When the Covid 19 pandemic hit, many restaurants closed their doors, some to never open again, but Fazoli’s, a Kentucky chain featuring Italian food, jumped to the head of the class with lower costs, and increased profitability. Read on to see why Fazoli’s succeeded!
The First Makeover
A dozen years ago, Fazoli’s brought in restaurant veteran Carl Howard to breathe some life back into the brand. “They were trying to compete on speed and price,” says Howard. “They had the fastest Italian concept in the sector, but the worst food.” Howard launched a complete redo, retooling the menu, and replacing paper plates with dine-in style service. Soon, Fazoli’s was back in the black with a devoted following.
Feel Good Food with Value Pricing
Fazoli’s primarily serves baked pasta dishes. Their number one seller is spaghetti with meat sauce followed by fettuccine alfredo. Number three seller is baked spaghetti and the number four seller is baked spaghetti with meat sauce. “We make everything to order,” says Howard. “It takes a little bit longer but you’re getting a higher quality meal. And we have a lot of different ways you can order are our meals: dine-in, take-out, drive-thru, plus we’re doing a lot of sales and third-party delivery through our mobile app.”
At less than $8 per typical entree, Fazoli’s continues to build a devoted consumer base, one that has moved away from tacos, burgers and fried chicken. Also Fazoli’s caters to families with super family meals that serves a family of four for as little as $15.
However, a great business formula by itself is not enough to survive a global pandemic.
Powering Through the Pandemic
When a business gets hammered with something as powerful as Covid 19, that’s when the strength of its management team really matters. Fortunately for Fazolis, Carl Howard’s team were all seasoned restaurant guys and former franchisees. “Our focus was to make sure that we got everybody — all the franchisees — to shore,” says Howard.
Howard’s Game Plan
- First order of business: call each and every franchise and let them know that come Monday morning, they would implement a new game plan.
- Preserve liquidity; make sure that you can survive the crisis financially and come out the other end. Fazolis assembled a list of liquidity saving ideas, both big and small for franchisees.
- Request economic relief from all vendors, from landlords to steamed-in music. In return, Fazolis offered would add a year to their contracts.
- Defer royalty fees and marketing contributions for franchisees until PPP loans were available.
- Reshape the business to fit the crisis. Social distancing and wearing masks a requirement? No problem: Fazolis went from a 40% sign-in business to a three pronged approach, with 75% of the business coming from drive-thru, and online ordering rising to15% of sales.
- Emphasize safety and convenience to consumers.
Fazoli’s began to grow significantly, and Fazolis shifted its emphasis from cost cutting to growing the business. “Health and Speed,” was the new rallying cry. Employees were to deployed with tablets to capture customer orders while they were on the drive-thru line, and gave hungry customers free breadsticks as well.
Becoming a Fazoli’s Franchisee
Once you sign the franchise agreement, franchisees are immediately assigned to Fazoli’s construction department and the franchise team, including the VP of operations, the director of franchise development, and a business consultant. This team works with the franchisee through the design and construction process, the process of hiring managers and staff. Most important to the success of the new franchisee, the team works to instill the Frazoli’s business culture, a critical element in a successful franchise.
” I sit and talk with every single one of our franchisees. before they come on board,” says Howard. “And I tell them, the most important thing to us is that you treat your people well. Also, you must treat your vendors well, paying them on time. We’ve worked really hard to keep your costs low. Finally, you need to follow the game plan; we have have zero deviations in our system, and the franchisees that run our plan do well.”
“We look for great people that have a positive mental attitude and who are highly engaged we expect our franchisees to know their business inside out. The most successful franchisees are always in the restaurant; They’re always working the game plan.”
A good opportunity for immigrant entrepreneurs
Fazoli’s is a lower cost of entry franchise with tremendous service and support from the corporation. Many of Fazoli’s franchisees are immigrants, notably from Nepal and Pakistan, and Fazoli’s prides itself on helping franchisees of any nation of origin work through barriers and cultural differences. “We’re not an intimidating group and we’re not very formal,” says Howard. “If anybody wants to be an entrepreneur and is willing to work hard work the game plan they’re going to be successful with Fazoli’s.”