In regards to menu changes, Boston’s goal remains to stay at 24 percent food cost. How do you balance premium items and stay at that number? How successful has the “dough-centric” menu been, especially from franchise partners’ perspectives?
To help achieve a highly competitive food cost, we ensure a healthy mix of high and low cost food items and strive to more prominently display the items with higher profit margins.
By leveraging existing ingredients, we were able to reduce single use items and create a more efficient kitchen, which is always a win. We’ve been running multiple LTOs and printing our menu twice per year, allowing us to leverage commodities through menu engineering and timely innovation.
Smart purchasing has allowed us to make changes to raw materials, with a standard of “as good or better,” but at the same time are lower cost. We did this by replacing “Pizza Cheese” with whole milk mozzarella at the same cost. We also added a higher-quality fresh ground beef patty that required no hand rolling. Our franchise partners have been vocal with their appreciation of our commitment to innovation while being mindful of their costs.
Talk about the balance between innovation and satisfying loyal guests, with everything from the Beyond Burger to Buffalo Cauliflower starters, new drinks, and an enhanced Appy Hour. What were guests telling Boston’s they wanted? And how did the chain respond, while staying on brand?
We track rate-of-sale (opportunities to sell versus quantity of items sold) of each item on our menu. Some items don’t move as well from a velocity perspective, but we know we have those loyalists who visit Boston’s for one specific item. Depending on the guest’s spending habits and consistency, we may or may not keep that item.
We test for execution and interest, and then make a decision. If we make a mistake, we change it. At the end of the day, we have the courage to try new things and we’re quick to evolve to serve the wants of the guest. We embrace the nimble menu strategy while making a continuous effort in how to improve them. Between being attentive to our franchise partners, listening to the guests, and the collaborative testing process, I’d say we have a high-performing batting average.
With growth, how big is the whitespace for Boston’s?
In Canada we have 400 restaurants in a country with about 32 million people. We are working on a smaller prototype, which will offer a lower franchise investment and allow us to consider new real estate options like smaller second generation, endcap, and non-traditional spaces. We can have several hundred restaurants in the United States. We are working to fill in the markets where we currently have a presence and then grow into additional markets. Our priority is to increase our regional density.
What’s Boston’s answer to staying agile with real estate, looking into locations like old casual-dining conversions to non-traditional?
With the development of a smaller prototype, we’re researching how different spaces allow for flexibility, while maintaining our approachability for families and sports bar enthusiasts. Second generation spaces can be great opportunities.
We are in discussions with a few airports and see endcaps and regional strip centers as strong investment spots too. We’re establishing relationships with developers who are interested in teaming up to attract the right brands. In some cases, they will build and deliver the shell of the building, so the capital requirement is significantly lower to get the restaurants up and running.
The sports bar category as a whole continues to shift. What are some ways Boston’s is differentiating itself? How do you remain family friendly but also a great place to be loud and watch the game?
Our entire positioning is based off of being 'America’s Sports Restaurant.' To be a passionate fan in the dining room is completely acceptable and adds to the atmosphere we welcome. We even have playing cards for kids that we hand out to families to create conversation and excitement at each table while they wait for their meal.
We do everything through a sports lens, we serve our full menu (featuring made-from-scratch food and plenty of shareable items), and we have local craft beer and handmade cocktails to enjoy. We naturally cater to families without alienating our sports enthusiast who come by for a beer and some pizza.
Other ways we are looking to differentiate, includes streaming ChiveTV in our restaurants, looking to show kid’s TV during certain dayparts, and testing some late-night activities that are family-friendly.
How has Boston’s evolved as consumers watching preferences shift? In other terms, how do you get customers off the couch and into Boston’s?
We have to focus on occasion-based dining, events with calls-to-action, and be the best in service to ensure our gourmet food is worthy of experiencing on-site.
One way we do this is by providing that local community spot created to cheer and celebrate your favorite sports team or enjoy conversation with coworkers, friends, and family. We’re a reasonably priced restaurant that can also cater to larger parties, has flexible seating, a Team Room in many of our new locations, and space to host large gatherings. Many competitors limit themselves to booths and static seating, which is not flexible or dynamic for growing families and large parties.
What are some of the biggest labor challenges facing Boston’s right now, and how is the restaurant solving them?
Labor is a significant issue across the country. With unemployment as low as it is, finding people is tough, which is causing wage pressure across the nation. On top of that, many states are increasing minimum wage, which makes it difficult on our Franchise Partners. No one pays minimum wage in the Heart of the House (HOH), but the mandated increases cause wage compression, putting pressure on the owners to increase wages. Servers get tips, so they make way more than minimum wage, but the mandated increase is a significant cost.
To help combat some of it, we are looking to simplify recipes and increase efficiency in the HOH. We are working on a wage matrix to give guidance to franchise partners on the number of suggested labor hours based on sales and guest counts. We’ve provided benchmarks for each restaurant for sales to help them efficiently plan labor.
Additionally, we are testing affordable handheld ordering devices, which have encrypted payment that will allow servers to serve more guests, while improving the guest experience. We have also updated our website and connected it with online ordering, and integrating with our POS system. This decreases the hours people spend handling take out. All of this will help Franchise Partners manage labor.