At Zaxby’s annual convention in San Diego last April, there was plenty of celebration for the chicken-peddling chain, its franchisees, and vendors, highlighted by a private concert from country music superstar Tim McGraw.
Amid the festive atmosphere, however, there was also much reflection. From one store in Statesboro, Georgia, in 1990, Zaxby’s has emerged as a powerful quick-service player 25 years later, claiming nearly 700 stores across 16 states.
“We’ve bootstrapped and matured,” Zaxby’s founder and CEO Zach McLeroy says. “We started as a mom-and-pop brand and have shown we have what it takes to compete.”
As significant as the 25-year milestone is, however, McLeroy knows the future is far from guaranteed. “We’re consistently assessing how we become a brand for the future,” he says.
While maturity is an unquestionably strong asset in the quick-service world—bringing awareness, experience, and connections to guests—McLeroy and many other leaders of aging restaurant brands say their concepts must evolve to ensure their standing in an industry full of competitive pressures, upstart brands, and shifting consumer habits.
“Sometimes it’s harder to maintain momentum than create it,” says Jill Thomas, vice president of global marketing for Cinnabon, which turns 30 this year.
John Gainor understands this dichotomy well. As the CEO of Dairy Queen, the iconic American quick serve founded 75 years ago along historic Route 66, Gainor finds himself charged with honoring Dairy Queen’s robust history while simultaneously earning relevancy with a new generation of fans.
“We want to appreciate our heritage, but also embrace change,” Gainor says.
Of course, balancing the past, present, and future can be a tricky feat.
The beauty of being an aging quick serve
With age, companies enjoy an opportunity to build brand loyalty over many years, deep connections that can cross generations and markets.
Kevin Hochman, chief marketing officer for KFC U.S., experiences this phenomenon every time he mentions to someone that he works at KFC, whose Original Recipe turns 75 this year (the brand itself debuted 63 years ago).
“I never fail to get positive stories and memories from people,” Hochman says. “There’s a lot of latent brand equity KFC has with customers.”
As the years pass, quick serves often strengthen their relationships with guests, developers, business partners, and franchisees, generating credibility that spurs expansion opportunities and performance success across the U.S., if not the globe.
Dunkin’ Donuts, for instance, has enjoyed a tremendous reception from consumers as it moves westward from its East Coast base. The 65-year-old brand drummed up incredible buzz when it initiated its first major push into California this past year, as well as in international locations such as Austria, Brazil, and Sweden, says John Costello, Dunkin’ Brands president of global marketing and innovation.
Decades spent satisfying customers and franchisees has also helped Dairy Queen grow its domestic and global footprint to a total of 6,600 stores in 27 countries.
“A few years ago, no one would’ve thought we’d ever have hundreds of stores in China and Thailand,” Gainor says, adding that Dairy Queen has opened more than 1,800 new stores over the last six years alone.
Indeed, as appealing as the new quick serve on the block might be, many prospective franchisees want to see a proven track record before plunking down a six- or seven-figure investment. Having 25, 50, or even 75 years worth of results to share helps influence new franchisees and investors.
“When people look into our history, they find some great stories from our franchisees and gain confidence in our brand,” Zaxby’s McLeroy says.
Age also brings experience and the wisdom necessary to propel operational success and bottom-line performance. At Zaxby’s Athens, Georgia, headquarters, McLeroy says, numerous company leaders started on the restaurant’s frontlines in the 1990s before moving into corporate leadership posts in the 21st century. Zax Inc. (which runs corporate locations) chief operating officer Marwan Yasin, in fact, started at the original Zaxby’s as a college student in 1990 and now oversees 120 company-owned units.
“It’s a huge advantage for us to have so many people on our team with established ties and insights into the business, people who understand the core of what we’re about because they’ve lived it on the frontlines,” McLeroy says.
The perils of being an aging quick serve
History, however, can be the proverbial double-edged sword.
While older brands enjoy decades worth of opportunities to delight customers, they’ve also had decades worth of chances to fall short. Anyone who’s been around for multiple decades has almost certainly earned friendships and fans alongside some level of consumer indifference or acrimony.
Against that backdrop, older brands must hold their ground against a litany of hungry upstarts.
“There are so many trying to get share of stomach that we thought we had tied up,” McLeroy says. “It’s a battle we have to be prepared to fight every day.”
KFC’s Hochman says there is an intense competitive environment in the ever-evolving quick-service marketplace. That’s particularly true in a chicken category that has seen explosive growth outside the chicken-on-the-bone segment, with new brands serving items such as chicken tenders, boneless options, and sandwiches. Such offerings, a departure from KFC’s staple fried chicken, didn’t exist 25 years ago, but now represent the majority of chicken sales at quick-service eateries, Hochman says.
“We don’t have brand equity in these more portable options, so how we get into these markets successfully has been a significant question,” he says.
For a brand like Cinnabon, a concept so intricately tied to one core product for three decades, the challenge can be getting consumers to try new offerings and line extensions.
“We’ve built our whole business on the world’s greatest cinnamon roll, so how do we give people permission to visit us more often?” Thomas says.
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By their very nature, more mature quick-service chains also possess older units, older equipment, older signage, older seating, and so on. A constant need for reinvestment hovers over operations.
Dairy Queen has some stores that date to the 1950s—units that feed nostalgia, yes, but could also use a facelift in light of the modern consumer’s high expectations for environment. While some Dairy Queen operators are wary of reinvesting in a wholesale upgrade for fear of losing an iconic look, Gainor says, it is his team’s responsibility to show franchisees the potential for profitability with reinvestment.
