Operators owning the nightOperators owning the night

By Alan Snel

The Orlando Magic had just finished playing a National Basketball Association playoff game at its home arena, so Dan Davis, general manager at the local Smokey Bones Bar & Fire Grill, was bracing for a late-night crowd of hungry fans.

The Smokey Bones on East Colonial Drive was prepared for the late-night diners. An extra bartender and three servers were hired recently to accommodate the post-10 p.m. customers, with more manpower soon to be enlisted. New late-night appetizers such as Smoked Southwest Spring Rolls and Smoked Wings were added to entice the night owls. And a new, edgy decor was conceived, including wall signs featuring “Bonisms.” One sign reads: “It’s OK to stare at a rack as long as it’s on a plate.”

Welcome to the late-night daypart at Orlando, Fla.-based Smokey Bones, which recently launched a pilot project at seven restaurants in six states hoping to capture traffic and sales during the potentially lucrative late-night window. Officials at the 67-unit chain said they believe they can eventually generate as much as 15 percent to 20 percent of the chain’s daily sales during the four-hour window from 10 p.m. to 2 a.m. Davis’ restaurant is among the seven pilots.

“Most restaurants are closing at 11 [p.m.], and being open another three hours is definitely appealing to the crowds that are going out to clubs and bars and want to get something decent to eat instead of Steak ‘n Shake and McDonald’s,” Davis said.
The late-night dining daypart is the restaurant’s last crack at customer traffic and sales. Big cities such as New York, San Francisco, Chicago and Washington, D.C., already have an inventory of well-established, locally owned restaurants where customers can find late-night or early-morning grub.

And now a growing number of chains are mining suburban and smaller city markets for patrons seeking a meal, snack or appetizer deep into the night. Many night owls hunting for grub are male and in the 18- to 35-year age range, according to operators pursuing business in the daypart.

The average check at late night also has appeal, landing at $6.33, much higher than the $5.49 average for the rest of the day in 2007, the most recent year that such information is available, according Jeff Davis, president of Sandelman & Associates, a San Clemente, Calif.-based research firm.

The Smokey Bones late-night project is one of the latest initiatives making a run at the late-night daypart. Irvine, Calif.-based Taco Bell unveiled its “Fourthmeal” campaign five years ago as a money-making initiative to bridge the gap between dinner and breakfast sales, while Denny’s rolled out its “$2 $4 $6 $8 Value Menu” last year to appeal to everyone from club goers to third-shift employees. Denny’s even debuted a location at the Auburn University food court in January to allow students to eat until 1 a.m.

Minneapolis-based Buffalo Wild Wings also joined the late-night party in 2010 with its “Late-Night Snack Menu,” featuring items such as $3 Mozzarella Sticks, Onion Rings and Mini Corn Dogs from 9 p.m. to close Sundays through Thursdays.

For Smokey Bones, the strategy of building late-night traffic is built on three legs: beefed-up staffing, an edgy ambiance and appealing appetizers and sandwiches, said John Ryan, Smokey Bones director of operations, who is overseeing the pilot project.

Initially, the Smokey Bones unit operators were instructed to stay open later, but were not given enough specific guidance, Ryan said.

“You had 67 restaurants doing 67 different things,” he said. “We told them to stop so that we could start with clean slates.”

That meant mapping a game plan. Smokey Bones hired more bartenders and servers. Operators tweaked managers’ schedules so that they would start and finish later. They informed bartenders to become quasi-circus-barkers to stage games such as bingo. And menus were embellished with finger foods such as flatbreads and smoked chicken wings.

Smokey Bones rolled out the special appetizer menu for 10 p.m. to 2 a.m., decreasing prices for appetizers by 40 percent to 60 percent. Offerings include $4 spring rolls and $5 Cajun shrimp at pilot project restaurants in the greater Boston area, Long Island, N.Y., Virginia Beach, Va., and Pennsylvania.

Select restaurants launched the late-night initiative in mid-April, and the project will expand soon to another eight to 10 stores. Eventually all the restaurants in the chain will stay open later.

Smokey Bones has many employees that are veterans of other chains used to late-night dining, such as Red Robin and T.G.I. Friday’s, which made it easier to implement the late-night initiative, Ryan said. Smokey Bones is a former Darden brand now owned by Sun Capital Partners.

Smokey Bones officials want the chain’s bartenders to do more than pour drinks. They are instructed to create an upbeat and entertaining environment, Ryan said. To further build a vibrant bar scene, Smokey Bones replaced its old booths and low tables with high tables and bar stools in the bar area.

