My dog, a lesser wit in the realm of statistics, is a veritable Einstein in spotting possibility. My dog, a lesser wit in the realm of statistics, is a veritable Einstein in spotting possibility. A pleading look fails to draw a tossed dinner-table scrap in 4,387 out of 4,387 tries. But Attempt No. 4388—why not?
Clearly he thinks like many a restaurateur, as we're reminded in drafting our weekly e-letter for menu planners, or assembling our "On The Menu" section of the magazine. The past abounds in examples of concepts that hit success with a particular item or menu, but couldn't leave well enough alone. Add other popular choices and you add more customers, right? So keep that bill of fare growing.
True enough, many learned. But they also complicated their kitchen, purchasing, and training functions. Quality slipped and serving problems soared. The smart ones pruned, while the bloated swooned.
Yet the industry's memory is shorter than a 5-year-old's. Or maybe it's hubris that blinds so many operators to the trade's past. Mere mortals may have failed with the extend-and-conquer strategy. But they're of finer stuff, with an extraordinary grasp of what consumers truly want and how to deliver it without up-ending the business. Like my drooling tableside mooch, they're betting the next attempt —theirs, not coincidentally—will be the odds-beater.
A similar braggadocio seems to trigger delusions in chain builders. We've yet to encounter the upstart that champions reckless growth with little thought to careful site selection or evolution of the concept. Yet there's probably not a sizeable chain in existence that hasn't found itself with a problem at Unit 300 that should have been resolved in Store No. 3. Equally prevalent are the number of operations that realize restaurants were opened to meet development schedules, not rigorous feasibility criteria. They can readily cite the bleeders that should never have been opened.
The dangers of those lapses in discipline are underscored by recent developments in the fast-casual sector, one of the most promising (and hyped) markets to emerge in years. Three of the sector's most prominent players—Chipotle, Noodles & Co., and Baja Fresh—have all recently made important management changes (in the case of the Wendy's-owned Baja, for the second time in 12 months). Chipotle's announcement is especially pertinent: Its former counsel, Monty Moran, is joining the McDonald's-held chain as president. In disclosing the appointment, Chipotle stressed that Moran has experience in building a company and setting up infrastructure—in short, instilling discipline into the growth process.
The moves, detailed in this and the prior installment of our "For The Record" section, come at a time when some highly regarded entrants in the field have already made the same sort of mistakes that hamstrung countless predecessors. Baja had to close units and slow growth. Anyone who's been in its stores knows that some service issues may also have to be addressed. But why should that brand be singled out? The same holds true for Quiznos, Panera, Cosi, and just about every other fast-casual hopeful that (theoretically) specializes in sandwiches.
We advise them to study a concept that was doubted in its early days because its menu was gargantuan and management duplicated the brand at glacier speed. Today, a typical Cheesecake Factory generates upwards of $11 million annually. Its bill of fare lists just about any in-vogue item short of sushi that you can imagine. Yet a kitchen can't be snarled in complexity when the place is cranking through enough customers at $16 a head to collect more than $210,000 a week. By listing extensive permutations of a reasonable number of ingredients, the menu gives the illusion of endless choice.
It seems so simple. But the scarcity of brands that can match Cheesecake's variety and success attests to the difficulties. Indeed, it's far, far easier to cite a concept that's stumbled in its efforts to extend the business. Just open the Yellow Pages to the restaurant section, close your eyes, and touch a finger to the page.
We hope fast-casual's new posse of executives realizes the potential of that sector not by loosening the reins, but by making discipline its watchword.
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