Editor's note: This is just one story in a recurring series that features interviews with top-level execs in the fast casual industry. If you would like us to feature a specific exec, please make your request in an email to Cherryh Butler at email@example.com.
When Frank Paci took over as CEO of McAlister's Deli in 2010, his mission was to grow the concept. Mission accomplished. Sales at company-owned restaurants were up 9.2 percent compared to this time last year, while sales at franchise restaurants are up by 8.2 percent over last year. McAlister's isn't only focused on growing sales in existing units, it's also increasing the number of restaurants in the chain, opening 12 new restaurants in 2012, with 20 others set to open in 2013.
FastCasual.com wanted to know how Paci and his team have managed to grow the brand. He answers below.
Q: Why do you believe McAlister's has been able to flourish even in these economic times?
Paci: The core element to the success of the McAlister's Deli brand is consistently delivering a high level of hospitality to our guests. In addition, we have invested in our business by enhancing our menu offerings. We have upgraded the quality of our proteins with items like Black Angus roast beef and Black Forest ham and upgraded our grilled sandwiches and salads. I think during tough times people feel like they have to sacrifice, but we allow them to enjoy great quality food and hospitality for an attractive price without having to leave a tip. As a result, customers are voting with their feet and demonstrating that they like what McAlister's offers by returning regularly to our restaurants.
Story continues below...
Q: What is your advice to restaurant owners who aren't seeing the same type of sales growth?
Paci: I recommend focusing more on service. A lot of emphasis in this industry is on spending more in the area of marketing to get customers in the door. But, it's the quality of experience that really impacts whether they come back or not, and this is what drives growth.We don't spend a significant amount of our budget on marketing. Instead, we invest in delivering superior hospitality and food quality.
Q: What has been the biggest challenge you have faced as CEO of McAlister's?
Paci: The biggest challenge is establishing credibility with franchisees. There are a lot of brands in which the management and the franchisees have a difficult time gaining alignment on strategic issues. I've worked closely with our franchisees to leverage their experience and get their valuable input to help us grow as a system. Our franchisees are terrific in that they want to invest in hospitality and food quality and not all systems can say that. I believe we will be able to continue to work together to grow our system.
Q: What's in the pipeline for McAlister's?
Paci: We continue to look at ways to enhance the quality of menu offerings for our guests. Early next year, McAlister's will introduce a new Cajun line that includes a Cajun Shrimp Po' boy and Cajun Shrimp Salad. We'll also feature our Lite Choose Two combinations in the first quarter and continue to offer more healthy choices for our guests. As for growth next year, our plan is to continue to add units with existing franchisees and to recruit new franchisees who believe in providing great food and hospitality.
Q: What is your position on technology? For example, Is McAlister's a quick adopter of things like social media, mobile marketing and digital signs or do you have a wait-and-see approach?
Paci: We certainly see the value of technology and have taken an approach that our role as the leader of the system is to test new technologies and fine tune them in company restaurants before rolling them out to the system. We also allow franchisees who have an interest in a particular technology to participate in the tests. We have digital menu boards in a couple of company and franchise locations as an example. We also have Coca-Cola Freestyle machines in three of our corporate stores that we are testing. We try to invest our resources wisely to ensure we are bringing value to our franchise owners and operators system-wide.
Q: What do you think will be the biggest trend for fast casual in 2013?
Fast casual will continue to outpace other segments. We find that people want more control of their experience, as well as higher-quality food, and fast casual restaurants allow them to receive that. With McAlister's, we provide our guests the flexibility to control their dining experience with the best of both worlds -- a quick, high-quality meal with great hospitality. Our guests can have a quick bite without feeling rushed or can enjoy a more relaxed dining experience if the occasion warrants.
Read more about operations management.