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.”


Olive Garden Shrinks Meals for Millennials

November 14, 2013

CHICAGO – Olive Garden, purveyor of the Never Ending Pasta Bowl, has discovered portion control.

In an effort to attract millennials and boost flagging sales, Darden Restaurants Inc.’s Italian restaurant chain is introducing small plates, including Parmesan asparagus and grilled-chicken tapas. This amounts to a 180-degree turn for a chain that has long sold big portions to eaters who like a deal.

The challenge for Olive Garden will be encouraging diners in their 20s and 30s, many of whom shun chain restaurants, to drop by for nibbles without alienating loyal customers who convene for family feasts.

For millennials, “social occasions generally don’t tend to be large meals in a traditional sense,” said Darren Tristano, executive vice president at Technomic Inc., a research firm based in Chicago. “They’re looking for items they can share, sample, that allow them to graze.”

Small plates may not be “a clean fit” for Olive Garden, given its focus on families and boomers, he said.

Olive Garden created the tapas recipes about six months ago and began testing the food earlier this year in Atlanta, Los Angeles and Grand Rapids, Mich.

After offering the dishes for a limited time last month, the chain plans to add them to the permanent menu in December. It’s also trying out more small plate varieties such as garlic hummus, chicken meatballs and tortelloni stuffed with cheese, to gauge customer response before introducing them nationwide.

Olive Garden has been struggling in the aftermath of the downturn as Americans eat out less. Efforts to lure cash-strapped diners with such deals as three-course dinners and $6.95 lunches haven’t helped much.

As a category, sit-down restaurants are lagging behind fast food and fast casual joints. Sales at full-service restaurants will rise 2.9 percent this year to $208.1 billion, compared with a 4.9 percent gain for fast-food eateries, according to National Restaurant Association estimates.


Olive Garden Woos Millennials with Smaller Portions

October 10, 2013

Olive Garden, purveyor of the Never Ending Pasta Bowl, has discovered portion control.

In an effort to attract millennials and boost flagging sales, Darden Restaurants Inc.’s Italian restaurant chain is introducing small plates, including Parmesan asparagus and grilled-chicken tapas. This amounts to a 180 degree turn for a chain that has long sold big portions to eaters who like a deal.

The challenge for Olive Garden will be encouraging diners in their 20s and 30s, many of whom shun chain restaurants, to drop by for nibbles without alienating loyal customers who convene for regular family feasts.

For millennials, “social occasions generally don’t tend to be large meals in a traditional sense,” said Darren Tristano, executive vice president at Technomic Inc., a Chicago-based research firm. “They’re looking for items they can share, sample, that allow them to graze.”

Small plates may not be “a clean fit” for Olive Garden, given its focus on families and boomers, he said.

Olive Garden created the tapas recipes about six months ago and began testing the food earlier this year in cities including Atlanta, Los Angeles and Grand Rapids, Mich.

After offering the dishes for a limited time last month, the chain plans to add them to the permanent menu in December. It’s also trying out more small plate varieties such as garlic hummus, chicken meatballs and tortelloni stuffed with cheese, to gauge customer response before introducing them nationwide.

Olive Garden has been struggling in the aftermath of the downturn as Americans eat out less. Efforts to lure cash- strapped diners with such deals as three-course dinners and $6.95 lunches haven’t helped much because Brinker International Inc.’s Chili’s and Applebee’s, owned by DineEquity Inc., are also advertising cheap eats.

As a category, sit-down restaurants are lagging behind fast food and fast casual joints. Sales at full-service restaurants will rise 2.9 percent this year to $208.1 billion, compared with a 4.9 percent gain for fast-food eateries, according to National Restaurant Association estimates.

Same-store sales at Olive Garden, which has about 820 locations, have declined in five of the last eight quarters. Darden, which also owns Red Lobster and LongHorn Steakhouse, recently announced it is “significantly” cutting Olive Garden store openings to focus on attracting new customers.

“It’s wise to slow down that growth a little bit,” said Stephen Anderson, an analyst at Miller Tabak & Co. in New York. “They’re getting very close to that saturation point in the U.S.,” which would be between 900 and 1,000 stores, he said.

The company is reworking the recipe for its crispy chickpeas after the seasoning and breading didn’t resonate with diners in testing. It also increased the size of its grilled chicken tapas from one to two skewers of meat after customers said the portion was too small to share.

“If you only have one, people are fighting,” said Jay Spenchian, executive vice president of marketing.

The small plates, priced at $4, are “expanding the way people think about Olive Garden,” he said. “The reaction has been excellent.”

While some customers grab a quick glass of wine and a small plate, others eat them as appetizers to a larger meal or to sample something they’ve never tasted before, he said.

