Del Frisco’s Grille

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Sister brand of high-end steakhouse taps into growing polished-casual market

Del Frisco’s Grille is operating in a sweet spot in the U.S. economy, appealing to disposable-income-rich, affluent diners, as well as aspirational consumers looking for a more upscale experience.

Capitalizing on the prestigious name of its much pricier sister concept, Del Frisco’s Double Eagle Steakhouse, this smaller, polished-casual chain booked $44.1 million in sales at its 11 units open at the end of December 2013, an 83.8-percent jump from the year earlier, when it had five units. Del Frisco’s Grille has opened two more locations so far in 2014, in Burlington, Mass., and Irvine, Calif.

The brand is a bar-centric concept, offering craft cocktails and bar snacks such as cheesesteak egg rolls and ahi tuna tacos, as well as burgers and flatbreads, along with USDA Prime steaks with the usual sides. Mark Mednansky, chief executive of Grille parent company Del Frisco’s Restaurant Group Inc., said the Grille locations in suburban locations handle robust brunch business, too.

“The concept really has proven to have legs in many different cross-sections of the country when it comes to real estate,” he said. He noted that, while Del Frisco’s Grille was planned for urban locations as places where people who entertained corporate clients at the steakhouse could go on their own dime, he has found that it resonates with upscale guests everywhere. In addition, consumers with less of an upscale flair may go to the Grille as a special occasion.

Keys to success:

Multiple dayparts: The brand appeals to consumers throughout the day, as guests frequent the restaurants for brunch, lunch, cocktails, dinner or late-night. “If you just come in for a cocktail, we’re thrilled to death,” Mednansky said.

Local feel: Different designers are used for almost each restaurant to make sure the ambiance appeals to the local community and consumers. Additionally, about 20 percent of the menu is left to local management’s discretion so they may use purveyors in the area or offer dishes they know appeal to locals. Craft beer and local wines are offered, and the wine list is largely left to local management’s discretion.

Great real estate: As part of the larger parent, Del Frisco’s Restaurant Group, the Grille brand has the clout and resources to locate and hold on to great locations, including the chain’s flagship restaurant at Rockefeller Center in New York, as well as a location in Santa Monica, Calif., across from the well-known and often-visited pier.

Strong corporate culture: “We empower our general managers to run the business the right way,” Mednansky said. “They’re responsible for every aspect,” he added.

Staff is also retained with benefits including free health insurance — not only for managers but also for hourly workers who work more than 25 hours per week. Hourly employees pay for part of their insurance until they’ve been with the company for two years, when Del Frisco’s picks up the full cost. Del Frisco’s also offers 50-percent matching funds for 401(k) retirement accounts for employees who have been with the company for a year or more.

“The happier our employees are, the happier our guests are,” Mednansky said.

Burger Fi – Better Burgers Made by Scratch

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Fast-casual chain touts scratch-made items to stand out in competitive segment

The “better-burger” segment is crowded lately, with Smashburger, Shake Shack and others expanding apace, but the four-year-old BurgerFi chain has held its own with healthy sales growth. The company tripled its systemwide sales for the year ended Dec. 31, to an estimated $42.8 million, according to NRN research. More importantly, estimated sales per unit also showed robust growth of 25.6 percent, to $1.9 million.

The North Palm Beach, Fla.-based chain, whose name stands for “The Burgerfication of the Nation,” has equally ambitious expansion plans. BurgerFi Intl. LLC plans to more than double its locations in 2014, adding several major urban markets.

BurgerFi has made its mark with cooked-from-scratch burgers topped with its BurgerFi sauce, as well as menu items such as a Kobe beef hot dog, wine and craft beers, all served in stores built with sustainable materials and boasting eco-friendly practices. And after hiring a new creative director this summer, the chain has embarked on a redesign to put more of the focus on its story and positioning as a way to set itself apart in the crowded fast-casual burger field.

While there are many chains in the better-burger boat, they don’t all fulfill that promise “through and through,” said the new creative director, Ronn Pearson. BurgerFi was started by chefs who believe in everything being hand-prepared.  “Those guys walked into the kitchen and they didn’t know from fast food. They didn’t know from cutting corners,” he said. “Nothing is rolling off trucks.”

Keys to success

The menu: BurgerFi offers high-quality burgers made with fresh Angus beef, a selection of hot dogs — including the Kobe dog and one stuffed with apples — and frozen custards. It also has a “secret menu” of special items such as the ½ and ½ Burger — half angus, half veggie — and Urban Fries with parmesan and garlic aioli.

“The opportunity for all of us in that better-burger segment is to pull the people who are stepping away from the McDonald’s, Wendy’s and BKs of the world because they’re producing an inferior burger,” Pearson said.

The eco-aware approach: While Pearson said the chain makes no claims to being 100-percent green, it is appealing to the more eco-friendly public, featuring recycled-material furniture, such as chairs made from soda bottles;  ceiling fans to help reduce air conditioning use; a low carbon footprint; and waste recycling.

“We’re not granola eco-hippies, but we are aware,” said Pearson.

New markets: Units grew 175 percent, to 33 locations, by the end of 2013, which included tough markets such as New York. Pearson said by the end of July, the company was opening its 52nd location, and plans call for reaching 70 locations by year-end 2014.

Neapolitan Shake

Besides its home state of Florida, where locations in Tampa, Orlando and Naples are coming soon, BurgerFi launched this year in Denver, Boston and Napa, Calif., which became the chain’s first location on the West Coast.

BurgerFi is careful about choosing new markets and locations, said Pearson. It looks for endcap spots where it can have outdoor seating, which makes the store expansion intentionally slower and more deliberate, he said. Management is studying existing stores to establish a set of best practices for expansion, Pearson said.

