As Golden Corral CEO Lance Trenary reflects on COVID’s early days, he’s reminded of the brutal national headlines.
One media outlet called the restaurant a “zombie company,” and another proclaimed, “the buffet is dead as we know it.”
Long after those initial weeks, the journey has remained tenuous, with immense pressure from the Delta and Omicron variants. Golden Corral overindexes with families and seniors, and those are typically the most reluctant groups.
The declines have been substantial, the CEO acknowledges. The chain’s footprint has slimmed by nearly 100 restaurants since the end of 2019, when it had 483 stores.
“If you think about it is a whole, it really has been hard on the industry, especially family casual and fine dining, but for the buffet segment, it’s been hellacious,” Trenary says.
Instead of feeding into the negativity, Golden Corral used the attention as a rallying cry, and developed a saying: “The comeback is greater than the setback.”
Around this time last year, roughly 250 restaurants were open for buffet, weekly AUV averaged $65,000–$70,000, and comps were declining about 25 percent compared to 2019.
Each of those metrics have greatly improved to begin 2022. Roughly 360 buffets are open, average weekly AUV is exceeding $80,000, and comp sales are flat compared to 2019. Another 30 stores are scheduled to reopen before the year is over, depending on lease negotiations with landlords.
Golden Corral has also managed to open 13 restaurants during the pandemic.
“Which is crazy if you think about the standpoint of the buffet segment,” says Trenary, referring to the number of store debuts. “To have new organic growth during the pandemic, we really felt like it spoke very strongly for our brand. The confidence that existing franchises and new entities both have in the development of our brand once they saw that Golden Corral was not only going to survive, but be able to thrive again, I think people really got excited about where our brand was from where it was going.”
Before the pandemic, Golden Corral didn’t have a sophisticated off-premises program and was forced to create one from scratch. The weigh-and-pay model has evolved into partnerships with Olo and Punchh and integration of third-party delivery providers. Consequently, off-premises mix has lifted from around 2 percent to more than 8 percent.
Some stores implemented makeshift drive-thrus and are seeing delivery/takeout account for about 20 percent of sales. The challenge, Trenary says, is educating customers on Golden Corral’s new capabilities. If that’s successfully conveyed, he believes the brand can sustainably reach a 15–20 percent off-premises mix.
“They just don’t think about us as takeout,” Trenary says. “They think about us as a buffet, being able to go along and select a little bit of everything. We’re really trying to build a platform around our value and our family meal replacement and things of that nature. And so we started advertising it now, and we’ve had some pretty good success.”
Throughout 2021, the brand leveraged multiple models, such as cafeteria style, tableside service, and even off-premises only in some circumstances. While implementing these adjustments, the chain closely listened to customer feedback. Trenary says it became “overwhelmingly” evident that buffet was the desired form of service.
Golden Corral leadership spent numerous hours speaking with state sanitary officials, health departments, secretaries of commerce, and governors to ensure they understood touchable and shareable services have proven not to be a spreader of COVID.
Restaurants still conduct temperature checks for employees, and customers may use disposable gloves. In a big step forward, the chain recently announced it was removing mask mandates for employees in jurisdictions where it’s allowed.
“We had to really make sure that we followed the science, if you will,” Trenary says. “I know that’s an overused term these days. But we wanted to make sure that our restaurants were safe and sanitary and that we were going to be in a good place. But once we were thoroughly convinced of that and it was backed up by the science, then we put a full-court press on going back to the buffet, and our customers have appreciated it and loved it.”
The extreme headwinds facing buffet at the start of COVID—including whether it would be allowed to exist in the future—pushed Golden Corral to explore new prototypes.
However, since customers chose buffet as their No. 1 option, the work on store designs has switched from an immediate urgency to completely transform Golden Corral’s platform into how can the company enhance its brand and increase customer access. This means Golden Corral’s primary innovation project will be maintaining its status as America’s top buffet choice.
The second initiative is a nod to the chain’s roots, which is a value-based steakhouse with a salad bar and comfort foods in the form of an entrée. It will be called GC Grill House and debut in Inverness, Florida. The prototype—a second-generation conversion—will be opened by an operator who’s worked with Golden Corral for nearly 40 years.
The other prototype is a 3,500-square-foot fast-casual concept that will have a drive-thru pickup window. The brand is in the final stages of completing the menu and cementing designs. Trenary says construction is likely to begin sometime later this year.
“We fully believe that our franchisees will want to come out of the gate and do these and test them, along with our support, but we are also committed to doing them from the company’s standpoint,” Trenary says. “We’re operating some company restaurants now, and we fully intend to help move these innovation projects along.”
“We still believe that we’re going to emerge from COVID much stronger as a company than what we ever have in the past,” says Golden Corral CEO Lance Trenary.
Franchisee support has been at the core of all Golden Corral’s pandemic-based strategies. When COVID hit the U.S., the company deferred royalties until around September 2020. Since then, the chain has taken payments on a sliding scale; stores only move up if they’ve achieved certain sales milestones. Currently, the royalty rate is 3.76 percent, which is still below the historical 4 percent. For franchisees who bought company stores, charges for equipment, leases, and royalties have been deferred.
To create successful paths for the long-term, Golden Corral set aside $750,000 to match local store marketing and covered management recruiting expenses. The chain also invested nearly $300,000 in time motion studies to determine the most efficient ways to prepare the 160 items on its buffet menu.
Other focus areas include insurance packages, workers’ compensation, utilities, waste management, hiring, and legal services—any and all areas that could impact the P&L.
“We’re a 49-year brand at this point, and things seep into your system. We wanted to go back and really challenge ourselves to think about things differently than what we have historically, and I think it’s going to pay off in a big way for us,” Trenary says.
“We’re looking to get a couple of points out of our labor costs and then taking that money and reinvesting it back into our management development, coworker benefits,” he adds. “Being an employer of choice does cost money. We think it’s the right play long-term, but we want to be able to help our franchisees have the resources to be able to do that.”
All those initiatives are consistent with Golden Corral’s 100-year plan, which is essentially a promise that the brand will be around for the next century.
That’s not to say restaurants don’t need assistance anymore, says Trenary, who was recently named chair of the National Restaurant Association Board of Directors. He’s hopeful that a new restaurant recovery fund will be a part of Congress’ next economic omnibus, noting that past measures like the Paycheck Protection Program and $28.6 billion Restaurant Revitalization Fund don’t entirely make up for two years of lost revenues and profits.
Trenary says a lot of hurt remains in the industry, and that applies to Golden Corral, as well. That’s why the brand is exploring every possible prototype, innovation, and cost-cutting strategy to support franchisees.
“We really believe that if we can get them enough time to get back on their feet, then they will ultimately have the opportunity to recover long-term, and they have a great sustainable business,” the CEO says. “ … We still believe that we’re going to emerge from COVID much stronger as a company than what we ever have in the past.”