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Tag Archives: O’Charley’s

Pride in your restaurant…

…can help you in your interactions with your guests.

Even if you work in a fairly generic restaurant like Chili’s or Applebee’s, surely there’s something in the history of the organization that can be pointed to to distinguish it from every other restaurant in world; sometimes it can even distinguish it from others in the chain.

I work for neither of the above restaurants, but for example:

Chilihead waiter points to picture on the wall, directing the patron’s attention to it – “Did you know that every Chili’s has one picture that hangs upside down? Have you ever noticed this picture and wondered why it was upside down? It’s a tradition that every Chili’s maintains…” Waiter tells whatever story they’re taught about the way the tradition started. If there’s no “official Corporate version”, they make up something outrageous. They also point out, “We’ll be 35 years old this year. We’re very proud to be one of the oldest surviving restaurant chains in the country”.

Or O’Charley’s waiter says, “Did you know that there’s an actual Charlie? He founded our restaurant and he’s still alive and lives in Nashville. We just turned 40 last year. We’re getting pretty good at cooking by now”!

Or an Applebee’s bartender tells a bar patron, “Did you know that our first restaurant was called T.J. Applebee’s Rx for Edibles & Elixirs? Have I got a prescription for you – my special Cosmopolitan features Absolut Citron, Cointreau and fresh squeezed lime juice. Would you expect anything less from the worlds largest restaurant chain? We might be large, but we’re your neighborhood restaurant, right”?

Yeah, I know, the verbiage is a bit corny. I’m not suggesting that you copy these, but you should know your restaurant’s history and be able to integrate relevant parts of it whenever it seems appropriate. Even if you mock your own corporate restaurant to your friends because it’s “too faceless”, “too corporate”, “too impersonal”, etc., remember, as long as you work there, you should take advantage of whatever advantages the corporate history that you were forced to memorize during your training phase offers because, remember, it’s your income. If you find this onerous, I’d suggest that you’re probably not working at a place that is comfortable for you.

If you work at an independent restaurant, you have an advantage. Simply by reminding your guest that your restaurant is locally owned, you put yourself apart from the competition. It’s likely that the history isn’t formally taught in a structured fashion, so you might have to use anecdotes that has been passed around, or, failing that, ask your ownership about the history of the restaurant. You might be able to find some interesting things to relay to your guests.

There’s always a hook somewhere – whether it’s community involvement, the artwork on the wall, the piano that’s 60 years old that was played by Van Cliburn during a visit in the 60s, the menu item that’s been on the menu for 20 years; the list is endless. Every restaurant has something that distinguishes it from every other restaurant. Sometimes it’s sitting right in front of your face.

And speaking of O’Charley’s

Jeffrey Warne, recently named CEO of Nashville-based O’Charley’s Inc. and The Tennessean, the Nashville newspaper, did a Q&A with him in today’s Sunday edition.

Here is just one question, as answered by Warne:

How has the company controlled margins?

If you go back to 2008, we made the tough decision to reduce support staff. We eliminated some positions and through attrition we did significantly reduce the staff by about 20 percent. We also set up in 2008 a labor model that would predict when guests are in the building.

Using eight years of historical data, we mapped when guests were in our restaurants in 15-minute increments. The labor model was very effective at controlling labor costs. When we matched our labor as best as we could to when (guests) were in the building, our guest satisfaction scores took off, as well.

It is an informative series of questions and answers with a “numbers guy” and you can read the entire interview here:

http://tinyurl.com/Warne-interview

But you might want to hurry, as this article could be archived pretty quickly and might not be available for long.

O’Charley’s posts profit despite sales slump

Ocharleys

Like the recent news about P.F. Chang’s, O’Charley’s, the casual dining chain, has found a way to post a profit despite slumping sales. In their case, it wasn’t smarter and more efficient operations, but a one-time tax benefit that occured this quarter.

Despite the news that they posted an unexpected profit, shares in the company dropped because it’s predicting an operating loss in the next two quarters. Same store sales are down 6.9%, which really isn’t all that unusual right now, but large chains are vulnerable to share price pressure because the sheer volume of stores that see negative growth is considered a sign of weakness.  For instance, the steakhouse segment has beeen hit much harder, with drops in sales averaging well into the double digits, but they have fewer stores. In fact, O’Charley’s has part of that market with their Stoney River Steakhouse chain, and that exacerbates the problem for them. Back in March, Stoney River was down around 18% (remember I reported recently that Capital Grille reported around a 25% sales slump!).

The thing that makes P.F. Chang’s look better in contrast to O’Charley’s is that it’s difficult to  find efficiencies and reductions in things like food costs because a successful chain is already operating at close to optimum efficiency. A restaurant runs the danger of compromising service and food quality when they try to cut fat out of the budget, and P. F. Chang’s seems to have been able to do this, while chains like O’Charley seem to be struggling. They have a new CEO, Jeffrey Warne, who was installed only in June. He has his work cut out for him. He’s quoted as saying, “”This continues to be a challenging environment for casual restaurant companies.”

Well, that’s insightful.

I shouldn’t be so sarcastic though – Chang’s could end up having similar results in Q3 and Q4 because, let’s face it, it is a demanding marketplace, demanding a close watch on both the little and big things. It helps that P.F. Chang’s is a smaller chain – I think they have somewhere around 130 – 150 stores plus their Pei Wei chain. They were always fairly conservative about growing the chain, a lesson that O’Charley’s and Starbuck’s apparently didn’t learn. I’ve always felt that businesses are rewarded by playing to their strengths by not overexpanding too quickly. Despite what the fictional Wall Street trader Gordon Gecko said in the Oliver Stone flick Wall Street, greed is not always good. 

I wonder how many pieces of flair O’Charley’s waiters have to wear these days.

O'Charley's Bar