The casual-dining brand seeks 200 stores by 2027 and expects to surpass $1 billion in sales in the coming years.
Twin Peaks is approaching store No. 100, a milestone resulting from momentum and perseverance. As a casual-dining brand relying heavily on the in-restaurant experience, COVID couldn't have been more of a nightmare. But Twin Peaks managed to keep its eyes open.
During the pandemic-fueled 2020, the sports bar opened three lodges. In 2021 and 2022, the restaurant debuted a total of 18 locations. In 2023, Twin Peaks is expected to reach 15-16 store openings. Already this year the brand entered new markets in Chattanooga, Tennessee; Daytona, Florida; and Columbus, Ohio. It also signed new area development agreements to add five stores in Kansas and four units in Central Florida.
"Exciting to see the brand take off," says CEO Joe Hummel, who's been at the helm since 2017. "Even during a crisis like COVID, we were able to sustain our momentum, took a small pause like everybody did, but really picked the ball up and started running pretty fast after that."
For Twin Peaks, the first criteria for unit growth is an obvious one—find the best site and don't chase deals. Hummel says the design team is constantly value engineering to remove unnecessary expenses, but also ensuring the restaurant keeps key customer touch points that got the brand to where it is today. That includes dozens of televisions, fireplaces, outdoor patios and building extensions, a scratch kitchen, elevated tequila, bourbon, and cocktails, and 29-degree beer. The CEO adds that Twin Peaks has a "good core group" of vendors that competitively bid against each other and a solid number of general contractors that understand the elements of building a store affordably.
"It's constant," Hummel says. "It's daily, weekly, monthly to make sure that we're keeping things in check, and we're always double checking our reasons behind building things. And it's not just because that's the way it always has been. We want to make sure it fits the guest need and that it also financially makes sense."
In the past several years, Twin Peaks' AUVs have grown significantly, Hummel says. In Q1, new DMAs Chattanooga and Daytona opened with $180,000 per week and $160,000 per week, respectively. On an annual basis, that would equate to a $9.4 million and $8.3 million AUV. The CEO attributes higher sales to a barbell pricing strategy catering to all household income levels. A unit in Winston-Salem, North Carolina, offers Happy Hour all day every day, including $5 margaritas and $3.99 for select shots. Another store in Daytona Beach, Florida, has Happy Hour on weekdays from 2-6 p.m. and Sunday-Thursday from 10 p.m.-close, with $5 select appetizers and $4.50 22-ounce drafts. The premium options are aplenty as well, like the New York Strip Steak and Chargrilled Salmon.
In the first quarter, systemwide same-store sales grew more than 4.3 percent, and inflation began to soften.
"You can eat on a budget or you can splurge with our offerings," Hummel says. "The amount of TVs gives people advantages to watch all their favorite games and be fans versus trying to do that in their own home with the expense hitting their own home. And then just the different settings that we're able to supply our customers. We give them so many different ways to use us, whether it's a lunch, a business lunch, happy hour, a dinner, a late night, the game, group gathering. I think we provide a lot of flexibility, which is driving people into our restaurants. Some competitors out there just have one extension of use where we feel like our extension of use is multiple."
Twin Peaks is under the ownership of FAT Brands, which purchased the chain in 2021 for $300 million. Former CEO Andy Wiederhorn called the casual brand a "crown jewel" in helping the parent company pay down debt. Twin Peaks is on pace to become a $700 million to $1 billion concept in the next several years, and Wiederhorn said a potential sale or IPO would put a dent in FAT Brands' repayments. He also indicated that FAT Brands may pursue acquisitions with the intent of converting purchased restaurants into Twin Peaks.
A good portion of expansion is coming from existing operators. Hummel says the chain recently sold the Cleveland market to a group that was already operating in Ohio. Also, franchisees in Mexico began with an eight-store development agreement, but that eventually ballooned to 32 units covering the entire country. These entrepreneurs then partnered with another group to take on Chicago. Twin Peaks has a national presence with locations scattered from coast to coast, however, Hummel says the ideal strategy is to grow from the core base of Texas, fill in the Southeast, and work toward the Mid-Atlantic and Northeast.
In February, the brand announced the hiring of Ray Bodnar as vice president of franchise sales and development. He came with more than 18 years of experience, most recently at Captain D's as director of franchise sales. Bodnar also spent time at Dickey's Barbecue Pit, where he sold the largest multi-unit development deal in company history.
"Ray understands deal structure and development agreements and he has good contacts that are in the food side of it or the hotel side of it," Hummel says. "We obviously help all of our franchise partners to find a really experienced operator to be their multi-unit guy overseeing the operation of it. But Ray is able to bring some of those business relationships of dealmakers and really understand the structure of capital and how that will work within a franchise partnership and how that will help them grow their development agreements."
Twin Peaks values corporate store growth, too. There are currently 30 company-owned units in the system, and two more are projected for August and September. Hummel wishes more could be built this year, but the chain ran into delays in the permitting process. In future years, he expects three-to-five corporate openings. The brand is nearing deals for three sites that would open in mid-to-late 2024.
The brand wants to reach 200 restaurants by 2027, including 25-28 stores internationally.
"The health of the brand, the excitement behind the brand, whether it's at franchise level or guest level, is really energizing and shows a lot for the brand as we continue to look out 25, 10 years," Hummel says.