Major expansion plans are in the works for East Coast Wings & Grill, according to Sam Ballas, chief executive of the Winston-Salem, N.C.-based chain.
Ballas said he hopes to grow the casual-dining chain by 12 to 15 units — all of them in the Southeast — each year for the next five years. By the end of 2012, the chain will expand outside of North Carolina for the first time, opening locations in Charleston, S.C., and in the San Antonio area.
The chain currently has 22 locations, with six under construction and slated to open later this year and 12 restaurant openings planned for 2013.
"2012, for us internally, is kind of our breakout year," said Ballas. "We feel like, very confidently, we can develop anywhere in the country."
And the wing chain has the numbers to back up its growth plan, said Ballas, a former investment banker and commercial real estate chief executive. East Coast Wings & Grill projects about $30 million in systemwide sales for 2012, a $13 million increase from 2011.
Ballas said that as his company expands, it will keep its same model: slow, steady growth, crafted by a lifelong businessman. Here, he discusses expansion, franchising, menu development and more of what's coming for East Coast Wings & Grill with Nation's Restaurant News.
Tell me about where you’re planning to expand your business.
Our Atlanta store will be open in 2012. San Antonio stores will open this year and a location in Charleston, S.C., will open this year. And there will be locations in Greenville, S.C., and Louisville in 2013.
How many franchisees do you have?
We are at 18 franchised entities, with four franchisee groups.
The quest for me, if I can have my cake, eat it and have a glass of milk, is to eventually have 200 units operating with 40 franchisees. By doing that kind of development strategically, and wanting to maintain a lower franchisee count is challenging, but it can be done. We want to add more qualified franchisees into the club, who would, in turn, develop multiple East Coast Wings & Grill locations.
How does your company go about finding franchisees?
We have a referral network that we’ve built among industry gurus and suppliers that have been following our brand. We keep them informed through newsletters. That referral network is our biggest feed, and we have done very little lead generation until now.
Now we invest in some print advertising with periodicals that support the brand, as well as some public relations work. Lastly, we started attending a handful of shows [in 2011] where we actually put a booth up for the brand, and we have some of our talent there, including franchisees, to share the story.
Tell me a bit about how you’ve developed your menu.
We’re going to tempt you with wings, but we’re going to retain you with the rest of the menu. So, [with East Coast Wings] we’ve created a competitor of a Chili’s or Applebee’s. You’re trying to leverage your menu to try to get a customer to come in a couple times a week. I know I’m going to get you for the wings…and now I’ve got you for that spinach salad.
What are your best sellers?
Of course, the wings. We have 75 different flavors of Buffalo wings. The top two [sauces] that are neck-and-neck are the Terri-Ginger Garlic and the Kentucky Bourbon. Those two sweet flavors are our top sellers.
How is your company responding to the rising prices of corn, due to drought, within the supply chain? What do you do to manage costs?
I come from a Wall Street background, and my executive vice president of operations, Tom Scalese, comes from a food distribution background. We chart corn prices, futures, oil — we do all that homework every month.
About three months ago, Tom and I were sitting down, working on the futures reports. And when [corn prices] dipped down to about $5.80 per bushel in May 2012, we locked in our prices through April 2013. So, we haven’t seen any increases in price over the summer. If [prices increase after April 2013], it will eventually end up on the customer’s tab.
We are prudent. I can tell you that we’ve got systems in place, and for us, it has worked out well.
Given the recession, many franchises have had difficulty securing loans in order to open new restaurants. Is this something you encountered when you were looking to expand?
We’ve been expanding all through the recession. It’s been faster and slower at times, but we’ve been expanding. The times that we were slower were deliberate because I wanted to pull my team away from store development into brand [proprietary sauces and menu] development.