Growth Chains: Francesca Restaurant Group

May 1, 2012

Multiconcept operator aims to maintain independent feel in chain units

April 16, 2012 | By Mark Brandau

Since 1992, Chicago-based chef and restaurateur Scott Harris has blurred the line between chain and independent restaurants, opening 26 Italian eateries called Francesca’s, each distinguished by some variation on the name and a different decor. That strategy has fueled Francesca Restaurant Group’s growth around Chicago, which the newest member of Harris’ executive team would like to accelerate.

“Companies reach an inflection point where they have to decide whether [they’ll] be comfortable with the status quo,” said chief executive Trenton Brown, who joined Francesca Restaurant Group in January. “Or do you have something repeatable, where a wide audience could appreciate what you’re bringing to the table?”

Francesca’s recently expanded into four new states, also opening two outlets of its Davanti concept, which is slightly pricier and more wine-focused than the upscale-casual Francesca’s restaurants. The company is targeting six new restaurants and 30-percent revenue growth in 2012, building new markets out concentrically from footholds in Arizona, California, North Carolina and Wisconsin.

“We’re putting the focus on what we believe to be the most repeatable concepts in the marketplace and on creating high-quality food and experiences over and over again, without feeling like a chain,” Brown said. “We want to feel like a one-off every time.”

Over the company’s 20-year lifespan, each restaurant opened with a one-off name — Mia Francesca or Francesca’s Forno or Francesca’s on 95th — but that approach occasionally would backfire if operating partners deviated with different suppliers or training methods, complicating the quality control process, Brown said. He joined Francesca’s to standardize those things.

“We can maintain that feel of the local neighborhood restaurant, but behind the scenes we’re experimenting with … the central, corporate approach to training,” he said. The company recruits staffers from new units’ neighborhoods and coaches them at a training restaurant.

The training is key to succeeding against local independents, Brown said, which are bigger competition for Francesca’s than chains like Olive Garden.

MARKET SEGMENT: upscale casual
SYSTEMWIDE SALES: between $45 million and $50 million
LEADERSHIP: founder Scott Harris; president and chief executive Trenton Brown
COMPETITION: independent Italian restaurants
TARGET MARKETS: Arizona, California, North Carolina, Wisconsin

People may love their local pasta places, he said, but more independents than chains have closed during the economic downturn, because mom-and-pop places lack many scale advantages and big advertising budgets.

Francesca’s will rely on execution and word-of-mouth rather than mass marketing, but its purchasing power and service and culinary standards should help it succeed where independents might falter, said Darren Tristano, executive vice president of Chicago-based consulting firm Technomic.

“The Francesca’s restaurants have a lot of strength even though they’re a group of independents and small chains,” Tristano said. “They can survive tough times and leverage economies of scale.”

He added that there continues to be a robust market for independent Italian restaurants — or an aligned group of restaurants meant to seem unique.

“There are a number of consumers who just prefer independents for the neighborhood feel,” Tristano said. “Francesca’s does a lot of that in what I would call a polished-casual experience, with a very casual-dining price point. That’s where their strength is.”

Brown said systemwide sales in 2011 “were closer to $50 million,” with unit volumes that vary from $2 million to $7 million depending on concept and market. As the company targets new markets, the family- and value-focused Francesca’s concepts could go in most cities with a population of at least 50,000 people, he said. He does not want to “overpopulate” Davanti, which likely would open in cities with populations of at least 100,000.

Francesca Restaurant Group also plans to open a few high-end doughnut shops in Chicago this year, called Glazed & Infused.

“There are big pluses to the approach we’ve taken,” Brown said. “We’ve been the tortoise, but we’ve seen a lot of hares die along the way in the race.” 

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