In his first nine years with Family SportsConcepts Inc., Nick Vojnovic watched the company’s Beef ‘O’ Brady’s restaurant chain grow at a tremendous rate.
What started out in 1998 as 30 locations, primarily in the Tampa Bay area, and $16 million of revenue, had increased to 250 sites nationwide with revenue of approximately $200 million by 2007.
But then the company hit a snag.
Beef’s, as Vojnovic refers to it, started experiencing tremendous commodity increases because of rising ethanol and fuel prices. Aside from the business having to spend more money to pay for supplies, those rising fuel prices are also driving people to enjoy some home cooking instead of eating out and Vojnovic, who became president of the organization in 2005, was hearing all about it from his franchisees.
“We are seeing pressure at the store level where they go, ‘Nick, I’m working just as hard, and I’m not making as much money,’”he says. “We, as a franchisor, have to lead that way and make sure they are making money and make adjustments.”
Because a lot of the company’s success is dependent on the franchisees making money and being happy, Vojnovic and the management team knew it was time to make some changes.
They decided to re-evaluate parts of their company’s brand and concepts to continue the kind of growth they’ve experienced and that meant trying new things.
One of those changes involved serving some liquor at the restaurants. There was some worry that expanding from beer and wine to include serving mixed drinks would turn the family-friendly Beef ‘O’Brady’s into a scene out of “NationalLampoon’s Animal House.”
“Our core customer is mom and dad with the 8-year-old or 10-year-old coming in after a soccer game,” he says. “We certainly do not want a bunch of 24-year-olds at the bar trying to pick up chicks, getting hammered and cussing.”
Though Vojnovic did not want to alienate the customers that made the company a success, he was willing to try to change while still keeping core customers satisfied.
“You’ve got to keep changing,” he says.“You cannot keep doing what you have always done. At the same time, you cannot lose that core, or you cannot ever alienate your core customer, or you could possibly go out of business.”
Research the change
Initially, management was dead against serving full liquor in the establishments. The leaders were so against it, they tried shutting down the franchisees who were already serving it without permission.
However, management was also hearing from some franchisees that they needed to serve some form of liquor in order to compete in their markets.
To drive any change and continue to succeed, you need to listen to other’s opinions.
“The one thing I have learned is that it is very important to get different perspectives and different viewpoints,” he says.
They decided to do some formal, controlled research to find out if serving liquor would offend their core customer base. They want to be able to cater to the family coming in after a soccer game, but they also don’t want to lose the mom or the golf foursome that wants a Bloody Mary.
Beef’s hired a consultant company who had previous experience in the restauranti ndustry to help them survey 1,300 customers in about 10 stores across the country.
“We only hire (consultants) if we are trying to find something out,” he says. “Wewon’t do just a general, ‘Tell us about Beef’s.’ Generally, it’s very focused, and we do it when we feel we have a particular issue we want to address.”
The management team would work with the consultant team on what they wouldwant to find out because the consultants were very good at forming the question ina way that would solicit the best answer.
“You know that they can word questions certain ways to get certain answers,” he says. “You want kind of a clean question that doesn’t really lean one way or the other.”
Customers were asked to fill out a survey and were given an incentive, like a free dessert, for completing it.
Surveys are kept to about 10 to 12 questions because any more than that may lose someone.
“On the phone, and even in person, thereis only so much people are going to put up with before they go, ‘Unless you’re paying me, I’m done,’” he says.
Normally, Vojnovic finds when gathering information for a change, you want to ask specifically about the change and keep the research focused.
However, in this instance, they were actually surveying about something else, and added the liquor question at the end.
“We threw the alcohol question in there because we had partners kind of pushing us for it, and we wanted to show them with the research that you shouldn’t do it,” he says. “But the research actually was the opposite.”
The results showed 91 percent of those surveyed said they would come to Beef’smore often or the same amount they had been coming.
“The research kind of gave us the light bulb moment that maybe it’s not as a bad as we thought; maybe it’s not that big of a deal for folks,” he says.
Aside from surveys, Vojnovic did a little investigating of his own the old-fashioned way to really make sure the change was worth a test run. He would visit restaurants himself and ask the customers directly about the possible change. Through that research, he found the same opinions expressed in the surveys.
