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Seasonal Strategies

Tacky Jacks raises the bar in the 'Redneck Riviera'


One would think winter would be a prime time for seats to be filled at a  destination restaurant. But Alabama’s Gulf Coast has some challenges—and opportunities. Just ask the management at  Tacky Jacks.

The first few times Mississippi businessman George Skipper visited Tacky Jacks as a tourist to Alabama’s Gulf Shores region, he had to employ his newly acquired bartender skills. Cokes and beers were a dollar each, and if no one was tending bar, patrons deposited money in a coffee can, then went behind the bar to retrieve their liquid refreshments from a cooler. After tending bar for the family, Skipper and his four sons retreated to the deck to watch the boats go by.

The restaurant/bar was—and still is—a quirky mainstay in the tourist area that some disrespectfully call “The Redneck Rivera.” The region, which includes the Florida panhandle, has sugar-white sand beaches, shrimp and grits on every menu, golf galore and attracts a diverse community. Midwestern snowbirds flock to it in the winter, college students gravitate toward it for spring break and Atlanta residents escape to its shores during the summer to enjoy the same high-mercury readings as at home, but tempered by the breezes coming off the water. Unlike many costal retreats, spring and summer are the region’s high season, not winter.

At the time of Skipper’s early visits, Tacky Jacks’ founder was in a buy-sell mode—he’d sell the restaurant, buy it back and then resell it. Skipper, who runs a successful insurance business in Jackson, Mississippi, decided to try his hand at being a restaurateur, becoming Tacky Jacks’ next—and perhaps final—buyer. “I just liked being down there,” Skipper says about Gulf Shores. “It’s a fun place to take your kids. People take care of each other.” He hired restaurant managers and let them keep the sales coming.

There are now five Tacky Jacks, three of which are owned by franchisee investment groups.  Skipper has plans to open more, using franchising as his growth vehicle. To that end, he brought on David Evans, a former executive with Elephant and Castle, who started as a consultant and now is vice president of operations and development, to streamline operations and make it into a franchise that could set up residency in towns where tourists and water meet.

“David gets things right,” Skipper says.

After a year of consulting with the chain, Evans moved to Gulf Shores from San Antonio last year to take over the full-time job of readying the chain for expansion.

Running a restaurant—any restaurant—isn’t for the faint of heart or light of wallet. And restaurants in vacation paradises present additional challenges because they routinely serve two masters—the locals and the tourists.

When Skipper first took over the two Tacky Jacks, the restaurants routinely shut their doors for winter. “I don’t like to close down,” he says. He prefers catering to the locals, as well as the snowbirds who take up residence in the variety of golf communities around his restaurants. “They used to be called ‘snowbirds,’ I call them ‘preferred customers,’” he says.

The problem, according to Tacky Jacks’ CFO Ken Kichler, is that “no one lives here.” The base population in Fort Morgan where the second store is located varies from 7,000 to 10,000, and the same area boasts 13,000 restaurant seats.

Families on vacation tend to dine out for 80 percent of their meals, but snowbirds, who reside in the area for three months or so, only eat in restaurants for about 15 to 20 percent of their meals, Kichler says.

A few miles away in Orange Beach (population 9,741), the Tacky Jacks has significant money swings: For  20 weeks of the year, sales are $100,000-plus; for 12 weeks, sales are $150,000; and for 10 weeks they are less than $20,000. Sales for the entire month of January equal one day in summer, he adds.

And then there are the hurricanes.

A hurricane doesn’t have to hit a restaurant to damage it, Kichler says. All it takes is enough wind and rain to chase people inside, or, for a longer-term effect, a strong enough chance of a hurricane to evacuate nearby areas. For instance, last Labor Day weekend “we should have taken in $120,000 for the four days,” he says. Instead, receipts totaled $25,000 for the week. That’s hard to plan for, especially when your summer receipts are paying your winter months’ overhead.

While no one can predict a hurricane during budget planning—or an oil spill—some chains eliminate the stress caused by slow times by shutting completely down in the off-season, while others staff-down and keep their doors open for what clientele still remains.

A painted turtle carved into one of the support beams in the bar adds to the tropical atmosphere of Tacky Jacks.

“Every year is Groundhog Day,” quips José Cofiño, a partner in Being Point, a hospitality consultancy firm based in Beverly Hills, California, about gearing up for the season.

