The Cheesecake Factory has started accepting reservations on a limited basis at all 206 of its namesake restaurants in the United States, a move intended to ease customers’ frustration with long wait times, executives revealed to investors Wednesday.
In reporting financial results for the fourth quarter ended Dec. 31, the company’s first as the owner of Fox Restaurant Concepts (FRC), the officials said little about the other concepts that have been brought into its fold through the complicated deal. But they noted that North Italia, the Italian concept acquired from Fox in a distinct transaction, posted a same-store sales gain for the quarter of 4%. The Cheesecake brand generated a comp increase of 0.6%.
They also disclosed that eight more restaurants will be opened in 2020 by FRC, a free-standing division that serves as an incubator for new concepts the parent company can then develop and operate through its Cheesecake business. Included in the planned FRC stores are more units of Flower Child, a fast casual specializing in unprocessed foods that promise to promote health.
Also in the pipeline for 2020 are six more units of North Italia, which opened another restaurant during Q4, bringing the current tally to 22.
CEO David Overton said the Cheesecake brand will continue to expand overseas through licensing agreements, in addition to developing six stores domestically.
Some of the company’s home-grown diversifications shrank during the quarter. Cheesecake closed one of its two RockSugar Southeast Asian Kitchen polished-casual restaurants, in Oakbrook, Ill., and shuttered the Grand Lux Cafe in Austin, Texas. Neither was “meeting our expectations,” said CFO Matt Clark.
Off-premise sales continued to surge for the Cheesecake brand during Q4, the executives said, noting that to-go and delivery orders now generate 17% of total restaurant revenues.
Cheesecake’s off-premise business has provided an opportunity to test a number of marketing initiatives, said company President David Gordon. The experiments will also enable the chain to “further lean into convenience,” he added.
The new reservations option came out of that experimentation, Gordon continued. He explained that Cheesecake restaurants are now setting aside a certain portion of their tables for guests who want to book a seat ahead of time and avoid the queue. Currently, the chain fills its tables and bar seats on a first come, first served basis.
“At the same time, [we] let guests know that they can always walk in, so that they're not under the impression that we're only taking reservations,” Gordon said. “And they're all available through Yelp. So we're marketing that through Yelp.
“We’re hoping this additional convenience will encourage guests who are more pressed for time to dine with us,” Gordon continued. “Based on the deliberate approach we're taking, and the results of our initial test, we expect our guest throughput to be consistent.”
Overall, the company posted numbers that reflect the impact of the North Italia and FRC acquisitions, which both closed on Oct. 2. Net income for Q4 increased threefold from a year ago, to $48.7 million, on revenues of $694 million, up 18.6%.
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