Macaroni Grill is the muscle
While Dividend is making new acquisitions the priority in 2020, there’s some growth on tap for the group’s now-stable golden goose, too.
Macaroni Grill’s turnaround was pulled off by an initial shuttering of 37 units in 2017, the assembly of a new executive team capable of putting together a carveout strategy, and some fresh revenue streams—catering, special events, and off-premises orders, in particular. These efforts helped dig the Italian chain out of its hole. Machado says the brand outperformed industry average same-store sales by more than 300 basis points in both 2018 and 2019.
“We don’t focus on trying to change who we are, just doing what we do better and trying to add to it. And it’s worked. We’ve seen continuous growth from new revenue streams like catering and third-party delivery,” he says.
This year, asset-light growth is top-of-mind for Macaroni Grill, mainly through licensing for grocery items and international franchising. The chain’s 30-plus year history has rendered its name recognizable internationally as well as domestically, and the team plans to leverage this reputation to gain more franchisees across the globe in 2020.
The chain’s new focus on delivery and catering over the last two years has led to a series of tech updates as well. Machado reports that 11 different tech systems—from third-party partners to online ordering platforms to scheduling systems—were implemented over the last 24 months. The brand will continue to hone these new systems in the months ahead.
“Too many people shy away from tech in this industry. Our whole goal with tech is to use systems that give us line of sight into the restaurants across our system, because, if you don’t have that line of sight, you can’t manage effectively,” Machado says.
Macaroni Grill recently invested in two of these “line-of-sight” systems with the particular objective of easing the labor challenge. The concept began using HotSchedules for activity-based forecasting and employee scheduling, and ProHabits, a leadership development and training program designed to inspire personal and professional growth through two-minute “microactions.”
While ProHabits is often used at the C-Suite level, Macaroni Grill rolled the platform out into restaurants, allowing team members in various stores to communicate all the way up the chain of command.
“We are trying to be creative and thoughtful with how we address labor,” Machado says. “In 2019, our turnover dropped 50 percent versus 2018, which is something I don’t think a lot of operators can say. We invested in ProHabits because it reinforces culture, and people are loving it because it gives them a platform to talk.”
In October 2017, Romano’s Macaroni Grill declared bankruptcy and went into chapter 11. But fueled by the $13.5 million that restructuring and turnaround-owner Mac Acquisitions raised to fund the revival, it extricated itself from chapter 11 just four months later. Philip Romano launched Romano’s Macaroni Grill in 1988 in Leon Springs, Texas, leading to Brinker International acquiring its franchise rights in 1989. It expanded to 230 outlets before being dealt to Golden Gate Capital in 2008.