Industry News | May 10, 2013
One Year After Acquisition, Krystal Keeps Growing
As Krystal marks its first year under the ownership of Argonne Capital Group, president and CEO Doug Pendergast is sharing significant milestones and changes that will pave the way for the iconic brand’s future success.
Pendergast says in just the nine months of 2012 following the purchase by Argonne Capital, both sales and transactions have grown. Further, the company’s profitability is up, providing store-level employees with a share of the increased profits via a richer bonus program.
Pendergast says, in addition to the increases in sales and profits, the company also paid down a significant portion of its debt. This action further strengthened the company’s financial position and bodes well for future investments in growth.
“Even though our brand is celebrating our 80th anniversary, we’re applying a fresh perspective to all areas of our business,” he says. “However, it doesn’t mean we’re changing everything. We’re recommitting ourselves to the founding principles of the brand as captured in our Krystal Kreed.”
Changes include a rejuvenated senior management team and a shake-up in the advertising team. Also, for the first time, Krystal has added a digital agency to promote the brand.
Krystal continues to gather feedback from customers and its 6,000 employees to systematically improve the Krystal experience, Pendergast says.
The data gathered is used to develop strategies that are implemented throughout existing markets, as well as in planning expansion into future markets. Krystal has a target of having 500 stores in place within the next four years.
With two new stores opening within weeks of each other and 11 more scheduled to open throughout 2013, the company is well on its way to reaching their goal. Pendergast says the newly recruited senior management team is responsible for much of the progress made by the company.
“We actively pursued the best and brightest talent we could find who would be dedicated to turning around the Krystal brand,” he says. “With support from Argonne Capital, we are now a company that is well positioned and prepared for expansion.”
Michael Klump, founder and CEO of Argonne Capital Group, says, “The positive steps taken by this team have been outstanding. The company is enjoying the largest single-year increase in customer value scores in the history of the brand. We are pleased with their progress and are ready, willing, and able to invest our time, ideas, and capital in moving Krystal forward.”
Klump credits the new team with relaunching franchise development efforts for the first time since 2006.
“This is significant, as it shows that the Krystal brand is gaining strength, and potential partners see the brand as one that will be attractive to new and existing markets.”
Krystal is also engaging industry leaders as resources to improve the business. Fitzgerald + CO of Atlanta is taking the lead as advertising and brand agency while \Bright Red of Tallahassee, Florida, is managing all social media and digital marketing.
“This first year has ended with encouraging results,” Pendergast says. “As we begin our second year, we have the people, processes, and plans in place to guide our work and position one of the South’s best-loved brands for a very bright future. It’s a great story and one in which each member of our team has played a vital role.”
Food & Beverage