Firing up the Next-Generation Steakhouse

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Firing up the Next-Generation Steakhouse

By Dorothy Creamer, Editor - 09/05/2014
About four years ago Homestyle Dining, parent company of classic steakhouse chains Ponderosa (www.ponderosasteakhouses.com) and Bonanza (www.bonanzasteakhouses.com), was at a turning point. The legacy brands continued to cater to a strong group of loyal diners, but were struggling to grab the attention of the Millennial market. In addition, swelling costs associated with owning and operating a buffet franchise was impacting many long-time partners. With roughly 100 years of food service between them (Bonanza is 51-years-old and Ponderosa is 49), Homestyle Dining was at a crossroads. The question was how to transition the classic steakhouse franchise to appeal to a younger demographic while fitting within the established business model and not alienating its loyal and frequent diners. The answer came in the form of a totally new concept, Bo’s Steak & Grill (www.bossteakgrill.com), which offers a fresh take on fast casual. Homestyle Dining CEO Tom Sacco shares with Hospitality Technology how the company is utilizing technology to endear its new venture to a younger generation of guests while revitalizing its legacy brands.  

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HT: Homestyle Dining has established a following with its classic buffet steakhouses. What was the thought process behind introducing a fast casual concept?
TS:
The original concept for Bo’s Steak & Grill came about four years ago when franchisees of our two legacy brands were asking us to develop a new, less expensive business model. The buffet business model was becoming more expensive as the world we operate in changed. Over time, both the buildings and parking lots grew and suddenly this fairly inexpensive concept became a large buffet operation and cost of entry had increased significantly. One of things we bantered around the most was why [we should try] fast casual and not sit-down. The number one reason was that there isn’t anything in the fast casual segment focused on steak. This country loves steak and there are many steakhouses in other genres, but nothing in the fast casual segment, so we saw an opportunity. Secondly, fast casual tends to be value-driven. Value is in our DNA. We’ve been doing that for 50 years, so we understand the value component. The final piece is that fast casual is smaller. It tends to be end-caps and smaller footprints, which fit the new business model that existing franchisees were looking for.

HT: Ponderosa and Bonanza have a strong loyalty following of older patrons who remember the television shows that inspired them. How did attracting a younger generation play into the development for Bo’s?
TS:
We saw an opportunity with Bo’s because we weren’t getting as many of the 25-40 year olds into the legacy restaurants as we felt we should. The Bo’s concept provides additional growth opportunities for our franchisees because it allows us to go after the demographic that has migrated to fast casual establishments in other segments — such as Chipotle.

HT: You’ve termed this new concept “fast casual plus.” What would you say constitutes the “plus?”
TS:
We noticed that many fast casual models out there really have taken the fast food business model and “plussed” the food, but guests are still sitting on plastic or fiberglass seating and the environment is very QSR-feeling. We wanted to establish a casual dining environment with culinary-driven fast casual food. Guests will still place orders at the counter and walk down a line to get their food, but they are sitting in a restaurant with a really cool, hip environment with fireplaces, couches, and music, but at a fast casual price point. The “plus” part of fast casual is in the environment as well as in doing food with a twist.  

HT: Beyond aesthetics, what is Bo’s focusing on to attract the mobile and constantly connected millennial market?
TS:
Everything in the restaurant is wireless and we’re offering free WiFi to guests through Spot On Networks (www.SpotOnNetworks.com). At the point of sale we’re using iPads operating on software from Custom Business Solutions (www.cbsnorthstar.com). Guests can order at the counter on the tablet and once they are at a table they can also order another drink or dessert. That’s where it changes from fast casual — our servers will get the drinks for guests and bring a dessert tray at the end of the meal. Then guests can cash out again. The server will bring an iPad to the table and the guest can sign the iPad right there and choose for a receipt to be emailed or printed. We are also looking to roll out a mobile app for Bo’s and are in talks with iOrderHQ (www.ior
derhq.com)
to do that. We do about 10% of our business in to-go and I think if we made the ordering process easier with mobility, we could do even more business.

HT: With this unique hybrid service model, hovering between self- and full-service, what strategies are in place to streamline operations?
TS:
It’s all driven off of the POS software.  Once an order is entered in the POS, it appears on screens and printers in the kitchen. If it’s on the cook’s line, he or she can look and tap a bar on the screen when they are done. For desserts and salads, an actual ticket will print that will get spiked when it is delivered.  Another feature of the POS software is that everything on the menu has a time associated with maximum preparation. When the timer gets to 80% of that allotted time, an orange bar appears. Once it goes over the time, the bar turns red and the kitchen manager is alerted. It tickles kitchen managers to be looking in certain areas, where they used to have to ask. Now, managers can see right away and are cued to take action.

Some of the equipment we’re using is so technologically advanced it takes a lot of guesswork out of preparation and service. We use Merrychef (www.merrychef.com) ovens from Manitowoc (www.manitowocfsusa.com) that are programmed with the time and preparation method to cook each particular product. It’s fascinating because in the old days, a kitchen would have a convection oven, a steamer and a microwave. Now this one piece of equipment does all three things. It knows how to cook things based on the recipe that is inputted.

