November 2007
HIGH STEAKS
By: Janice Cha

A new prototype for Montana Mike's is taking this mountain-lodge steakhouse to higher ground and increased revenues.

In western Kansas, where oil pumps, cattle and wheat fields outnumber good restaurants by, oh, about a million to one, the arrival of a Montana Mike's Steakhouse is a cause for celebration.

The majority of Montana Mike's 26 restaurants are located in such prairie-flat, big-sky states as Kansas, Oklahoma and Texas, which makes the concept's hunting lodge setting and décor a breath of fresh (mountain) air.

More importantly, Montana Mike's—a division of Hutchinson, Kan.-based Stockade Cos., which also owns Sirloin Stockade and Coyote Canyon—has found great success with a free-standing prototype that's expected to hike up growth rates for the next decade and increase units to 50 within five years.

Now the prototype costs more to build up front—$1 million, vs. the $500,000 to $700,000 for the usual conversions from pre-existing restaurants. But the design has more than proven itself on the numbers front. Since its first roll-out in Owensboro, Ky., late in 2005, Montana Mike's prototype stores have grossed nearly $3 million in sales on average. By contrast, the top 20% of the chain's best-performing converted restaurants bring in $2.4 million.

The sales jump comes as no surprise to the Montana Mike's team. "The new design lets us execute our full menu properly so we can handle higher customer counts and give guests a better overall experience," says Madison Jobe, franchise development director.

And there's also the "wow" factor of new builds vs. conversions. "If you can [build on] a bare piece of dirt, you have the opportunity to generate a lot more interest when it finally opens than when you're converting a building that used to be [another] restaurant," Jobe adds. "That initial excitement translates to a higher rate of visits and repeat visits.'"

Prairie Crossing
Before we head into the kitchen, let's look at the Montana Mike's growth strategy and how the prototype figures in. For the first nine years (and 17 stores), the company has focused mainly on converting restaurants in second- and third-tier towns such as Colby, Kan., population 5,500, or Hays, Kan., population 21,000.

"Those smaller markets have been under-served or not served at all by steakhouses," Jobe says. "In a small town, even a conversion can stand out as the best restaurant in the area."

A few years back, however, the Mike's team began designing a free-standing prototype that would let the company "take advantage of new markets and find new franchise partners, as many prefer to build from the ground up," Jobe says.

Conversions certainly kept development costs down, but the lack of store-to-store continuity proved a challenge for operations and training. "No two stores and no two kitchen lines were alike," Jobe says.

Two main goals emerged early on in creating the prototype. The first was to standardize operations and bring more efficiency to the kitchen line. The second was to match the kitchen to the menu, which had grown bigger and more diverse with each passing year.

"Some of the early Mike's, with half the cookline of the prototype, have a hard time meeting throughput on even a pared-down version of the current menu," Jobe says.

Peak Kitchen Performance
The design team was led by Montana Mike's CEO Tom Ford, who happens to also be the company's majority owner and a more than 20-year Stockade Cos. franchisee. Architectural and engineering firm Mann & Co., Hutchinson, Kan., handled the actual design work and kitchen layout.

"Before the prototype, our biggest challenge in expanding the chain with new franchisees lay in how to best run the kitchen," Jobe says. "The procedure of cooking a steak might be the same, but if the meat then has to be walked six feet to the right for plating, that can throw off the rhythm. Training staff was also a challenge, since we had to figure out how the lines would work, and each would be different than the previous 10."

The simple layout of the 2,800-sq.-ft. prototype kitchen—essentially three straight-line work areas with the manager's office at one end—came from a need to monitor kitchen action.

"From a management and leadership capacity, and also training and keeping an eye on multiple areas at once, the straight-line view down the prep area, cookline and 'servers alley' lets the manager watch and be involved, but still get work done in the office," says COO Terry Harstad.

The other factor determining equipment layout sprang from the flow of product. Raw product moves from the ends toward the middle before ending up at the long expeditor's table.

"It' s all about how to correct the problems we encountered in the retrofits," Harstad says. "For example, in the prep area, the sinks and counters are across from the walk-ins, saving steps. You start putting plates where you're going to store them. You clean the baked potatoes near where you'll be cooking them. You put the oven dedicated to baking rolls right on the cookline so no one has to fetch the rolls from the prep area. Saving a few steps here or there may not seem like much, but if it's you that's taking the steps, it adds up fast."