“I’m all about (being) in the stores,” he says. “I’m all about talking to customers, talking to owners, and I’ll just start asking hundreds of people, ‘What do you think?’ It’s anecdotal, but sometimes you start getting a sense. And I came back we havean executive meeting once a month and we have very robust conversations. I said, ‘This is anecdotal, but I’m not getting a lot of push back on this deal. I’ve only had one person out of probably 100 people I’ve talked to who even had a little bit of an issue with it.’”
Test the change
After all the data was compiled and it validated that serving liquor might be worth a trial run, it was time to put the data to the test.
“You never just do things without testing them first,” he says. “It’s weird, but sometimes the littlest things can throw you out of whack.”
The North Richland Hills location was chosen to be a one-store test market last October because it struggled in that market and management felt liquor might have been a factor. It was also isolated from other Beef’s and the company leaders wouldn’t have to worry about other customers going to a nearby Beef’s and asking why they couldn’t get the same drink.
In addition, a big part of choosing the location was they could trust the person running it. They trusted her and felt that she would rollout the program properly, wouldn’t start serving shots, and would give all of her sales data and check averages.
When the results showed sales were up and there weren’t any unruly drinkers driving their core customer out of the place, they decided that testing a second store a few months later would be a good idea
But before testing the second store, Vojnovic wanted some morefeedback and wanted to hear some different perspectives, so he briefed the organization’s advisory board, which is made u p of a diverse cross section of franchisees from across the country. He has several boards for different things within the organization, butno matter what the subject, he wants people who won’t always agree with him and tell him what he wants to hear. To get that, he has a mix of older franchisees and some who haven’t been involved with the company as long.
“I think boards are a tremendous asset,” he says. “If you can pick a diverse board that’s going to give you good critical feedback that you actually listen to them is a huge asset to any leader.”
The board also keeps the leaders in check when making a decision.
“So we aren’t making decisions that don’t sync up with what the franchisees (want) or at least have an opportunity for the franchisees to say, ‘No, that’s not going to work,’ or, ‘Why are you making me spend money on this thing we really don’t need?’ So, that is the mechanism we use to help police our decisions.”
It was agreed to try serving liquor at another location but to keep it quiet and see how it worked out before announcing it company-wide.
“A lot of times, we’re doing a lot of different stuff tests, smallscale, but we won’t tell anybody until it looks like it might go,” he says. “Because there’s no sense in saying, ‘OK, we are testing liquor; it didn’t work, so we aren’t testing liquor.’
“Normally, you run the test, and then if it looks like it might have some traction, that’s when you start running it by different groups to see how they feel.”
Beef’s eventually tested about 10 stores in different states. “We’ve really tried to make it pretty broad-based,” he says. “One thing I’m also finding out is that this is a big country and people are very different.”
While the test locations were important for the company, so was the amount of time to conduct the study. The company chose to test for a year to get a good sense of how the change will affect it.
“You want to lap sales,” he says. “In our industry, you’re always checking what’s called comp store sales. You’re comparing store sales from one year to the next. It’s hard to say, ‘Well, Nick we were up $200 compared to last week.’ Well, last week, something was going on.
“But, if I compare consistently over a year ago, then I could see for instance North Richland Hills is up 18 percent over a year ago.That’s good data,” he says. “You want to compare apples toapples.”
Although, the company wants to test about 25 locations before making a final decision, results of the change look promising so far. Along with the North Richland Hills store showing an 18 percent increase in sales, the other stores that have been tested are up 3 to4 percent in revenue as of July.
More importantly, Beef ‘O’ Brady locations aren’t turning into the home of raucous college parties, and that helps get buy-in across the organization.
The owner of the North Richland Hills location is now a strong proponent of serving liquor because she has seen it helps sales but doesn’t hurt the brand. She can now tell other franchisees, who may have been hesitant about the change, that it is a good idea. That wouldn’t have been possible without testing the change out in a formal manner.
“When they hear it from us, they might not believe it,” he says. “But, when they hear it from a partner, they go, ‘Wow, this is the real deal.’”
HOW TO REACH: Family Sports Concepts Inc./Beef ‘O’ Brady’s, (813) 226-2333 or www.beefobradys.com