Blog

A glance in the rearview mirror

August 11, 2010 by Don Fox — CEO, Firehouse of America

I apologize in advance for stating the obvious: The recession has taken a toll on the restaurant industry. Industry traffic is down; the majority of chains have seen negative comparable sales growth; the net number of restaurants has declined. It’s not a pretty picture. Fortunately, we are more resilient than most industries, and our collective performance -- while not glowing by our own standards -- is the envy of those whose fortunes rest on more discretionary consumer expenditures.

There are many economic factors at work, and they have varied in relative importance during the course of the recession. But none has been as impactful as the unemployment rate. With unemployment hovering near 10%, and some markets suffering in the mid teens, it is no wonder that the overall industry is lackluster at best and struggling to reestablish a consistent pattern of growth. An industry wide return to growth rests squarely on the employment fortunes of our nation’s populace.

So, given all of the above, there are fascinating lessons to be learned by observing companies who have grown sales during these economic conditions. Whether that growth has come through the development of new restaurants or same-store comparable sales growth, anyone who can lay claim to growing their business has a right to be proud of the achievement. And such stories are worthy of your time and attention. I dare say I have spent more time studying other restaurant companies during the past two years than I have at any time in my 36 years in the restaurant business.

What I find most interesting, and compelling, is that there are two distinct avenues toward establishing growth. One is clearly at the brand level, where executive leadership must make fundamentally sound and sometimes very courageous decisions about how the ship should be navigated through these troubled waters. Stay up on the trade periodicals and web sites, and you’ll have no trouble finding inspirational brands that have made the right choices (and have the sales results to show for it). The other avenue, however, is less heralded: the ability for any individual restaurant, virtually regardless of the brand, to buck the system and grow their business. There are many answers to be found with sound leadership at the unit level, excellence in operations and customer service, and creative local marketing.

Indeed, growth can be achieved, whether at the brand or individual restaurant level, and everywhere in between. There are shining examples of it in front of us, each and every day, which leads me to my final thought and the challenge that I presented to my Firehouse Subs franchisees and HQ staff.

Many, many months ago, I reminded our team that the average Firehouse Subs location has 56,000 people residing within a three mile radius of the restaurant. And on an average day, we have 200 guests. That represents an opportunity of 55,800 people. With that type of opportunity staring us in the face, each and every day how can one dare not aspire to grow? We need only find the right recipe to broaden the audience for or message, and thoroughly satisfy our guests when they arrive at the threshold of our business. To one degree or another, every brand, and every individual restaurant, has the same type of opportunity. They need only seize it.