Luby’s Inc. opened its fourth dual-concept unit, marrying its fast-casual Fuddruckers under one roof with its namesake cafeteria brand.
The Houston-based company debuted the latest combination, the third from new construction, in the Dallas suburb of Rockwall, Texas, just off Interstate 30, on June 26.
Luby’s, which started the concept with a Houston-area conversion, opened the first new-build unit in August 2012 in the Houston suburb of Pearland, Texas, and added a location in Austin in March.
In the most recent opening, the two brands share a 13,000-square-foot building. Fuddruckers, which has its own entrance and patio, covers 3,000 square feet and seats 92 customers. The Luby's cafeteria occupies 9,900 square feet and seats 220 customers.
The concepts share restroom facilities, which are positioned between the two brands.
The Fuddruckers unit relies on guests ordering at the counter and picking up their orders when alerted via lighted coasters. The décor is casual, with booths and tables in a roadhouse atmosphere.
The Luby’s portion features the typical cafeteria line, where guests select and carry their own food, and the décor has been upgraded with tributes to the Texas Hill Country and mid-century modern, which taps into the brand’s founding in 1947.
The first dual-concept location, the conversion that opened a year and a half ago, was added to Luby’s same-store sales comparisons in the third quarter, which ended May 7. That first unit had a 2.2-percent gain in same-store sales, said Chris Pappas, president and chief executive of Luby’s, and unit-level profit was 21.3 percent.
Luby’s plans to add a fifth dual-concept location in Webster, Texas, south of Houston, in the fall.
K. Scott Gray, Luby’s chief financial officer, said the combined units outperform sales tallied at the standalone brands. The new combo restaurants averaged $92,000 in weekly sales during the third quarter, compared with the weekly averages of $51,000 at core Luby’s and $32,000 at core Fuddruckers units.
A number of quick-service restaurants have offered dual-brand units over the past decade. Last fall, Bruegger’s Bagels and Caribou Coffee embarked on a dual-brand strategy in the Minneapolis market. Bakery-café chain Tim Hortons partnered with Cold Stone Creamery in some new locations and Atlanta-based Focus Brands has applied the strategy to its Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s, Carvel and Cinnabon brands, including a test of tri-branded units.
Snack brands have also paired up, as in the case of Philly Pretzel Factor and Rita’s Italian Ice.
Yum! Brands Inc. was a pioneer in the dual-concept concept in the past decade. After the acquisition of Long John Silver’s and A&W, the Louisville, Ky.-based company paired the brands with its flagship KFC, Pizza Hut and Taco Bell chains.
Brands with more extensive levels of service have tried the idea, but they have pulled away. After it made plans to sell off its Red Lobster casual-dining brand, Darden Restaurants Inc. in May shut down its six combined units with Olive Garden. The Orlando, Fla.-based company converted four of the units to the Olive Garden brand.
Luby’s Inc. owns and operates 94 Luby's Cafeterias, 68 Fuddruckers, 15 Cheeseburger in Paradise full-service restaurants and bars, and one Bob Luby's Seafood Grill. The company franchises 111 Fuddruckers locations across the United States (including Puerto Rico), Canada, Mexico, Italy and the Dominican Republic. In addition, the company’s culinary services division manages 26 healthcare, higher education and corporate dining locations.
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