Knowing When to Redesign or Reconcept a Foodservice Operation

Updating an existing concept can be as exciting as it is challenging. In order to generate the right return on investment, it is important to understand what’s driving the need for change and how that impacts customer expectations.

With business slowing due to the challenging economy, many restaurants and chains are taking this opportunity to refresh their existing concepts or even fine-tune new offerings. Efforts range from something as simple as applying a new coat of paint and other aesthetic improvements to something as complex as revamping the entire menu, re-working the back-of-the-house layout or even introducing a new concept.

Case in point: The Melting Pot's parent company introduced two new fast-casual concepts, including a burger restaurant (Burger 21) and a soup-salad-sandwich fresh spot (Peel), to coincide with the organization's 35th anniversary. During the past year, other chains exploring these redesign/reconcept options include Friendly's, Quaker Steak and Lube, and Beef-O-Brady's.

While it is clear there's a growing movement among restaurants to update their existing concepts or introduce new ones, the impetus behind these decisions tend to be as varied as the types of restaurants these changes impact. That's why deciding whether it is appropriate for an operation to redesign or reconcept the business is a tricky one. To further complicate matters, oftentimes foodservice professionals will use the terms redesign and reconcept interchangeably, which they shouldn't, according to consultant Juan Martinez, principal of Profitality.

"Reconcept is revolution, redesign is evolution," Martinez says. "Reconcepting may involve an operator who's in one category, such as fine dining, and wants to move into another category, such as casual dining. Making this type of transition calls for reconcepting because the operation is going into a new segment and its brand promise is different from what it was previously."

Redesign, on the other hand, involves more aesthetic or small menu changes that don't affect the overarching brand identity or back-of-the-house setup, according to Martinez. In this scenario, the operator may introduce different pieces of foodservice equipment to the operational mix, or perhaps change the menu by adding or subtracting items, but these changes don't affect the concept's brand promise.

Reconcepting the Concept
John Miologos, executive vice president of architecture and engineering for WD Partners, agrees. "I believe that reconcepting has to accompany a business change," says the former McDonald's corporate vice president worldwide. Using McDonald's as an example, Miologos explains that the once walk-up burger-joint decided to create new facilities with a seated dining area as business grew and the company looked to expand in suburban locations. "You have to look at how your business has changed and how you want it to change," says Miologos.

So what are some guidelines foodservice operators can apply when trying to chart a course of action? "A good portion of that decision is driven by market research," Martinez says. "Are you a dying brand in a driving category? Or are you a driving brand in a dying category?"

When the brand's suffering, a redesign may be the way to go, Martinez says. But if the entire category is suffering, it may be time for a complete business model overhaul – in other words, it is time to reconcept.

Redesigning Considerations
Go in strong, fast and noticeable when attempting a redesign, says Miologos. "Speed and mass are key. The most successful redressing happens when you touch multiple locations. And you can't just redo the interior or exterior, you should also look at the menu and service. The more areas a chain rejuvenates – introducing a couple new menu items, building a higher quality service model, enhancing the dining area and creating a new exterior look – the more predictable, positive outcome that chain will get for their capital." In other words, if an operator's going to go for it, then go for it, and communicate that change to the customer.

"Impacting all five senses is the ultimate improvement," Miologos says. That may mean opening up the kitchen to release more tantalizing smells, creating a branded music environment (like Starbucks has done by partnering with musicians), improving visual displays, upgrading the upholstery and generally updating the aesthetics of each unit.

Making changes within most customers' line of sight is a good place to start with a front-of-house overhaul, Miologos says. If on a budget, operators can save money by skipping the ceiling or floor and instead focusing on the furniture, walls and service areas.

Redesigning is also a good time to analyze overhead costs and invest in equipment that can save energy, water, labor or any combination of the three. The redesign process also represents a good time to take another look at the kitchen flow and make any necessary improvements to enhance efficiencies. "It's a combination of downsizing space, and investing in green equipment," Martinez says. "Maybe now is the time to go from three hoods to one hood and determine whether each piece of equipment is truly necessary. For example, does the operation really need three fryers or could it suffice using only one or two? Coupling green with leanness can lead to more cost savings down the road."

Simple aesthetic changes are usually not enough to make a noticeable statement to consumers. "You can't just put lipstick on a pig to make it more attractive, right?" Martinez says. "Even if you've dressed up the place, but you still have cold food, slow service or not enough menu variety, you're not those issues that probably matter most to the customers."

Research is Homework
Redesign or reconcept considerations must be followed up by good customer research to find out what the customers want more of, and what they're looking for that's not already provided. "It's important for companies to do an extensive customer insight study before anything else," Miologos says. "You don't want to go forward with menu changes without that knowledge."

KFC and Domino's seemed to handle their menu changes well – adding grilled chicken as well as sandwiches and pastas, respectively, without too many operational changes in the back, Martinez says.

Another consideration is evaluating the operation's current capacity, or goals for capacity. "Now that I've attracted these new customers with a new menu and other changes, can I service them in an easy way?" Miologos says. Menu items should be added or omitted based on customer preferences and service capabilities. Changes shouldn't negatively impact throughput or volume.

The actual redesign or reconcept of a foodservice operation can be a very exciting and demanding experience. Before starting, though, it is important to understand what's driving these changes, customer expectations of the business and the operational parameters to ensure the best possible outcome.