This post is part of the On the Margin blog.
Emptying my notebook following a busy NRA Show this week…
How Huddle House got operators to remodel: A few years ago, Huddle House was a 50-year-old brand with numerous restaurants that hadn’t been spruced up in decades. That made the chain “irrelevant” with younger consumers, CEO Michael Abt said during the NRA Show.
“We needed to become more relevant,” Abt said.
The company decided it needed to remodel. But it also had to convince operators to fix up their locations.
To do this, it proved the remodel with company-owned locations so it could show operators that fixed-up restaurants generate more sales.
Yet that wasn’t the only thing the company did to convince operators to remodel. It put “skin in the game,” Abt said, by literally paying operators to remodel locations.
“Once operators completed a remodel, we sent then a $20,000 check,” Abt said. “And then we spent $5,000 on local store marketing.”
It worked. Operators remodeled units. And the company ended up paying out a total of $1.8 million.
Corner Bakery Cafe is big into catering: Catering is all the rage these days. Once the territory of specialists and sandwich shops, now there are more types of concepts that are using catering sales to boost unit economics.
But few do catering to the extent that Corner Bakery does.
Catering is 25 percent of the system’s sales. And that’s average. “We have a place in downtown Chicago and a place in downtown Los Angeles that do over 50 percent,” CEO Frank Paci said. “Atlanta does more than 50 percent.”
Catering is a great business for restaurants because it’s remarkably efficient. “By 11 o’clock, you may have $2,000 to $3,000 of sales in the book at 8 percent labor,” Juan Martinez, founder of the industrial engineering consulting firm Profitality, said during the NRA Show.
Not surprisingly, Corner Bakery is careful in how it presents its catering orders. Its catering packaging is more intricate than even its to-go packaging. And the company delivers its own catering orders rather than relying on a third-party company to do the job.
More from Arby's and Marco's Pizza
Arby’s Paul Brown on kiosks: Rising labor costs have generated a lot of speculation, much of it in these pages, that the quick-service restaurant sector would quickly adopt self-serve kiosks.
But maybe not so fast, at least according to Arby’s Restaurant Group CEO Paul Brown.
“What about the drive thru?” Brown said, noting that 60 percent of his chain’s sales come through the drive thru. “That’s not very well addressed.”
Brown also noted that hardware could be problematic when it fails, and it can be expensive.
Indeed, that might well be why we haven’t seen wider adoption of kiosks at, say, grocery stores. So perhaps the kiosk revolution will be miniscule.
Single POS systems are the future: Toledo, Ohio-based Marco’s Pizza is working to adopt technology to keep pace in the rapidly evolving pizza business. But it also recognizes a big drawback — its system has many different point-of-sale systems.
The chain is working on that — it’s currently looking at a potential shift to a single system to make technological advances easier systemwide. Byron Stephens, the president and chief operating officer, expects that the system will go to a single POS system in a year to 18 months.
And technology, he said, is vital for his company. “It’s like having tires on a car now,” Stephens said.