“Last October, Robert Weissmueller, a 35-year veteran of the McDonalds Corporation, was named president and CEO of Lexington-based Fazoli’s Restaurants, Inc., an Italian quick-service chain of more than 300 restaurants acquired by Sun Capital Partners. Weissmueller recently took some time to discuss his plans for the future with Business Lexington restaurant industry columnist Mark Sievers. The entire interview is available as a podcast at www.bizlex.com.
MS: Bob, (you have) a wealth of experience in the food service industry and obviously a lot of opportunities that you could take advantage of. What attracted you to the Fazoli’s opportunity?
BW: The opportunity to build and grow a company. I thought the concept was strong. And the opportunity to come in and deal with a great team that’s here in Lexington and build this entity to be bigger than what it is today.
MS: The Sun Capital Partners, I know, in their portfolio has other food service companies and other food companies — in fact, food manufacturing companies. How are you, or are you, able to draw upon some of those other brands and resources in some synergistic way to help Fazoli’s?
BW: It’s really under exploration at this point and time. We hope that there’s some synergy around the different entities to allow us to have greater purchasing power, to be able to buy more effectively, buy greater quality products, as well as to, hopefully, because of the volume, get our prices down somewhat, too.
MS: Absolutely, that’s great. As you got into Fazoli’s and started working with the team there and the concept and the franchisees, what were some of your biggest pleasant surprises, and what do you see are some of your biggest challenges?
BW: I think the surprises, the pleasant surprises, were when you walk in the door, you always wonder what is the team like that you’re going to work with — both franchisees as well as the employees of the company. And I have been pleasantly surprised that we have a great team of people that I work with here in Lexington in the corporate office, as well as individuals all over the country in 31 states, and our franchisees certainly bring a lot to the plate as well. It’s just been a great group of people to work with.
MS: To grow the company in the way that you and Sun Capital Partners envisioned, what do you see are some of the biggest challenges/obstacles you’re going to have to overcome?
BW: In terms of just simple growth, I don’t know if there are a lot of obstacles. I really look at it as a lot of opportunities. We are in 31 states, but there are huge markets that we don’t even exist in today. So that clearly is a humongous opportunity for us to be able to develop. We are in the process of looking at how to re-imagine our stores and bring them current and up-to-date (to be) a facility that resonates a little bit better with our customers than they do today. So we’re in the process of doing that. We’ve just done our Tate’s Creek restaurant here in Lexington and are in the process at looking at what other markets to go to next. We’re also looking at building additional restaurants in existing markets, where we want to build more to get density, so we can be more relevant in terms of our ability to market more effectively. We are evaluating new markets all over the country as to what markets represent the greatest opportunity to go to first, and we have a number of licensees, franchisees, who have expressed a desire to expand within their markets. So we’re excited about really those four elements that I think are opportunities to grow.
MS: As you look at growth, unit growth, are you looking primarily at the growth through franchising, or is it going to be a mix of franchising and company growth, and also are you looking at different building formats? I know most of your stores are freestanding, but I know you have an in-line format out off of Leestown Road, which has some economic impact in terms of cost to build a structure. Are you looking at various other non-traditional or just different types of locations for your stores?
BW: We will continue to explore the in-line concept, because I think that has validity within certain markets. But we have drive-throughs in all but one. We understand what that represents for our business and the convenience that it provides the consumer today, so we’ll continue to build — most of our restaurants will be — free-standing locations. In terms of franchise versus licensees, the franchise is an important part of Fazoli’s. They bring a lot to the table that helps us think smarter about the business, and we don’t want to lose that, so we will grow both company as well as franchise stores as we expand.
MS: Okay, that’s great. Talk a little bit about your menu that you’re testing. The Aaaahtalian menu … I noticed on your Web site you referred to it as guest driven. I’d like you to talk a little bit about that …
BW: The new — major new — products we put on the menu board are the new ravioli. We have a new meat lasagna; before our lasagna was just cheese lasagna. We have a new Rigatoni Romano. Those are totally brand new products we haven’t had on our menu board before.
In addition to that, we’ve made substantial, if you will, tweaks in existing products that have improved overall product and appearance in some cases. Our pizza was not what our pizza needed to be. We totally reformulated that. We went through 80 different doughs to get to the right pizza. Our sauce, marina sauce, is a great tasting sauce, but from a color and texture standpoint, it wasn’t quite where we wanted it. So we’ve gone back, and it’s more of a richer, fuller textured product, which has made a vast improvement. We’ve rolled out four new Italian salads with a full chicken breast. Before our salads had strips of chicken, and this is a whole chicken breast. So it substantially improved the overall quality of that product, and we are pleased with it.
