Show Me the Money: I Need a New Prototype

 

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Last month Amelia Levin wrote an article about what drives restaurants to re-brand or re-concept. That article got me to thinking and I would like to further discuss the reasons foodservice operators may initiate efforts to develop a new prototype design.

Developing a new prototype is an exercise to refresh a concept’s personality. Foodservice consultants and operators equally enjoy such efforts. Each party views this as a glorious exercise. Because it creates a new beginning for the concept and a different way to deliver the brand promise, the unveiling of the updated prototype tends to generate significant fanfare.

What drives a concept to develop a new prototype? The answer to this question is quite simple. Unit economics often drive this decision. Management may feel that making changes in the design can enable a better customer experience and allow the unit to make more efficient use of labor and other aspects of the investment. The net result is a platform that allows the concept to grow and flourish, providing higher returns for the company.

Considering the time it takes to develop a new prototype, it behooves foodservice executives to start the process looking for ways to create a better concept, even if the current model continues to work well. Proactive executives understand the need to improve their prototype before the model’s performance starts to decline and are always trying to stay ahead of the curve and relevant in the eyes of the consumer. Of course, if the current investment model and design is just not working, the exercise can become a matter of survival.

It is challenging for restaurants to stay relevant to the customers over the course of time, and the current economic climate has only exacerbated this situation with many operators trying to increase their “share of stomach” at the expense of each other. To remain relevant in the eyes of the customer, foodservice operators need to sharpen their value proposition. New menu additions can do this, but eventually a new prototype is warranted and a “facility of the future” effort may be necessary to truly move the needle.

Prototype re-designs are not only a great opportunity for a foodservice concept, but also for suppliers and consultants alike. It provides a platform to consider new technologies and equipment platforms, as well as new décor and retail features. Developing a new prototype can create a framework to try new features that can ultimately drive improvements in the concept’s return-on-investment.

A full prototype design effort should include retail (form) and operational (functional) changes. The key is to uncover and fix the issues that may erode the foodservice operation’s ability to sell more and generate more profit. Taking these steps can also address any competitive issues the operation faces.

One quandary foodservice operators face when developing a new prototype is an unwillingness to address the business’ sacred cows – those aspects deemed untouchable by the company’s culture. Management also needs to address how far they are willing to move the needle when it comes to design. After all, the concept consists of a system that fulfills the brand promise. While the new prototype must be different to increase customer appeal, it still has to blend with the current execution in the existing restaurants, in both the retail design and operational execution. Failure to do so can result in the concept having two representations: an old prototype and a new prototype rendition.

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Foodservice operators have to continually re-invent themselves to stay competitive and developing or refining the unit prototype can be a part of these efforts, especially considering that a concept’s typical lifecycle is believed to be around five years. In the current extremely competitive environment, perhaps this cycle is shorter. The goals of any investment effort should be to increase customer demand and to have the units provide a higher return-on-investment.

My next post will touch on the different ways to undertake a new prototype design effort and some general advantages and disadvantages of both.

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