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January 2004

By Janice Cha
SPECIAL REPORT: One Kitchen, Two (+) Brands, Four Walls

Equipment strategies evolve as chains perfect multiconcept operations.

If you’ve thought about combining brands under one roof, we know why. Creating combos or trombos—units of two or three brands—helps maximize profit per square foot and drive business during off-peak hours. And if adding a second concept to an underperforming store boosts sales, you can turn a sluggish-sales location into a winner.

But you’ve got to look before you leap. And look a long time. From the back-of-house equipment perspective, multibranding requires scrupulous attention to details for each of the brands.

“Conceptually, multibranding makes all the sense in the world,” says Jeff Rosenfeld, managing partner for Kessev Finance, a franchise finance advisory firm in Minneapolis.

“But when you go to do it, there are so many moving parts, that unless both concepts belong to the same company, it becomes very hard work. The devil really is in the details.”

To date, it’s been mostly large chain players who’ve multibranded their kitchens, and there’s lessons to be learned from their experience. They’ve suffered through trial and error, worked with manufacturers to perfect equipment, and charted new territory with “brand blurring” and “brand extension.”

When Taco, Pizza And Chicken Worlds Collide
Though multibranding experiments have been found around the country for years, it took a powerhouse such as Yum! Brands to realize the idea’s potential and roll out units nationwide. Multis became a key growth strategy in 1997. Today, the Louisville, Ky., company says that updating single brands into two-in-one outlets can result in 30% to 40% sales increases, compared to increases of 5% to 7% when a single-concept stores is renovated.

The five brands in its stable—A&W, KFC, Long John Silver’s, Pizza Hut and Taco Bell—make for plenty of combinations. Today Yum! operates 2,200 multibranded sites worldwide, and they generate $2 billion in sales. More than 2,000 of those multi sites are in the United States, a figure that represents 11% of its domestic system. The company plans for 6,000 domestic multis by 2007, and sees potential for more than 13,000 U.S. multis.

Following years of evolution, the latest permutation is a KFC/Long John Silver’s unit that will serve as a prototype for new multis. Terry Davenport, Yum! senior v.p. for concept design and multibranding, outlines the building’s overall goals as “balance and symmetry.” Behind the scenes, an integrated production line allows drive-through servers and counter servers to assemble chicken and fish orders from either side.

Outside, setup is streamlined. The prototype exterior is a two-towered building shell that comes with a “kit of parts” unique to each brand. Add red-striped awnings and a striped, peaked cap and you get a KFC, add a checked tower cap and a neon-lighted fish and voila, a Long John Silver’s.

This design formula also boosts brand identity with logos and décor that keep elements separate while they share a main entrance. Inside, both brands get equal play. Though customers order from a central counter, the dining area is decorated with KFC murals on one side, LJS murals on the other.

Allied Clocks New Ground
Testing new ground in the multibrand arena, Allied Domecq gave its Dunkin’ Donuts/Baskin-Robbins/Togo’s trombo yet another tweak in November with the debut of a brand-blurring prototype. Taking the opposite approach of Yum!, which broadcasts brands at top visual volume, the All Day café soft-pedals the three concepts in order to tout the store’s round-the-clock offerings and “fun, convenient” setting. The building exterior features a clock face that combines all three brand logos.

Measuring 2,300 sq. ft. and seating about 30, the prototype in Burbank, Ill., is slightly trimmer than typical Dunkin’/Baskin/Togo’s trombos.

As in other trombos, most workstations serve more than one brand. Employees use the same ovens to bake Dunkin’ Donuts muffins and scones as well as Togo’s bread products. Toasters and workstations turn out both breakfast and lunch sandwiches. Cashier stations rely on one POS system. Storage, hand-off counters, phone-order stations, self-serve beverages, storage, refrigeration and holding cabinets are all shared.

But Allied’s real multi push continues on the Dunkin’/Baskin front, where retrofitting a Dunkin’ Donuts with the ice cream component boosts unit sales anywhere from 10% to 20%. Equipment costs to add a Baskin to an existing Dunkin’ runs about $40,000, for dipping cabinets, cake display, sundae center and menu boards. (Cost to equip a whole new store with both brands runs $200,000.)

Overlap on the combo equipment front is slim: the back of house shares the 3-compartment sink, walk-in freezer and dry goods storage only.

Back Yard, Taco Bell Tap Efficiencies
Generating top efficiency from a production line shared by two different concepts requires equipment compromises, as Back Yard Burgers and Taco Bell discovered two years ago. At that time, the Memphis, Tenn., burger chain granted Yum! the right to use its trademarks in the operation of up to 10 co-branded restaurants, with a future option for up to 500.