New marketing leadership: Pearson, who joined the company in June, said he’s been tasked with building up an in-house marketing team. He’s planning a big digital push and realignment of marketing dollars, as well as redesigning elements of the BurgerFi experience. Pearson said he realized the company was not clearly conveying its chef-led menu focus.

“These aren’t just burgers that we’re slinging,” he said “There’s more to the process. There’s more to our story.”

The franchisees: BurgerFi locations are 15-percent corporate-owned, but franchisees are vetted for commitment to the story of the brand. All franchisees and employees go through a two-week training program called BurgerFi University that drills them in the basics of the brand.

“We’ll talk to anybody, but we believe the franchisees that are most successful are those that believe in what we believe in,” said Pearson.

 

Black Bear Diner

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Lodge-themed concept elevates family-dining experience with casual-dining touches.

At Black Bear Diner, it’s all about value — and bears.

Bob and Laurie Manley, along with partner Bruce Dean, founded Black Bear Diner in Mt. Shasta, Calif., as a restaurant offering American comfort foods in a bear-infested, mountain lodge-themed setting that defies simple categorization.

Black Bear offers food and service more befitting of casual dining, despite its diner name. Guests feel they’re getting a great value, said Doug Branigan, Black Bear’s vice president of franchise development and operations.

“We’re polished family dining, in the upper tier of family dining,” he said.

The concept, founded in 1995, competes with brands ranging from Cracker Barrel to Mimi’s Café and offers a menu of homestyle dishes with “bear-sized” portions, from the popular chicken-fried steak to a tri-tip platter. Unlike most family-dining concepts, however, Black Bear offers beer and wine.

The average check is about $13 per person. Restaurants are typically between 4,800 and 5,800 square feet.

Based in Redding, Calif., Black Bear has grown to include 63 units in eight states, though core locations are across Northern California.

Four more are expected to open before the end of 2014, with another eight to 10 planned next year. The company aims to reach 100 locations by 2018.

Currently, 46 of the restaurants are franchised and five are corporate owned, with another 12 considered “affiliated licensed” restaurants owned by company executives.

The chain had $135 million in U.S. systemwide sales in 2013, a nearly 24-percent increase over the prior year. The company won’t disclose same-store sales, but said sales trends have been positive for 14 consecutive quarters.

Black Bear ended fiscal 2013 with 61 locations, a nearly 13-percent increase over the prior year, and estimated sales per unit were $2.3 million, up 11 percent.

Keys to success

Even daypart sales: Sales are roughly split evenly between breakfast, lunch and dinner, with dinner accounting for about 35 percent of sales. Family-dining competitors like Denny’s and IHOP, meanwhile, are struggling to build their evening business.

Value: The portions are generous and guests feel they are getting a lot for their money.

Anti-chain: No two restaurants are the same, though they all incorporate a certain namesake animal in the decor, including black bear totems carved from logs and black-bear-themed murals.

Relaxed atmosphere: It’s come-as-you-are and bring the kids. Servers wear jeans and suspenders and guests pay at a cashier on their own timing.

Authenticity: “We never intended this to be a chain. Mt. Shasta isn’t exactly a bastion of brand development,” said David Doty, Black Bear’s chief marketing officer. “It’s really the consumer that’s been pulling us along. The brand just resonates with them.”

 

Buffalo Wild Wings invests in taco concept

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Casual-dining operator acquires majority stake in Dallas-based Rusty Taco

Buffalo Wild Wings Inc. has made a majority investment in nine-unit Rusty Taco Inc. of Dallas as it continues to buy into emerging brands, the company said Monday.

Terms of the Minneapolis-based casual-dining operator’s investment in the fast-casual concept were not disclosed.

The deal follows Buffalo Wild Wings’ minority investment in March 2013 in PizzaRev, a Los Angeles-based fast-casual pizza chain that at the time had three units. Buffalo Wild Wings has 1,030 casual-dining restaurants in the United States and Canada.

“Rusty Taco’s fresh approach to tacos truly sets this concept apart,” said Kathy Benning, Buffalo Wild Wings’ executive vice president and chief strategy officer who oversees new business development, in a statement.

“Buffalo Wild Wings’ investment is part of our strategy to partner with emerging restaurant concepts that have the potential for significant growth, can work throughout the country and have a highly engaged management team with a passion to grow the business,” Benning said.

Rusty Taco, which opened in 2010, has two company-owned restaurants and seven franchised locations in Dallas, Denver and Minneapolis, St. Paul and Maple Grove, Minn.

Customers order at the counter and pick up their food when their name is called. Tacos are priced and sold individually and range from beef fajita and barbecued pork to chicken and vegetarian. Breakfast tacos are served all day.

“We are delighted to be partnering with Buffalo Wild Wings and believe it can have an immediate impact in helping accelerate our growth,” said Steve Dunn, chief executive officer of Rusty Taco, in prepared remarks.

“Our co-founder Rusty Fenton always said, ‘Tacos are the most important meal of the day,’ and we truly live that every day by providing our guests with the freshest ingredients and authentic tasting tacos at an affordable price,” he added.

PizzaRev, which now has 11 units in California, two in Minnesota and three in Utah, is set to add restaurants in California and to enter Missouri, Nebraska, South Dakota and Texas.

“As part of our long-term growth strategy, we are actively looking for additional concepts to invest in to build a portfolio of emerging brands, and continue to build a dynamic restaurant company,” said Benning.

For its second quarter ended June 29, Buffalo Wild Wings reported a 43.8-percent increase in net income, to $23.7 million, or $1.25 per share, compared with $16.5 million, or 88 cents per share, in the same quarter the previous year. Revenue rose 20 percent, to $366 million, including same-store sales gains of 7.7 percent at company-owned restaurants and 6.5 percent at franchised locations.