The chain saw a 106 percent boost in off-premises business.

Faced with a treacherous casual-dining environment, Famous Dave’s is approaching historical sales levels this quarter.

The brand declined 7.4 percent in July after seeing a 22.9 percent decrease at company-operated stores in Q2 and a 31.5 percent slide at franchises.

Fueling the consistent improvement in sales has been growth in off-premises. Early into the pandemic, Famous Dave’s quickly deployed curbside pickup and constructed makeshift drive-thrus with cones and signage. Famous Dave’s also worked with Elliot Baum, franchise owner of 15 Famous Dave’s restaurants, to open a ghost kitchen in downtown Chicago in April.

The leverage of takeout, curbside, and third-party delivery resulted in a 106 percent increase in to-go sales at corporate units. This was offset by a decrease of 77.8 percent in net catering sales and 86.8 percent plummet in dine-in sales.

In most locations, restaurants are operating with 50 percent capacity.

READ MORE: Famous Dave’s Stays Nimble in Face of COVID-19

“The quarter has been challenging with the continual changes in state and local dining restrictions,” said CEO Jeff Crivello, commenting on BBQ Holdings’ Q2 earnings. “Famous Dave’s stores have been performing well through the numerous changes and have continued to increase our to-go business through strong social media marketing as well as the use of our delivery service providers. We are hopeful that dine-in sales at the Famous Dave’s stores will provide incremental sales as restrictions are lifted and override catering sales which are slowly coming back.”

Famous Dave’s ended Q2 with 94 franchises and 30 company-run locations. BBQ Holdings portfolio also includes Real Famous Barbecue, Clark Crew BBQ, and the recently acquired one-unit Real Urban Barbecue, and Granite City Food & Brewery.

In February, BBQ Holdings announced that it agreed to purchase 18 Granite City units—the company’s first move outside of the barbecue sector.

Because of Granite City’s reliance on dine-in traffic, sales were hit harder in Q2, but have also rebounded. In Q2, comps slipped 65.5 percent. But same-store sales lifted from $900,000 in April to $3.4 million in June as restrictions eased. Granite City is off to a better start in Q3; July comps decreased 33 percent.

“The Granite City brand has seen a significant increase in sales as dine-in restrictions have lifted and we believe that the uptick in sales will continue so long as restrictions continue to ease,” Crivello said.

Q2 revenue increased 28.2 percent to $27.1 million. The growth was due to the addition of Granite City, Clark Crew BBQ, and Real Urban Barbecue since the year-ago period. BBQ Holdings swung a net loss of $6.3 million, $0.68 per share.

Also of note, BBQ Holdings entered into multiple franchise agreements in the quarter. The company entered two agreements with existing franchisee PDX Partners to offer Famous Dave’s products via delivery and takeout in two California Johnny Carino’s locations.

The other agreement involved new franchisee DCI Colorado Springs #2. BBQ Holdings is co-branding the operator’s Texas T-Bone Steakhouse in Colorado Springs with Famous Dave’s.

“While we have been prudent in managing our cash as the stores reopen, we continue to be concerned about the future direction of the COVID-19 pandemic and will, therefore, continue to manage our cash appropriately,” Crivello said. “We are very pleased to see the resiliency of Famous Dave’s during this pandemic and that other restaurant groups are looking to team with us based on our recently executed franchise agreements.”

Casual Dining, Chain Restaurants, Feature, Famous Dave's