(Ambrosio’s note: At age 53, Sizzler, the fast casual steakhouse franchise that once boasted almost 700 restaurants and was worth more than a billion dollars, is staging a comeback.
“The Next Generation of Sizzler” boasts a refreshed restaurant prototype with vibrant lighting, brighter colors, contemporary furniture, interactive ordering kiosks and guest directed dining. Their menu overhaul has made way for fresh seafood and ground beef programs, hand-cut steaks and more.
Sizzler USA, a US-based management group led by CEO Kerry Kramp, acquired the company from Australia’s Pacific Equity Partners this summer, thus injecting new energy with 100 percent focus on domestic performance.
With Sizzler experiencing three years of consecutive same-store sales increases, plans are underway to add 40 new restaurants in the next five years in such markets as Chicago, Denver and St. Louis, Mo.
And while the chain is down to just 176 U.S. restaurants, there are many reasons to be optimistic that we’ll be hearing a lot more from Sizzler in the months and years ahead.)
Franchise Chatter (FC): During its heyday, Sizzler had as many as 700 restaurants, but has now shrunk to just 176 outlets. Can you explain what happened to Sizzler?
Kerry Kramp (KK): Sizzler USA, which started in 1958, has enjoyed wonderful growth and development over the years. However, during the mid-90’s, when the buffet business was just getting launched, Sizzler looked for ways to compete and strayed from their tried and true formula of “steak, seafood, and salad bar.” A subsequent acquisition of Rustler Steakhouse during this time also distracted operations and caused Sizzler to lose its focus and relevance.
The company filed for Chapter 11 in 1996 after shuttering a great number of units across the country. Over the past three years, locations that were not viable and whose leases were expiring have closed. Some franchisees who were unable to keep up with the times have also closed down their restaurants, leaving a very sound system with viable franchisees.
We’ve recently launched a plan to expand Sizzler’s presence in California, as well as reintroduce the brand — with the help of new franchisees — in some very viable markets (Denver, Chicago, Minneapolis, Kansas City, St. Louis) where Sizzler continues to have a loyal following waiting for us to reenter the marketplace.
FC: Can you share with us the story behind your decision to acquire Sizzler from Australia’s Pacific Equity Partners?
KK: Together with an incredibly talented group of people, I joined up with the existing talent within Sizzler USA to turn the company around and to acquire Sizzler USA from Australia’s Pacific Equity Partners and Collins Food Management. Three years were spent analyzing the relevant history of the concept while at the same time revamping every aspect of the business to better connect with today’s consumers.
Working with some very talented and committed franchisees, every element of the business was reviewed and renewed to create the “Next Generation of Sizzler,” combining the best of the past with a new look and feel, a healthier menu and reasonable prices.
FC: What is your specific strategy for reviving the brand and making it relevant to consumers today?
KK: We have two main strategies. First is to offer food that is so compelling, flavorful, and fresh that our guests will be our greatest ambassadors through word of mouth. And second is to create a look and feel that complements how great our food tastes.
KK: The #1 differentiator for Sizzler is the very concept itself. It is truly unique in having both an elaborate grill menu and an “all you care to eat,” made from scratch, freshly prepared soup, appetizer, salad, entrée, and dessert bar. Our guests can complement their meal with items from these bars or make these bars their whole meal at very reasonable prices.
FC: Can you describe the ideal franchisee for a Sizzler restaurant?
KK: An ideal franchisee would be someone who shares our passion for the Sizzler brand and history, and is capable of operational excellence to ensure each guest has a great dining experience, every time. The obvious elements also need to be in place: capital to grow and develop the business, and an infrastructure that can ensure a great dining experience.
FC: What is your success model for building strong relationships with your franchisees?
KK: There are lots of dynamics that go into any relationship, especially a relationship where people are putting their capital, time, attention, and passion into “your” brand. It’s an honor and at the same time an obligation to effectively read and analyze the business, while providing leadership and guidance into the future.
An ability to listen, a willingness to partner, and an openness to applying best practices are all components that make for a great franchisor-franchisee relationship.
KK: The ideal neighborhood for Sizzler would have a combination of office and retail to provide adequate guests for lunch, and then rooftops and entertainment venues for dinner. We currently run approximately 50/50 lunch to dinner, so we need a broad blend of available guests in order to be most effective.
We’re making gains in attracting younger guests with our revamped menu and remodels, and we continue to appeal to the value conscious, seniors, young professionals, and families.
FC: What are some of the things you are doing to help your franchisees become profitable?
KK: We assist our franchisees in cultivating a productive work force, using recipe compliance to ensure food costs are in line, and purchasing well to ensure the availability of the highest quality ingredients at the best prices.
We actively engage with each franchisee through our Business Partners who have responsibility for certain company restaurants as well as select franchised restaurants. This exposure to both company and franchised locations gives them practical and actionable experience that can be shared with franchisees. They also have the ability to use “their company restaurants” to help in the training and development of people or systems within the franchise community, if needed.
KK: Our goals for Sizzler revolve around two basic things. First is to convince guests who have not experienced Sizzler in many years — or have not ever tried Sizzler — to come in and give us a try. We believe they will be very impressed with our attention to detail, the quality of our menu items, and the degree of hospitality that every employee in our restaurants provides.
Second, we’d like to do our part in helping put people back to work. We intend to expand the Sizzler business to more locations to provide communities with a great and affordable place to bring their families, while at the same time creating good jobs for people who want to be in the service industry.
FC: What advice can you give prospective franchisees on how to evaluate the overwhelming number of franchise opportunities available to them?
KK: My advice would be to find an opportunity that you can understand and be proud of. Look for a franchise that has the financial potential to sustain your goals and objectives, and with honest and capable people running it. You should find something that you can truly commit yourself to.
FC: Finally, what advice can you offer new franchisees on how to increase their odds for success in the restaurant business?
KK: Ι believe that if you provide a valuable service that has relevance to people, then you can be successful. You should think deeply about every decision that affects the guests that you serve. If they feel that you have their best interest at heart, you will reap the rewards that you deserve.