A public company’s leader tends to get some attention when he opens a financial reporting session with the preview, “On this call I will highlight several poor decisions prior management made that led to the poor results this past quarter.”
That’s how Adam Wright, acting CEO for the Famous Dave’s barbecue chain, started his telephone conversation with financial analysts on Wednesday. He didn’t disappoint.
He blasted the outgoing regime, led by one-time McDonald’s CEO Ed Rensi, for changes ranging from shrinking portions to changing dishes, revising uniforms and fiddling with a Famous Dave’s signature, cornbread muffins.
Sales fell so fast that principal shareholders swept out both Rensi and the company’s chairman and immediately reversed some of that administration’s moves. As dramatically as it had fallen, customer favor rebounded, according to Wright.
“[In] the first eight restaurants to return to the original plateware, increased portion size [and] iconic items such as our cornbread muffin, we have already seen significant improvements in the guest feedback, specifically overall satisfaction,” he said.
Wright’s team also canned Famous Dave’s experiment with a fast-casual format. The company will likely turn back to a fast-casual venture once it fixes the company’s core business, he said, but the model has to be different than the one launched by Rensi’s management predecessors.
The core-brand reversals were quickly carried through all 14 company-run Famous Dave’s units, and now the chain is looking at enhancements the new regime adjudges to be more consistent with the concept. For instance, in test is a whole-muscle brisket that’s smoked for about 12 hours.
The marketing focus is shifting back to barbecue, which is what put Famous Dave’s on the map, and less attention is being paid to distractions like pushing happy hours. Indeed, a new small-plates bar menu was dropped.
The changes came as Famous Dave’s unit sales were dropping on a comparable basis by 9.2 percent. Most of the decline came in dine-in dinner business, which suggested that customers didn’t like the changes they found.
Wright says there was no doubt about it. Almost 9 percent of customer complaints channeled through to headquarters were gripes about the change in portion sizes, he explained.
“As we looked at the data, it was clear we had to make these changes back, and changes should never even made,” he said.
Wright noted that the board now collectively holds 45 percent of Famous Dave’s outstanding shares.