Back Yard Burgers has been tackling its turnaround for the past year a half, and its chief executive says recent initiatives are taking hold.
David McDougall, who became Nashville, Tenn.-based Back Yard Burgers’ chief executive in January 2013, as the brand emerged from bankruptcy, said a remodeled unit in Franklin, Tenn., which had suffered a fire, and menu initiatives are among elements that bode well for the company’s future.
Back Yard Burgers now has 68 units, with 22 company-owned locations and 46 franchised units, down from 180 restaurants at its peak before the bankruptcy, in which it received a $14 million infusion from Nashville, Tenn.-based Pharos Capital Group LLC.
Lattimore Michael founded the concept in Mississippi in 1986, and moved its headquarters to Memphis, Tenn., eventually taking the brand public in 1993. In 2007, BBAC LLC, a holding firm created by Pharos Capital and Cherokee Advisors, took the chain private in a $38 million deal. Back Yard filed for bankruptcy protection in October 2012.
McDougall said the company has been working on operations and the menu, which yields an average check of about $9.50.
The fire-damaged Franklin, Tenn., restaurant has elements of what the brand will look like, he added.
“We put in a new interior design with a more contemporary look and feel,” he said. “We put in new LED lighting and fixtures. We opened the restaurant up so there’s more visibility into the kitchen. We put in a complete brand-new kitchen in and, with that, some new restaurant drive-thru technology and display systems.
“It’s been a good first step as we look at a new concept store,” McDougall said. “The store itself has been performing extremely well compared to previous sales.”
McDougall discussed the turnaround with Nation’s Restaurant News:
What was the challenge when you came on board?
We got started in this turnaround back in January of 2013. The focus was certainly on ensuring our company-owned and franchised restaurants would be successful financially and operationally. It’s been an 18-month process. Both our franchised and company stores are performing much better.
How many units did Back Yard have at the time?
I believe we were at 84. Our company base has been stable. But clearly, bankruptcy has a lot of ramifications, and sometimes some unintended ones. From the standpoint of our franchise system, when they saw we had closed a number of company locations, that clearly didn’t send a strong message. What that resulted in was as folks came up for renewals or the stores weren’t performing well anyway, they saw it as an opportunity to leave, and they did.