Turnaround stars

The recent economic news has been grim, but there’s a conga line forming in the restaurant business. With the exception of P.F. Chang’s financial results, this has been a feel-good time for the trade.

Look at the results for three former flat-liners in what’s been christened the polished casual market. Ruth’s Chris was losing sales at the rate of more than $1 million per store. Last week it posted a comp increase of 5.8% for the second quarter.
Morton’s, an archrival, topped that achievement with an 8.3% increase.

And Kona Grill did even better, logging a 9.1% rise.

Meanwhile, Dunkin’ Donuts’ parent dazzled Wall Street with the industry’s most significant (and successful) IPO in years.
Ignite Restaurants, the parent of Joe’s Crab Shack and Brick House, surprised a lot of Wall Street watchers with the announcement that it’d filed for a $100-million offering.

It’s far too early to declare a return to good times, nor an escape from the bad. Recent days also brought the bankruptcy of Chicken Out, the D.C.-area takeout concept once hailed as an ideal acquisition candidate, and Elephant & Castle, the high-volume casual chain. A Chevys franchisee also had to seek protection because of several blood-sucking leases.

But it’s not premature to hail three industry leaders for their amazing turn-around efforts. Indeed, their recognition might be overdue.

I’d watched them like a vulture during the worst of times because I was convinced their concepts were headed to a liquidation auctioneer. A turnaround seemed like too much of a moon shot given where the brands were.

But I was proved wrong. So, with apologies, I’m paying homage to three turnaround stars, even if their charges still have a ways to go in their recoveries.

I’m breaking it into three installments for ease of consumption. Here’s the first.

Popeyes’ Cheryl Bachelder: Working a common-sense plan.

Before the world fell apart, the AFC Enterprises concept announced it was rebranding to play up its Louisiana heritage. The yawns from reporters and financial analysts must’ve been deafening. Hadn’t the chain proclaimed the same mission time after time?

The ho-hum factor wasn’t diminished by the comeback plan put forth by the incoming Bachelder: Embellish the brand’s appeal, improve stores, make them financially sound, and expand. You could’ve ripped that turnaround punchlist from a how-to book.

But the tactics were different, particularly for what Bachelder termed the brand-building “pillar.” Popeyes was a chicken-on-the-bone concept. That heritage would be underscored by the rebranding of the chicken as Bonafide, a clever way of saying it was true fried chicken, with a name that made you think “bone.”

The problem with it and other fried chicken brands was the limited appeal at lunch. You don’t want to get all greasy before heading back to work, or down a heavy mid-time meal before a sleep-inducing meeting. So a new array of sandwiches and wraps were added.

Similarly, you can’t munch a fried-chicken breast while steering with your other hand (trust me, I’ve tried it). Portability was a true shortcoming, particularly in generating more sales through the drive-thru. So Popeyes added nuggets, tenders and snack-sized minis.

Then there was the overriding concern about price. Chicken is relatively inexpensive, but the economy had tanked. If it wasn’t a bargain, consumers were going to walk away.

Popeyes countered with an array of new, low-cost and snackable selections.

Meanwhile, operations were scrutinized via a new service tracking system. Some of the resulting fixes were so basic as to merit a Do’h!: Clearer headsets at the drive-thru, so orders wouldn’t botched, and the installation of timers to keep everyone mindful of service speed.

It wasn’t a matter of splitting the atom. Any ops specialist preaches the better part of Bachelder’s strategy as standard operating procedure. The tactics were peculiar to Popeyes’ challenges and menu. But there wasn’t anything mind-blowing about the adjustments.

The key was the execution. Coming up with a plan is easy. Making it happen as planned is the challenge.
Bachelder did it. That leaves the key question of how.

Given how adeptly the plan was communicated and executed, there’s only one solution: A semester at Hogwarts. And maybe in the graduate program at that.