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The Cheesecake Factory expects to launch its Cheesecake Rewards loyalty program in June.

Cheesecake Factory expects to debut rewards program in June

New platform will offer members access to reservations in order to skip wait lines at the restaurant

The Cheesecake Factory Inc. is set to unveil its new Cheesecake Rewards loyalty program, likely in June, executives said during a first-quarter earnings call Wednesday.

The Calabasas Hills, Calif.-based company launched a pilot of Cheesecake Rewards last June in Houston and conducted a second test in Chicago last November, said David Overton, Cheesecake CEO and chair.

“We've had strong operational execution, and as a result, have accomplished our pilot goals, with our acquisitions and member activity rates exceeding our expectations,” Overton said.

David Gordon, Cheesecake Factory president, added that that the new loyalty program would likely debut in June and would be promoted with national search engine optimization, awareness building and some in-restaurant marketing.

“I think there's really three components to the program,” Gordon said. “The first will be published offers, which would be things like access to reservations complementary slice of cheesecake on a member's birthday, those type of activities to support acquisition and just ongoing engagement. Then we would have unpublished offers that will be given throughout the year, and those are really designed to drive … those incremental visits.”

A third component would be marketable moments, such as the traditional Treat or Treat Promotion around Halloween or National Cheesecake Day, he said.

Gordon added that “it won't be a points-based program. It won't be a spend-based program, more of a surprise and delight. We do know that access to reservations is an important component for people at Cheesecake Factory. We've historically been known for our long waits, and we think that's a benefit that will certainly drive acquisition.”

Access to reservations will also cost the company nothing, he added. “Our goal is to not have this program impact restaurant-level margins,” said Gordon, adding that Cheesecake Factory has never had a traditional customer relationship management program.

With off-premises channels holding at about 23% of sales and delivery making up about 10% of those sales, Cheesecake Factory has tested some marketing and promotions around online ordering, Gordon said.

“We've been working with DoorDash to be able to integrate rewards members into the DoorDash platform, which will allow us to make offers available to DoorDash members as well,” he said. DoorDash is The Cheesecake Factory’s exclusive third-party delivery partner.

Gordon also said the company plans to continue its integration of Flower Child, the Fox Restaurant Concepts fast-casual brand at now at more than 30 restaurants, into the Cheesecake Factory management group.

“Our teams here at the office, along with all the FRC teams are working through the plan that we constructed early on in the year, and we're on target to really be fully integrated by the end of the year, which was our goal at the onset,” Gordon said. Integration, which already has incorporated human resources, will allow the fast-casual brand to tap into Cheesecake Factory’s supply-chain and information technology components, he added.

For the first quarter ended April 4, The Cheesecake Factory reported net income of $28 million, or 56 cents a share, compared to $23.2 million, or 45 cents a share, in the same period a year ago. Revenues increase to $866.1 million from $793.7 million in the prior-year quarter.

During the first quarter, Cheesecake Factory opened two new restaurants, a Doughbird in Nashville, Tenn., and a Flower Child in Tucson, Ariz.

The company expects to open as many as 20 to 22 new restaurants in this fiscal year, including as many as five to six Cheesecake Factory units, five to six North Italias, and as many as 10 FRC concepts, including three to four Flower Child locations. In addition, in fiscal 2023 the company expects two to three Cheesecake Factory restaurants to open internationally under licensing agreements.

The Cheesecake Factory owns and operate 318 restaurants throughout the United States and Canada. It has 30 Cheesecake Factory restaurants operate under licensing agreements internationally and a bakery division that operates two facilities.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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