HT: Have you experienced any stumbling blocks with incorporating new technologies?
TS:
Technology makes you operate more efficiently, but it’s much more challenging to set up the business. It requires a lot more intuitive thinking in terms of what you put into the software from a programming standpoint. For example, you have to load all the timing whereas in the past someone would just be calling it while standing on the line. We have also experienced some challenges with the POS when Apple released updates for the iPad. Custom Business Solutions had to go in to rewrite the code to make sure software is still compliant. That’s part of the challenge of being on the forefront of some of this technology. Sometimes the right hand and the left hand aren’t always in sync from a timing standpoint.

HT: Millennials are known for their social networking proclivity. What is Bo’s social media strategy?
TS:
Right now, with just the one location, any comment posted on Bo’s social media portals will be responded to by me or our social media coordinator. We’ve used a service (www.firebellymarketing.com) to monitor and track the legacy brands’ social sites, and we are looking at Unilyzer (www.unilyzer.com) eventually to do that for both Bo’s and the legacy brands. For right now, I want to stay close to each social site and the commentary. If people are asking for something that we aren’t doing, I want to be aware. We have already made some operational adjustments based on comments we read on Facebook.

HT: What efforts have been made with the legacy brands — Ponderosa and Bonanza — in terms of next-generation engagement?
TS:
Last summer we tried a promotion to engage guests via their mobile devices and social channels. We utilized a software application called Front Flip (www.frontflip.com) to track guest’s mobile engagement. When guests visited a Ponderosa or Bonanza restaurant they could scan a QR code and be entered in drawings to win prizes. We found that while more than 50% of our guests had mobile phones, they didn’t have smartphone technology and really weren’t motivated to go in and take a picture of a QR code to maybe win a free dinner or even one of the grand prizes.  There is still that generational disconnect between the brands when it comes to mobile and social technologies. We had franchisees learn more about these strategies for this promotion and once they got into it, they admitted they found it interesting, what you could learn about your customers. The bottom line is, if we want to be around another 50 years, we have to learn what the consumer today is doing and wants.    

HT: As a new build, Bo’s locations are outfitted with wireless connectivity. Obviously this is a value-add for guests who want to stay connected, but how has that improved other operations?
TS:
We have wireless at Bo’s and the legacy brands. Bo’s was designed from the ground up to utilize Wi-Fi and we are transitioning to the same thing at Ponderosa and Bonanza. This includes digital displays from BrightSign (www.brightsign.biz) like we have at Bo’s and some legacy locations. We have a program at Ponderosa called New Vision Refresh and part of that includes digital menu boards and displays designed with wireless capabilities. It’s in about 30 restaurants right now but will eventually be in roughly 200. One big benefit of the digital menu board is that any time we make a change in menu items for those restaurants we can just send a wireless message and change it in 30 seconds. Other restaurants have to have us send them hard copies of POP to hang in restaurants.  

HT: Restaurants are struggling with data management, particularly in franchised environments with disparate POS systems. Homestyle runs several different POS platforms. Have you found a way to effectively manage data in order to grow both the legacy and the new Bo’s brand?
TS:
We have a lot of different point of sale hardware and software platforms across our company and franchisee network. We use Mirus Restaurant Technologies (www.mirus.com) because it’s agnostic and will work with all the different POS systems. Mirus mines the data, puts it into the same format and compiles it on one dashboard for us to review and manage the business.
It’s been good for Bo’s, but it’s been an even bigger eye opener on the legacy side. We have hundreds of restaurants and probably about 20 different POS platforms. Some are on newer systems and some are on clunkers, but the data is equally important.Mirus can get all of it for us. It’s amazing the benefits exception-based reporting has provided. We can launch a program on a Monday and by Tuesday morning John Kelly, our vice president of marketing, will get an alert telling him what specialty items did or didn’t sell from the night before.

HT: How will you continue to evolve across all three brands, and how are the franchisees responding to this new direction?
TS:
We want to keep ourselves strategically placed in the steakhouse world. Our plan is to develop the Bo’s Steak & Grill, Ponderosa and Bonanza trifecta so that we have each: the fast casual, the sit-down and the buffet steakhouse. This way we can play on all three platforms and cater to the different ways people want to eat steak. The evolution might be scary for some of our long-term loyal franchisees. When you have people in your system for 40 or 50 years, it’s not just technology differences — it’s generational differences. So far the franchisees have been open-minded to us leading them down this path to become more relevant to the way diners eat out. Guests will eat at other places and those restaurants might have WiFi and iPads. We need to be in touch with what is going on out there if we are going to be a relevant and viable dining option.  


Related News:
Tom Sacco To Speak at Restaurant Executive Summit
Hear Tom Sacco, CEO of Homestyle Dining, offer his insights into managing the transformation of F&B operations at the 2014 Restaurant Executive Summit. Sacco will join a panel of other executives including Richard Eisenberg, president of QSR International and Brian Wright, COO of Au Bon Pain to discuss how they are changing operational models as consumer expectations for service and personlization change. The Restaurant Executive Summit will take place November 3-5 at The Ritz-Carlton in Ft. Lauderdale, FL. Click here for the full agenda and information on how to register.