Industry News | March 27, 2013 | QSR Exclusive Brief

Huddle House Puts on Fresh Face, Readies for Growth

The times are a changin' at family-dining chain Huddle House. With new CEO Michael Abt on board since October 2012, an updated design prototype, and a sharper focus on franchisee growth and profitability, the brand is ready to hit new heights in 2013 and beyond.

To ensure its success, Abt says the brand will continue its long-time focus on growth in small markets, which allows each operator to truly connect with the local community and get to know customers on a personal level.

"The importance of creating a community feel with our existing customers is something that’s not new to us," Abt says. "We feel that connecting with our local communities is very important, and most of our restaurant operators actually live in the communities where their restaurant operates.

"Our hospitality and our service in our restaurants is very personal," he continues. "Many of our team members know their customers’ names and the customers love that. Customers like to feel that they dine where they’re recognized and appreciated.” 

And while the brand will stick to its homegrown roots, it's putting an increasing amount of effort into recruiting a handful of big-time franchisees, like oil companies Pilot, Flying J, and Kent Oil, Abt says. With these new franchisees in place, the brand will have signed 26 new franchisee agreements by the end of the fiscal year in April, compared to just 16 last year.

"This year, we will have built 16 new restaurants versus 10 the prior year, and our plans call for 20 restaurants next year and 30 signings," he says. "And that just ramps up over the next few years.”

The brand is also investing more time and effort into its franchisees, Abt says. “Since we started here back in October, we’ve put a lot of emphasis back into focusing on our franchise partners and providing a lot of support for our franchise partners," he says.

"We’ve hired four new franchise area directors to support in the field; we’ve hired a new director of training, a new assistant director of training," Abt adds. "And our emphasis is really on helping to develop and grow the franchise partner capabilities so they can do a better job taking care of their customers and their restaurants.”

He says franchisee profitability is the ultimate measure of success for Huddle House. "If you ask our franchise partners if they’re making more money and they’re goriwng their business and they say, 'Yes, we are,' then I feel like I’ve done my job,” Abt says.

And the franchisees have certainly noticed the change.

"There is a very good understanding on [Abt's] part … that our profitability is the main focus and the priority," says Matthew Flynn, a multiunit franchisee with the brand. "Store-level economics says we’ve got to make money to grow this brand, and our Huddle House franchisee system is most likely going to grow this brand going forward.”

Something else franchisees, as well as customers, have noticed is the new Huddle House store design. The Evo model features plush booth seating, modern lighting, and contemporary colors inside the store, while the exterior focuses on the brand's updated logo.

Abt says the new design, which has already been adopted by five restaurants, has seen notable results. "Our customers are responding through increased visits," he says. "As a matter of fact, our new restaurant design is generating 30 percent higher sales than our most recent model. This is driven primarily by slightly increased seating capacity, but mainly the new design helps to promote just an overall stronger value proposition to our customer.” 

And according to guest surveys, 25 percent of Huddle House customers say they’re willing to visit more often because of the new Evo design. Sixty-three percent report they’ll recommend the restaurant to a friend, and 91 percent say the new design is much or somewhat better than the previous model.

To encourage franchisees to get on board with remodelling their units, the brand is launching an aggressive remodel incentive program at the end of April, Abt says. 

"We have almost 400 restuarants right now; five of those restaurants are our current Evo design," he says. "And between builing new restaurants and remodeling restaurants, … we see 90 percent of our restaurants being rather young within four years.”

By Mary Avant