Article

Operators cash in with catering

Catering options increase revenue, community footprint for franchisees.

January 7, 2008 by Valerie Killifer — senior editor, NetWorld Alliance

When Nothing but Noodles rolled out its catering program systemwide in August 2007, the company did so based on the recommendations of several of its franchisees.

For the fast-casual noodle chain, with about 20 locations from Washington to New York, the catering program offers franchisees an extended arm into the communities they serve.

"Being in a smaller community, some franchisees are really driven to it," said Phil Pederson, director of operations and training for Scottsdale, Ariz.-based Nothing but Noodles. "It's a whole other profit center to be had and a good way to market stores. It's also a way to get out to the people that have never been into Noodles."

When Nothing but Noodles launched its program, the idea was to provide catering options for lunch, dinner, weddings and weekends. While lunch has been the biggest driver of catering sales, it has not interfered with the chain's day-to-day lunch and dinner business, Pederson said.

A growing trend

According to the National Restaurant Association, catering sales are expected to exceed $6.4 billion in 2008.

While the majority of chains getting into the catering business are casual dining, fast-casual operators also are increasing their catering programs in an effort to drive revenue.

Au Bon Pain opened a catering facility inWashington, D.C., designed to help the company expand its catering business. Spicy Pickle also started a catering program this past year.

A brand long in the catering business, Rising Roll Gourmet, introduced its lunch catering program after the company's launch in 2004, but added a breakfast catering option in 2007.

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"Catering is key to our business," said Rising Roll president Mike Lassiter. "Some of our stores do 50 percent of their volume on certain days in catering sales."

Lassiter said the brand's sandwiches are a good fit for catering services because a variety of its sandwiches present well in a catering environment.

Nothing but Noodles executives tested all of their menu items to determine which ones held up the best. About 80 percent of the company's menu items are available on its catering menu and customers also have the ability to customize their order.

"A lot of this food can be made before we get into our lunch or dinner rush scenario," Pederson said. "The product, since it is made to order, holds up exceptionally well. Everybody eats with their eyes before their mouths so we wanted it to be appealing."

Before launching its program, the concept also had to prepare for any operational challenges that lay ahead. While Rising Roll's existing lunch program paved the way for breakfast catering, Nothing but Noodles' program had no proven track record.

Marketing director Katie Jensen spent time on the phone trying to determine what operational issues franchisees would face. Questions the company addressed included the best type of marketing and POP materials to be used along with what type of customer would use the service. The company's franchise advisory board also weighed in on almost every decision in the process.

"I don't think anybody was blindsided (by the decision)," Pederson said. "They were all involved and I think that helps selling a new program."