Breaking away from the cycle of blah
Famous Dave’s added 23 new items to its menu, including this Thanksgiving-esque offering.
You could call it the perfect storm. On the one hand, casual dining franchises like Ruby Tuesday, Chili’s, Olive Garden and others have become commoditized to a point where consumers can hardly tell the difference between them, says Andrew Becks, chief operating officer of marketing agency 301 Digital Media.
On the other, the industry is facing a seismic shift in consumer preferences. Customers are shying away from higher check-average dining in favor of fast casual and non-traditional, low-cost dining segments, Becks says.
The result: “Casual dining franchises are facing the reality that developing a brand identity that really resonates with the next generation of consumers and rises above the noise is harder than it once was,” Becks says.
Pat Phelan, CEO of restaurant consultancy Leap Hospitality, agrees. “Consumers are demanding a better experience when they eat out, they want local food, something entirely different than what they could eat at home,” he says.
Currying favor through food
Given the state of the landscape, it might be more difficult for casual dining segments to rise above the noise as Becks says they should, but many are trying. The first point of attack: the food.
Famous Dave’s, whose iconic brand has revolved around barbecue, added a whopping 23 new items to its menu, with a twist that draws on its heritage. These include dishes such as Hillbilly Hubcaps, Cajun-seasoned fried jalapeño slices served with rémoulade sauce, and Burnt Buttz, a smoked pork that is flash-fried and griddled in blackberry barbecue sauce. The addition of such items to the menu has an added bonus, says COO Geovannie Concepcion. Because the frequency with which diners go out for barbecue is not terribly high, Famous Dave’s is hoping these new dishes will increase customer frequency.
“We’ve kind of been stuck in the mud for the past 10 years, as other restaurants were moving quickly and doing a refresh every five years, we’re just a little behind. So we’re going to try to fast forward and get with the times,” says CEO Jeff Crivello.
It’s also about value, the franchises say, as casual dining restaurants offer more wallet-friendly items with an eye toward millennials. Famous Dave’s also has a new value menu, which includes a mix of both barbecue and non-barbecue items served with smaller portion sizes at lower price points.
Applebee’s, meanwhile, added steak to its signature 2 for $20 deal, something Chief Marketing Officer Joel Yashinsky calls “an important part of our value proposition.”
“Our focus has revolved around abundance and value and that you get a great plate of great-tasting food at a reasonable price and that is compelling to all guests,” Yashinsky says of Applebee’s offerings. He noted the brand has seen an uptick in millennial guests but whether that’s attributable to the steak addition or other factors isn’t known.
At Pizza Inn, an all-day buffet was launched after a customer poll.
Decor reboot to boot
Casual dining franchises are betting that it’s not just food that needs to be compelling to all guests. Many are going in for a decor makeover as well.
Famous Dave’s is banking on a softer color palette on its walls and opening up the bar and the dining room to attract a broader demographic and also bring women in. “We have invested in marquee lighting, and other audio-visual components and we stream country music videos,” Concepcion says. The new vibe has more energy, he argues, and is warm and welcoming to a younger demographic.
Bennigan’s has even developed its own music for the restaurants, and is focusing on highlighting its nostalgia elements on the menu like its Death By Chocolate dessert and the Monte Cristo, a turkey-cheese signature fried sandwich.
Casual dining franchises are also focusing on unit economics by taking a look at the footprint of their restaurants. Paul Mangiamele, chairman and CEO of Bennigan’s, says the new restaurant design being rolled out is reduced in size by 40 percent.
“The average unit volume is now increased by 35 percent, making the ROI very attractive as a franchising model. You have to deliver compelling unit economics,” Mangiamele also points out and that’s exactly what he hopes to achieve with the new footprint.
The smaller footprint models also give casual dining franchises an opportunity to make inroads in urban markets where a good portion of millennials and even baby boomers live and where real estate prices are unfortunately sky-high, says Phelan.
Applebee’s added steak to its 2 for $20 deal, an “important part” of its appeal, its CMO says.
“If you look at the real estate trends in urban markets, the rates are prohibitive for a lot of larger footprint models to work there so even from that standpoint it makes sense for us to focus on smaller restaurants as a way of serving high-density areas,” he says.
Casual dining franchises are hoping such a revamp will also attract younger demographics, although the verdict is still out on just how much they will embrace the changes.
“With the advent of ready-to-cook segments like Hello Fresh and Blue Apron, you really have to give consumers an additional reason to dine out and add in more innovative experiences,” Phelan says. That, he suggests, could simply take the form of more gimmicky or outlandish food presentations. Jimboy’s new Taquito Burrito, for example, features three beef or chicken taquitos rolled inside any grilled burrito. Instaworthy anyone?
Change is the new constant
All drama aside, casual dining franchises insist the changes they’re implementing should be enough for them to break out of the cycle of blah. It’s also important, says Bob Bafundo, president of Pizza Inn, that franchises actually listen to their customers. After a poll showed a demand for an all-day buffet, the casual pizza dining franchise is rolling out exactly that.
There are a few casual dining franchises that are even experimenting with a fast-casual wing to the operation. Bennigan’s has a Bennigan’s On the Fly, a smaller scale model anchored in airports and other non-traditional locations, and Famous Dave’s is leaning in on delivery options.
Casual dining franchises can’t afford to lose sight of what really matters, Mangiamele says. “It’s always about food, it’s always about beverage, it’s about service. That’s your ticket to the dance, and if you’re not focused on that you become victim to brand drift.”
The bottom line for all is the bottom line and many are hoping the injection of new menus, new decor and the training that must align with all that is just what’s needed to avoid the dreaded brand drift.
“Differentiation is the only option forward for these brands or else they run the risk of becoming the Sears of casual dining,” Becks warns.
And that would be a decidedly unappetizing option.