MEMPHIS TENN. Bakery and Marie Callender’s family-dining chains into a single corporate entity based here, officials at the new Perkins & Marie Callender’s Inc. say they are poised to strengthen each concept’s foothold in its respective geographic region. —After integrating the Perkins Restaurant and
For 480-unit Perkins, that means starting up stalled expansion and introducing a streamlined menu of the 40-year-old chain’s breakfast and comfort foods to a broader audience throughout the Southeast. And for 140-unit Marie Callender’s, that means bringing the 60-year-old chain’s trademark pies to more people throughout California and the Southwest and eventually upgrading the brand’s look. —After integrating the Perkins Restaurant and
“We have the potential to be an eminent player regionally,” said Jay Trungale, president and chief executive of Perkins & Marie Callender’s Inc. “We are not looking to be national, but dominate the segments we operate in.” —After integrating the Perkins Restaurant and
Perkins & Marie Callender’s Inc. is owned by New York-based private-equity firm Castle Harlan, which purchased both brands with plans to merge as many of the corporate functions as possible while still keeping the brands separate. —After integrating the Perkins Restaurant and
“We don’t normally do mergers of such large enterprises,” said Dave Pittaway, senior managing director at Castle Harlan. “We did have a glitch in the past with a manufacturing plant, so with such a large integration of systems necessary we wanted to make sure we did our homework.We have had no major glitches.” —After integrating the Perkins Restaurant and
Castle Harlan purchased California-based Marie Callender’s restaurants in 1999 because it was attracted to its recognizable name in pies as well as its licensing agreement with ConAgra, Pittaway explained. —After integrating the Perkins Restaurant and
“Out west, Marie Callender’s pies are like a cultural phenomenon,” he said. “Also, ConAgra was paying a royalty to sell the brand, and the restaurants were getting the carryover benefit of its advertising.” —After integrating the Perkins Restaurant and
In 2005, Castle Harlan acquired Perkins with an eye on potential licensing opportunities for the Perkins pancake brand. —After integrating the Perkins Restaurant and
“But we did our homework first, and at the end of the day, the analysis showed that we could save money across the board and share best practices without compromising the integrity of both brands,” Pittaway said. —After integrating the Perkins Restaurant and
Under the guidance of Trungale, who previously was chief executive of Denver-based Vicorp, cost savings of nearly $10 million were achieved by combining purchasing, human resources, general administration and information technology functions. —After integrating the Perkins Restaurant and
Specifically, by leveraging the combined buying power of Perkins and Marie Callender’s, consolidated purchasing of certain core products saved more than $2 million annually without any change in product specification, Pittaway said. —After integrating the Perkins Restaurant and
In addition, some Perkins’ franchisees, who operate about 380 of the chain’s units, are seeing a food-cost benefit of $8,000 to $9,000 in annual savings per store, and even more at the higher-volume Marie Callender’s, Pittaway said. —After integrating the Perkins Restaurant and
Pittaway also noted that by combining human resources and eliminating process duplication in general administration, the company saved more than $4 million. —After integrating the Perkins Restaurant and
Jim Stryker, chief financial officer of Perkins & Marie Callender’s, said integrated employee benefits resulted in lower rates for casualty insurance, improvements in claim management and lower rates on some fixed costs. More important, he said, the company was able to save between $2.5 million and $3 million without diminishing the overall employee benefits programs. —After integrating the Perkins Restaurant and
However, Trungale said, even with all of the consolidating, “we recognized the integrity of both brands and are not blending operations teams, recipes or marketing strategies. But we are sharing the best practices of both.” For instance, he said, Marie Callender’s is known for its bakery displays while Perkins has a system of ideal food-cost targets. —After integrating the Perkins Restaurant and
“Wherever we have been able to, we have adopted for both brands whichever system appeared to be a better one, such as these,” he said. —After integrating the Perkins Restaurant and
Officials also streamlined the Perkins menu, reducing it from 150 menu items to 100 of the most popular options. This shaved two minutes off serving times as well as two full percentage points on food costs, Trungale said. He added, however, that rather than bringing the food-cost savings to the bottom line, larger eggs and thicker cuts of bacon were brought into the mix. Also, monthly specials were removed from the menu in favor of six promotions a year. —After integrating the Perkins Restaurant and
Perkins also opened four units in the past year, the first the chain had opened in several years. More are in development in Florida and Minnesota. —After integrating the Perkins Restaurant and
“Most are in Florida because it is a very, very powerful market for Perkins,” Pittaway said. “We missed some explosive residential growth down there. Breakfast is Perkins’ powerhouse, and seniors like breakfast.” —After integrating the Perkins Restaurant and
In an effort to attract franchisees, Perkins is building company stores to prove the operating model works, Trungale said. —After integrating the Perkins Restaurant and
Changes at Marie Callender’s are not as far along as they are at Perkins,Trungale said, noting that the 140-unit chain, of which 46 units are franchised, has had few openings in recent years.“We think it is due for an upgraded look and some conversions, but we haven’t made any decisions yet,” he said. —After integrating the Perkins Restaurant and
The chain will continue to focus on California, its pre-eminent market with 90 stores, and Nevada, Arizona and the Pacific Northwest, with plans to open 15 stores in five years, Trungale said. —After integrating the Perkins Restaurant and
The long-term goal, he said, is to get the concepts and people fully meshed so Castle Harlan can exit before the company peaks. —After integrating the Perkins Restaurant and
“We want it to be in a growth mode so financially rewarding that whoever comes in isn’t starting from scratch but can instead continue on,” he said. —After integrating the Perkins Restaurant and
Pittaway said: “We always look at possible exits: IPO, sales, etc. Right now we are working on getting the numbers up, and at some point in time we will be sellers. If it weren’t for the financial melt-down going on we might have looked at it sooner, but now we think we’ll be here for a while.” n —After integrating the Perkins Restaurant and