Established concepts aim to invigorate images, sales: the climate for full-service chains is anything but casual as the segment's prolonged sales slump forces mature concepts to adapt to new competitors and customer preferences

Nation's Restaurant News,  Nov 5, 2007  by Carolyn Walkup

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Helping to finance Houlihan's new restaurants are transactions finalized last May for $60 million in a senior credit facility and $28 million in private equity. Houlihan's 2007 sales for the fiscal year ended last Sept. 30 were $262 million, compared with $248 million last year.

Bennigan's, the 307-unit pub and grill chain based in Plano, Texas, dating from 1976, also is working to update its image. The chain is getting rid of the old--including wall-mounted artifacts, brass beer taps, old-style televisions and plastic burger baskets. The changes follow indepth consumer research, says Clay Dover, chief concept officer for the brand, which is owned by Metromedia Restaurant Group.

Framed pictures of Irish landscapes and breweries, in keeping with Bennigan's Irish-pub theme, and a customized mural replace such wall kitsch as canoes, plastic plants and odd photographs, a change Dover calls the most significant. Guests can program the music of their choice into an electronic jukebox.

"When you put all these pieces together, you get a newer look and feel," Dover says. "When a new restaurant goes up next to you, we have to adapt and be proactive."

Dover says reaction to the changes was positive when Bennigan's introduced the program to both franchisees and corporate general managers a few months ago. The company is offering some remodeling incentives, but Dover would not give specific details.

"We are trying to keep the pace with technology and everything else," Dover says. "Consumer expectations continue to climb. Now it's a challenge for heritage brands to step up. We're involving ourselves more in the lifestyles of our consumers."

Applebee's is known to be in the testing stages with two new designs. Features include limiting memorabilia collections to one area of its restaurants and to highlighting community-specific artifacts, a new logo, a frozen beer tap behind a sheet of ice and other touches. Officials at the 1,905-unit chain, whose sale for $2.1 billion to Glendale, Calif.-based IHOP Corp. is pending, could not be reached for elaboration.

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Ruby Tuesday, the 933-unit brand from Maryville, Tenn., hopes to realize positive returns soon from its investment in upgrading its image. Although samestore sales in the first quarter ended Sept. 4 fell 4.8 percent at company-owned restaurants and 2.9 percent at franchised ones, chief executive Sandy Beall says upgrades are continuing in anticipation of future traffic improvement. Traffic has increased at remodeled units by about 2.5 percent, he says.

Remodeling costs are less than $20,000 per unit, Beall estimates, involving primarily replacing Tiffany lamps with new red lights in circle lamps and replacing old artifacts with contemporary ones.

"It is different than the dated, '80s fern bar look that we've had for 35 years," he says.

In case some franchisees are wondering how they will pay for the upgrades, Beall says the company will help them figure out ways to make remodeling affordable.