Blog

It's time to feel good!

May 26, 2011 by Don Fox — CEO, Firehouse of America

The latter part of May is always a busy time of year on my calendar. During the waning days of spring, there is a convergence of our Firehouse Subs Public Safety Foundation charity tennis tournament, the National Restaurant Association trade show in Chicago, the International Council of Shopping Centers convention in Las Vegas, and a quarterly meeting of our network of Firehouse Subs Area Representatives. All four events are critical, and each year, they serve cumulatively as a bellwether for not only our Firehouse business, but for the restaurant industry and economy at large. Having just returned from cramming all four of these events into a six day period, I am compelled to say that things are looking good on many fronts for our industry.

Despite the hard times of recent years, people continue to embrace the merits of charity. Our Public Safety Foundation raised a record $350K through this year's men's doubles tennis tournament. Our vendors, employees, and customers are donating at record levels. And it is a good thing, because with disasters like the recent large-scale tornado strikes, coupled with reductions in municipal budgets, the need for money and helping hands is as pressing as ever. We were proud to bring a relief team to Alabama just a few weeks ago to donate and serve more than 10,000 sandwiches to first responders and survivors of the storms in that region. And even as we were enjoying great tennis and raising money in Florida last week, our franchisees in northwest Arkansas were racing 60 miles to the north to aid in feeding the people of Joplin Missouri. Of course, we aren't the only ones undertaking that task. When I see other restaurant brands on the scene at such disasters, it makes me incredibly proud to be part of an industry that gives back to the communities they serve when they are in dire need.

Trading in the clay courts of Jacksonville for the brisk winds of Chicago, I found the atmosphere at this year's NRA show to be remarkably refreshing. While vendor participation appeared to be well short of where it was a few years ago, attendance seemed to be up substantially. More importantly, the attitude of operators and vendors alike was positive and upbeat. After two to three years of great caution, it appears that brands are increasingly looking to reinvest in and refresh their concepts. The education sessions were packed with operators looking to soak up best practices and practical information they can use to keep their businesses moving forward. Fast Casual – the golden child of the recession – was at the forefront on Sunday with a great panel discussion, and the segment was talked about in many other presentations. In many respects, the Fast Casual segment has been the home of innovation and evolution within our industry. It is a country club that many non-Fast Casual brands are trying to join. But without a doubt, the highlight of my time in Chicago was my meeting with the Fast Casual Industry Council Steering Committee. This think tank of some of the best minds in the fast casual segment is on the ground floor of evolving the FCIC into a role model organization for the National Restaurant Association. During the months and years to come, the FCIC is an organization that every fast-casual player will want to be a part of. It is a very exciting time for the segment.

After two days in Chicago, it was on to Vegas. Like the NRA show, the ICSC is not quite on the scale of years past. But also like the NRA, attendance was up dramatically this year. There was a renewed buzz about new restaurant development, focused on the deserving brands within the industry. Developers' portfolios have evolved during the past few years. Opportunities to expand restaurant brands within leased spaces are there, and better still, money is there to do it. Access to capital, while not anywhere near pre-recession levels, is available for those franchisees and brands that display the necessary strength and experience. And frankly, who would WANT things to return to pre-recession conditions? We will all be healthier ....landlord, banker, and tenant... if we find the right middle ground of reasonable costs where all parties in the equation can be profitable. As long as any one of the parties is profiting at the disproportionate expense of the other, all three parties are at the risk of failure in the long run. If the last three year has taught us anything, it should be that.

And finally, I wrapped up the week in Las Vegas by meeting with our network of 40 Area Representatives. We have been riding a wave of strong positive system comp sales for the past 20 months, and even in the face of $4 gas, the trend continues. We have opened 33 new restaurants this year, and should open more than a total of 80 before year end. And those 33 new restaurants have sales averaging more than 35% above our system average unit volume. As you might imagine, the mood among my AR's was pretty positive. But better yet, as measured by a recent satisfaction study, our nearly 200 franchisees are delighted with the brand and are extremely positive about the road ahead. While not all restaurant brands are enjoying this level of success, Firehouse Subs is not alone. There are many great stories being written right now within the restaurant industry.

Heck...I even left Vegas with some extra money in my pocket. Now, if I could just replay my second round match in the tennis tournament, things would REALLY be great!