But all of this isn’t done because of what Bob Weissmueller likes. It’s really about the customers to me. Everything we do, if you ask my staff, I tell them all the time — it doesn’t matter what I like, it matters what our customers like. And that’s what we need to serve.
MS: I’d like to talk a little bit about the core test out at Tates Creek. It’s my understanding it’s more than just the core; it’s the whole customer experience …
BW: Yeah, it clearly is. I think in today’s age we need to be current, and we need to be relevant to our consumers. So there’s probably four or five major elements we looked at. We closed off six windows in the restaurant, two on either side and two up front. That allowed us to do some things from a core standpoint and put some artwork up there. We changed the condiment bar from linear to parallel to each other; That allows better access from the consumers that are sitting up front in the restaurant as well as those that are sitting near the front counter. And when people use the condiment bar now, you’re not sitting in the dining room trying to enjoy your meal while somebody is trying to get a knife or a soda, so it separates those functions. We’ve put in a brand-new service counter and took out our salad cabinet, partly because we’re putting hot chicken on our salads now; we need to do that behind the front counter. So it allowed us to do that so we can service the customer faster and have a bigger area for presentation for business. We also totally upgraded our restrooms to make them feel cleaner. They’re nicer, they’re better and they’re more sanitary. So I think people feel great about that as well.
MS: I’d like to talk just a little bit about your franchise community. Being a former food service executive myself, I always valued the input of the franchise community, because they are in it day to day, and they have much of their actual family estate and net worth tied up in the franchise. And while they aren’t really what you’d call sophisticated consumer research input, its very intuitive just from their day-to-day interactions with customers and their instincts. How do you tap into all that wealth of knowledge of the franchisees and bring it in appropriately to your whole processes at Fazoli’s?
BW: I try to get out to the field and spend time with the franchisees in their backyard and their restaurants to understand what they’re going through in their marketplace. My time has been limited here most recently, but we also have a franchise board of directors that we meet and we discuss the issues. We have created a pretty critical plan that we are following as to how we improve the business, so they have the opportunity to provide input regarding anything that we do at Fazoli’s. So that has been helpful to us. It’s a matter of staying focused, because you can’t do everything all at once when you meet, so we’ve got a pretty focused plan we are working on. They bring a great deal of zest to that and a great deal of knowledge, so that has been helpful too. I think the difficulty always is you’ve got to take the emotion out of it. When you’re day to day in that business, sometimes emotion can override “what are the facts?” There is a propensity to want to put more and more menu items on the menu, and I keep on saying, “Let’s get the core menu right first before we explore other opportunities.” So I think they understand that and agree with it, and so far initially we’ve got some exciting new results with the new menus, so we are pretty pleased.
MS: There is always a push and pull between two elements usually in a food service company. You have the people who are operations-centric, and they want menu simplicity, fewer things and easy, and then you have the sort of marketing-centric people that want to keep adding things and adding variety. And somewhere in there there’s a sweet spot that’s not perfect, but it works Tell us a little bit about more specifics about where you would like to take the growth, the lowest hanging fruit and how you plan on doing that. Like filling in some markets or going into new dream field markets, combination of both, and does Fazoli’s have any international aspirations at some point?
BW: I want to come back to the last question just for a moment. We were talking about the franchisees, then I’ll talk about the growth opportunities. To me it’s all about the balance in whatever you do. I don’t care what business it’s in, it’s about balance. But you have to understand, to create balance over time there’s going to be some imbalances. But at the end of the day, over the long run, you are pretty well balanced, and what gets you there is having a focus, having a common drive about what you are about. And I believe the franchisees and Fazoli’s are getting there, and I feel pretty good about that. We’ve got a plan and we’re focused on what we need to drive (it), and so we all benefit from it. It doesn’t mean to say we’re not open to new ideas or new concepts, but staying focused on what we really need to take care of is going to take us a long way.
As it pertains to new growth, we have just started. And I mean just started looking at either bringing in or using outside resources to really look at every DMA in the country for new store growth, to ascertain what makes Fazoli’s successful in a particular market, to ascertain that good volume estimations. And then go about developing those markets where we have the greatest opportunities and defining what that opportunity is today by mark up. In terms of existing markets, we need to fill out existing markets to be able to get more marketing knowledge, not only to serve more customers — that’s the number one goal — but to be able to drive the revenue necessary to be able to market more effectively in those markets. So we are also in the process and we’re reviewing a lot of this information, looking at some outside companies, so we’re excited about that.
