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    How to Age Gracefully

  • The pros and cons of getting old as a brand.

    Zaxby’s which turned 25 this year, recently unveiled a new store prototype. “Don’t wait until it’s broken to fix it,” CEO Zach McLeroy says,of the brand.

    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.