Olive Garden has plenty of competition in the race to win over millennials. Applebee’s has introduced late-night specials such as half-price appetizers and girls’ night out to attract younger customers. Its Club Bee’s locations stay open until 2 a.m. and sell sangria and bahama mamas to the party crowd.

Outback Steakhouse, owned by Bloomin’ Brands Inc., recently sold a $10.99 steak-tasting option with two or three pieces of beef with different sauces including brandy peppercorn and Bearnaise. Cheesecake Factory Inc. has small plates including chicken samosas and fried zucchini.

More millennials are dropping by the Olive Garden in Irving, Texas, to sample the small plates, Alex Aragon, the restaurant’s general manager, said in an interview.

The tapas are “closing the gap between lunch and dinner,” said Aragon, who noted that it’s easier for the younger crowd to text and check their phones while munching hand-held bites.


Olive Garden stocks Sam’s Club shelves with dressing, cheese

May 11, 2012

By Sandra Pedicini, Orlando Sentinel, April 25, 2012

 Olive Garden’s Italian salad dressing and shredded cheese are now for sale in Sam’s Club stores across the country.

The Italian chain, owned by Orlando-based Darden Restaurants, said Wednesday the products will be sold at Sam’s Club stores exclusively for a year. Darden, which also owns Red Lobster and LongHorn Steakhouse, will study sales results before determining whether to expand its new grocery business.

 It’s a chance “to extend the brand beyond the four walls of the restaurant,” Darden spokesman Rich Jeffers said.

But don’t expect to buy breadsticks or chicken parmesan anytime soon. Darden says it would have difficulty re-creating the quality of its restaurant meals in frozen entrees, so it would stick with basic items such as the dressing and cheeses made by outside companies but marketed under the Olive Garden brand under a licensing deal.

T. Marzetti, which sells its own products in grocery stores, also makes the Olive Garden dressing. Lotito Foods produces the cheese blend.

Locally, a two-pack of 20-ounce Italian dressing bottles sells for $6.98. The 14-ounce, refrigerated blend of asiago, parmesan, romano and provolone cheeses carries a price tag of $7.98.

Olive Garden, which has already sold dressing in its restaurants for a decade, also will sell mozzarella and parmigiano-reggiano cheese in select Sam’s Club stores. Those will include some in Central Florida.

Seeing Olive Garden venture into the grocery aisles isn’t a surprise, said Steve West, a restaurant-industry analyst for ITG Investment Research. “We’ve seen this kind of trend for years.”

P.F. Chang’s, Romano’s Macaroni Grill and California Pizza Kitchen all sell frozen meals. Tony Roma’s, which has its restaurant operations based in Orlando, also sells frozen entrees and recently began hawking ribs on a cable home-shopping network.

Analysts said Olive Garden’s food manufacturers would likely pay the restaurant chain between 5 and 10 percent of sales in royalties. It would be small change for Darden, a company that rings up $7.5 billion in sales each year.

“It builds brand awareness, which I’m not sure they really need to do, but it does give them another revenue stream which doesn’t take a lot of cost,” said Darren Tristano, executive vice president of Chicago-based foodservice research firm Technomic. “I think even if it is successful, its not going to be that meaningful to a brand that’s so large.”

Tristano recently bought a bottle of Olive Garden dressing from Sam’s.

“I’m not sure it’s as good as it is at the restaurant,” he said. “That could be quality or psychology. I’m not sure. It’s close enough that I feel like it’s a nice opportunity.”


Bertucci’s Reboots Restaurants to Court a Younger Generation ; With Guidance from SapientNitro, Ads go Digital

May 2, 2012

DC Denison

By D.C. Denison Globe Staff, 16 April 2012, The Boston Globe

© 2012 New York Times Company. Provided by ProQuest Information and Learning. All Rights Reserved.

How does a familiar, family-oriented restaurant chain shake off middle age and become cool enough to attract the digital generation?

It puts its executive chef into a cooking show on YouTube. It changes the music played for patrons to contemporary pop instead of big band arrangements of Italian standards. Instead of 95 cookie- cutter outlets, each restaurant is made to feel like a local business. Booths are phased out in favor of larger, more open tables, suitable for hanging out, and so-called small plates are served to encourage sharing.

After 31 years, Bertucci’s is courting a new, youthful clientele in an effort known within the company’s Northborough headquarters as “The Millennial Project.” One of Boston’s most tech-savvy marketing agencies, SapientNitro, has been hired to launch a new campaign with an emphasis on digital media. The chain, which has 95 restaurants in 10 Northeastern states and the District of Columbia, last week aired new television and radio ads, introduced new menus, and posted the first episode of the YouTube series featuring head chef Jeff Tenner.