We do have one store internationally right now; it’s in the Philippines. In fact, I have one of my people who is over there as we speak, where our franchisee wants to grow and is excited about growing in the Philippines and would like to grow, in fact, all over Southeast Asia. But I think the concept has a lot of relativity beyond the borders of the continental United States. Clearly the closest border is Canada. The product fits well into the daily dietary habits of most people, whether it’s Asian (or others) — I’ve spent seven years internationally, and Asians eat a lot of noodles. Now it may be a little different type of noodle than Fazoli’s serves, but the makeup of it is somewhat the same. So we are excited about the opportunities, not only here but abroad.
MS: Are you evaluating any unique or innovative uses of technology in your restaurants going forward?
BW: Yeah, we’ve been spending a lot of time around equipment technology about our food. How can we make better food, have better quality food, and how can we do it in a way that allows us to do it faster? We have a need for speed, as I tell everybody at the office. So we’ve been dealing with a number of equipment manufacturers in that arena. We’re pretty well wired up otherwise. There (are) some modifications we need from a software standpoint and from a p.o.s. standpoint that we’re gearing towards, (regarding) how we continue to stay ahead of the curve, if you will, on a going-forward basis. So we’re excited about what we are doing from a technology standpoint.
MS: Great. Any other initiatives that you have underway that you think are important for Fazoli’s fans out there to be excited about and to look for?
BW: Yeah. We’ve got a lot. The new menu that we just rolled out is just a start. We have a plan over the next four quarters that we are working on to not only improve existing products but to evaluate potential new products. So we’re working hard on our sandwich line. We think there is a real opportunity to improve what we have and to add incremental products to that sandwich line, and primarily it will help the ability for our drive thru. We need something that is more portable, that people can eat on the go, and many of our products tend to be more dine-in friendly than products that you can actually eat on the road. We have a lot of products you can take home and eat. So we are working on that. We are working on the core menu, in terms of broadening our pasta base and looking at those things that are relevant to the consumer. And an ongoing basis, as well, we have a number of, if you will, limited time offers, LTOs, that we are reviewing as we talk to see when and if those might play a broader part of the menu.
MS: I know a year or two ago, Fazoli’s implemented a breakfast day part, with a limited breakfast line with pastries, coffee and wireless internet access. What’s the conclusion on that initiative?
BW: I pulled it out of most of the restaurants, for a number of reasons. We needed a broader line of products than what we had to be able to be more customer-relevant, to provide the
customer with what they want. We didn’t market it. We had so many other things going on. So you’ve got all this new news and you’re not telling anybody about it, so as you can imagine, we didn’t do very well with it. We had bigger priorities we needed to focus and concentrate on. So in the bulk of the stores other than interstate stores, we’ve taken it out. We’ll come back probably and review that at some point and time, but right now there is just so much more opportunity for us to concentrate on.
MS: If you could whip out your crystal ball and polish it a little bit and kind of look into it and see where Fazoli’s might be five years from now — What’s your hope, your dream, your vision?
BW: Five years from now, I would hope we would have between 600 and 700 restaurants. Our average unit volume would be significantly higher than it is today. We would have really happy, great people who have made this company very successful, both franchisees and employees who are being rewarded for their efforts with opportunities to grow. I think you will see us really take command of being the number one Italian restaurant in the country. We’d provide great quality food at a real great value. So we are excited about the opportunities that lay ahead of us.
MS: Great! That’s fantastic. I know as a Fazoli’s consumer myself and as well as my teenage son, who is a big fan of your products, we look forward to the expanded menu and expanded locations where we can have more opportunity to dine there. And in conclusion, any concluding remarks that you want to talk about the brand?
BW: No, I’m pretty satisfied with the brand. I say that, but I also always have a happy dissatisfaction with whatever it is I do. So you always have to be self-driven, and there will always be a lot for us to do. But I’m excited about the opportunities that lay ahead of us. Just as a side note, it’s nice coming to Lexington. I’ve driven through Lexington before but never have stayed here. and I must say that more than anything, I’ve truly enjoyed the people here. The people in Lexington are just wonderfully warm and inviting, and that’s been a great opportunity, so I can hardly wait to get the rest of my family here. We’re looking forward to building this company and having a real success story that we can talk about a few years from now.
MS: Great, and not only are people from Lexington warm and friendly, they are also hungry. So they are looking forward to all these new initiatives.
BW: Well, come on over to Fazoli’s, we’ll take care of you.
MS: Well, Bob, thank you so much for your time today. We really appreciate it at Business Lexington and learning about the exciting things going on at Fazoli’s. And Fazoli’s is an important part of the Lexington business community and also a part of the national food service community, so we are very proud to have Fazoli’s in our town and very glad to have you as part of our business community.
BW: Well, thank you so much. I appreciate it, Mark.