Famous Dave’s pivot to off-premises is continuing to pay off as same-store sales increased 2 percent in October after a 73.3 percent bump in to-go sales during the third quarter.
The Minneapolis-based concept is experiencing comp growth after a 7.4 percent decrease in Q2. Parent company BBQ Holdings also reported that same-store sales for franchised units dropped 10 percent, compared to a 31.5 percent decline in the second quarter. Company-owned stores slipped 4.6 percent in Q3 after a 22.9 percent decrease in the previous quarter.
The newly acquired Granite City Food & Brewery dropped 25.9 percent in Q3 and 23.8 percent in October after seeing same-store sales plummet 65.5 percent in Q2.
Average weekly sales for franchised stores lowered from $51,396 in 2019 to $46,268 this year, or a 10 percent difference. At company-owned stores, average weekly sales slid from $49,853 to $47,401, or a 4.9 percent decrease.
The improvement in to-go sales was offset by a 55 percent decrease in catering sales and 33.4 percent decline in dine-in business. However, restaurant-level operating margins rose 3.4 percent due to the reduction of labor and food costs. The company also returned to positive EBITDA at $2 million.
“It has been a busy quarter, but we feel the entrepreneurial spirit of BBQ Holdings is hitting on all cylinders, and we expect to continue driving sales in a variety of ways as we adapt to the ever-changing consumer,” said BBQ Holdings CEO Jeff Crivello in a statement.
In Q3, Famous Dave’s was primarily focused on building its ghost kitchen footprint. The chain signed a 25-unit deal with Bluestone Hospitality Group to open ghost kitchens and dual restaurant brands with Johnny Carino’s. Crivello said that during the testing phase, the add-on resulted in $500,000 to $1 million in digital sales for individual locations.
Famous Dave’s also opened a ghost kitchen inside a Granite City unit in St. Cloud, Minnesota. The brand plans to complete the same process in six more Granite City locations by the end of Q1. To further its digital enterprise, the company also launched a new website and will begin the rollout of a new POS system.
BBQ Holdings ended the quarter with 127 Famous Dave’s locations and 18 Granite City units. The parent brand also consists of Real Urban Barbecue and Clark Crew BBQ. The company said in a filing that some restaurants were required to reduce or shut down in-person dining in late October because of a rise in COVID cases.
“Although the Company has experienced some recovery from the initial impact of COVID-19, the long-term impact of COVID-19 on the economy and on its business remains uncertain, the duration and scope of which cannot currently be predicted,” BBQ Holdings said in its filing. “The Company cannot predict what additional restrictions may be enacted, to what extent it can maintain off-premise sales volumes or if individuals will be comfortable returning to its dining rooms during or following social distancing protocols, and what long-lasting effects the COVID-19 pandemic may have on the restaurants industry as a whole.”