up to 4 percent
$1.4 to $3.7 million
For the casual-dining chain that served its billionth chicken wing last year and claims bragging rights to America’s best wings—having won the Festival Favorite award the last two years at the National Buffalo Chicken Wing Festival in Buffalo, New York—it’s hard to say there are more compelling attributes to the brand than its wings. But truth is, there are many factors that make Quaker Steak & Lube one of the most interesting franchise opportunities.
For starters, there’s the automotive-themed décor that attracts customer engagement even before restaurants open. Every Quaker Steak & Lube has classic autos on display, including authentic cars on loan from local customers, plus at least one classic motorcycle and one NASCAR model. Sometimes classic cars are hung from the ceiling, but in most cases they’re on a Backyard Buddy. (For those who aren’t gearheads, that’s a lift used by people who work on cars.)
“Most of our restaurants have at least one or two classic cars on Backyard Buddies, and these cars are loaned to us by collectors,” says Frederick Dreibholz, CFO and interim CEO at Quaker Steak & Lube. “As soon as people hear a Quaker Steak & Lube is opening near them, they contact us to see if they can put their car on display—that’s been a really surprising and interesting phenomenon that no one anticipated when the brand was started. Who would have thought there would be so many people who want to display their cars?”
The cars are typically on loan at no cost to the restaurant, and they rotate in and out to provide new experiences for diners and more opportunity for local car buffs to share their prized possessions. One restaurant even had the chance to showcase the very first Mustang that rolled off the Ford assembly line.
“The décor packages in our restaurants are all very authentic and nostalgic, and we have one person who goes in and manages the installation of cars at all of our company-owned and franchise locations,” explains Dreibholz.
NASCAR models are a little more of an investment—harder to locate and typically hung permanently in the restaurant. Classic motorcycles are sometimes purchased and hung, and in other instances on loan from a local dealer who may even sell the bike that’s hanging in the restaurant and replace it with another.
The Lube, as it’s affectionately called by fans and friends, also seizes opportunities to make the décor even more personal. One restaurant that borders the Lake Erie canal installed an aqua-car, which travels on both land and water, to appeal to its many guests who arrive by boat. And in Syracuse, New York, a snowmobile hangs from The Lube ceiling.
Restaurant exteriors resemble a gas station—a nod to the first Quaker Steak & Lube, which opened in a converted Amoco station in 1974—with a bright-white finish, neon lights, and a massive Eat arrow. Originally operated as a cook-your-own steak restaurant and bar, The Lube discovered alcoholic beverages and cooking steaks didn’t mix well, so it changed the business model and in 1976 introduced chicken wings. Ironically, back in those days, the concept of eating wings was as foreign as the idea of talking on a cell phone, so the restaurant simply served them as a garnish—never anticipating that the throw-away item would become its best-seller.
In October, The Lube recruited a culinary master from upscale dining: Chef André David Halston left the Ritz-Carlton’s Innisbrook Resort to help accelerate The Lube menu beyond the realm of great wings. “Chef André is here to make existing items better, create new items, and maintain consistent quality across all Lube units,” says Dreibholz.
The beverage menu has also stepped up its game, with an increased focus on specialty cocktails like the signature leaded Lube-N-Ades, alcoholic versions of The Lube’s hand-shaken lemonade. Recently, the Lube added hard cider, a draft product that draws like beer, and expanded to 24 beer taps in newer locations. And the brand’s exclusive Lube Lager will be available regionally in core Ohio, Pennsylvania, and New York markets.
Last year, The Lube opened eight restaurants—two were company-owned and the rest were franchised—and this year the company anticipates opening at least 11 units. System-wide sales were $156 million in 2013, and are projected to be around $180 million this year.
One of the biggest reasons The Lube continues to develop company-owned restaurants is for a testing ground for new menu items, limited-time offers, and operational tweaks, preferring to prove what works before asking franchisees to make an investment.
The Lube has introduced three new prototypes to make franchise opportunities more affordable and flexible. The original prototype of 11,000 square feet was followed by a 9,000-square-foot design, and both required at least a two-acre site to support parking for restaurants of that size. “What we did was skinny those designs down, partly by having fewer seats but mostly by being more efficient in the bar and kitchen,” says Dreibholz.
Now, prototypes range from 5,000– 7,700 square feet, and are available in freestanding designs as well as designs tailored to end-cap locations.
Quaker Steak & Lube is focused on its heritage markets of Pennsylvania, Ohio, and West Virginia for opening company-owned units, but it also opens restaurants in markets that its customers and franchisees identify. For instance, nearly 650,000 “Lubies” follow the chain on social media and in a contest last year voted Toledo, Ohio, as the top market where they wanted to see a Quaker Steak & Lube, with Orlando, Florida, a close second. Sites are being reviewed for a company-owned Toledo location, and the chain is actively seeking a franchise partner for Orlando.
Change—particularly when it’s in the form of improvements—is a constant for the growth-minded company, which isn’t afraid to try new tactics. For instance, Quaker Steak & Lube has experimented with offering both a full-service and fast-casual lunch model in some locations. In the fast-casual model, guests opt to order and pay at a kiosk and then a server brings their meal.
“Far and away, our guests choose the full-service over the fast-casual option,” Dreibholz reports. “There doesn’t seem to be much demand for the fast-casual service, which suggests guests are satisfied with our speed of service during lunch.”
The greatest opportunity for change—and one that the chain has enthusiastically embraced—has been the addition of healthy items led by its Lube-A-Licious Lite menu.
However, The Lube also continues to serve plenty of food that’s “good for your soul just because it makes you feel good.”
Additionally, The Lube is looking into adding dessert options and has seen a positive response to offering sharable appetizers in a single-serve format, driven by diners’ growing interest in small plates. There’s also a trend to simplicity—so the menu transitioned from a lengthy 16 pages to an easier-to-digest eight pages.