Fazoli’s closes only Las Vegas restaurant

February 24, 2016
Jennifer Robison
Las Vegas Review-Journal
February 17, 2016
http://www.reviewjournal.com/business/fazolis-closes-only-las-vegas-restaurant

1004922526_fazolis_021716_3.jpgThere’ll be no more free breadsticks on North Town Center Drive.

Italian fast-food franchise Fazoli’s has quietly closed its lone Las Vegas eatery. The restaurant, behind the 7-Eleven at Town Center and Covington Cross in Summerlin, shut Feb. 8, 15 years to the day after its 2001 debut.

The closure defies broader market trends, as big, national chains including Chick-fil-A and Cracker Barrel prepare market launches for late 2016 and early 2017.

“Las Vegas is definitely a growth market,” said Darren Tristano, president of Chicago-based restaurant consultant Technomic.

So why did operators shutter Fazoli’s?

Company spokeswoman Janet Ritter deferred to the franchisee, Las Vegas-based Glencoe Management, and Glencoe Management didn’t return phone calls. The company’s website said it owns 21 local Burger Kings, including one at 1280 Town Center Drive, next to the former Fazoli’s.

But Ritter said Fazoli’s, a Kentucky chain with 217 U.S. locations mostly in the Midwest and South, “would like to have a presence in Las Vegas, and we are seeking franchisees to open units in the Las Vegas area.”

The Fazoli’s closure capped a market foray that never really picked up steam.

Ritter said she had no information on number or dates of operation of prior local stores, but at least two other Fazoli’s franchises — one on Ft. Apache Road near Rhodes Ranch and another on Eastern Avenue in Silverado Ranch — opened after 2001 and closed years ago.

The 28-year-old company had as many as 300 U.S. restaurants before it began pruning locations in the recession. Each restaurant typically employs 30 to 40 people, Ritter said.

Competition has hurt Fazoli’s, Tristano said.

The U.S. market is saturated with chains, including Panera Bread and Noodles & Co., that serve pasta and pizza. Plus, Fazoli’s straddles a blurry line between fast food and the more upscale fast-casual segment, which includes operators such as Chipotle and Au Bon Pain.

“That’s not a terrible place to be. The problem is, you’re lumped in to some extent with fast food because of the drive-thru and the price points, but the quality is not at the level of a fast-casual restaurant,” Tristano said. “That’s not to say it’s not good quality, but there are so many concepts with customized, prepared-to-order food.”

It didn’t help that Fazoli’s had just a handful of local stores. A franchise needs 20 to 25 locations in a big market to build loyalty and brand awareness, Tristano said.

Still, Fazoli’s seems to have righted its ship: The company said in December that same-store sales were up in 65 of the prior 68 months, including a 3.1 percent jump year over year in November. It opened 10 new franchises in 2014 and 2015.

And restaurant operators continue to salivate over the Southern Nevada market, Tristano said.

“Las Vegas has the demographics and growth that many chain brands are looking for,” he said. “Not all of the markets in the United States are growing, but you’re seeing housing development and population growth there, and that’s a big deal. Chains tend to be prioritizing growth markets.”


Noodles & Co. expands in Washington

April 6, 2012

Noodles & Co. expands in Washington

By Danielle Douglas, Published: March 18

Getting your fix of pad thai, penna rosa or mac and cheese will get easier this year as Noodles & Co. opens eight fast-casual eateries throughout the Washington area.

The new additions will give the Broomfield, Colo.-based company a total of 30 locations in the region, which it entered 10 years ago with a restaurant in Fairfax. Eateries are to open this spring in Chantilly, Falls Church, Reston, Springfield, Alexandria, and Germantown, and on K Street NW and in Georgetown in the District.

Built on the notion that noodles are a universal comfort food, the chain offers a medley of Asian, Mediterranean and American pasta dishes starting around $5 a bowl. Patrons can opt for a small or regular-size bowl of noodles, soup or salad, which they can customize with add-ins of meat, shrimp or tofu for $2 more.

Orders are placed at the register and delivered to your table. Diners are encourage not to bus their table or tip. This hybrid-service model is popular at fast-casual spots such as Nando’s Peri Peri and Cosi, but Noodles & Co. wants to take it a step further.

Starting this spring, the company is to offer full table service after 4:30 p.m. at restaurants in Denver, Chicago and the Washington area. Customers must still place their initial order at the counter, but can request additional items from servers. Noodles & Co. tested the service in Denver, where sales climbed by 15 percent last year.

“Restaurants have identified an opportunity to sell more by getting you while you are at the table, and that could mean anything from a dessert to a beverage,” said Darren Tristano, executive vice president at Technomic, a research and consulting firm. He pointed out that Asian-inspired eatery Mama Fu’s in Austin also offers full service in the evening.

A soft sell

At Noodles & Co., president and chief executive Kevin Reddy said the evening service was the natural next step in providing customers “a higher level of service without giving anything up in terms of value, or price or time.”

“We’re not incentivizing [servers] to upsell,” he said. “They’re not getting compensated by trying to ring an extra dollar out of the guests. We are building sales through it, but in a very informal, friendly, non-intrusive way.”

All new restaurants, he said, are being designed with more seating, but are only a tad larger than the average 2,700-square-foot store. Reddy said the company improved upon the kitchen design to gain more space. He estimates it cost $675,000 to retrofit each new local eatery.

Reddy, a former chief operating officer at Chipotle Mexican Grill, has more than doubled Noodles & Co.’s restaurants to 284 in 19 states since joining the company in 2006. Sales at Noodles & Co. reached $300 million in 2011, a 15 percent increase over the prior year, according to Technomic.

Growth in the fast-casual niche has outpaced the restaurant industry as consumers gravitate to wallet-friendly meals. Tristano at Technomic said sales in the category jumped from $5 billion to $27 billion in the past 10 years, averaging 7 percent to 10 percent annual growth. Analysts expect revenue will keep pace this year as leaders like Chipotle and Five Guys continue expanding.

Dozens of fast-casual restaurants are in the works inside the Beltway. Homegrown Sweetgreen and New York-based Energy Kitchen recently inked deals for space at 1901 L St. NW. Local chain Z-Burger has staked out space in Columbia Heights and Clarendon, while Yo! Sushi has locations under way at Union Station and in Chinatown.

And that’s just the start. Restaurant broker Thomas N. Papadopoulos said six of his clients, including Bobby’s Burger Palace and burrito chain Boloco, are hunting for space. He estimates that demand for new sites is up more than 10 percent this year, compared with a year earlier.

Reddy is not surprised. Noodles & Co., he said, encountered stiff competition as it scoured the market for sites.

“Washington is such a vibrant area … if you can get the right deal, you know you’ll be successful,” Reddy said, which is why Noodles & Co. will continue searching for more locations to reach its goal of 100 restaurants in the region.

© The Washington Post Company

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