Fixed costs don’t go away, Cofiño says, so restaurateurs in tourist spots have to make the decision which is the bigger hit—closing and absorbing those costs or maintaining a skeleton crew and having the problem of how much food to prep each day.

The relatively easy part of a seasonal restaurant is gearing up, according to Fred LeFranc of Results Thru Strategy, in Charlotte, North Carolina. “The real hard one is taking the business down.”
Neither Cofiño nor LeFranc are familiar with Tacky Jacks, so their comments and advice are based on their experience with chains in comparable locations and with similar challenges.

One of the reasons it is easier to gear up, LeFranc says, is because of a “nomad labor pool” who follow the work. College students are another option, because they already have a deadline by which to leave. It’s important to be upfront with the people you hire, he says, so they know exactly how long they’ll be employed.

When he worked with the Ruby’s Diner chain, four of its ‘50s-style diners were located at piers, and they were able to get the gearing up and winding down, down to a science, LeFranc says. Key was methodically tracking each restaurant’s sales history so they could build a labor pool to reflect the ups and downs in customer counts.

Another strategy, according to Cofiño is to “Love Thy Locals.”

During the off-season, “successful, smart people” will let the townies know they have a seat at the table waiting for them. It’s a matter of “support me during the lean times and when it gets busy, I have a table for you,” he says.

In Hawaii, there’s a term for this, he points out—kama’aina, which is similar to the airlines’ frequent-flier
programs which reward loyal customers with upgrades or free drink coupons. “It’s a financial decision,” Cofiño points out. “Give a break to those who will support you” year-round.

While it’s natural to raise prices in the busy season, Cofiño warns against “jacking up” prices for locals. One solution is to give residents an ID card that entitles them to discounts in the on-season.

Kerens, Texas-based Frank Steed, a former executive with several restaurant companies, including Metromedia before starting his own company, The Steed Consultancy, also weighed in. Location, he added, is the key to making enough money in the  high season to ease you through the low points.

Management at Tacky Jacks has already decided the concept has to be on or near water to make it work. About 50 percent of their patrons at the Orange Beach restaurant arrive via boat, not car, Skipper estimates.

When it’s sunny, it rains dollars at the Tacky Jacks bar. Patrons can dock their boat right outside and join the fun. The owners have even found a way to make their potent Bushwackers portable for boaters who want to take the signature drink out fishing with them.

But the concept will work in suburban locations. One of the new restaurants was constructed off the causeway outside Mobile, Alabama, right across the bay from Gulf Shores.

“You could literally dangle your feet in the bay, but you don’t want to because that’s alligator territory,” Evans says.

Tourists show up on the weekends, but the clientele during the week are the business people from downtown Mobile, Kichler adds.

Even with three different models of the concept to show track records, the franchisor knows it still has to do more disclosure than the typical franchisor.

All three consultants we talked to caution that while vacation-spot restaurants can do extremely well, franchisees need to know what they’re getting into and how to budget for the ups and downs in income.

Hit the road, Jacks

The current Tacky Jacks franchisees are investment groups, but the next crop of franchisees will be more along the lines of owner-operators, Kichler says.

Evans has been working diligently on documenting and improving the systems so he can start talking to prospects. Over appetizers at the Orange Beach location, he pointed out the changes to the menu—many of which he experimented with in the kitchen of his condo during the months he commuted to Gulf Shores.

Tacky Jacks’ fare is similar to typical bar food, but with a Southern flair. Seafood is a staple, of course, varying from deep-fried alligator tails to crab claws to Asian-spiced, firecracker shrimp. An unexpected twist Evans added is ahi tuna dip, a sophisticated presentation next to the Buffalo wings and “Mexican Garbage,” a an oversized plate of nachos that would feed a small football team for a week.
Their signature drink is the Bushwacker, a potent combination of silver rum, coconut rum and coffee liqueur whipped up to resemble a milkshake, with a Bacardi 151 floater on the top. “We didn’t invent the Bushwacker,” Evans boasts. “We just perfected it.”

Over-the-topness is appreciated by the clientele. For Mardi Gras, the bartender at Orange Beach served Bushwackers topped with tiny plastic babies in honor of the king cake tradition, where a trinket is baked into the cake to symbolize the baby Jesus and to grant good luck to the person who gets that slice.

Each Tacky Jacks has large outside bars and wooden decks in common, but the tackiest is the one at Fort Morgan, called Tacky Jacks 2. Dollar bills, signed by patrons, line the bar and the walls. Tacky, yes, but as one of the patrons told us with pride as he pointed to a hanging bill—the first, but certainly not the last, dollar he spent on beer at the bar—“that’s mine.”