“We’re contemporizing the brand,” said Skip Weldon, senior vice president of marketing at Bertucci’s. “We’re moving into a new space.”

Why revamp the whole brand? The clientele that grew up with Bertucci’s, the baby boomers who embraced wood-fired pizza in the 1980s and 1990s, are getting older and going out less, company executives said. If it wants to grow, the chain needs to attract “Millennials,” loosely defined as consumers between the ages of 18 and 30, said Michael Maione, head of the Bertucci’s account at SapientNitro.

“Long term, Bertucci’s has no choice in the matter,” said Dennis Lombardi, executive vice president of food service strategies at WD Partners, a design and development firm based in Columbus, Ohio. As the baby boomers move on, “the torch is being passed to the Millennials,” he said.

Founded in 1981 by Joey Crugnale, who opened the original restaurant in Somerville, Bertucci’s grew quickly in its first two decades. In 1998, Crugnale was ousted in a hostile takeover, and Bertucci’s Corp. is now owned by Jacobson Partners, a New York private equity firm.

Growth at the chain, and in the general “casual dining Italian” sector, has been relatively flat over the last five years, said Darren Tristano, executive vice president at Technomic Inc., a Chicago research and consulting firm. Total sales at Bertucci’s during 2011 were $200 million, up just 0.5 percent over the previous year.

Tristano said the new emphasis on Millennials and digital media is a good strategy for a chain that is looking for more dramatic growth.

“Millennials spend less per ticket than baby boomers, but they come in more often,” he said. “More importantly, they are your future.”

Cory Ip, a 28-year-old program manager at SapientNitro, said the agency has identified three primary ways that the restaurant can appeal to younger diners. “Millennials crave unique dining experiences, not chain restaurants,” she said. “We also like companies with a mission. And we like to share. I can’t remember the last time that I ate at a restaurant when I didn’t share the food with my friends.”

Weldon said the company’s aim is to translate those preferences into the revamped Bertucci’s.

Unique? Bertucci’s will be branding each restaurant according to its location: “Bertucci’s Waltham,” for example. A prominent chalkboard will feature local specials and notes from the restaurant staff.

Mission? Bertucci’s marketing will promote the idea that the chain has a passion for its “hand-crafted” brick oven pizzas.

As for sharing, the restaurant is reducing the number of booths in favor of open high-top and farmhouse-style tables, and emphasizing small plates and shareable items on its menu. It’s also updating its interiors – more contemporary, less old-world Italian – and has redesigned its menu.

To get the word out, SapientNitro has built digital media into a new advertising campaign. Bertucci’s previous advertising mix was only 2 percent digital; radio was the largest segment. By contrast, the new campaign, aimed at Millennials, will be 48 percent digital and online. The chain is pushing buttons on all the usual social media networks: Twitter, Facebook, Pinterest, and Instagram. It has created a new mobile device-friendly “landing page” designed to make it easy to order takeout from a smartphone. And Tenner will appear in cooking segments on YouTube. “It puts a face to the Bertucci’s brand,” Tenner said. “It gives us an authentic feel, more like an independent restaurant.”

The obvious risk is that Bertucci’s could alienate its current clientele without drawing enough new customers. Bertucci’s executives said they are treading carefully to avoid driving away their core: the baby boomers who have patronized the chain since the early 1980s, and continue to do so. Those customers have options, including other Italian-themed restaurant chains such as Olive Garden and Uno Chicago Grill.

“Baby boomers are going to become lighter buyers as they get older, but our research has shown that casual dining Italian will still grow,” said Bonnie Riggs, a restaurant industry analyst with the NPD Group, a market research company based in Port Washington, N.Y.

“Boomers still perceive casual dining Italian as a good value.”

Joyce Lee, the chain’s director of marketing, doesn’t think the new campaign will push away older customers.

“Most of our social media is geared towards Millennials,” she said, “because they are primarily the ones who will be using these services. Our core customers won’t even see many of these initiatives. So it’s not replacing one group with another. It’s growing the entire pie.”

Lee paused for a beat, and added, “That would be a pizza pie, of course.”

D.C. Denison can be reached at denison@globe.com.

Globe Newspaper Company, Inc.


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.


HEADQUARTERS: Chicago
MARKET SEGMENT: upscale casual
NO. OF UNITS: 28
SYSTEMWIDE SALES: between $45 million and $50 million
LEADERSHIP: founder Scott Harris; president and chief executive Trenton Brown
YEAR FOUNDED: 1992
COMPETITION: independent Italian restaurants
TARGET MARKETS: Arizona, California, North Carolina, Wisconsin
WEBSITE: www.miafrancesca.com

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.” 


Contact Mark Brandau at mark.brandau@penton.com

Follow him on Twitter: @Mark_from_NRN