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Famous Dave’s plans fried chicken ghost restaurant

CEO: Delivery is ‘buying a future’ for the chain as demographic pivots to millennials

Famous Dave's of America CEO Jeff Crivello said delivery, despite its operational challenges and fees, has re-energized the chain whose key demographic has shifted from diners over the age of 40 to Millennials.

“It’s buying a future for the company,” said Crivello, who spoke to Nation’s Restaurant News on the phone after the company released its fourth quarter earnings after market close Monday.

Crivello said delivery now represents 50 percent of sales for the Minnetonka, Minn.-based barbecue chain, up from 31 percent in May.

Off-premise sales and menu innovation have been a key focus for the brand. In October, the company rolled out 11 new dishes systemwide after testing more than two dozen items earlier in the year.  The menu revamp, headed by award-winning pit master Travis Clark, also helped to drive sales and traffic at company stores.

Some of the new dishes diners are ordering more frequently include cheese curds and the new three-meat combo plate. Along with the food additions, the chain also redesigned the table menu with more photos.

Later this year, likely in the second quarter, Crivello said the company plans to pull the trigger on a ghost restaurant test — a strategy aimed at boosting off premise sales without opening a new restaurant.

Crivello said the unnamed restaurants will serve separate menus of fried chicken and burgers in Michigan and California. He said the plan is to post the “ghost” menus on Grubhub under a different name, but the meals will be prepared in a Famous Dave’s kitchen, likely a store owned by a franchisee.

“Nobody knows it’s coming from Famous Dave’s,” he said.

Towards the end of the year, the chain still plans to pilot virtual kitchens. This would be a restaurant or commissary with a smaller footprint developed specifically for off-premise delivery and catering of the Famous Dave’s menu.

For the fourth quarter ended Dec. 30, 2018, same-store sales at company stores increased 2.2%, with traffic up 6.3%. Same-store sales at franchise locations decreased 1.5%, compared to 1.1% increase from the same quarter a year earlier.

Quarterly revenue increased 7.2% to $13.4 million from $12.5 million a year earlier. Net income of $1.1 million, or 12 cents per share, was up compared to a loss of $3.8 million, or 53 cents a share, for the fourth quarter, last year.

Famous Dave’s closed the year with 127 franchise locations and 17 company restaurants.

Contact Nancy Luna at [email protected]

Follow her on Twitter: @FastFoodMaven

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