David Evans is living the good life in the Gulf Shores region of Alabama. He’s found a concept to sell that has a lot to recommend it to vacation hotspots located on the water.

Skipper says when he first took over, he removed all the bills—not because they looked tacky, but because he had heard about another restaurant where the IRS came in, counted the dollar bills on the walls and recorded them as revenue. He later relented, Skipper says, after realizing that when people write their names on the bills, “they’re leaving their signature” on the place.

He’s even had long-standing customers take home one of the bar stools to be reupholstered. When they bring it back, the stool becomes their personal throne at the bar.

Story hour

Evans may be charged with telling prospects the Tacky Jacks story, but Skipper remains the color commentator. He’s not in franchise sales, but that didn’t stop Skipper from trying to sell a franchise to President Obama, when he  paid an impromptu visit to the Tacky Jacks in Orange Beach, during the summer of 2010.

Skipper says he was delighted at first by the visit because it gave him a chance to pressure the Commander in Chief for a long-overdue answer to his letter advising the president on how to fix the economy. Skipper was still a little miffed the president didn’t take his advice—or reply. But he was still hospitable.

“I told him, ‘I’m glad you’re here because there’s a spot open in the North, in Wisconsin, and if you’d buy it, I’d run it for you,” Skipper says. When the president looked skeptical, Skipper claims he added, “Sign a note for two shares and I’ll honor it.”

President Obama didn’t take the bait.

Having the most powerful man in the world sitting on your deck is a mixed blessing, Skipper adds. The publicity is good, but the restaurant was closed for two hours and the roads leading into town were blocked or in gridlock for hours. He had to put up with regulars complaining about sitting for hours in traffic because of Tacky Jacks’ visitor. In addition, Secret Service agents were positioned on the roof with sniper rifles, and the agents in the restaurant all had their hands on their glocks, he says. It had all the makings of an insurance nightmare. And remember, Skipper makes one of his livings in the insurance industry.

He says he sighed with relief when the entourage was gone—mostly because it saved him from having to ask the President of the United States to leave the premises.

Sparring with heads of state isn’t an everyday occurrence, but quirkiness is always on the menu. For instance, there was the time a couple was married on the beach and ordered a 100-pound Tacky Jacks Farmer’s Omelette layered in the shape of a wedding cake. The groom’s cake was a 50-pound pancake.

While the bride and groom may not have been wearing Tacky Jacks attire at their wedding, T-shirts are the No. 1 merchandise seller. “I see them all over the world,” Skipper says.

The challenge is, of course, building  that same loyalty and sense of fun in new places.

The concept’s ability to travel well is being tested in Panama City, Florida, where a new Tacky Jacks just opened. In addition to the Gulf, the restaurant has  a swimming pool, which was already on the premises, as part of its ambiance. “I come from a no-swimming pool policy,” the insurance executive says, “but they talked me into it.”

One of the ways management continues to attract regulars is to offer live music, karaoke nights and beer-and-bingo events.  But those options are only in the winter. “We end the promotions at spring break,” Kichler says. “We want table turns.”

Merchandise is also a moneymaker for the chain, however, Evans admits it may not be quite as lucrative for future franchises, especially if they’re not in destination locations. Vacationers want a memento of the occasion, he explains, so they’re more likely to stock up on T-shirts or beer glasses with logos.

Plus after 25 years, Tacky Jacks is an icon in the local Alabama community, something they’ll have to work a little harder at accomplishing in other areas. Evans believes his key markets will be in the South and Southeastern regions of the U.S.

Disaster management

Mother Nature is hard enough to plan around, but even worse are those disasters caused by man. The BP oil spill in the Gulf, which spewed oil for three months straight in 2010 added insult to injury.

“When it happened no one conceived it would affect us the way it did,” Kichler says. “We had a record-breaking weekend right after it happened and our biggest Memorial Day weekend.”

And then the oil washed ashore—“and all of a sudden business fell through the floor,” he says. “Our two stores lost over $1 million together”that summer.

The business loss was bad enough, but it occurred at the very same time they were raising money for expansion. How they were able to pull it off, he adds, is a miracle. “We kept positive that it could be done.” Three new restaurants is the proof miracles still do happen in the restaurant industry. Especially in paradise.

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