What is in this article?:
- Fazoliâ€™s CEO talks turnaround
- Innovation and franchise development
Carl Howard describes what the chain is doing to gain sales momentum.
Carl Howard, CEO of Fazoli's
Innovation and franchise development
What has this past fall season been like for Fazoli’s? The results in the rest of the quick-service industry have been decidedly mixed.
We were aware of the economy remaining sluggish, and that’s been going on since 2008, because there hasn’t been a key catalyst moment where everyone said we’re completely through the tough period. Everything going on with the government makes it harder for the consumer to understand the day-to-day rules they have to play by.
I can’t control the weather, the government, the economy or consumer confidence. All we can do is to continue to upgrade our experience, which we look at every day. The bag’s not empty; we have so much stuff going on to make us best in class. We’ve changed the way we help an unhappy guest with more management training in the dining room than ever, under what we call the ‘Guest Ambassador’ program for our general managers. We’re trying to give our customers the $15 casual-dining experience for $6 or $7.
Do you think you’ll ever reach a point where the brand transformation is complete and it becomes a matter of accelerating unit growth? How do you approach that balance?
Meaningful innovation is always important. Things that are meaningful to the guest and your core consumer will be important, and we’ll continue to try and find the next big thing. But yeah, we think our menu and what we’ve done don’t need to be tweaked a lot further; now we need to make it easier for our consumer to understand and for our employees to operate. So we’re working on simplification, from our kitchen equipment in the back-of-the-house to the layout of the menu board. We’re going back to ensure greater accuracy and consistency in our recipes.
We continue to work on meaningful innovation, but now we’re working on expanding in that way that franchisees aren’t overwhelmed by a brand that’s close to operating like a casual-dining brand.
What’s the state of your franchise development pipeline right now?
We have nine new locations committed with six under construction. We’re going to open next in Ohio, Indiana, Colorado, Iowa and Texas. The majority of those will open in spring and summer of 2014, and we’re building the recruitment group of new franchisees behind that.
What’s been different for this turnaround is that for a long time we didn’t have a franchisee base that was growing. I tell that to Sun Capital all the time: We’re not like Bruegger’s Bagels, because when Jim [Greco, former chief executive] got there, he had 10 franchisees that were growing and opening stores. I didn’t have any. Now, we can encourage our operators to start growing again, and two have already opened new units, with a third partner kicking the tires on a new development deal.
Will we see a balance of traditional and nontraditional units in the next several Fazoli’s openings?
Ideally, we’d love everyone to take a new piece of land and put up a shiny, new freestanding location, but that would be a slow way for us to develop, given the amount of capital needed. You’ve seen a lot of people slow down that way, because people are having a tough time with startup capital.
I do see gas-and-convenience locations being the majority of our growth moving forward, but certainly not all of our growth. We’re very close on working with an airport group and a college campus group. We’re getting interest from a lot of different avenues.