Periodic remodelings are standard practice throughout the industry, but a new wave of building modernizations is among the latest strategies that mature quick-service chains are employing to keep customers from defecting to more cafelike competitors in the fast-casual arena.
Fast feeders are doing away with many of the stereotypical looks of their restaurants of old—garish color schemes, molded plastic seats, harsh lighting and a clutter of oversized promotional posters—in favor of more subdued color schemes; natural-looking decorating materials; softer lighting; more tasteful chair, floor and wall coverings; and even real plants.
And though an increasing number of customers don’t get out of their cars when ordering from quick-service restaurants, operators nonetheless feel the competitive urge to provide attractive environments for those who do come inside.
Among the chains leading the design revival are Jack in the Box, McDonald’s, Wendy’s, Subway, Arby’s, KFC and Dunkin’ Donuts. Some franchisors and franchisees have seen business increases from units that were remodeled recently, though it’s too soon to call for others that have made remodeling investments.
“Positive consumer response to fast-casual has caused traditional fast-feeders to take notice and follow suit,” says industry consultant Dennis Lombardi of WD Partners in Columbus, Ohio. “The QSR guys are studying how consumers react to quick-casual and would like to replicate some of that.”
New decor packages are aimed at matching the look of the restaurants to the level of its food offerings, many of which are being upgraded to close the gap with such chains as Panera Bread, Pei Wei Asian Diner and Starbucks Coffee.
San Diego-based Jack in the Box has started to enhance both the exteriors and interiors of existing and new stores as part of the 2,088-unit chain’s major reimaging and brand reinvention program. The chain has set a goal of completing 200 remodels this year and of remaking all stores within five years, said Terri Graham, its vice president and chief marketing officer. Currently, only a few Jack in the Box branches sport the new look.
Among the changes are new seating options, including booths, round tables and high-tops; bright earth-tone color schemes instead of the chain’s traditional red-and-white combination; bold graphics; decorative pendant lighting; ceramic tile floors; background music tailored to regional tastes; updated menu boards; and more contemporary crew uniforms with black T-shirts.
Closed-circuit televisions would play custom-created vignettes depicting the fictional clown-headed chief executive “Jack” marketing character, along with clips of sports, news and weather.
“Programming is still evolving,” Graham said.
Exterior upgrades are to include more landscaping, such as flowering shrubs, ornamental grasses and even small trees, and less-cluttered drive-thru windows. Graham explained that every detail down to the packaging would carry a uniform look that incorporates a new logo.
Dunkin’ Donuts, which just unveiled in Philadelphia its 14th store using a new layout, considers to be still in test mode changes such as new logos, neon signage near the front door and an increased focus on coffee and bakery goods. Current layouts vary widely among the chain’s 5,200 domestic units.
“We’re emotionally connecting with everyday Americans celebrating life,” said Joe Scafido, Dunkin’ Donuts’ chief creative and innovation officer. “Our customers have told us they don’t want Wi-Fi and fancy couches. They want high-quality products that are affordable and easy to order in a pleasant, clean environment.”
Wi-Fi Internet connectivity can be found in some unexpected places these days, including many McDonald’s and some Subway units. Chicago Subway franchisee Phil Mesi has just started installing Wi-Fi networks in his seven stores, although he said that’s not typical of his Subway colleagues.
Mesi estimates that business increased between 10 percent and 20 percent in the three units he has remodeled with the chain’s “Tuscany” decor package, and the increase has been sustained even though the novelty might have worn off.
“People want a nice atmosphere and environment, and they enjoy their meal more, even though it’s the same food,” he said.
The Tuscany look has been installed at about 12,000 of Subway’s 20,000 domestic locations, said corporate spokesman Les Winograd.
The package, replacing Subway’s original urban cityscape motif, instead reflects a European look. Hints of Tuscany, which reflect the heritage of Subway president and co-founder Fred DeLuca, are seen in wall murals, a brick-look wall covering behind the counter, porcelain floor tiles and dining-area table and chair surfaces in tones of gold, green, wheat and deep red.
With remodeling going on throughout the quick-service sector, franchisee Mesi even has found himself complimenting nearby McDonald’s in downtown Chicago for their decor upgrades.
“We’ve got a lot of competitors nearby,” he said. “You’ve got to see what your neighbors are doing.”
McDonald’s reimaging initiative to refresh older units has been completed at about 6,000 locations. Some of the elements are overstuffed armchairs, natural-looking materials, softer lighting, pastel color schemes and plasma televisions.
Arby’s, Wendy’s and KFC also are in the long-term process of upgrading company-owned units and requiring franchisees to remodel older restaurants to fit the chains’ newest design packages. The new looks at Arby’s and Wendy’s share a general cafelike atmosphere, in contrast to older building models that still have fluorescent lighting, decades-old color schemes and harder-to-read menu boards.
KFC has given franchisees a June 2008 deadline to complete the chain’s latest round of remodelings. Cost estimates range from $250,000 to $500,000 per location.
The physical look of a restaurant is the fourth-most-important part of a consumer’s decision-making process when deciding where to go to eat, said Robert Passikoff, president of the New York-based Brand Keys consulting firm, who calls reimaging “a smart idea,” in spite of the costs.
“Service and store experience is becoming a very big surrogate for brand differentiation,” Passikoff said. “They realize they have to do something about experience. The issue is that companies are getting away from the traditional fast-food experience.”
