Industry News | May 5, 2017 | By Danny Klein | QSR Exclusive Brief

It's 400 Units and Counting for McAlister’s Deli

McAlister’s iced tea remains one of the industry's most recognizable menu items. McAlister’s / Tony Clark Photography
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When Paul Macaluso took on the role of president at McAlister’s Deli in December, one of the first themes that rose to his mind was potential. It was still front and center five months later as the Focus Brands’ chain celebrated a sizable milestone.

The brand, which started in 1989, long before the fast casual segment had any real footing in the industry, opened its 400th unit on April 28 in Cedar Hill, Texas. With restaurants in 28 states and 33 openings last year, Macaluso says the McAlister’s engine isn’t anywhere near flooded.

“Four-hundred is a big number but there are so many parts of the country we haven’t been to yet and we can grow in, and even places like here in Dallas,” he says. “There are sill tons of opportunity for us to expand. And that’s what’s really exciting. We truly have tremendous potential.”

The long-term goal? Open a McAlister’s in every state. Because, as Macaluso says, why not? McAlister’s has proven it can resonate with customers across demographics and has the brand recognition and backing to succeed in a multitude of markets. Focus Brands, which owns Auntie Anne’s, Carvel, Cinnabon, Moe’s Southwest Grill, and Schlotzsky’s recently relocated to new, high-tech digs in Atlanta.

The small and mid-sized chain strategy serves Focus well. The company combines departments across brands and promotes individuality and integrity with its restaurants.

This is something Macaluso wants to keep in tact as McAlister’s charts its path forward. “We want to have smart, concentric growth. We don’t want to get overextended because we want to be able to support our franchisees and leverage our supply chain,’” he says.

The road begins with spotlighted territories. McAlister’s is targeting key states, including Florida, Georgia, Iowa, and Texas. Over the next few years, Macaluso says, the brand wants to build penetration in those markets and continue to boost top-line sales, because, naturally, doing so is the best way to inspire more franchisees to buy in, and for current operators to tack on additional units.

That brings to light another point. Fittingly, the operator of McAlister’s 400th unit is one of its veterans. The Saxton Group has been building stores for more than a decade. The landmark unit was their 69th, meaning they run 17 percent of the franchise system right now.

Co-CEO Adam Saxton is the chairman of the franchise advisory council and helps Macaluso and the leadership team shape the direction of the brand.

“They’re based here in Dallas. They all reside here. And it really means a lot to them as well,” Macaluso says.

McAlister’s expects to open more than 33 units in 2017. Part of that growth will be fueled by digital advancement. The new store features an upgraded area for to-go business and that segment is only growing, Macaluso says.

As part of the milestone, McAlister’s gave away club sandwiches with the purchase of a glass of Famous Tea to guests who downloaded and placed their order through the mobile app.

A big part of the promotion, in addition to thanking guests for helping McAlister’s reach 400 stores, was to introduce them to the capability of the app. “With the purchase of a tea they’ll have to enter their credit card information and they’re realize how easy the app is to use, how easy it is to come in and get their food, and then their information will be stored so the next time they want to order it will be even more seamless for them,” Macaluso says.

Off-premise business is going to be a large revenue source for McAlister’s moving forward. “We see it as a big driver for us,” he says. “Both in terms of people coming to pick their food up and ordering their meals. We’ve done some testing with pick-up windows. We also have curbside pickup at some locations. We’ve done some testing with third-party delivery companies.”

The company also recently added a director of off-premise marketing to help pull the strategy together.

As all these initiatives roll out, McAlister’s can stand on its foundation as it bolsters its business. The brand was a believer in fresh ingredients and better-for-you options before they became survival tactics in quick service. Its Choose 2 platform remains a hit, as does its classic tea, and overall menu variety.

“We have an overarching menu strategy,” Macaluso says. “We call it simple yet elevated. They’re very familiar products that we will infuse some innovation into. But our menu really has broad appeal. It’s not going to be confusing to anybody to find something that they like. … It’s just using fresh ingredients. We know that is super important to people today. And we’re continuing to make sure we make investments in our ingredients to stay relevant to consumers, and also to give them the best things that are going to keep them happy and keep them coming back.”