles a seaside shack, while the interior features nautical décor and employees dressed in Hawaiian shirts. Changes have also been made to increase kitchen efficiency.
Like Shakey's, Captain D's anticipates these changes will make it easier for the chain to expand into new markets, particularly those served by strip malls. "By making the kitchen more efficient and through the demographics we're now able to attract, we can expand into some growing strip malls and save some of the expense of a huge investment in real estate," Harris says.
Damon's is also experimenting with its look. Since Shannon Foust joined the casual restaurant franchise as CEO two-and-a-half years ago, the company has made changes that include creating smaller units without sacrificing sales. "The size was brought up because it creates greater flexibility in development, it costs less money to get into and didn't affect sales volume," Foust says. "Because we've redesigned the kitchen we're able to reduce our ticket times quite substantially and [are] able to maintain sales levels."
The kitchen was opened, allowing guests to watch food preparation and staff to monitor dining room volume. The entrance was also moved so guests see the dining room instead of the bar first, and windows were added to give the restaurants a brighter feel.
Popeyes Chicken & Biscuits has also undergone some cosmetic changes. About three years ago, the franchise examined its direction and decided the best way to move forward was by embracing its Cajun heritage (the company was founded in New Orleans in 1972).
"We wanted to be distinct from our competition, so we took advantage of the culinary culture of the company's birthplace, [New Orleans]," explains Jon Luther, president of Popeyes. To complement the company's Cajun heritage, newly added balconies and murals give locations a New Orleans feel; blues, jazz and zydeco music play in the dining room; and Cajun favorites like gumbo and crawfish are on the menu.
But even after the paint in a franchise has dried, the menu has changed and the employees are wearing new uniforms, franchisees must always be prepared for the next change, because even the most major revamp isn't set in stone. As Flynn points out, times, tastes and competitors are always changing. "Franchises constantly have to be thinking and observing," he says. "There's just no time to rest in this business."
