Seafood Restaurants is soon to have new ownership, but chief executive Phil Greifeld said the transaction would be seamless for guests.
Boca Raton, Fla.-based private-equity firm Sun Capital Partners recently announced an agreement to sell Captain D’s to New York-based Centre Partners. Terms of the deal were not disclosed, but Centre Partners will be moving forward with a brand that is in the midst of a notable turnaround.
Under Sun Capital’s ownership, the 527-unit chain has recorded about nine consecutive quarters of same-store sales increases, and Greifeld said comparable sales have risen 4.3 percent year to date despite industrywide trends that show consumers pulling back on spending.
Greifeld spoke with Nation’s Restaurant News on Thursday about Captain D’s turnaround and innovations yet to come.
What will the change in private-equity ownership mean for Captain D’s?
Captain D’s primary focus, day in and day out, will continue to be on our core value, and that is to constantly heighten the guest experience. Whether that means something operational — or in execution, product innovation, marketing campaigns or food quality and consistency —we will continue to focus on what has made this brand so successful over these past three years.
What are Captain D’s plans for growth?
Clearly we’ll be looking to sustain the success. In 2011, we saw the first same-store sales increase in seven years. In 2012, we established record same-store sales comps of 8.4 percent, and we established new franchise average unit volume records. In 2013, we are up 4.3 percent in same-store sales so far this year. With the 8.4-percent increase last year, on a two-year comp basis, we have double-digit comps of 12.7 percent. So our strategy will be to sustain that robust momentum, and we’re confident we can do that.
What are the plans for unit growth next year?
We’ll open two to three company-owned units in 2014, and franchisees will probably open four to six, then we’ll start ratcheting up from there. We just launched a franchising initiative, so it’s our first year of growth in a long time. We feel pretty good about that.
The brand had not been franchising for a long, long time. We’re laying the groundwork to cultivate more growth throughout our existing franchise base, as well as with new franchisees. We plan to add new company units as well.
Last year, we opened a new unit in Georgia that has shown average unit volumes of $1.5 million. We have another couple under construction right now — all franchise units — and we are enthused that, as our highly attractive franchise model becomes more known in the franchise community, people will be taking advantage of our strong brand and strong unit-level economics.
New look, new food
Does the new unit in Georgia have the new Beach Design?
Yes. Captain D’s has always had a more nautical theme, but the new design is more coastal seaside destination. It’s bright and airy. It’s refreshing, and it dovetails perfectly with our breadth of seafood offering. Most importantly, it has resonated very, very well with guests.
How are you applying the new look to remodels?
We carefully tested over a long period and we’ve found it works. We’re seeing anywhere from a 7-percent to a 9-percent sales lift — higher in certain areas — at remodeled units.
We picked an entire DMA, including Birmingham, Huntsville and Montgomery (Ala.), and we remodeled all company units. Now we are turning our attention in 2014 to the Atlanta DMA. We’re methodically planning the rollout throughout certain DMAs.
How are you working with franchisees on the remodel plan?
The franchises have accepted it as well. Upon renewal and transfer, they adopt the new design. The franchisees that have implemented it are also experiencing a healthy sales lift.
What percentage of the system has the new look now?
We’re in infancy stages. Probably about 9 percent of the system has the new look.
What’s new on the menu, and what’s to come?
We have an incredibly talented team on product innovation and culinary, quality assurance and marketing. They have collectively come together to revitalize all aspects of food quality, consistency and innovation. We found the company LTOs did grow stale over the years, but our team has developed new products that have resonated with guests. Whether it be the lobster bites, or the new crab poppers, stuffed crab shells or Southern-style white fish, it’s all done incredibly well.
At same time, we’ve been rolling out to our entire system a new grill/broiler platform. Company units will complete the rollout by the end of this month. Franchise units will be done by the end of January. That arms us with a new platform where we can further innovate our offerings to guests.
Does the grilled platform offer opportunity to build check averages with more premium items on the menu?
The grilled items challenge guests to spend a bit more. I wouldn’t say it’s added to check growth, but the culinary team has been innovative with appetizers, drinks, desserts and other add-ons, as well as prices higher than the $4.99 meal deals that give guests an opportunity to spend more. Our checks and transactions have grown over the past couple years, which seems counterintuitive given what’s happened to the macroeconomic environment. But sales are being driven by check, not by price increases, as well as increased frequency with core guests and new trial. The 8.4-percent comp in 2012 mostly came from increased footsteps.
Can you give a hint about innovation to come?
We can’t give away all our secrets. There’s a lot of exciting innovation in the pipeline, and you’ll see that hitting our LTOs in 2014 and beyond. We’re just getting started. We’re in the infancy stage of transforming this business, and it’s going to be a lot of fun with our new equity sponsors.