Today eight Taco Bell/Back Yard Burgers restaurants are operating in Fort Wayne, Ind.; Louisville, Ky., and St. Louis. Taco Bell serves as host brand to Back Yard, though you would not know it from the outside: Exterior signage on the two-towered structure gives both equal billing.

The bulk of the kitchen integration was handled by Yum!’s multibrand engineers. “They came in, spent time in our restaurants, took our specs and plans and all the interior details of the kitchen, then took the Taco Bell footprint and line and began adding our [equipment] components,” says Nick Griffith, executive v.p. for Back Yard Burgers. “They would send us the designs and ask for feedback—we basically served as consultants.”

Many of the tweaks that let Back Yard co-exist with Taco Bell are transparent to customers and employees, yet crucial for smooth flow of people and product. Yum!’s multibrand engineering team attended to such details as ideal placement for the condiment unit, the toaster and the product-holding unit.

The biggest changes took place in the production line. Adding an automated chain broiler, and spec’ing different but similar equipment, allow the two concepts to combine burger and taco assembly into a single smooth operation.

The automated chain broiler—itself a joint creative effort between the manufacturer, Yum! multibrand engineers and Back Yard Burgers—is a “high tech cooking apparatus that lets you stack four frozen patties on the feeder, which takes them through the cooking chamber and places the cooked product into a temperature-controlled holding pan,” Griffith explains. The automatic broiler, with its 120-patties-an-hour capacity, replaces an underfired broiler and a skilled worker. “It gives you a consistent product, with no judgment calls needed,” Griffith says. So successful is the automated broiler that Back Yard is making it available to franchisees.

Meshing the line also required a bit of give and take, equipment-wise. For example, Taco Bell spec’d a steam-driven thermalizer, while BYB operators use an electric/ceramic unit that produces heat up to 800&Mac251;F in seconds. “They asked us if we could work with the steam unit,” Griffith recalls. “We brought one into the test kitchen, assessed it thoroughly, and decided it’d work.”

Another equipment tweak called for manufacturer input, as well. The BYB equipment list spec’s a new protein holding cabinet—an eight-drawer (two-high, four-wide) unit that keeps product from drying out. Yum! multibrand kitchen designers required a lower-profile holder, so the maker obliged with a one-high, four-wide model. The refrigerated make-line was fine-tuned with narrower pans, to allow burger toppings to share space with taco fixings.

The BYB menu was also downsized for smoother flow at the dual operation, from 10 to six combo meals to match Taco Bell’s highly promoted combos.

“They didn’t want to shock guests [with too many choices] and cause delays in line times,” Griffith says. “This way, they can quickly distinguish between the two brands, scan the photos and make a choice.”

Nathan’s: Famous For Menu Extensions
“And now for something completely different,” as Monty Python would say. The multibrand formula at Nathan’s Famous takes a simpler, but effective spin. Instead of blasting the dual-brand message through building signage, décor and other trade dress, the Westbury, N.Y., chain sidesteps the issue by co-branding its menus under a host brand.

Nathan’s Famous operates more than 350 quick-service restaurants. The company’s other brands include the Miami Subs sandwich chain and Kenny Rogers Roasters rotisserie chicken restaurants. Nathan’s also owns co-branding rights to sell fish-and-chips products from Arthur Treacher’s, owned by TruFoods.

Although the chain has been co-branding since 1990 (partnering with TCBY, Blimpie’s and Pizza Hut, to name a few), the menu co-branding program really took off in 2000. Today, nearly half its units are co-branded; of those, 95% use the menu branding strategy.

“Co-branding items in a menu category, such as Kenny Rogers Express chicken or Arthur Treacher’s fish, adds credibility to the items,” says Don Schedler, Nathan’s v.p. of development, architect and construction. “And because you end up sharing a lot of equipment, franchisees have a tremendous advantage when they can get two or three brands for their initial investment.”

How much advantage? “The fish category could go from 3% of total food sales to about 12% by adding the Arthur Treacher’s name,” Schedler says. “And although Nathan’s has always sold chicken, we saw those sales move from 6% to 10% of total sales when we added the Kenny Rogers name.”

Equipment-wise, the menu-strategy requires just as much planning and adjustments as any other co-branded unit. Adding Arthur Treacher’s, for example, required smaller fish fryers in order to fit them under the hood. The hot dog grill was reduced from 6’ width to about 4’, and the toppings table was reconfigured to include smaller, more efficient holding units.

At the same time, the chain tested various pre-prepped potato products in order to eliminate the blanching step from production—a move that also freed up valuable hood space. Hot toppings and holding cabinets were moved to an under-counter spot, and shared menu products—Nathan’s French fries and coleslaw are served with all brands—help streamline production.

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