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Famous Dave’s posts proof its turnaround is working

For the first six weeks of Q4, off-premise business has lifted comparable sales for company units by 7%, according to parent BBQ Holdings.
Photograph: Shutterstock

The recast of the Famous Dave’s barbecue chain generated head-turning results for the full-service brand in October and early November, with a 10% increase in to-go sales and a 33.9% leap in catering business driving up comparable sales for company stores by 7% thus far in the fourth quarter, according to parent BBQ Holdings.

Comps for franchised restaurants have risen on a comparable basis by 2.8% between Sept. 29, the end of the franchisor’s third fiscal quarter, and Nov. 3. The computation for company stores included results through Nov. 10.

The newly renamed company, which plans to become a two-concept operator before the end of the year, said dine-in traffic and sales have also improved, but did not reveal preliminary figures.

The upsurge was pronounced but less dramatic for the third quarter, BBQ indicated. Systemwide comps rose 0.4% on a 4.7% rise in small-order off-premise sales and a 12.7% increase in catering. Those jumps offset a 3.3% decline in dine-in sales. 

A big part of the turnaround plan for Famous Dave’s is turbocharging the barbecue’s to-go and catering business. Proceeds from off-premise orders rose to 53% of total sales, with 33 points coming from to-go and 20% from delivery. 

The strategy also plans for putting more focus on the bars of Famous Dave’s restaurants and developing a smaller prototype. The chain is also experimenting with a fast-casual version of the brand, as well as ghost kitchens, or commissaries that exclusively produce delivery and catering orders.

Our financial results for the quarter reflect the investment and resources we have committed to reviving the Famous Dave’s brand and restaurant system performance,” BBQ CEO Jeff Crivello said in a statement. 

BBQ noted that it also made progress on a number of other strategic initiatives. The company said it has signed a lease for a 3,000-square-foot “bar-centric” restaurant in the Uptown neighborhood of Minneapolis, the first of the franchisor’s smaller stores.

BBQ will enact a major step of its plan when the company’s first Clark Crew BBQ restaurant has its grand opening in Oklahoma City later this quarter. The concept features the award-winning recipes of Travis Clark, a legend on the competitive barbecue circuit. BBQ has secured rights to open Clark Crew restaurants under a partnership with Clark.

Although the first Clark Crew has yet to open, BBQ has already formed a new subsidiary, Clark Enterprises, to license the name for use on retail sauces, rubs and related products.

The parent company changed its name to BBQ Holdings in September in anticipation of adding other growth vehicles to its fold. BBQ has indicated that it could acquire concepts as well as starting ones.

During Q3, the company acquired five franchised units, in keeping with an effort to improve operations. The company has earmarked $10 million for the acquisition of franchised stores and renovation of company units. Famous Dave’s finished the quarter with 96 franchised restaurants and 32 company stores, or 19 fewer in total than were in operation at the end of the year-ago period.

The acquisitions resulted in a loss of $50,000 for Q3, according to BBQ, compared with a year-ago profit of $1.4 million. 

Revenues rose 68.3%, to $23.7 million.

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