Who says you can’t teach an old brand new tricks? Some of America’s iconic full-service chains are betting that remodeled restaurants and reengineered menus will rejuvenate their images.
Paul Mangiamele is not hesitant to use the “re” words—reinvestment, rebranding, and reintroduction—to describe the process that Bennigan’s restaurants are undergoing. He even goes so far as to call what is happening within the chain a revolution.
The Dallas-based company’s president and CEO says the casual-dining segment has been “in a coma” the past few years, suffering from a condition he calls “brand drift.”
“We had drifted away from the basics—those elements that made us successful in 1976 when we opened our first restaurant and allowed us to maintain our leadership in the segment through the early ‘90s,” he says. “As a result, customers drifted away.”
To fuel the brand’s resurgence, Bennigan’s unveiled a makeover plan that included new designs and menu shifts. A 5,000-sq.-ft. prototype replaced the typical 10,000- to 12,000-sq.-ft. design, effectively lowering cost of entry for franchisees and fitting more readily into different site options—from end-caps and in-line spaces to freestanding pad sites. Since 70 to 75 percent of sales come from food, Bennigan’s new design moved the bar from the center of the restaurant to the side, freeing valuable real estate for tables and creating a more communal feel. And while the dated Tiffany lamps are gone, colored glass is used in windows overlooking the food preparation area.
“We’re respecting our traditional trade dress, but giving it a new energy and vibe,” Mangiamele says. The same goes for the food and drink. For example, Bennigan’s popular potato skins are back, but instead of their 80’s iteration of piled-on toppings, they now come with a variety of dipping sauces.
On the beverage side, a carefully crafted collection of specialty drinks is being developed to pair with updated, chef-driven menu items and the original 100 offerings have been pared down to 14. Accentuating the emphasis on warm, Irish hospitality, one signature drink is the Long Ireland Iced Tea and the restaurant is testing an Irish coffee made tableside with house-made whipped cream.
“It’s a $100 presentation for a third of price,” he says. “That’s part of how we’re giving our guests real value for their money.”
But Mangiamele emphasizes the remodeling is just one catalyst for sales increases. “As our franchisees remodel, there is an obligation to also re-train and hire additional team members,” he says. “If an operator is relying on just the remodel, there will be a spike in sales but it will be short-lived.”
Of the 85 Bennigan’s locations in 10 countries—40 of which are in the U.S.—almost all are franchise-owned. About 20 percent have already undergone revitalization, and the chain is opening an average of one new restaurant a month.
Buying Into Success
On a larger scale, Atlanta-based Huddle House, which has 400 units in 21 states—98 percent franchise-owned, is giving franchisees a $2.5 million incentive to implement its new remodeling program. The company is offering the first 100 franchisees $25,000 each to offset the costs of remodeling and local marketing. Franchisees must commit to the program by July 31, 2014, but Huddle House is also offering its franchise partners third-party financing to complete construction.
By the end of June, 10 percent of the Huddle House franchisees had converted to the new prototype, and the company’s director of franchising, Jim Carr, says each retrofitted restaurant has seen sales increases of 10 to 25 percent.
The $2.5 million incentive program clearly demonstrates Huddle House’s commitment and confidence in the remodel program, Carr says. “We want to help our franchisees retrofit their restaurants faster to help them reap the sales benefits and to reduce brand confusion for consumers.”
The company unveiled its remodeling program, which includes a tower entrance, warm colors, and plush, contemporary seating, in mid-2012.
“We’re going away from being a diner to becoming more of a family restaurant,” Carr says. “We want to draw in younger customers, especially young couples with children.”
Also key to the remodel plan is increased seating capacity, expanding from 65 to between 76 and 96 seats, and more space in the kitchens to accommodate larger or multiple grills. The previous design had space for grill surfaces that were three to four feet long, but the new prototype doubles that grill capacity.
While the new prototypes are 3,000 to 4,000 square feet larger than the original diners, franchisees with smaller spaces are encouraged to reorient their kitchens to slip in an extra grill and bump out space for increased seating. Another signature feature of the new prototype is the “Huddle Booth,” which can accommodate seven to 12 guests and encourages group gatherings.
Huddle House, which is celebrating its 50th anniversary this year, anticipates more than 90 percent of its units will be reimaged by 2017 and expects to add 135 new restaurants over the next four years.
Better Bar Scenes
Old Chicago Pizza & Taproom, rebranded from Old Chicago Pasta & Pizza, is reinventing itself with a focus on the bar and a name change that emphasizes its craft beer expertise.
“Between 35 and 37 percent of our volume is liquor, beer, or wine, and 75 to 80 percent of that mix is beer,” says Mike Mrlik, Old Chicago’s brand president. “We’ve added six taps to the 30 we already had, and that plus our bottled varieties allows us to offer a total of 85 beers.”
At least 30 percent of those beers are crafted at local and regional breweries in each restaurant’s community. Seasonal beers are also highlighted, and brew-centric tasting events plus a loyalty club give beer lovers even more reasons to become regulars.
Service is another important aspect of beer expertise, and Mrlik says, “With our bartenders, we went all the way back to the basics with new uniforms and training on how to correctly pour beer. We even installed a new refrigeration system and brought in new glassware shaped for each beer style.”
Research also revealed some “weak spots” in Old Chicago’s food menu, which the company addressed with more than 40 new items including a Tavern Thin Crust Pizza and Panini—lighter fare intended to attract women. Overall, the new prototype—which includes transitioning the interior from dark woods to lighter tones, took two years to develop.
Stores where the changes were tested saw a 10 to 18 percent lift in sales, Mrlik reports, and he expects all of the company-owned locations to complete renovations this summer. Founded in 1976 in Boulder, Colorado, Old Chicago, has 58 company-owned units and 36 franchises.
Another chain known for its bar scene, Hooters of America, debuted its new prototype in Slidell, Louisiana, in June. Highlights of the 6,300-sq.-ft. restaurant include a centrally located bar, improved seating, updated décor, expansive windows for a brighter, airier setting, and a large video wall with four 70-inch televisions. Dave Henninger, the Atlanta-based company’s chief marketing officer, says 20 additional remodels are planned this year and the company plans to maintain or accelerate that pace in 2014.
The 30-year-old Hooters brand, with 412 restaurants in 44 states and 27 countries, also introduced a new bar menu in February and recently added a late-night, half-price appetizer menu.