The restaurant sector has been among the hardest hit from the Covid crisis, to be sure. Nevertheless, outlets that had strong takeout and delivery channels already in place were best positioned to weather the storm -- or do better than weather it.
Casual Italian dining brand Fazoli’s last month reported record-breaking business across many of its 200+ outlets. The company CEO Carl Howard told QSR Magazine that he expected 80% of Fazoli’s to reach record sales this year.
The secret may be that the brand was quick to recognize that off-premise is not just a channel but an experience just as important as dining in. The waiting staff took to the drive-through line taking orders with tablets, handing out Fazoli’s signature breadsticks, delivering to curbside. The mobile app allowed a direct path from customer to the POS at the local outlet.
We reconnected with CMO Jodie Conrad, who was featured at our Brand Insider Summit-QSR last February who tells us how this pandemic is making convenience a core value proposition for all quick dining brands going forward. Before leading Fazoli’s marketing effort, Conrad had marketing roles at Wendy's, Donatos Pizza and Coca Cola. You can listen to the entire podcast here.
Interview has been lightly edited.
MediaPost: In what key ways did Fazoli’s experience the COVID crisis?
Jodie Conrad: We're in the Midwest, the Southeast. It hit us after the global pandemic was proclaimed and a lot of stay-at-home orders to place in mid-March, and it was devastating. Our restaurants were down 30%-40% in some cases, and we had no idea how long that was going to last. So we were able to stay open throughout because of our off-premise business, both drive-through as well as online channels of third-party delivery and online ordering for takeout.
So we stayed open, but we were down considerably and really just put some automatic measures in place around our procedures with our crew on masks and gloves and cleaning to make sure that we were keeping the best protocol we possibly could for up until our dining rooms can reopen and after they reopened.
May was the first month that the business really turned around. I think, as people got through all the groceries they'd stockpiled at home, couldn't stand cooking at home anymore, felt at least comfortable going out to go through a drive-through and pick up something for dinner.
And I think our food also really helped us, because there is something just really comforting about pasta and bread sticks and providing comfort food at a time when people were really looking for that.
MP: How were you communicating with your franchisees throughout all this? What sort of coordination did HQ have with different regions?
Conrad: Our CEO really took the lead through this and sent a lot of messages to the franchisees, that we were going to help them. We provided some relief for contributions as well as royalty relief for some of those initial time periods. And we also wanted to have a uniform cleaning and sanitation policy.
I think we were a little more aggressive from a marketing standpoint than some of the franchisees in terms of knowing what was going on with the unemployment driven by the pandemic. We did a lot of offers and communication through our mobile app, which has become an important tool for us. And so we were communicating with franchisees how they could also do more with mobile, as well as reaching out to their customers through email.
MP: How did you change your overall media spend?
Conrad: We did shut things down for a while, like most folks. We had some direct mail that we couldn't cancel that happened in the beginning of May. And then from there, we really didn't do anything until late May. And a lot of our franchisees, to be honest, really didn't pick up their marketing activities outside the restaurant until late July.
MP: But some of your outlets reported record year-over-year sales. You were optimizing the off-premise experience in specific ways.
Conrad: There are probably three things that were key there. One is, we were overt in communicating to our customers what we were doing to keep our restaurants clean, to keep our employees safe, and to keep consumers safe as they visited us.
Secondly, we provided more discounts than we typically do. With unemployment being what it is, money was tight. So we were more aggressive on the value side then we've been for a while.
Third, one way we provided value was really focusing on some different family meals. A successful tactic for us was a $19.99 super family meal that had two family-size pastas, a whole pizza, 16 breadsticks included, and a gallon of ice tea or lemonade.
MP: You came to understand early on that things like drive-through convenience and wait times were a real key part to this, too.
