News

Mama Fu's Asian House sees revenues increase, costs drop

September 29, 2009

In the 17 months since Murphy Adams Restaurant Group purchased the Mama Fu's Asian House concept, the company has been able to lower total turnkey startup costs at the unit level by more than 20 percent, while also increasing same store revenue at corporate and affiliate stores by more than 6 percent, the company has announced.

The growth is attributed to a series of strategic modifications, including a new streamlined restaurant prototype and a menu reorganization that resulted in a higher average ticket price through added-value bundling opportunities, increased alcohol sales and a focus on higher-profit items.

Additionally, Mama Fu's delivery service, launched only a year ago, has become 12 percent of the business' revenue, and more than one-third of revenue is generated from off-premise sales through delivery, catering and take-out offerings. A planned upgrade to the online ordering service, with new features such as text reorder, text confirmation and an iPhone application, is expected to further increase the restaurant's off-premise sales numbers. Murphy Adams has also focused on improving performance at every location, and reducing overall operating costs by nine percent. The company has lowered process and labor expenses, decreased the cost of goods and improved the efficiency of its supplier and distribution systems, allowing for a six percent increase in year-over-year same-store revenue.

"In a tough economy, we knew we had to get our costs down significantly. Now we're very lean, we've increased our revenue and solidified our brand," said Randy Murphy, president of Murphy Adams Restaurant Group and Mama Fu's Asian House. "By redeveloping and revamping the restaurant prototype, adding delivery service and streamlining operations, we've been able to meet our goal of building a more successful business model without raising prices for the consumer."

While Murphy Adams Restaurant Group plans to open three more corporate stores in 2010, the company is focused on franchise growth.

"With the high quality of properties available now in the 3,000 square foot range, franchisees are looking at a build-out scenario instead of building from the ground up," Murphy said. "That means much less risk and much less up-front capital."