NRN takes a look at 20 restaurant chains best positioned to crack the Top 200 — and what they’re doing to get there. RELATED: • Spotlight on the 2014 Next 20 • Overview: Meet the NRN 2014 Next 20 • Infographic: The Next 20 at a glance • 2014 Next 20: Sales and Unit Trends
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Zoës Kitchen was founded in 1995 by Zoë and Marcus Cassimus in the Birmingham, Ala., suburb of Homewood. Their son, John Cassimus, joined the fast-casual concept several years later and helped expand Zoës within Alabama and bring it to Arizona, Florida, Louisiana and Tennessee. In 2007, when at 20 units, Zoës Kitchen sold a majority stake to private-equity firm Brentwood Associates. In 2014, when the chain had grown to 114 locations, parent company Zoe’s Kitchen Inc. successfully held an initial public offering, raising $70 million.
Zoës menu emphasizes Mediterranean-inspired dishes, including signature offerings like Chicken and Orzo Soup, hummus, Greek Salad, Chicken Kabobs and Chicken and Slaw Pita.
Zoës Kitchen shrimp tabouli salad
The decor features bright oranges and vibrant greens, with such “freshness cues” as a wall divider explaining the herbs used in dishes.
Zoës Kitchen units have a dine-in check average of $9.57, placing it squarely in the under-$10 fast-casual sweet spot. Out-of-store onsite catering makes up 17 percent of sales, and orders average $200 each. Other takeout is between 13 percent and 15 percent of sales, the chief financial office said on a recent earnings conference call.
“Our food travels well and, as a result, we believe our strong catering offerings are a significant competitive differentiator and generates consumer trials of our brand,” said Kevin Miles, Zoe’s president.
Keys to success:
Strong growth: For the year ended December 2013, Zoës had systemwide sales of $128.5 million, an increase of 38.9 percent from the year earlier. It ended 2013 with 102 units, up 36 percent from the year before, and estimated sales per unit were estimated at $1.5 million, up 3.6 percent from the year before.
Expanding the C-suite: Zoës added the new position of chief operating officer in October 2013, and hired Jeremy Hartley, who was previously at Mimi’s Café and La Madeleine French Bakery and Café.
Menu innovation: Zoës was one of the first chains to use some alternative, gluten-free grains, such as quinoa. The chain also introduced this year a “Live Mediterranean” initiative, which emphasizes the communal and health aspects of the region’s cuisine.
Shifting Dayparts: In June, Zoës executives said they were looking to expand the chain’s dinner offerings and to shift the daypart mix to a 50-50 split between lunch and dinner. Currently, the mix is 60 percent lunch and 40 percent dinner. In addition, catering continues to serve as a major sales driver.
“Our cooks show up at 7 or 7:30 [a.m.] to prep fresh food for the day, and they are assembling the catering,” said Jason Morgan, chief financial officer. “Essentially we have that 17 percent [of sales] in the restaurant before the first customer shows up. Catering is our breakfast daypart.”
View the other Next 20 standout brands:
• Del Frisco’s Grille
• Capriotti’s Sandwich Shop
• Burger Fi
• Black Bear Diner
