Article

Homestyle Dining leverages smaller footprint to create 'plush fast casual' steak concept

Bo's Steak & Grill features a backyard barbecue theme, with country music, denim and red solo cups.

July 31, 2014 by Alicia Kelso — Editor, QSRWeb.com

Tom Sacco, CEO of Homestyle Dining, jokes that the original fast casual concepts were Homestyle's Ponderosa and Bonanza brands back in the 1960s.

"You'd walk up, order at a counter, go down a line and get your salad and drink, and by the time you got to the end of the line, they'd be handing you your steak and away you'd go," he said.

Things have obviously changed since then. The "chute-line" concept has since transformed into the fastest growing segment in the $680 billion restaurant industry, while real estate and food costs have made it harder than ever to run a big-box, big-menu restaurant. This confluence of trends illuminated a light bulb among Homestyle Dining's executives – to take what they know, steakhouses, and make it fit into the fast casual space for cheaper. And so Bo's Steak & Grill opened in May in Lindale, Texas.

"I know the steak business pretty good and I know the casual dining business pretty good. We wanted to take the magic of what we had originally and bring it down a little (by scale). We wanted a next-generation steakhouse, which is different than what's currently out there. That idea got my juices flowing," Sacco said.

Fast casual plush

The company started coming up with ideas that could translate into 2,500 to 4,000 square feet, but that stayed true to its steak/salad bar DNA. (By comparison, Ponderosas run from 9,000 to 12,000 square feet on average, and Bonanzas are 5,500 to 7,500 square feet).

Executives spent a year looking at different fast casual concepts and studying industry trends. Sacco said they came up with a bit of a twist – fast casual plush.

"For us, casual dining meant the Chili's and Applebee's. We felt we played more with the Cheesecake Factory's and the PF Changs – a sort of casual plush. So the price-points and check averages are about the same, but the environment made the difference. That's how I started to think about Bo's within the fast casual segment – expectations grander than a hamburger or taco concept, a bit more plush. Not upscale, but the environment is nicer," he said.

The environment is centered around a backyard barbecue theme that was derived from the company asking, "If Bo was a person, who would Bo be?" The answer, according to Sacco, is someone who is "outgoing but sophisticated, blue jeans, parties, drives a pickup truck but not a beat up one, has a chocolate lab as a pet, a real family and friends kind of guy." Fictional Bo comes home from work, fires up the grill and has everyone over for food and cold beers.

To fit this backyard BBQ idea, the chairs at Bo's don't match. Neither do the plates, flatware or glassware. The employees wear jeans and there is denim on the back of the booths. Non-alcoholic drinks are served in red solo cups, and sauces are served in mini red solo cups. All of the restaurant's boxes are recycled as coasters and stamped with the Bo's logo.

"Nothing at the table looks like a typical restaurant and that's by design," Sacco said.

The menu

The menu's core is steak, which makes up about 50 percent of the mix, or "exactly where we hoped it would be," Sacco said. Everything else was created by a culinary team that was challenged to aim for unique differentiators.

"You can get a baked potato anywhere. I want our baked potato and our sweet baked potato to be distinctive," he said.

For example, the sweet potato is rolled in maple syrup and topped with crushed rock candy before it's baked, then served with cinnamon butter. The regular baked potato is cooked with bacon grease and sea salt. One of Bo's most popular appetizers is its candied bacon – which is seasoned with brown sugar before it's baked and served in a mason jar.

Instead of bread or chips and salsa, fresh veggies and pickles are waiting at the table with the brand's signature smokehouse ranch dressing.

"We are trying to put different spins on the food, so when people come to Bo's, they get something a little different," Sacco said. "I think we hit a homerun."

Guests order at the counter and can walk through a line to have their salads customized in stainless steel serving bowls. When the main meal is over, servers tend to each table with a dessert tray.

"This is where the fast casual plush idea comes in," Sacco said.

Guests can then ring up their card at the table using iPads.

‘Aggressive' expansion plans

Bo's has been open for about three months, but the company has "aggressive" growth plans. Sacco thinks the right restaurant model can help with this objective.

"We think there's a void for steakhouses right now. America loves steak, but the problem is the cost of real estate. If you can shrink those components, then you can manage the increased commodity and labor costs," he said. "It just gets to be too difficult to make money in the big boxes, but there is high demand for the concept."

Sacco said Bo's is achieving volumes similar to full-service steakhouses and is projected to hit $1.5 million.

"The investment for the smaller-box models is $500,000 to $600,000 and if you do $1.5 million in sales, you don't have to be a rocket scientist to know this could really work," he said. "Everyone is paying the same price for high meat right now, for labor. Everyone in the restaurant industry has that in common. But if you're paying two-thirds less to build the restaurant and stay there, then it becomes a dynamic opportunity."

Right now, Bo's has a pioneer franchising program in place to jump start its initial growth. The program incentivizes the first 10 entities to "get some critical mass going," Sacco said. With the 25 to 45-year-old demographic a target, Sacco is hoping Bo's will "rejuvenate" the idea of the traditional American steakhouse, which took a hit during the economic downturn.

"I'm not suggesting this will ever replace a full-service, sit down, beautiful steakhouse dinner. But, consumers still have limited dollars to spend and are being very selective with their dining choices. They don't want to get dressed up, drive 30 miles and drop $200," he said. "We hope Bo's will make the steakhouse experience more accessible, quicker, less expensive and more fun for people."