It’s an “interesting time” to be a casual-dining chain, says Mike Archer, CEO of Houlihan’s. It’s been a little over a year since the casual-dining veteran—formerly of Applebee’s, TGI Fridays and Morton’s The Steakhouse—bought and took over Houlihan’s with private-equity firm Capital Management. Archer spoke with Restaurant Business last week on the changes he’s brought in—and still plans to make—to keep competitors on their toes. There are even a few lessons from Houlihan’s that others pushing to modernize can learn from.
Sameness doesn’t work
“For the last 30 years, I think the consumer really valued consistency and predictability, and frankly, restaurant companies were made and grown and they thrived in that environment,” Archer says. “But the guests today are looking for different experiences, so what was once considered a strength is now a weakness.”
Archer says he plans to make Houlihan’s feel more like an experience and less like a “cookie-cutter” chain restaurant through its revamped bar offerings, its seasonal specials and a more localized feel. He wants to work with restaurant managers to develop market-specific dishes, and localized restaurant remodels are on the horizon.
Making ‘craft’ sell
One of the major changes Archer initiated thus far was a “complete and total upgrade” of Houlihan’s bar program. Starting in the summer, bars began serving more local craft beers and new craft cocktails with ingredients such as organic mixers, fresh juices and liquor-infused ice cubes.
Archer says the revamps have led to an increase in bar sales, and a nice uptick in the mix between cocktails and beers sold. He says directly training restaurant bartenders on the program was key to making it work.
“Instead of just sending out in an email or a typical training package, myself and the head of marketing visited every single market, had dinner with all the bar managers and walked them through the [new bar] program, and we got them really excited about it,” Archer says.
Seasonal doesn’t have to be ingredient-specific
Another change Archer initiated: adding more seasonal offerings. Previously, Houlihan’s changed its menu twice a year, Archer says; now, restaurants are offering a rotating specials card that will change three to four times a year. But it isn’t always based on what’s in season. The current selection highlights better-for-you options, with nutritional info such as low-calorie counts and sugar content called out in the menu descriptions, timed to the many early-in-the-year dieters.
But the menu isn’t a traditional range of healthful options. Along with grilled wings and Mediterranean black bean dip, it includes indulgent fare such as brownie batter cake, which is “57 calories per bite if eaten in 10 bites,” and steak enchiladas with the phrase “Nutritional info? Who cares? Treat yourself” included in the menu description.
Local vibe with a national supplier
Archer acknowledges that acting like a local concept is difficult to do with 70-plus units, particularly in regard to the menu and supply chain. “I want to get in a place where menus have somewhat of a local feel to them. … I shouldn’t have to make decisions based on what’s convenient or expedient for supply chain,” Archer says. “So our challenge is, how do we do this? I think we are starting to get an understanding of that, but we don’t have it figured out yet.”
Archer says he wants to bring restaurant managers more into the innovation process to help develop local dishes. He experimented with this through development of the revamped bar program, in which restaurant bartenders were asked for their input on which local craft beers to offer. But Archer found they had to rein it in and provide some guidelines.
“[The bartenders] got very excited and started to put beers on there that were very unique and very nichey, and what would’ve happened is those wouldn’t sell,” Archer says. “So we came in to let them know, here’s what their lineup could look like in terms of quantity and different tiers of beer, and then we told them to go find things locally that would fit those parameters.”
The revamped beer lists at restaurants now feature a mix of top beer brands such as Bud Light and Miller Lite, in addition to smaller yet well-known brands like Guinness and Sam Adams, and several local and regional beers.
Competing with indies
“One of the things we realized is that [guests] thought we weren’t exactly a chain, but we weren’t exactly a local place,” Archer says. “So we thought, how do we more effectively compete with local independents … because as we start to think about where the opportunity to compete more effectively [is], it really is more toward these independents.”
Archer says as Houlihan’s starts to grow again, he’s looking to open in more neighborhood sites—such as inline units in suburban neighborhoods—over traditional restaurant sites outside malls. New units will have different designs to feel more local, Archer says.
Embracing trends for future growth
Archer says he plans to expand Houlihan’s, but slowly and in existing markets. But he’s not relying solely on the main brand. He expects to open two to three restaurants a year between Houlihan’s and what he calls another growth vehicle, J. Gilbert’s Wood-Fired Steaks (also owned by Houlihan’s Restaurants Inc.).
Also on the horizon for the casual-dining chain is adding delivery service. Archer says Houlihan’s plan to test delivery in a few markets in the next few months. He says the company will look at packaging and presentation to make sure items will travel well before launching the service.