After three years of fine-tuning, Zoës Kitchen is harnessing the power of the Mediterranean diet to fuel expansion.
Armed with a revamped menu and decor, and new leadership, the 45-unit fast-casual chain plans to grow by one-third in 2011, with the goal of hitting 60 units by year’s end.
Central to that growth is food that basks in a halo of freshness and health. Zoës was founded in 1995 by Zoë Cassimus, a Greek emigrant who wanted to share her culture of eating. The concept’s roots, however, have broadened over time.
“We are not ‘Greek,’ but can instead borrow flavors and ideas from the entire Mediterranean,” said Greg Dollarhyde, executive chairman and an investor, explaining the concept’s breadth of offerings.
In 2007 Brentwood Associates, a Los Angeles-based private-equity firm, acquired the Birmingham, Ala.-based concept, and Dollarhyde was brought in as chief executive. Dollarhyde in March stepped aside from day-to-day management, handing the reins over to a new president, Kevin Miles, who most recently was Zoës chief operating officer. Miles held similar roles at Pollo Campero and Baja Fresh.
Headquarters: Birmingham, Ala.
Segment: Mediterranean-inspired fast casual
No. of restaurants: 45
Average check: $9-$10
Systemwide sales: projected at $60 million in 2011
Leadership: Greg Dollarhyde, executive chairman; Kevin Miles, president; Jason Morgan, chief financial officer
Year founded: 1995
Funding: private equity
Notable competitors: Any upscale fast-casual restaurant
Website: www.zoeskitchen.com
The recent executive changes are among several that have been made in the past few years.
“We felt that we needed a new decor package and an evolved menu that would be more friendly to dinner guests and males,” Dollarhyde said. “In order to maximize available dayparts, we added beer and wine and introduced beef to the menu through our steak roll-ups and stacks, and [added] more appetizers like fresh hummus.”
The menu was expanded to include “clean items like veggie kebabs and rich items to get you through the winter like grilled pimiento cheese sandwiches — a Southern favorite,” he added. Zoës prepares food on-site and has no commissary. Bestsellers include chicken kebabs, grilled stack sandwiches, chicken salad, spinach rollups, Greek salads and hummus. The average per-person check falls between $9 and $10.
Signage and ambience also were refurbished, Dollarhyde said.
“To be more enticing to dinner guests, we changed all the surfaces in the restaurant from floor to ceiling, leading to a more modern and clean look,” he explained. “We added tasteful music and made the lighting adjustable so that we could set a better dinner mood rather than [having harsh compact fluorescent light] bulbs.”
Dollarhyde said the chain also emphasized training.
“We are fanatic about customer satisfaction,” he said. “Every customer e-mail is distributed to the entire senior and mid-level team so that everyone knows what’s going on.”
Even with the changes, Zoës’ audience is skewed female, according to Dollarhyde.
“We look to please the modern, educated woman with higher disposable income who is on the go, and the people who want to be around her,” Dollarhyde said. “Our age demographic is very well distributed among that demo from 24 to over 50 years of age. More than 75 percent are working, and over half have kids at home.”
As Zoës expands, it is seeking real estate near that audience. Targets are 2,500- to 3,000-square-foot end caps in areas with good retail traffic.
“We like to be near ‘daily needs’ centers, and we also have a few downtown stores,” Dollarhyde said.
Zoës is currently in 12 states, mostly in the Southeast. Officials will continue to develop there, targeting sites from Texas to the Washington, D.C., area, Dollarhyde said.
Zoës’ fast-casual positioning was among the characteristics that attracted Brentwood to the concept, said managing director Rahul Aggarwal, noting that fast casual connotes quality food, affordability and convenience.
“As a consumer-focused fund, we look at sectors from the perspective of what is most positively received by the customer,” he said. “The fast-casual sector of the restaurant industry addresses many key sensitivities that are and will continue to be important in the future.”
Recent research from The NPD Group supports the segment’s strength. In March the Port Washington, N.Y.-based firm said customer counts at the nation’s largest fast-casual concepts rose 7 percent in 2008, followed by 4 percent in 2009 and 6 percent in 2010. By comparison, guest counts for the entire industry and the quick-service segment declined or remained flat during the same time frame, NPD said.
Contact Ron Ruggless at [email protected].
