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Captain D's attributes sales growth to the grill

Captain D's attributes sales growth to the grill

Chain, franchisees gain confidence to build units

Long known for its battered, deep-fried fish, Captain D’s has been enjoying success more recently in part because of its grill.

The Nashville, Tenn.-based seafood chain has reported 15 straight quarters of same-store sales growth, including 5.2-percent growth in its second quarter. A big contributor to that, executives say, has been a strong increase in its sale of grilled items — including fire-grilled tilapia skewers and shrimp skewers, as well as limited-time offers such as Parmesan Crusted Tilapia.

“A year and a half ago, we implemented a new grill and prep platform in every Captain D’s restaurant,” said Phil Greifeld, Captain D's CEO. “The innovation and product quality that followed has been fantastic. We have a fresh-to-order fire-grilled menu. Our grilled sales mix has doubled, and it now represents a nice portion of our overall sales mix.”

There are other reasons for Captain D’s recent success. The company has aggressively reimaged its restaurants, and expects to have 45 percent of its 512 locations remodeled by the end of the year. Remodels provide an instant sales boost for existing locations.

The company expects to finish that redesign in two years. “It resonates well with guests,” Greifeld said. “We’re a company that’s incredibly guest centric. It’s the biggest driver of our success.”

The sales growth is also attracting new operators who are developing locations. In November, for instance, the chain inked a deal with California-based operator Tony Lutfi to buy five locations in the Kansas City area, where he’ll develop five additional units.

“I love the brand,” Lutfi said. "I love the management team. It’s the right brand for us. The seafood segment does not have a true leader, and they’re poised to become the leader in the segment.”

Captain D’s has been redefining itself from just a quick-service restaurant concept, instead providing customers with fast-casual quality and atmosphere at quick-service speed and price point.

“If you’re able to serve guests on plated servings and give them the quality they want at fast-food prices or a little above, and you give a unique flavor, you’re poised to win,” Lutfi said. “I think they are on the right track.”

It’s also giving the company confidence to add locations. Greifeld said the company would build two to three units this year, and five or six next year. “Then we’ll grow it up from there,” he said. “We’re shifting into aggressive growth mode, both franchise and company. It’s exciting. We have a great operational infrastructure, and can seamlessly absorb more company restaurants into our operations.”

Sun Capital Partners bought the chain in 2010 from Sagittarius Brands. The chain had been struggling after years of same-store sales declines. The company hired Greifeld that same year, and by 2013 it was sold to Centre Partners in a deal Reuters dubbed the “Turnaround Deal of the Year.”

The system has grown in the years since. According to NRN Top 100 data, the company’s systemwide sales grew 7 percent, to $499 million last year, from $467.1 million in 2012.

The company’s new grill and prep platform enabled the chain to add more innovative products. Previously, Greifeld said, the company did not have the proper cooking platform to execute a menu of grilled items or expand its menu.

The new grill, Greifeld said, enabled the chain to develop different types of grilled items and toppers.

And while the chain had traditionally served deep-fried fare — which, Greifeld points out, remains core to the menu — customers not only gave Captain D’s permission to serve more grilled items, they demanded it.

“It certainly fits within our brand parameters to offer grilled items,” Greifeld said. “Guests told us clearly that this is not going outside the brand’s guardrails.

“We’ve proven it with results. We have doubled our grilled sales mix. It’s worked really well for us and is going to be a permanent part of the menu for the foreseeable future.”

Another sales driver is the company’s value deals. The company has five bundled value meals for under $5, enabling customers to get Lobster Bites, fish and shrimp, Breaded Flounder or another entrée, two sides and hush puppies for under $5.

“Some people may feel this is a bold statement, but we feel we have an unmatched value proposition in the restaurant space,” Greifeld said. He added that the meal deals have “allowed us to take a substantial amount of QSR share. It’s driving our robust comps we’ve been reporting over the last four years.”

Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze

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