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 firstname.lastname@example.org.
While pizza seems to be taking over the fast casual world, Teriyaki Madness CEO Rod Arreola has been preparing for his very own Asian invasion since he opened the first unit in 2003. The Las Vegas-based concept specializing in fresh, made-to-order Teriyaki dishes, recently signed a deal with 20 new franchisees to open units all over the country. The new agreements will result in almost 100 percent growth and are just part of Arreola's strategy to have more than 100 open units in the next five years. So far, his strategy seems to be working, as the concept boasts an average 23 percent year-over-year, same-store-sales growth among franchisees. With an investment of $225,000 to $358,000, Teriyaki Madness has average unit volumes of $855,000 and profitability of 16 percent to 21 percent, Arreola said. In fact, the success of the current franchisees has inspired each to pursue additional stores.
"This is really just the beginning," Arreola said. "After 8 years of proving the concept and building the team, it is great to see the excitement from franchise candidates who have experienced the Madness for themselves in Nevada. They see the volume of customers and have been raving fans of the food themselves. That being said, I truly believe this concept really fits anywhere and everywhere."
Arreola chatted with us about why he expects other Asian concepts to jump on the fast casual bandwagon and how he plans to drive the competition.
|Teriyaki Madness CEO Rod Arreola
Q: Why should a franchisee choose your concept over any others?
Arreola: The bottom line is our bottom line. Our return on investment and profitability versus other top restaurant franchises is a point of differentiation. It's a simple operation to understand and execute, not just for the franchisees, but for the customers as well. Teriyaki Madness is also a safer and more Americanized Asian concept than the other traditional Asian restaurants out there serving typical Chinese and Japanese sushi.
It's also a fun business. Our culture is all about working hard, but also showing our franchisees and customers that we like to play hard as well.
According to industry experts, the Asian food market is going to continue to grow exponentially as diners are demanding more flavor. Diners are also looking to eat healthier and live fitter lives, which our concept also taps into.
Q: Do you think the Asian segment is the next "big" move in fast casual?
Arreola: Yes, absolutely. I believe the Asian segment is going to be huge and is really just in the infancy of its growth. Diners across the U.S. are certainly maturing as far as their palates are concerned, and I believe they are now looking for unique and bold flavors which Teriyaki Madness provides. From what we're seeing, consumers are tired of the usual sandwiches, burgers and pizza concepts and are looking to experience something fresh and new.
Q: What is your growth plan? In what other states are you looking?
Arreola: We're currently targeting Arizona, California, Colorado, Nevada, Texas and Utah for growth. Ideally, we would like to see concentric growth around our Las Vegas hub and see outward growth from there. That being said, I really think this concept can fit anywhere. If we were to find the right franchisee in Florida or the Northeast, we would consider bringing them on.
Q: Twenty-three percent year-over-year same-store-sales growth among franchisees is pretty impressive. What is your strategy to sustain it?
Arreola: First, we have to continue to provide our customers with tremendous food quality and outstanding customer service, so they continue to spread the word amongst their friends and family. We also must continue to press our advertising and marketing efforts to gain new customers who have never experienced the Madness. Lastly, we must continue to innovate and improve on the brand in every way possible — things like adding LTOs to the menu, improving on our décor, enhancing our brand identity by telling the story of who we are, and increasing efficiencies just to name a few.
Q: What is the No. 1 way you market to customers? (print, radio, social media, WOM)
Arreola: We do a great job spreading out how we market to our customers. Print in the form of direct mail coupons and advertising has been our predominant method for a long time, but just this year we changed our strategy to make radio our top strategy, and it has been tremendous. On a local store level, direct mail still dominates, but from a corporate franchise level we are using most of our dollars on radio ads.
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Cherryh Butler has been a reporter for nearly 10 years, writing on a variety of topics ranging from the restaurant industry to business and health and fitness news. Before joining FastCasual.com as editor, she oversaw KioskMarketplace.com and PizzaMarketplace.com and contributed to RetailCustomerExperience.com. She's also written for several daily newspapers, magazines and websites, including The Kansas City Star and American Fitness magazine.