Turnaround initiatives at Nashville, Tenn.-based Captain D’s Seafood Kitchen have spawned positive same-store sales momentum, leading chief executive Phil Greifeld to project a return to franchise growth in the second half of 2012.
For the March 25-ended first quarter, Captain D’s reported an 8.1-percent same-store sales increase, Greifeld said. That result included gains of 8.5 percent at the brand’s 275 company-owned restaurants and 7.7 percent at its 252 franchised locations.
Both the company-owned restaurants and the franchised system also set records for weekly sales during February, he added.
Captain D’s benefited from an unseasonably warm just like many other restaurants chains, but the sales improvement resulted mostly from increased guest counts, Greifeld said.
“What we’re doing is resonating with our guests and lapsed users,” he said. “The same-store sales increase comes out of traffic growth, not check average. About 90 percent is attributable to traffic gains, which is most pleasing. We’ve taken very little price.”
The chain’s revitalization strategy has included a new marketing campaign, which launched Feb. 14, as well as increased training for new hires, who go through a more thorough process that screens for people with a high quotient for hospitality, Greifeld said. He added that Captain D’s re-engineered the way it processes its core fish product, which has resulted in higher guest satisfaction scores.
“We really committed ourselves to putting the guests first,” he said. “That’s enabled us to marshal our resources in a very united direction to improve all aspects of our business: restaurant execution, bringing in people with the drive to succeed, creative marketing, great products and great price points. The list goes on … but it’s about returning to basics with clean restaurants and friendly service.”
Captain D’s currently is installing broilers in all company-owned restaurants, which would allow for the brand to develop grilled items and to prepare its core fish items differently. The equipment is in place at 40 percent of corporate units, and all restaurants in the system will have them in 12 months, Greifeld said.
He noted that the initiatives began gaining traction before this positive first quarter, as Captain D’s same-store sales turned positive in 2011 after eight years of annual declines. Greifeld would not quantify the sales growth, but Nation’s Restaurant News’ Top 200 research found that the chain’s estimated sales per unit grew 2.2 percent to an estimated $825,300 in 2011, compared with $807,800 a year earlier.
The positive momentum has Greifeld confident that Captain D’s will be able to restart franchise growth, which he suspended soon after he was hired as chief executive in September 2010.
“We had enough things to fix when I joined,” he said, “but in the latter part of 2012, we’ll relaunch a franchise program.”
Boca Raton, Fla.-based Sun Capital Partners owns Captain D’s, which operates in 25 states.