With its financial restructuring now complete, Damon’s Grill is launching a strategy to rebuild the chain, according to president and C.E.O. Carl T. Howard.

Since being acquired in April of last year by Alliance Development Group Holdings, LLC, Damon’s has closed under-performing restaurants and sold its 19 company-owned locations to a new Pittsburgh-based franchisee, Damon’s Management Group, LLC. Damon’s Management Group is continuing to operate the restaurants under the Damon’s brand and plans to open several new locations. The company recently took control of restaurants in Pittsburgh, Columbus, Cleveland and several other cities.

“We believe that Damon’s Grill has a tremendous amount of potential,” said Mike Sabatini, president of DMG. “Pittsburgh has always been a great market for Damon’s, and we plan to expand our presence here with at least three new restaurants, as well as, in other cities.”

Earlier this year Damon’s completed seven sale-leasebacks on most of its remaining real estate holdings to Servant Investments, LLC. “Now that our debt is significantly reduced, we are in a much better position to focus on Damon’s future,” Howard said. “Since being acquired by Alliance, we’ve been working on a number of important initiatives, but now we will be able to devote our full attention to rebuilding the brand.”

Howard said that the first step in Damon’s growth strategy will be to reposition the chain to offer guests better value and a dining experience that is different from its competitors. “We will continue to be a sports-themed casual restaurant, but there will be major changes to our facilities and menu that will improve our traffic, frequency and profitability,” said Howard.

Damon’s is working with several of the nation’s top restaurant consulting firms, including Technomic and W.D. Partners, on its repositioning strategy, which includes developing a new prototype to debut in late 2007. Designed to appeal to a broader guest base and be more cost-effective to build and operate, the restaurant will feature new audio-video technology and a brighter environment.

The repositioning strategy also entails extensive menu changes, which are already underway. “Technomic found that to attract a greater array of guests and increase frequency, our menu needs a greater breadth of appeal,” said Jon Quinn, director of Marketing.

Damon’s has already started revamping its menu, having recently introduced a two-tier kid’s menu featuring healthier entrées and side items for younger children and ‘tweens. A number of new adult menu items, including several salads and entrees under 600 calories, has just been launched. Damon’s also has retained San Francisco-based The Culinary Edge to develop its new menu.

Damon’s intends to expand almost exclusively through franchising, using Alliance’s development expertise to build new locations. The company expects to open between 10 and 15 new franchised restaurants within the next two years. Two new company-owned restaurants are on the drawing board for Columbus, although sites have not been selected.

“The new Columbus restaurants will provide a setting for us to test new prototypes, food and service programs, and ensure we maintain an operators’ perspective,” Howard added.

Damon’s also plans to sell its Columbus headquarters office and relocate the executive and franchise support offices to its nearby Learning Center, which will be expanded.

“We have a lot of work ahead, and although we have experienced several difficult years, for the first time there is a sense of excitement and enthusiasm among our staff and our franchisees,” Howard said. “There’s no question, Damon’s best days are ahead of us.”

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