Unlike the quick-service iteration, the 2.0 version has blown the doors off sales wise. The first opened in December 2016 and there are now units in Harrisburg and Burlington, North Carolina. The Harrisburg store, which has operated a full calendar year, has been able to sustain, if not grow, East Coast Wings’ sales in a box 1,000 square feet smaller.
“Think about that win for a location that can develop cheaper, operate with less expense, modeling, but yet have the same revenue sustainment that in itself drives larger EBITDA, right?” Ballas says.
Aside from size, the 2.0 design has a reworked interior and exterior for cost effective development. It’s rustic and industrial with a smaller footprint that reduces development costs by about 20 percent.
And there’s more to this shift than the physical. East Coast Wings has been a technological innovator for years, especially in the loyalty space. The chain launched its program in 2011—far earlier than many casual dining companies. The goal was to not only encourage repeat visits, but to build its customer database, boost check average, and get to know the brand’s diners.
About four years ago, East Coast turned the mirror around. The company sought a partner and looked for a direct way to reach its base.
“How do I get you away from the very bland, traditional, fill-in-the-blank comment cards, and be a little bit innovative in technology?” Ballas says. “Our solution was we would attach that platform to a loyalty program. I will tell you if you go back and look four or five years ago, casual dining was not talking loyalty programing when we were. We were ahead of the curve, as small as we are, with our customer-based loyalty program”
East Coast also decided it didn’t want its mobile and online ordering to be a borrowed, “black-label platform.” In other terms, East Coast wanted a system that it owned. The issue there, and a reason many brands take the other route, is that it comes with a hefty cost.
East Coast linked up with Paytronix for its loyalty program, Buxton for data analysis, and Olo for online ordering. All names often associated with the biggest punchers on the market. The chain is also partnering with FreedomPay for pay-at-the-table, ensuring secure transactions and decreased liability for partners.
“[These were platforms] that most franchise systems, or any chain system, casual dining at our level couldn’t afford to even use. So we implemented a lot of strategy early in 2016 because last year was the first year in the history of the brand that we felt a little tightness. And we had a couple of months in some negative same-store sales,” Ballas says.
East Coast needed to foot the bill to flip the results.
“We implemented all these different levels of platforms into a marketing and growth strategy. The beginning part was the conversation. By the middle of Q3 2016 we were implementing the strategy, which showed us the fruit results by end of June this year,” Ballas says.
Thanks to the loyalty program and “some strategic movement,” mobile and online ordering is producing a ticket average nearly 42 percent higher.
“That’s a huge number,” Ballas says. “We saw that strategy early. But here’s the key: The key is that when you have a sound financial model as a corporate structure, especially a franchise model, and you see opportunity strategically to find growth revenue dollars, and you have the capitalization be able to make that distinctive move, you need to make it fast. Our numbers this year are a combination of the ability of the brand to utilize strategic platforms and technology combined with the DNA of quality food and the best franchisees in my space.”
The secret weapon, Ballas adds, was East Coast’s franchisee-driven ability to execute this 2016 strategy.
Outside of the technology, East Coast is adjusting menu offerings to appease market trends and add cost value engineering into offerings. This began in 2016 with a fall menu and will conclude with a 2018 spring menu, the brand says. There are also more than 65 craft-style beer options available. The most recent fall menu was released in late October and offers 15 new items ranging from entrée skillets to desserts. Some highlights include: Lobster Mac n Cheese Skillet, Ahi Tuna Crisps, and Macadamia Nut Cookie Skillet.
East Coast, which also has a new logo, hired Mark Lyso as its new executive vice president of operations in June. Lyso served as executive director of Franchise Development at Sizzler, director of recruiting with Famous Dave’s of America, and chief operating officer with Ruby’s Franchise Systems, in the past. “He’s like a kid in the candy store with all the platforms we have accessible for our team to be able to support the unit level, and everything we do at corporate is to support the unit-by-unit operation on the ground and improve the experience for our diners,” Ballas says.
One reason Ballas believes East Coast can fulfill its growth plan is because of its franchisees. Ballas believes in the system so much he’s going to do something he says is “completely unheard of in the franchise model.” He is working on a plan to place leading franchisees on the ground with the opening team for new stores.
“Franchisees don’t typically volunteer a week of their time to go with a three, four, five-person corporate team and go fly to Memphis, for example, and go open a East Coast Wings + Grill,” Ballas says. “But we have franchisees who believe that the integrity of the units have to be in tact immediately to the point where they want to be vested in the process. … Some people would say, ‘Why do you want to give away your cool tools to all the other franchisees?’ Well, they don’t have the same franchisees I have. You might give away the farm but can they make the field grow corn?”