Conrad: We really think that what has led to both being able to survive the roughest times and then thrive is that we had a lot of those off premise platforms in place before this all happened. Since the pandemic, more than half of our business is now going through the drive-through. So we added some things to make that a better experience. With much more volume going through the drive-through, [we had] folks with tablets out taking orders further down the line, so we could improve service times. We're not as fast as burgers and fries, so we had to take some steps to make it faster so people wouldn't feel intimidated pulling into a longer line.
We also redirected some of the labor in our dining room again out to the drive-through to make that a better experience, like delivering breadsticks to people as they were waiting in the drive-through line.
MP: What have been the most important channels for communicating to consumers?
Conrad: We have found communicating through our mobile app, both on discounts and incentives, as well as communicating to that group through email about some of the cleaning and sanitation procedures we have in place, have been really important. And we've also found a greater than typical response from our direct mail. I think a lot of people are looking for value and coupons, because they're feeding the whole family all throughout the week now.
MP: As things start returning in various parts of the country, what's been the consumer response?
Conrad: I think, as we talk today, all of our dining rooms are reopened, at least at some capacity level. We provided tools for all franchisees to use to help execute that, to mark social distancing, to close off tables, so that we can have social distancing with our guests in the dining room.
Our dining-room business continues to be down from where it was before the pandemic. Our business had been shifting more and more off-premise. But we still had, before COVID happened, about 40% of our sales come through dine-in business -- which, based on my experience certainly at the Donatos but even at Wendy's, is a much higher percentage.
It's still down pretty considerably -- probably around 30% from where it was before the pandemic. But we're fortunate that we've been able to make that up through delivery, drive-through and online ordering.
MP: Have you been surprised at all, or have you learned anything about what role Fazoli’s plays in people's lives?
Conrad: It’s interesting. There aren't a lot of quick-service Italian concepts, which is sort of like a blessing and a curse. We're also not in the “I'm hungry for a burger” list. We have people who visit us less frequently.
But some people who didn't visit us as often have kind of rediscovered us during this time period, because we were able to offer a viable alternative. They recognize the value that we could provide during this time for a lot of those folks who really needed a good deal to be able to afford to feed their family. So I think it's really strengthened our relationships with our guests, and it's been pretty amazing to see.
MP: I'm guessing that the mobile app use that we had discussed last time you were with us skyrocketed?
Conrad: It has! Along with delivery. Those two have had our highest percentage growth and sales.
The convenience, that's something that people just need right now. And we've been able to add more functionality there. Where before you could only order to pick up in restaurant, now you can choose to pick it up through the drive-through.
If you don't want to get out of the car, if you're uncomfortable for safety reasons, or if you're just a parent with young kids in the back, you can pick it up through the drive-through. We’ve added curbside pickup. We didn’t necessarily need it in the past, but now it’s one of those things that's expected. And you can also choose delivery through there as well, so you can place the order not only through Doordash, but you can order on the Fazoli’s app, or at fazoli.com.
MP: What change have you seen occur over the last four or five months that you think is going to be a permanent change?
Conrad: I think the convenience and access features that became something that you absolutely just had to have to survive through COVID, is going to linger. Again, that was already starting before all of this happened in terms of people just wanting to be able to order and get their food whenever and however they want. And I don't think that's ever going away.
MP: I know that as a user, I'm persistently frustrated at the online ordering experience for my local favorite restaurants. I was staggered that there are these platforms that still make it so hard just to enter your credit card. Certainly the difficulty factor is in our minds when we're making those choices.
Conrad: I completely agree. And I think having been in this industry for a long time, when we thought about the consumer experience, we really focus more on when people were dining in with us and what kind of experience they had.
But there's a whole experience to the off-premise as well. Whether it's how easy it is to place your order when you're using an app or going online, or how accurate and quickly you can get through a drive-through.
All of those things are just as important to the experience. When we first launched our mobile app, we weren't at the time partnered with Olo, and our existing infrastructure didn't allow for a great mobile ordering or online ordering experience. So when we changed that last fall before all of this happened and just made it easier, we saw organic growth, just because it was a better experience. People just expect it now. They don't have the patience if we can't provide it for them.