Pedini believes Newk’s got here through focusing less on discounts and more on the aforementioned contests and similar themes. For instance, Newk’s often pulses challenges where the brand asks users to come in three times a month. If the guest does so, they’ll earn 1,500 points (a free pizza). It’s a loyalty push that rewards frequency over straight spend. And it’s proven more lasting to those who sign up, in terms of sticking after their day one offer.
“Pizza is the lowest food cost item that we have,” Pedini says. “It’s like $1 food cost. So it’s a great thing for us to come in because they had to come in and spend a certain amount, three times during that month.”
In just March, 14,000 people that had never come in three times in one month did so.
Newk’s more recently teamed with Norwegian for a summer cruise promotion where a guest signed up for rewards and then made a minimum purchase of an entrée and fountain drink to enter (existing members skipped the first step). The carrot was a seven-day cruise for two and airfare.
Newk’s expanded its tech arsenal over recent months as well. It struck a partnership with AI-generated answering system kea to take orders and payments over the phone. Even with all the digital options live today, about one in every 10 Newk’s orders are still called into the restaurant.
Pedini says Newk’s tested a different AI program last year, but it didn’t land. Customers got frustrated and the brand reversed course. Yet it still hoped to ease the call-in painpoint considering steady labor challenges. CTO Adam Karveller found kea, a California-based company that also works with Hopdoddy. Newk’s is now seeing an average of 500 orders per day and sales on that side of its business have climbed 30 percent. Simply, kea is answering calls employees weren’t before. It’s not putting them on hold, either. The technology sounds like a human and has personality, Pedini says. “She doesn’t just say, ‘hi, what’s your order,” she says. “… the franchisees love it.”
The challenge at Newk’s, unlike some other chains that tapped the AI well, is its menu is known for breadth and customization. Tech needs to be able to understand modifiers.
But speaking of Newk’s menu, this is another arena Pedini tackled from the outset. She had been with the brand a couple of months when CEO Frank Paci, the former chief executive of Corner Bakery, McAlister’s, and Einstein Noah Restaurant Group, was hired.
Paci asked Pedini where she wanted to start. They stayed in the conference room for a week, she says, “every day, all day long,” going through each menu item and category and looking at mix. “OK, we have this salad on here, but less than 1 percent of people order that so why should it be on the menu,” Pedini recalls. “And, by the way, this menu item is calling for a special ingredients that is only on this item. It was these kinds of conversations.”
When Chris Newcomb founded the brand, he went full-on with flavor and ingredient-conscious sourcing. There are no fryers or microwaves in locations. But over time, favorites emerged and others became outliers. Newk’s new leadership shed 30 SKUs in the first eight months and improved its cost of goods—it appreciated a 25 percent food cost reduction on remaining menu items. Pedini says the approach was straightforward: don’t change anything popular but reexamine everything on the fringes to see if it could either be stripped or reformulated to use ingredients already in the kitchen. In one LTO example, Newk’s summer launch included a Watermelon Feta Salad (with chicken), Green Goddess Salad, Chicken Avo Club Sandwich, and Lemon Cake. No new proteins were added or anything that would clog the line.