Article

Why Famous Dave's is going fast casual

The new format reduces partners' investment costs and the company's labor expenses.

June 18, 2013 by Cherryh Cansler — Editor, FastCasual.com

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 cherryhb@fastcasual.com.

Famous Dave's has been around for years, but the full-service barbecue joint has found recent success in the fast casual market by emphasizing its new format, Famous Dave's BBQ Shack. Although the first Shack opened in 2010, featuring most of the same food served at Famous Dave's but at less expensive price point and faster service model, it's already gaining a following. In fact, it was just named to FastCasual.com's 2013 Top 100 Movers & Shakers and has nine units operating.

John Gilbert told FastCasual.com why the chain decided to focus on fast casual and how it intends to corner the barbecue market.

Q: Why did you decide to open a fast casual concept?

Gilbert: Our founder, "Famous Dave Anderson" conducted a "Bastions of BBQ Tour" in 1996 during which he toured more than 50 restaurants in three days. The common thread among the locations he visited was that they were roadside shacks. Customers had food delivered to their cars or ordered counter side and had food delivered to their tables. There were only a handful of full-service BBQ restaurants. Dave and his team designed our next set of restaurants based on these classic BBQ shacks.

John Gilbert

The 90s — when Famous Dave's was brand new — was also the era of casual dining. In the midst of our growth we experimented by opening a full-service restaurant, even though we'd only been building shacks. And we saw huge sales. That led us to build casual dining restaurants from that point forward.

Our freshened up Shack — the one's we're building now — came about in 2010. We revisited the shack concept because it reduced the investment cost for our partners. Most of our shacks are conversions of existing buildings. Revisiting the shack concept also allowed us to reduce labor expense, as they operate with a smaller menu.

We're seeing that we can run large sales volumes in high density population areas. Shacks provide access to areas in which the casual dining footprint doesn't work.

Q: Who is leading that part of the business? Will it continue to operate as part of Famous Dave's or will it eventually become its 'own' brand?

Gilbert: The Shack will remain a part of the Famous Dave's brand, even as we continue to grow it. We don't have plans to operate it as a separate business.

Q: How differently do you market the two concepts, meaning do you rely on social media, for example, more for one brand, radio for one brand, etc?

Gilbert: We do not market it differently. We do recognize, however, that guests need and experience our brand in different ways – dine-in, to-go, catering and retail – and we've organized the company according to these lines of business. In recognizing these unique customer drivers, we market the brand differently according to occasion. The Shack fulfills dine-in, to-go and catering needs, but in a manner in which speed and access are paramount.

Q: What is the growth plan for both restaurant formats? How many of each will you open by 2015?

Gilbert: We are currently emphasizing our fast casual growth, but that will not deter the growth of our full-service restaurants. Rather, the number of our fast casual restaurants as a percentage of our total units will grow. Fast casual could possibly reach 25-50 percent of our annual growth by 2015.

Q: Who are your biggest competitors in the fast casual space?

Gilbert: Boston Market, Panera, Chipotle, Pei Wei. Anything that's polished in the fast casual market competes for our guest traffic.

Q: How do you plan to beat them?

Gilbert: Most of our competitors are prototype builds. It's not easy for them to go into an existing space and convert it to a prototype. The easy feel of BBQ, however, doesn't require such regimentation of prototype. This allows us to capitalize on real estate as it becomes available and convert it. That's a huge economic advantage for us when it comes to expansion.

The other major advantage we have over our competitors is our catering capability. More than 30 percent of our business these days is generated by off-premise sales. That blows away any other casual dining brand averages and is even hard to beat by our fast casual competitors.

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About Cherryh Cansler

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Cherryh Cansler is VP of Events for Networld Media Group and publisher of FastCasual.com. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.

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