Massaging the wee hours for sales can be risky because of the potential danger of shifting restaurant customers from another daypart to late night, which could mean “cannibalizing your own sales at a less profitable amount,” said Bob Lin, president of Abuelo’s, a 40-unit Mexican casual-dining chain owned by Food Concepts International of Lubbock, Texas.

The upside is capturing sales by lowering the margin on items because “it’s money you otherwise would not be making,” Lin said.

Abuelo’s rolled out a late-night program from 10 p.m. to midnight at six of its 40 units 14 months ago, and the company is still evaluating its effectiveness, Lin said.

Parasole Restaurant Holdings, an Edina, Minn.-based company that owns 10 brands, sees the value of reaching out to the late eaters. Late-night French Toast of the Dead and $1 tacos are offered at Chino Latino in Minneapolis, for example.

“We look at late night as one more opportunity to give our guests an experience and one more opportunity to pay the bills,” said Kip Clayton, Parasole’s vice president of business development and marketing.

He estimated late-night sales contribute about 5 percent to 10 percent of overall sales, but said, “The difference of profitability of a couple of points could be huge.”

CASE STUDY: Smokey Bones Bar & Fire Grill, Orlando, Fla.

John Ryan, director of operations at Smokey Bones Bar & Fire Grill, a 67-unit casual-dining chain based in Orlando, Fla., is the company’s point man for driving late-night traffic and sales at seven pilot project restaurants. In those units, staffing has been beefed up, an edgier ambiance has been installed and late-night appetizers and sandwiches have been unveiled. Ryan talked about how Smokey Bones is massaging late-night operations for more sales.

What leads you to believe that Smokey Bones can cash in on the late-night daypart?

After we changed from barbecue to a bar and grill, we recognized we had to expand our hours. Originally we went to midnight, then we looked at 2 [a.m.] or whatever the local jurisdiction will allow. We believe there is an opportunity to take advantage of the late-night hours for most of our locations, and that means staying open ‘til 2 a.m. With some of the workforce working beyond 9 or 10 [p.m.] and looking for great food after they get off work, we believe there is an opportunity.

You had 67 restaurants doing 67 different things when you initially expanded the hours. Was it a challenge to get everybody on the same page?

I’d say it has been refreshing. If [there] was a challenge, it was recognizing what staffing changes we needed to put in place. Then we had to have them trained specifically for late night, compared to lunch or dinner.

What are the differences for your staff between lunch or dinner and late night?

As we bring people in now and train them for late-night shifts, they’ll become more expert on late-night offers. They’ll understand the type of beverages sold late night — with shooters and bombs and the greater emphasis on cocktails rather than beer and soft drinks that are served at lunch and dinner.

Could you talk a little about the new ambiance and atmosphere?

We’re reviewing uniforms for bartenders, and we are in the process of putting in a different music provider, which also will include video. We have Bones TV, and it’s funny clips and videos that run continually. They will be more mainstream and family at lunch and dinner, and we’ll have more edgy and adult-themed videos after 10 o’clock. We also will address lighting and will be adding neons in the bar area for late-night lighting.

What about the late-night food offerings?

There is a lot of emphasis on appetizers at a reduced price point. We have seen huge sales in flatbreads. We’re selling a burger and fries for $5. We have a buffalo chicken sandwich, pulled pork sandwich and pretty spectacular appetizers that cost 40 to 60 percent less than at other hours.

What demographic are you hoping to attract?

Three groups: hospitality employees, retail employees and then you have emergency service people, whether it’s hospital, fire departments or police departments. Certainly, working class and above legal drinking age. We’re trying to attract people who want a great late-night meal. We won’t be the neighborhood pub, but we want to be inclusive.

What role will the bartenders play?

They will be the hosts of the parties. We need to identify the right people for those roles. We’ve helped the general managers and human resources with the interviewing — doing role-playing, for example. The bartender training will be different for them than the servers. We want the bartenders to welcome people and to get to know them personally. We want everyone who comes to know the bartender’s name, and we want the bartender to know everyone’s names.

What trends are you seeing at your seven pilot restaurants?

So far it’s been successful. We’ve had good traffic. The managers are seeing people coming after midnight. We have had to make exterior lighting changes to indicate to people that we’re a restaurant that’s open late at night.

You’ve set the bar pretty high with expectations of 15 percent to 20 percent of daily sales coming from the late-night daypart.

Some of the 67 units will fall short of that, but at the seven pilots we’re seeing very good sales. We’ll shoot for 15 percent, and if we fall a few points short, that’s still better than 10 percent.

Contact Alan Snel at [email protected].