As Experiential Brands gains momentum, Fuzzy’s will position itself as an example of what growth should look like. The long-term goal is to double in size to more than 300 locations in the next five years, and Damico feels that’s well within reach with the current franchise sales and marketing teams in place. The pace would be 15 to 20 stores next year, followed by 40 in 2023 and then 50 openings annually in the final stages of the five-year plan.
Texas, Oklahoma, Missouri, and Colorado will serve as growth markets for existing franchisees while new partners will focus on expansion in the Carolinas, Georgia, the Florida Panhandle, Alabama, and Tennessee.
“Fuzzy’s is the base of this new platform, so we're not going to do anything to hurt the growth of that brand, and it's poised really for incredible growth,” Damico says. “My role as the CEO of Experiential is really to make sure that the brand—and it's not just Fuzzy’s, it’s whatever brand that falls into that new platform company—gets the resources they need to not only support franchisees, but to get at that growth. And the growth is planned to be significant. So there will be some significant investments in whatever brand we acquire.”
With atmosphere and experience being a heavy focus at Fuzzy’s, dine-in sales mixed 75 percent prior to the pandemic. That’s now lowered to roughly 60 percent, with delivery rising from roughly 2 percent of sales to between 12 and 13 percent.
Damico isn’t sure if Fuzzy’s dining rooms will return to that 75 to 80 percent range, but if it does, he doesn’t see it reaching that level until at least 2023. But just because consumers are moving away from the dining room, doesn’t mean the chain’s experiential values disappear.
They simply shift to different channels, like the opening of Fuzzy's Taco Shop Taqueria, a slimmer version of the fast casual that offers a reduced menu and to-go focused footprint. The concept will open in spaces between 1,200 to 1,800 square feet, compared to the 3,000 to 4,000 square feet of regularly sized restaurants. The first Taqueria unit opened in Minnesota earlier this year.
Fuzzy's also plans on opening its first drive-thru location in the first quarter.
“How are we going to make that experience badass, and how are we going to make that experience better than other fast-casual drive-thrus,” Damico says. “There's a lot to learn there. There's a lot to do. We’re watching every state right now and what drive-thru means from an alcohol component, because our restaurants generate a significant percentage of our revenue from the alcohol, from the margarita, the beer, and the full bar. We've got to figure out how to carry that through the drive-thru where we can legally.”
Fuzzy’s desire to align with multiple brands is very much in line with what’s been seen across the industry in recent months—both in quick service and full service. For instance, Panera recently joined forces with sister companies Caribou Coffee and Einstein Bros. Bagels to form Panera Brands, a new fast-casual conglomerate that encompasses nearly 4,000 stores across 10 countries.
In the casual-dining segment, Famous Dave’s parent BBQ Holdings purchased Village Inn, Bakers Square, and steakhouse concept Tahoe Joe’s within a span of months, and Logan’s Roadhouse and Old Chicago parent SPB Hospitality acquired J. Alexander’s.
“I think the timing is perfect because there's lots of concepts out there that are looking for acquisition and I think the time is right for us to do this,” Damico says. "When we think about 2022, my expectations are to continue to build the team at Fuzzy's to get at the growth that I anticipate happening and really spend some time understanding the concepts that are out there that will fit into our filter and can become an important part of driving the value of Experiential Brands.”