Spaghetti Warehouse CEO details changes ahead

Spaghetti Warehouse turned 40 this year, and company executives are working to freshen the casual-dining concept.

Earlier this summer, the Irving, Texas-based chain introduced five new entrees and two appetizers, including inspirations from Asia (Kung Pao Chicken Spaghetti) and from the sea (Grilled Salmon and Basil Cream Fettuccini).

Azam Malik, president and chief operating officer of Spaghetti Warehouse Restaurants Inc., said the new items met “the latest trends for flavor” and were “selections that reflected the preferences of consumers and our guests.” The company also hired a new corporate executive chef, Larry Bellah.

The 16-unit Spaghetti Warehouse has restaurants in seven states, Florida, New York, Ohio, Oklahoma, Pennsylvania, Tennessee and Texas.

Doug Pak, chief executive of Spaghetti Warehouse since taking ownership in 2007 and an ensuing internal shareholder buyout last year, spoke with Nation’s Restaurant News about the concept, recent changes and its anniversary year.

What have been the major operational changes?

The biggest change is our whole new menu. We brought in a new corporate chef. … We haven’t really changed our menu in over a decade. For the first time, we’re really bringing in fresh new ideas. The great thing is, it really excited our guests and our employees.

Our biggest challenge was with our facilities. We’re not taking on any major remodels; but we wanted to offer a fresh look. We budgeted for some paint and equipment and, with our employees being excited about our 40th anniversary, it became a team-building exercise. As our guests came in, they took notice and told us they liked what we had done to our facilities.

Prior to this year, the company had not done much over a 10-year period; this is the first time we’ve experienced any major changes with the brand. And, I think with some of this has come a mind-set change.

Over our 40 years, Spaghetti Warehouse has had a lot of long-tenured employees, at the managerial level and employee level. We’re proud of the fact they’ve stayed with us, but because of that, making changes has been difficult. So, what we did, for the first time, is we communicated what we were doing and our front-office people went out toured every one of our locations and brought this fresh perspective to share.

We really brought in the purpose of what we’re doing and that had never had happened in the company before now. With the 40th anniversary, it wasn’t just a one-time promotion that we would do and then be done with. … Change takes time, we know that and we’re headed in that direction.

What are the biggest hurdles for the Spaghetti Warehouse brand?

I’ll give you three. First, it’s the changes. We’re a small company and you’d think you can be nimble, but actually it’s not that easy. If you had all the stores in one place that might be the case. We’re spread out, and that makes the ability to have constant communications very challenging. We know we’re bringing about big changes. It’s just going to take time.

Second, there is so much we want to do and big changes we want to bring about but we are a small company with limited resources and a small brand. However, with the ownership change that happened last year, I believe we have a solid three-[to]-five-year plan to take this brand to another level.

Third, it’s the facilities. We have a unique concept. But, it’s really a double-edged sword. It’s a warehouse. It’s big and it has an old American feel. People love that; there’s an ambiance. At the same time, they are big facilities. It is capital intensive. It requires an investment to go through large-scale facility changes. I’m confident that it’s going to happen over time.

What are the brand’s strengths?

There is the differentiation of our warehouse concept. The decor package, the exteriors are unique and because it’s so large, we’re the best place for large parties, whether it’s for birthdays, company events or anniversaries. We host parties for everything from 50 people to the largest group of 200. … Our name is a strength in that we’re a warehouse, people like coming here. And the fact we’ve been in business for 40 years is important, too.

We’ve got more than 100,000 e-Club members and nearly 65,000 Facebook fans. That speaks volumes to the loyalty of our brand.

What can guests expect from Spaghetti Warehouse in the year ahead?

What guests want from us is to be an emotional destination place, meaning we want to connect with our guests. Because the brand was dormant for so long, our guest’s expectations maybe weren’t as high, but now with all of the changes happening … what we’re trying to do is really emotionally connect with our guests. When our guests walk in, we want them to feel welcome and feel as though this is a place of celebration, this is place where they can be free and feel like they’re at home. That’s our No. 1 goal right now, is that they connect with us. A return to family values, if you will.

If we can serve as a place that reminds people of their families and friends, I think that’s what we want to accomplish. It’s reminds them of family regardless of who they are with at the time. … If you look at the research reports that are out there, everybody in America is going through so much stress, they’re cutting down the time they spend with family; they’re looking for an escape. We want to be that place where they come, feel at home and just relax. And, we don’t want it to just be a routine, but really sitting down and have a good time. It’s the emotional connection that we’re constantly thinking about and working on. The 40th anniversary is our reflection point for growing and having that kind of positive experience in the years to come.

How do you capitalize on the history of a 40-year-old brand?

I think there’s something important to be said and valuable about brands and companies that have been here for 40 years. We have a very loyal guest base, guests who started coming to Spaghetti Warehouse 30, 40 years ago and they’re still dining in our restaurant. What’s interesting is the multi-generational families who are now in their 40s and 50s and they’re bringing their kids. They’re telling their kids about what it was like to come here when they were younger. It represents a level of comfort, familiarity and stability even at a time when the world is changing so fast. …

Our five-year plan calls for growth for the first time over a decade. The brand has been closing stores for too long, and we are going to change that with opening new stores with a new prototype that we are working on. I believe we are positioned well to grow again because there is still powerful brand awareness out there for Spaghetti Warehouse.

What are you most optimistic about for the brand?

I’m most optimistic about the two prototypes we’re looking at. We are thinking about and designing two potential concepts, one similar to what we have: a large space for big events and parties with a slightly different experience, more of that emotional connection.

We’re also thinking about developing a fast-casual concept. Having these two different extensions of the brand is very exciting.

We’re also very positive about our commitment to help with downtown revitalization … in urban areas where you’re seeing the trend of re-gentrification with young families and people moving back downtown. We fit right into that trend into lots of cities.

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless