Each restaurant brand will expand with the future in mind, and Schlotzsky’s is seeing the most dramatic difference. The sandwich chain released Design 1000, a 1,000-square-foot double drive-thru unit with no dining room, and Design 1800, an 1,800-square-foot prototype with one drive-thru lane and 35 indoor seats. After growing with a legacy box that’s 3,000-plus square feet, the brand believes a majority of new stores will feature one of the two newer designs.
The first Design 1800 restaurant opened in August while Design 1000 came online in April.
McAlister’s slimmed its prototype from more than 4,000 square feet to as low as 2,700 square feet, and Moe’s is looking at a 1,600-square-foot model.
“With smaller dining rooms, we haven't seen an issue with the shift,” Guith says. “For Schlotzsky's, we've had drive-thrus for a long time. It's just continuing to get better and better at drive-thrus. … I think the challenge is going to be that everybody wants that real estate now. It plays to our advantage because I think we can go places and appeal to people that other brands, even some of the bigger brands, can't.”
Restaurants are altering their box size with an important goal in mind—reaching a 50 percent digital and loyalty mix within the next five years. When Guith became president of McAlister’s in April 2018, loyalty was one of its biggest issues, and in the board room, it was said that “you’re an on-premise concept in an off-premise world.” The executive took that to heart, realizing the classic brand can honor its heritage and extend digital accessibility at the same time. After updating its loyalty program from “surprise and delight” to a point-based tier system, participation skyrocketed, and Guith says that’s because customers were waiting for it.
“I think that experience is what's the core and that heavy user will continue to drive the majority of it,” he says. “But extending the accessibility is what digital does.”
For Auntie Anne’s, Jamba, Cinnabon, and Carvel, much expansion comes via co-branding opportunities, such as 12 new Auntie Anne’s and Jamba drive-thru locations in the next year. Before leading Focus’ restaurant category and serving as McAlister’s president, Guith oversaw Cinnabon, so he’s familiar with how crucial the strategy is. The industry veteran estimates 50 percent of his job was recruiting Auntie Anne’s franchisees.
It works, he says, because of the simplicity—that isn’t necessarily the case for restaurants. When Guith worked at Yum! Brands, he saw the unwinding of those combined concepts. KFC and Taco Bell worked together in a few rural areas, but overall, it became too confusing. He believes there’s more of an opportunity for colocation, meaning brands share a dining room and bathroom, but keep operations separate. Like McAlister’s sitting beside Jamba in one market and near Moe’s in another. Through this, Focus is finding synergy with real estate, labor, and marketing.
Guith says it’s an example of franchisees leveraging “the power of the portfolio,” a rallying cry Focus will continue to hammer as its footprint builds across the country.
“I think we've done a nice job coming through the pandemic better than most,” Guith says. “We've got some good positive momentum.”