“Everything has to be in line with franchisee profitability,” Gainor says.
As a brand matures and grows, meanwhile, it often faces another complex element: heightened pressure to deliver. Employing more people and serving more communities engender more responsibility.
“There’s more at risk, more at stake than there was 10–15 years ago,” McLeroy says.
5 ways brands can stay relevant
Particularly at a time when fast-casual chains and ambitious quick-service enterprises are aggressively pushing technology and consumer trends, more mature brands risk looking old or tired and struggle to retain relevancy.
Zaxby’s McLeroy says older brands like his must be “constantly nimble.” From menu and service to environment and technology, McLeroy says, nothing is off the table at Zaxby’s. “If you just keep the status quo, the competition will just pass you by and consumers will head elsewhere,” he says.
Based on advice from executives at several legacy brands, here are five ways aging companies can balance maturity’s benefits with the evolution necessary to compete.
1. Leverage history
Interestingly, many quick-service brands are charging into the future by embracing the past.
With recognizable brand markers such as its red-and-white striping, its “Finger Lickin’ Good” tagline, and the Colonel Sanders character, KFC has embraced its history—and the 75th anniversary of the Colonel’s Original Recipe—in its recent marketing, including television advertisements featuring comedian Darrell Hammond portraying the Colonel.
“The Colonel represents an American success story, the ultimate chicken salesman and showman, and we’re taking that idea of an over-the-top salesman and running right toward the joke,” Hochman says.
KFC supported the Hammond TV ads with digital assets at ColonelSanders.com, including online games. “In the past, we told the Colonel’s story in a biographical way, but now we’re telling it in a more engaging, interactive way for young people to digest,” Hochman says. “Our core vales remain relevant today, but we have to share them in a contemporary way that excites customers and celebrates our heritage.”
Similarly eager to capitalize on its illustrious heritage, Dairy Queen launched its Best Blizzard Ever menu this spring. Leveraging social media, including nearly 10 million Facebook fans, DQ crafted an all-time favorites menu that captured headlines and consumer attention.
“This got people excited and engaged with us,” Gainor says.
2. Update stores
For the aging brand, consistent reinvestment in the physical plant is necessary, including the occasional store overhaul that capitalizes on modern design trends.
Spurred by a remodeling incentive package for franchisees, Hochman says, 70 percent of KFC’s stores will be remodeled in the next three years. The restaurants will boast the company’s new “American Showman” design, a look that is both contemporary and nostalgic. The design features red-and-white striping on the exterior, bucket-shaped lights, and photos from the Colonel’s life on interior walls, images honoring a man some consider the original celebrity chef.
Zaxby’s, too, has recently debuted a new store design. The farmhouse-styled eatery features gabled roofs, an exterior that is the traditional burnt red barn color, and a rustic interior highlighted by natural wood, reclaimed brick, and vintage signs. Together it delivers a look simultaneously classic and timeless.
“Our mindset is, ‘Don’t wait until it’s broken to fix it,’” McLeroy says. “The new store design provides us a better connection point with guests, and we’ve already seen sales increases at the stores [sporting the new design].”
3. Be front and center
In an effort to be top of mind with consumers, Cinnabon has crafted strategic partnerships with other best-in-class brands to create more than two dozen consumer packaged goods products carrying the Cinnabon name. The chain teamed with Jim Beam’s Pinnacle brand to release Cinnabon Cinnamon Roll Vodka; with Kellogg’s to launch a Cinnabon cereal; with Pillsbury to market Cinnabon Toaster Strudels; and with Air Wick to unveil Cinnabon-scented air fresheners.
Other quick serves, meanwhile, tap into pop culture to corral relevancy and capture eyeballs. Zaxby’s has used a diverse cross-section of celebrity spokespeople—from musicians and professional athletes to comedians like Amy Sedaris—to spark contemporary connections, while Dairy Queen recently partnered with Universal to release a Jurassic Smash Blizzard tied to the blockbuster Jurassic World film.
4. Embrace technology
Though Dunkin’ Donuts was founded when rotary phones were the norm and cell phones were sci-fi fantasy, the brand has gone “all in” with social, digital, and mobile of late, particularly to reach Gen X and Millennial consumers. The chain launched its Dunkin’ Mobile App in 2012 and its DD Perks loyalty program in 2014, programs that have more than 10 million downloads and 3 million members, respectively.
“These were important milestones for our brand, as they’re a way for us to further engage and reward our most loyal guests … as mobile devices increasingly become the remote controls of peoples’ lives,” Costello says.
5. Evolve your menu
As consumer tastes and desires change, older brands often have to evolve their menus beyond their core offerings.
Costello says it’s important for Dunkin’ Donuts to continually innovate and offer new products to its guests to keep the brand fresh. Over the last 12 months, Dunkin’ has introduced more than 40 new products, including LTOs and seasonal offerings, such as the Oreo and Chips Ahoy! cookie-inspired coffee and doughnut flavors the brand unveiled this summer.
Cinnabon has placed a significant emphasis on portability, largely by moving the beloved taste profile of its classic cinnamon roll into other products, such as CinnaSweeties and Cinnabon Stix.
Dairy Queen, meanwhile, launched its $5 lunch menu in 2013 to earn lunchtime credibility, and it brought Orange Julius into its stores to latch onto the smoothie trend. This month, Dairy Queen will enjoy the national rollout of DQ Bakes, a new platform featuring hot desserts, artisan-style sandwiches, and snack melts.
“It’s our ability to embrace constructive thoughts and deliver products that resonate with consumers that is so critical,” Gainor says.
