Special Report | June 2013 | By Laurel Nakkas
Birth of a Brand
It always starts with a simple idea.
For Brian Bailey at Ichor Restaurant Group, it began with the idea that Ohioans needed better barbecue. Six years after that idea initially took hold, Old Carolina Barbecue opened the doors to its first unit, in Canton, Ohio. The company later opened California-inspired Baja Pizzafish and will soon launch Smoke, a concept that draws inspiration from the smoked burgers served in Old Carolina and the sauces from Baja Pizzafish.
For Fazoli’s CEO Carl Howard, the idea was that the fast-casual Italian market was severely lacking. That gave him the inspiration to open a new (currently nameless) modern Italian concept, set to launch at the end of 2013.
And for Smashburger’s founder and chairman Rick Schaden, the idea was that it was time for his company to launch its own fast-casual pizza concept with an emphasis on fresh ingredients. That paved the way for Live Basil Pizza, which opened its doors in May.
Every successful quick serve has to start somewhere. Getting the brand from simple idea to doors open, though, takes time, money, and a heavy dose of strategic planning.
Two is better than one
Experts say no individual should develop a new brand alone, even if they have experience in the industry.
Ichor’s Bailey, who partnered with a high school friend to launch his company, says having a business partner is crucial to the success of a new brand, but only if that person is a good fit.
“He or she needs to be complementary to your expertise,” Bailey says. “My partner was very good operationally … and I am very good at the culinary and marketing aspects. If you are doing it on your own, you will get caught up in so many details, and you will find yourself complaining to your wife or husband. Your home life will suffer.”
When Nick Vojnovic bought Florida-based fast casual Little Greek in 2011 so he could develop it into a prominent chain, he kept founder Sigrid Bratic on as partner in the brand. She already had seven years of experience with Little Greek, and Vojnovic says having Bratic around helped keep him on track and ensured the “essence of the brand” stayed the same.
Those embarking on creating their second or third brand could follow in Schaden’s and Howard’s footsteps and use the help of their existing employees to develop the brand. The executives say the resources at their fingertips, from financing to marketing to design, significantly helped the brand-building process.
Create a brand, not a restaurant
Branding expert and QSR columnist Denise Lee Yohn says that once the initial idea for a new brand is hatched and the proper team is in place, aspiring operators should plan out their overall brand identity.
“What specific segments is the concept for? What is the concept in its essence? What are the defining attributes and personalities and values of the brand? How is it positioned competitively?” Yohn says. “All of that needs to be determined before you move into the expression of those things in a visual or verbal identity.”
Bailey adds that creating the brand identity is key to differentiating it from the many competitors in the marketplace.
“The key word is brand. When you open a brand, there has to be more than just food. In restaurants there is food, but a brand serves an experience,” he says. “Take the energy, the way the staff interacts, and how all of those things come together with the food. To me that is what is most important.”
Hiring a marketing professional is helpful when creating that brand identity, Yohn says, because they can help create a focal point for everyone else involved in the startup process.
Line up your financing
For most operators launching a brand for the first time, securing financing will be the trickiest part to the process.
Mike Rozman is the co-president and chief strategy officer at Boefly, an online marketplace that matches borrowers with compatible lenders, eliminating the need to travel from bank to bank. Boefly has provided services to quick-serve clients such as Arby’s, Jamba Juice, Del Taco, Dunkin’ Donuts, and Hardee’s. Rozman says it is critical that the borrower is prepared to seek a range of financing opportunities, adding that outside expertise is sometimes necessary to figure out what those might be.
“I know national lenders that have no interest in doing a startup or small business, but the average franchisee or independent owner doesn’t know that,” Rozman says. “So it’s going to be really critical for that business owner to get in front of a wider array of lenders.”
Howard says quick serves, on average, cost around $200 per square foot to build.
“You can do a down-and-dirty great concept with great food … and get that open for $100,000,” he says. “Or you can go all the way and do something extremely polished for $750,000. It depends on what you want to do.”
Schaden says poor financial planning will not only cause a new operator to worry about the business, but will also distract them from ensuring the product is as good as it should be.
To make sure the business’s ongoing financials are protected, operators should create a business plan that estimates how much of product the brand must sell each week and month to pay the staff, pay rent, and keep the doors open, Bailey says. “If you need help with that, get a partner who has that expertise,” he says. “Or there are executives, there are universities that have groups, and [there are] organizations that help small businesses. Also, the local chamber may have people who can get some of that business experience and can help you learn how [a profit and loss statement] is going to be important to your unit.”
