Restaurant Development & Design

JAN-FEB 2019

restaurant development + design is a user-driven resource for restaurant professionals charged with building new locations and remodeling existing units.

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J A N U A R Y / F E B R U A R Y 2 0 1 9 • r e s t a u r a n t d e v e l o p m e n t + d e s i g n • 1 7 the reinvestment in the brand through- out the community. It's not just about remodels, but sometimes we're relocating and building from the ground up, which really gets the community's attention. It demonstrates our commitment to growing both in and outside the Wisconsin market without forgetting our Milwaukee roots. Tell me about your grill incentive program. CS: The grill incentive program started in 2012. We realized a majority of our restaurants had microwaves instead of grills, and the product quality wasn't consistent. We wanted to improve the quality of our products to match the vi- sion Cousins Subs was founded on when my dad started the company, which meant we needed flattop grills in all of our restaurants. It's a big ask of our fran- chisees to make that investment. So, we incentivized $8,000 of the approximate $30,000 cost — $4,000 in cash and $4,000 in a royalty reprieve for any franchisee who purchased a grill, in addition to an incentive offered by our steak supplier for all grill conversions. After 80 percent of the system upgraded to the new grill system, sales for those stores were up 12 percent during the 52 weeks following the grill installation. What was the biggest problem in the underperforming stores you closed? CS: Over time, traffic patterns and trade areas change and impact sales. You don't want to close restaurants but need to look at the investment and return for the fran- chisee and for the overall brand. Some- times the sales just didn't match what we felt we could achieve with a remodel, and when the franchise agreement was up for renewal, we made it a requirement to remodel. Some lower sales volumes no longer justified a substantial reinvest- ment by way of a remodel, so those stores just didn't see viability for the future. While it's never easy to close locations, we needed to make that decision for the overall health and future success of the Cousins Subs brand. Why was it important to close stores? CS: We really started by evaluating all franchise agreements. In 2011, we closed all underperforming or noncompliant locations, evaluated trade areas to see if it made sense to relocate some stores and then worked with franchisees to secure their commitment to the brand. When people don't get on board, it sometimes means they aren't supposed to be part of a larger brand. It's like you're pruning a tree — sometimes you need to do that to gain a stronger core. The results are in the numbers. Between 2011 and 2015, we saw same-store sales across all units increase by 16 percent and saw average unit volumes increase by 33 percent to $600,000. Those are metrics that tell me we made a good decision. Quantity isn't always the key. Quality is important; it's the quality of the restaurant, loca- tion and franchise owner that will help stabilize and solidify the brand moving forward. We had to go through that pro- cess back then in order for us to focus on successful growth today. What are some challenges in your revamp and expansion? CS: We would love to have all the remodels done today, but we wanted to be understanding and work closely with our franchise community. We made it clear remodels would happen at the time of franchise renewal, so in some cases this could be 2026. Some will go earlier, and some will go by their contract. With expansion, finding locations in trade areas that allow for an upgrade for drive- thru is challenging but important. Off- premise also needs to be a heavy focus, especially when entering new markets. Ultimately, finding sites that help sup- port the evolution of our brand is key. Have you had any surprises along the way? CS: When we set out to remodel and rebrand, our goal was to incorporate and introduce a new restaurant look and de- sign that can evolve rather than be static. We didn't want to look at only the short term and then in ten years, we'd have to come up with a new restaurant design. So, what's been interesting is seeing that evolution in the last six or so years. The first store was remodeled in 2012 and the design has changed since then to what we are doing today. It's not so different that you don't feel you're in a Cousins Subs, but it's been neat to see how we've had to evolve the look while keeping the consistency. We are staying on top of the latest trends in lighting, technology and techniques. All these things will continue to evolve. With the solid base design, then it just becomes enhancements in the future, but it's been interesting to see the path those enhancements have taken. + The Cousins Subs remodel modernizes the chain and highlights its Midwestern roots. Image courtesy of Cousins Subs

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