Starting on the left side of the cookline moving toward the expeditor table, the equipment line-up includes a cook-hold oven (used for holding baked potatoes, mashed potatoes, green beans, gravies and sauces), a double-decker broiler/griddle (for burgers, chicken breasts, bacon and light sautéing), a charbroiler (handling the bigger cuts of meat), a work table and a gas griddle (used for toasting buns and garlic bread).

Only a few steps away, a short reach across the aisle, is a reach-in refrigerator holding meat products destined for the nearby bank of grills and broilers.

From the right of the cookline, again moving in toward the expeditor table, you've got the breading stations supplying the fryers and a pair of hot plates.

The fryer set-up is one of the efficiencies that the conversions lack. Most of Mike's fried products, from catfish and chicken tenders to fresh-cut onion rings, are hand-breaded to order. In conversion units, lack of space meant that that the breading station had to be placed around the corner in the prep area, staffed by one person at the fryer and another handling breading. Now one person can do both jobs.

Opposite the cookline you'll find the cold-holding units, prep tables, hot wells and the pass-through area, topped by infrared strip heaters. Just-cooked product can be plated and garnished at the expeditor table before being handed off to servers. At the far end of this row, a dough proofer and oven sit next to each other, making the Montana Mike's signature oversized dinner rolls—again, conveniently close to the cookline action rather than back in the prep area, as is often the case in conversion units.

The prep area along the back wall includes a convection oven, smoker oven, boilerless steamer, dough mixer, dough divider, vegetable cutter, salad dryer and vegetable-washing sinks.

Conveniently close to the prep-area are the walk-in coolers and pair of chilled rooms, one for meat cutting, the other for storage and staging of meat products.

What do workers think of this more efficient kitchen? "The staff at new stores takes it all for granted, but trainers from the older stores appreciate the fewer steps required," Harstad says. "It's easier on the staff and better for customers."

Entering High Country
Guests may be oblivious to Montana Mike's finely honed kitchen, but they definitely know they've entered "mountain country" when they step through the front door and are welcomed by a greeter standing at the front porch of a high-country log cabin porch.

The Montana Mike's signature cabin porch features a cedar shake roof and corrugated tin walls, a rough-hewn stone wall (serving as a counter), a (faux) cabin door and window plus assorted camping gear to complete the lodge look. The dining room walls and ceiling are similarly decked out, hung with canoes, rifles, snow shoes, mounted animal heads and other lodge paraphernalia.

Bar Necessities
Off to the right (or left, depending on the floorplan) is a full-service bar found only in the proto stores.

"None of the early Mike's conversions included bars, even though they listed beer and wine on the menu," Jobe says. "We've since learned that the full-service bar is a key element, not so much for overall sales, but more for the message it conveys," Jobe adds. "People planning to order some of our mid-price items expect to enjoy some wine or beer with their dinners. If there's no bar in sight, they could get the wrong impression from the start, thinking the place is too family oriented."

The bar's placement on the far right side of the dining area also helps streamline the traffic flow from kitchen to tables, which gives bar patrons more privacy. The placement also means that the cabin porch/hostess stand and a mural of the Montana Rockies become the restaurant's focal point when you first step inside.

Lighting The Way
The prototype's biggest front-of-house change—and one that's gradually being retrofitted to older units—is the lighting package. Choosing standard, off-the-shelf fixtures, the Montana Mike's team settled on a line of products from a Bellingham, Wash., firm that specializes in nature-inspired lighting for home use.

The lighting package is pure rustic mountain lodge, featuring lights that combine sheets of powder-coated steel cut into forest motifs (pine trees, mountains, moose and deer, for example) paired with amber-colored bulbs or glass. The light cast by the fixtures is warm and inviting and offers a huge improvement over the hodge-podge of recessed fluorescents or featureless hanging pendent lamps that still remain in some of the converted units.

Scouting Ahead
If you're living in one of those smaller towns we mentioned, chances are you may well be seeing a Montana Mike's opening within driving distance in the near future.

Mike's opened four stores in '07 (three protos, one conversion). Next year, the company will open six or seven restaurants, including units in Georgetown, Texas, and Ponca City, Okla., plus two sites in Indiana, one in Kentucky and one more in Texas.

"Our goal is to double to 50 units in five years," Jobe says. They're definitely hiking the right path.