What is in this article?:
- Houlihan's prepares J. Gilbert's for franchising
- Finding franchisees
CFO Rob Ellis touts the brand's unit economics and business model.
(Continued from page 1)
Will it take Houlihan’s longer to recruit franchisees and train them for that type of a concept?
I don’t think it would be longer or more expensive. Houlihan’s restaurants are by far more complicated to run because it’s an all-scratch kitchen with 80 items or more on the menu every day. The training in the back-of-the-house and the server and manager education are the most complex.
By comparison, J. Gilbert’s is the easiest. It has 30 finished entrees for dinner, so there’s not much additional complexity there. We’ll have more training around the higher-end wine business. In terms of building costs, it’s almost the same amount per square foot, so we’re able to drive higher margins and sales through a restaurant that operates one shift. It’s a different business model than casual dining, but in a lot of ways it’s much simpler. At the higher average check, you can hire better staff and keep them longer, which is the key to delivering better customer service.
Was there a lot of the same re-engineering of the investment costs for J. Gilbert’s as Houlihan’s recently had done for its flagship brand?
Yes. We started the development of the prototype for franchisees based on our restaurant outside Hartford, Conn. That’s a 7,000-square-foot restaurant. We adapted its floor plan and built in better capabilities for private dining, and brought in décor elements from our previous J. Gilbert’s in St. Louis. It’s more “contemporary rustic,” which are two words that don’t necessarily fit together, but it combines nice rustic woods with contemporary lighting and glass fixtures, and nice custom wine cases.
Then we built that out and opened the newest restaurant in St. Louis to test whether it could be done for an efficient total cost. We took over the lease on an existing restaurant and opened this one for about $1.6 million total.
How do you grow J. Gilbert’s without letting the flagship Houlihan’s brand wither?
We should be able to handle it. We have a strong track record of supporting our franchise system, and we changed the focus on the franchise system on the Houlihan’s side to be separate from our corporate development, so now the regional managers and kitchen people are supporting their franchise markets directly.
It will probably be a fairly slow ramp-up on the J. Gilbert’s side as well. We would be happy to have signed one franchisee for it in the next few months, but we don’t have any public growth targets for it yet. It will be a function of finding highly qualified, enthusiastic operators.
Contact Mark Brandau at email@example.com.
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