Franchising | June 2011 | By Jody Shee

5 Brands You Should Know About (But Don’t)

Restaurant success comes in many sizes, but those on the cutting edge agree that passion is essential. 

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Kelly’s Roast Beef

Headquarters: Saugus, Massachusetts
Founded: 1951
Number of units: 6

In its 60 years of operation, Kelly’s Roast Beef has become a Massachusetts good-eats legend. It began in 1951 with Frank McCarthy and Raymond Carey Jr. as a family owned hotdog stand that happened to sell roast beef at Revere Beach.

As much as for its medium-rare, tender knuckle–cut roast beef sandwich, Kelly’s is known for its volume. In 2010, it boasted sales of $26 million from its now six fast-casual units. It went through nearly 1 million pounds of french fries and 560,000 pounds of roast beef. Its second location in Saugus is one of the top users of Coca-Cola in the U.S., says Dean Murphy, Kelly’s director of operations. “They are impressed with our sales,” Murphy says.

For its 60th anniversary this year, Kelly’s is teaming up with Coca-Cola for weekly sweepstakes drawings in which the grand-prize winner will receive Boston Red Sox tickets.

It comes as little surprise that the roast beef sandwich is Kelly’s biggest seller, priced at $5.95 and $6.95 a la carte. Some even insist that the operation was the country’s first to ever serve roast beef sandwiches. But the company’s fish and chips sell nearly as well, given the operation’s Boston-area locales. Therefore, the units always enjoy a sales spike during Lent, Murphy says. The menu is loaded with seafood options like fresh local clams, New England clam chowder, scallops, and its popular lobster roll, which contains 2 pounds of lobster for $16.95.

There are no LTOs, but that doesn’t mean the menu has been stagnant for all these years. “We realized that people eat other things. So we have added wraps, salads, and soups,” Murphy says, noting that these items appease the younger generation and the health-conscious.

There are no immediate plans to expand Kelly’s, now in its second generation of operation. “Location is everything for us. We are not actively pursuing new ones, but we are willing to look at what might become available. Our growth will be slow,” Murphy says.

Four of the units have drive thrus, and all of the food preparation is done at each individual location. The initial beach location operates from only 1,200 square feet, so when the Saugus location opened, the family included everything on its wish list, including a large seating area and plenty of storage space. It came in at 12,000 square feet. The other units range from 6,000 to 8,000 square feet. Some 400 employees help to keep the volume up.

Nick’s Pizza & Pub

Headquarters: Crystal Lake, Illinois
Founded: 1995
Number of units: 2

With two units in the Chicago area, Nick’s Pizza & Pub has made its imprint, not for Chicago-style pizza, but for its homemade, crispy, thin-crust pies. The dough, sauce, sausage, cheese, and Italian beef come from 40-year-old family recipes, says Nick Sarillo, president and founder.

He opened the first 350-seat restaurant in Crystal Lake, Illinois, in 1995 because he wanted a place where parents could take their kids for a good time and not receive scornful glares. Himself a carpenter, Sarillo built the 9,000-square-foot building using barn wood and antiques for a casual décor.

But the bigger story is Sarillo’s management style, in which he treats the 100 team members in each restaurant like part owners who share the company mission to provide the community an unforgettable place to connect with family and friends.

Team members are invited to weekly “fiscal huddles,” where they review the profit-and-loss statement. They volunteer to “own” a line item on either ledger sheet for a month. They forecast a number for that item and then aim to meet their number. For example: “Rather than me say not to waste napkins, they hold each other accountable as to how many napkins they put on the table,” Sarillo says.

One 16-year-old recently forecasted lunch sales and then devised a plan to meet his forecast by putting together an individual pizza-and-drink lunch special and promoting it at his high school.

It all provides intrinsic rather than external motivation and has helped the company keep employee turnover at an astonishingly low 25 percent annual rate. He is writing a book, tentatively called Pizza on Purpose, about his management style. It’s scheduled to release in 2012 by Portfolio, a division of Penguin Group USA Inc.

The company’s marketing is built solely on giving to community fundraisers in which 15 percent of a day’s sales go to the selected cause. It could be to help a school band, hockey team, Boy Scouts, or, recently, it was to raise money for a local family’s medical need. The group to benefit from the donation often hands out fliers, calls the newspaper, or promotes through social media, so the restaurant itself never has to advertise.

For its 2010 efforts, the company received the National Restaurant Association Illinois state Restaurant Neighbor Award in the small business category.

With the company still bouncing back from the recession, Sarillo’s growth plans for Nick’s Pizza & Pub are tentative, but he says he would like to open three more in the Chicago area by the end of 2012. Each of the units does slightly more than $3 million in annual sales.