No meal is more central to the American diet than the sandwich. Portable, convenient and eminently customizable, it fits the needs of the modern consumer, and recent research shows that there’s still a long runway for growth of sandwich sales in restaurants. Americans ate 12.5 billion sandwiches in restaurants from October 2013 to October 2014, according to consumer researcher The NPD Group. But a recent survey of more than 1,000 consumers by menu research firm Datassential found Consumers are still making the majority of their sandwiches at home.
For more info: http://nrn.com/food-trends/restaurants-can-still-find-revenue-sandwiches
That may seem small — First Watch will have 148 units by the end of the year — but it’s no less significant for the breakfast-and-lunch chain. Bread & Company is a fast-casual concept, presenting full-service First Watch with a host of possibilities, not just for Bread & Company’s two units, but for the concept as a whole.
“The lucky part about Bread & Company is it has a different service model,” First Watch CEO Ken Pendery said. “First Watch is a full-service concept. And we’ve always thought of ourselves as a pretty fast delivery model. The one thing Bread & Company offers is we can have some form of fast-casual component to it.”
That component and other aspects have yet to be designed. But the concept could ultimately give First Watch some insight into service speed. It could also provide the basis for a combined service model with elements from full service and fast casual. And some of the things the company learns at those two units could be applied systemwide.
For now, Pendery said the two-unit brand would operate under the Bread & Company brand as a traditional fast-casual concept.
“The great part about being able to pick up a brand that’s been successful with a service model or a specific menu item or a beverage program is we’re looking for something we can learn from,” he said.
The purchase of Bread & Company isn’t the only acquisition for First Watch over the past couple of years. Earlier this year, First Watch bought The Good Egg, an Arizona-based breakfast chain that gave the company 20 locations in Arizona. In 2012, First Watch bought two J. Christopher’s locations.
The acquisitions have supplemented First Watch’s robust new unit development. Pendery said the company expects to complete the year with 10 new units, and expects to add 15 locations next year.
“It’s been a busy couple of years,” Pendery said. “But when you’re growing, it’s always more fun. They’re nice problems to have.”
The previous acquisitions, however, were of full-service concepts similar to First Watch. The Good Egg locations remain under that brand, and will likely remain so, Pendery said.
The company is launching a new “Urban Farm” reimaging in its system, and The Good Egg will have the same remodel, but with a different brand name. “It has the history of a 30-year-old company,” Pendery said. “We don’t want to shock the customer with a rebrand.”
Pendery acknowledged that the primary goal of buying Bread & Company was to get its real estate. The chain was founded in 1992 as an artisan bakery serving breads, rolls, pastries and coffee, and had just 15 seats. In 1995, the chain expanded to include salads and sandwiches. It built a following and had as many as four locations.
Recently, the brand “just lost a little luster,” Pendery said, but still had loyal core customers. The company had two remaining locations in good sites. “We were really after that location,” he said. “In some instances, some acquisitions are as much real estate driven and location driven as for the brand itself.”
The company is reconstructing one of the two locations and plans to keep the brand intact, at least for now. “We have the option to rebrand,” Pendery said. “We’re in no rush to rebrand until we get close to the customer. We’re not afraid to operate a different brand. It’s possible it will become a First Watch, if not likely.”
While the brand has a different service model, that model “is not hard,” Pendery said. But the brand serves food similar to First Watch, only in a fast-casual format, like breakfast omelets and waffles. “They do things we do,” Pendery said. “We think we can work with that breakfast component in fast casual and pick up elements we could use in some parts with First Watch going forward.”
This doesn’t appear to be First Watch’s last acquisition. Pendery said this week that the company could continue to make acquisitions if and when opportunities come available.
“We’ll have organic growth and franchise growth and the occasional acquisition,” he said.
Fuddruckers opened its first restaurant in South America this week, in Santiago, Chile.
Houston-based parent Luby’s Inc., which also owns Cheeseburger in Paradise and the Luby’s cafeteria brand, said Tuesday that the 3,500-square-foot Fuddruckers unit was opened by new Chilean franchisee SRTC, which has agreed to open nine more locations.
“We are excited to continue the global growth of the Fuddruckers brand through partnerships with homegrown operators like SRTC, who have established themselves as leaders in the field,” Luby’s chief operating officer Peter Tropoli said in statement.
Fuddruckers has development agreements elsewhere in Latin America, including southern Mexico, Panama, the Caribbean and Puerto Rico, the company has said.
Chile-based SRTC also operates Ruby Tuesday’s units, which it first franchised in 1999. The company has six brands and 700 employees.
The Chilean franchisee located its first Fuddruckers, with 140 seats, in the upscale Las Condes area of Santiago. Fuddruckers said the menu includes classic burgers, as well as specialty offerings such as an Avocado Cheese Burger and Cheese Arugula Burger.
Luby’s has cobranded with Fuddruckers in the U.S. at least five locations. The combined units outperform sales tallied at the standalone brands, Luby’s chief financial officer K. Scott Gray said in a July earnings call with analysts.
The new cobranded restaurants averaged $92,000 in weekly sales during the third quarter, compared with the weekly averages of $51,000 at Luby’s and $32,000 at Fuddruckers units.
On Nov. 10, Luby’s reported a loss of $1.4 million, or 5 cents per share, in the fourth quarter, compared with a $429,000 profit, or 2 cents per share, the previous year. Revenue rose slightly, to $123.6 million, from $123.3 million the previous year.
Same-store sales rose 0.4 percent at Luby’s Cafeterias in the fourth quarter and fell 4.6 percent at Fuddruckers, the company reported. For the full year, same-store sales increased 1.4 percent at the cafeterias and decreased 3.5 percent at Fuddruckers.
Luby’s owns and operates 94 cafeterias, 71 Fuddruckers restaurants, eight Cheeseburger in Paradise units and one Bob Luby’s Seafood Grill. The company franchises an additional 110 Fuddruckers locations in the United States, Puerto Rico, Canada, Mexico, Italy and the Dominican Republic.
Luby’s Culinary Services division provides foodservice management to 25 healthcare, higher education and corporate dining locations.