Fazoli’s CEO Carl Howard’s body told him several months ago that retirement was quickly approaching.
He injured his back multiple times toward the end of last year, resulting in three ruptured discs. Since then, he’s had two epidurals, undergone five hours of physical therapy each day, and tried multiple alternative treatments like hyperbaric chambers and “machines you’ve never even heard of.” Surgery may be necessary to fix the issue, which would take three to four months of rehab and rest.
With a long, physical journey ahead, Howard decided retirement was the best option, effective March 18. Doug Bostick, senior vice president of operations and franchise development, who’s spent 21 years at Fazoli’s, will succeed him and assume the role of president.
Howard says he’s leaving the company in the hands of someone who “lives and breathes the Fazoli’s brand.”
“I ended up doing physical therapy and I get home at one and work every night until 8-9 o’clock just to keep up with the email, and Doug was running the day-to-day,” Howard says. “It just came to the point where I decided that I was going to step away from the business. Doug’s got a great team surrounding himself. He will be completely fine. It’s time for somebody else to take over the brand anyway. I’ve been there for almost 14 years.”
Howard joined Fazoli’s in 2008, when the brand was “on the verge of insolvency,” he says. One of his first priorities was commissioning a consumer migration report and an Attitude, Awareness, and Usage (AAU) study. The results validated his own findings that food quality needed improvement. Franchisees were unhappy, restaurants were closing at a rapid pace, and the system was experiencing double-digit sales and traffic declines.
Fazoli’s began by fixing the menu, which included about three variations in the first 18 months—complete overhauls, Howard recalls. Sales went from dropping 10 percent to flat, but he cautioned everyone that on the two-year comparison, the restaurant was still sliding, meaning more evolution was required. The brand switched to plateware and traditional silverware and started providing service after the point of sale, like handing out breadsticks in the dining room.
The fast casual took off, Howard says, and was sold to Sentinel Capital Partners in 2015. While under the private-equity group, the strategy was to sell a chunk of company-operated restaurants and focus on franchising. When COVID arrived in March 2020, the fruits of labor started to manifest, and Fazoli’s became a rocket ship.
“I’m not bragging, but we did everything right,” Howard says. “We understood the consumer better than most brands, we were better positioned, already had the value equation. We got really aggressive with value with 5 under $5 and $19.99 Super Family Meals. We were up 20 or 30 percent and it really hasn’t stopped since.”
Fazoli’s ended 2021 with 20 straight months of positive same-store sales. Systemwide comps grew 21.7 percent year-over-year in December and increased 26.3 percent on a two-year stack. Traffic lifted 15.7 percent in 2021 year-over-year and rose 13.8 percent compared to 2019. Drive-thru accounted for 49 percent of sales. In the second quarter, the Italian brand broke 138 weekly sales records.
In terms of development, Fazoli’s signed 22 new franchisees in 2021 and added 64 units to its pipeline. The chain also opened 10 locations in seven states. Going forward, the goal is to sign 40 more operators and debut 15-20 stores in 2022 and then open 20-25 units in 2023.
FAT Brands purchased the fast casual for $130 million last year, putting it side by side with a number of quick-service and casual-dining chains, such as Johnny Rockets, Round Table Pizza, and Twin Peaks.
“This brand is really now past the point of sneaking up on people now,” Howard says. “It’s just really going to grow and thrive.”
Bostick, who’s been with Fazoli’s since 2000, has the unique perspective of observing the chain’s two-decade trajectory first-hand. He remembers five years into his tenure when he and other employees began pushing back, recognizing the chain wasn’t headed in the right direction with operations and product quality.
He also recalls Howard’s entrance in 2008 and when the brand showed initial signs of acceleration a few years ago. To Bostick, COVID was the turning point.
“I remember to this day when Carl said, ‘Doug we got to stop being defensive and go on the offense.’ And when we went on the offense, we changed the face of the brand forever,” Bostick says. “Record sales after record sales. I couldn’t even tell you the amount of record sales on the company side, on the franchise side for the system.”
The industry veteran has spent 21 years assuming increased responsibilities in a variety of departments, including company and franchise operations, construction, development, and training. Bostick played a crucial role in building Fazoli’s off-premises channels and quickly mitigating COVID’s impact.
The chain has 220 locations in 25 states, and Bostick’s goal is to exceed 300 stores. During his first week in charge, the executive will attend seven Discovery Days to meet potential franchisees.
Howard isn’t completely removing himself from the business either. Over the years, the pair have developed a strong friendship, and even though Bostick is now president of the company, he knows there isn’t anyone else he’d rather call when mulling over an important decision.
The two don’t agree on everything, but 95 percent of the time, their thoughts are aligned, says Bostick. There will be some changes and additions, which Howard believes is completely necessary given the inflationary environment and forever-changing consumer sentiment. Whatever decisions are made, he trusts Bostick to make the right choices.
At the same time, Bostick knows he and Howard are cut from the same cloth, with both having background in operations and franchising. From a bigger picture perspective, he has no plans to alter what Howard built for the past 14 years.
“What we’re going to be working on this year as a brand is not changing for any reason whatsoever,” Bostick says.