What’s in a logo
Though coming up with a name and logo doesn’t have to be the first step in developing a brand, some say it can be helpful to have a concrete visual early on for people to see.
For his part, Bailey believes the logo should be chosen right off the bat, and he says a freelance graphic designer can be just as good as a large firm in coming up with one.
“To me, the image, or the essence of the brand, is what it is all about and shows what story we are telling with the food,” he says. “It has to go hand in hand.”
Yohn says it is important to pick the logo early on for the sake of the shareholders who will need to support the brand before the customers. She says a designer should be given general ideas about the logo rather than specific ones.
“Tell the professional what the attributes are of the logo that you want and what you are trying to communicate about the brand, but let them decide the best way to express that in a logo,” Yohn says.
It’s all about location
Picking a location for the first restaurant involves multiple considerations. The first is the geographic market. Operators must first decide what city and state in which to launch the new quick serve. This includes researching which concepts have failed, which have succeeded, and what the market is like in different cities in order to find the right target audience, the experts say.
After deciding to open the new modern Italian fast-casual concept, Howard and his team researched five major cities as potential launching grounds. He says it’s important to have confidence in the market before breaking ground because financial support will trail off if a concept has already failed in one location.
The second factor playing into the location decision is figuring out whether or not to construct a new building or use an existing space. Vojnovic of Little Greek says retrofitting old restaurants is useful because it can cut an investment by half.
Operators must also be patient; a site search for a first restaurant should take time.
“You really want to learn your area and you really want to take the time to make sure it looks like what you want,” Schaden says. “And then, once you’re sure, you’ve got to make sure it fits your economic model.”
While site selection should be a carefully planned process, Bailey says, a failed restaurant doesn’t necessarily mean a bad location.
“I think good operators of the concept can succeed in almost any location,” he says.
“You have to make yourself a destination. But if it is a good concept, people will come to it.”
Give it some pizazz
Illinois-based Aria Group Architects has designed close to 2,000 restaurants worldwide, many of which were new startups. Though it is possible to come up with an in-store design without using a professional designer, president Jim Lencioni says, the creativity a designer or architect brings to a startup is well worth the cost because it gives a brand distinction and identity and ensures that a restaurant will have a clean, easy-flowing space.
He says the in-store design should take into account every physical aspect of the space, from the floors to the lighting, ceilings, counters, and walls. The process, he adds, should be less about simple decorating and more about utilizing the architecture and branding.
“One thing about quick serve is you want it to be attractive, but you also want to move the people through it,” he says.
And while it is helpful for a designer to have a brand logo in hand to help influence the in-store design, Lencioni says, often the logo and in-store design process happen at the same time; such was the case for Aria Group’s recent client, Swirlcup.
Whatever you do, don’t slouch on the food
Creating menu offerings is usually a process of trial and error. There are consulting companies that develop recipes and menus using their own chefs. Howard and his team, for example, used the Culinary Edge in San Francisco to develop the menu for their modern Italian concept.
Any entrepreneur developing their menu in-house, meanwhile, should remember that testing the product with potential customers before the store even opens is a must, Bailey says. He suggests renting a table at a local festival or food contest to get the food into strangers’ hands.
“Your friends and your family are going to say nice things,” Bailey says. “But local events are going to tell you whether or not people are willing to pay for it, and strangers will give you feedback.”
Throw open the doors
Social media can help attract a lot of customers on the first day in business, Yohn says, but it must be used with the specific market in mind. Community outreach and hosting preview nights are also ways to build a local fan base before the restaurant even opens, she says.
“Depending on the location and the market, having really breakthrough signage that says ‘grand opening’ very visibly and all the awareness building things that people do with balloons and flags is really important so people know you exist,” Yohn says.
While the grand opening is important, a “soft launch” of the restaurant before the official opening can ensure things are running correctly for the first week or two. Live Basil Pizza, for example, opened the Friday before Memorial Day weekend, an infamously slow weekend for restaurants.
Schaden says the soft launch was for the best because the team could focus their attention on getting the restaurant’s baking schedules nailed down before they had to think about promoting the brand.
“When you open the doors, you have to make them say ‘mmmm’ when they eat, and if you can do that, that is the best advertising you can get,” he says.
Take it slow and steady
Though there are undoubtedly thousands of tips, tricks, and pieces of advice for successfully launching a startup, perhaps the most significant is making sure the process isn’t rushed.
“Make sure you take the time to get it right,” Schaden says. “If you are not sure you have the right product and that you can duplicate that product customer after customer, you’ll be short on your success. Ultimately, the food wins today. [Even if] you are ready for financing and you pick a great site, all of those great things are really ancillary to the food.”
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