James O’Reilly’s has looked at the industry from both sides of the aisle. He joined casual sit-down Smokey Bones in fall 2019, coming over after four years as CEO of Long John Silver’s. Before, O’Reilly worked as CMO and chief brand officer of Sonic Drive-In, CMO at KFC U.S. and SVP of U.S. marketing for parent company Yum! Brands.
The experience was clear to see. During his tenure, Smokey Bones, a 1999 Darden-founded barbecue brand that sold to Sun Capital Partners in 2007, operated outside the traditional handbook. It launched four virtual brands and even had a full-tilt drive-thru model built that showcased an express menu and robust technology across the experience.
When Huddle House and Perkins owner Ascent Hospitality Management approached O’Reilly, however, it was yet another lane that caught his attention. “Having been in casual dining for the last four or five years, and all the advances in casual dining and things that we did at Smokey Bones, when I applied those to family dining and Huddle House and Perkins, I see so much opportunity for growth in the family dining segment,” says O’Reilly, who officially became CEO June 19.
What O’Reilly is referencing reflects the broader climate. Family dining offers full-service hospitality and value in a package unlike any other. The spend per guests tends to range between $12–$15. Casual dining is closer to $20. And yet, the food is cooked to order, served by staff, and done so in an environment, O’Reilly says, where consumers who demand more value for their money while still enjoying quality and great experience, can tap in.
“Consumers now,” he says, “are under a lot of pressure from an inflationary and cost-of-living standpoint. I believe that family dining is, can be, will be, a more significant growth driver in full service in the coming years than it has been in the past years.”
“… And our brands can experience a real renaissance in providing that,” O’Reilly adds.
Ascent’s fiscal year ended in April. It closed the calendar with 32 franchisee agreements and five consecutive months of multi-unit signings. Over the past two years, Ascent has inked 70 franchise agreements. The company entered fiscal 2024 with nearly 600 stores open or in development across the U.S. and Canada. These recent deals will scale Huddle House and Perkins across the map, including Arkansas, Florida, Georgia, Illinois, Kentucky, Ohio, Texas, and more. The movement also looks to reignite expansion after Huddle House closed a net of 20 stores in 2020, 10 the following year, and 17 in 2022, to exit at 286 total outlets (231 franchised). Perkins turned into 2023 with 272 stores (191 franchised) after closing seven, 11, and 23 net locations over the past three years, respectively.
Huddle House’s average net sales per unit last year were $754,115. That number was $746,312 in 2021 and $321,951 in pandemic-rattled 2020. Perkins’ three-year view breaks down as $1.932 million, $1.8 million, and $759,929, respectively.
Traditional Perkins are opening in the 4,000 to 6,500 square-foot range on 1–1.75-acre parcels. Huddle House has a new prototype that’s setting sales records—a Decatur, Illinois, store did more than $53,000 in one week, the single-highest opening run for the design, and in a 2,100-square-foot box. It sits 65–71 people, with an option to do a bump-out to 80 and a dedicated third-party delivery area. Huddle House’s other lead prototype, EVO 85, is 2,500 square feet with higher seating capacity.
But getting back to O’Reilly’s view of the future, another opportunity that drew him to Ascent was the company’s heavily weighted franchise model. Beyond being familiar to his background, O’Reilly says it’s a slice of the business he’s always gravitated toward. He’s spent a good deal of time so far meeting with operators, talking on the phone, sitting on advisory council meetings, and simply reconnecting. He recently got back from a conversation with Ascent’s largest Perkins franchisee.
Three points pulsed during talks: One is a holistic notion O’Reilly feels lays even more runway in front of the brand. Operators have asked him to zero in on telling the story of Perkins and Huddle House in a “loud and proud way.”
“That’s something I have a lot of passion for doing,” he says. “I want to uncover and nurture these brand stories and tell them in ways that position our brands to win; not just to exist, but to win where we compete.”
There’s an interesting dichotomy between the brands. Huddle House, founded in 1964 in Decatur, Georgia, by John Sparks (named after football huddles) is more of a small-town restaurant that, often, competes closest with fast-food brands. His first week on the job, a Huddle House landed in Kentucky and shattered company sales records. “And when I asked about that, one of the things I learned and have learned since then, is in small towns, under 10,000 people, Huddle House does win, can win, and should win,” O’Reilly says.
Perkins, which arrived in 1957 as Smithies Pancake House in Cincinnati, is more of a suburban Americana chain that can become a family dining destination, O’Reilly feels. He says there’s room to fill a hole that exists in that corner of the country for elevated value and experience at lower price points. “It’s something that Perkins can win at,” he says. “With our quality, with our bakery, and our people, I believe there’s a huge market opportunity there.”
Naturally, when franchisees heard the news of his hire, they also began asking O’Reilly about that innovation track record. He says operators expressed desire to evolve, from tech to menu to in-store systems. O’Reilly hints he’s working on all these things, but it’s still early. Huddle House did recently roll a lineup of Sweet Heat Chicken featuring the brand’s signature Hot Honey Sauce. In June, the brand piloted a line of chicken and burgers (one of them being the Sweet Heat Chicken that spread in September) through dozens of stores.
Perkins, in mid-September as a nod to turning 65 years old, stepped into the world of retail coffee with bags and K-Cup Single Serve options. The line of new coffees includes Perkins House Blend and Chocolate Pecan Pie, which will be available year-round, as well as Perkins Pumpkin Pie, which will be offered during the harvest season.
“These conversations are happening right now,” O’Reilly says of innovation. “Both brands are evolving. We’re talking about those exact questions, evaluating the different types of off-premises asset options, from full-scale drive-thrus to drive-thru lanes with pass-through windows to higher technology applied to curbside service.”
Tests are coming, he continues, so Ascent can understand what the right level of tech investment should be for each chain. “Because, without a doubt, consumers are equipped with technology,” O’Reilly says. “They carry around sophisticated computers in their pockets. Consumers are very accustomed to using technology and they want frictionless experiences, and so that’s something that we should be able to live up to at Ascent with our brands, and we will.”
The third thing O’Reilly heard during franchisee checks concerned inflationary pressure. Not only on the food and paper side, but also as it related to restaurant development, from equipment to construction—all things, he says, operators weigh when considering growth through four-wall unit economics. The total investment necessary to begin operation of a Perkins Restaurant is $1.535 million to $3.290 million for a new development unit when leasing the land and building and purchasing the equipment and signs. For Huddle House, the range is $561,635 to $1.443 million. “That is something the team and I are laser focused on, is our unit economics—making sure that they’re compelling,” O’Reilly says. “Looking at ways to bring down costs, both inside the four walls and in the building of the four walls, so we can grow faster.”
Speaking of expansion, Ascent has broader visions. O’Reilly says the company intends to grow and add to its portfolio through M&A. “We have an expertise in this segment, understanding consumers and family dining,” he says. “We have expertise on the real estate and construction side, on the menu development side. And looking at brands that allow us to deepen what we do and broaden what we do, while also achieving scale, is very, very attractive to us. That is something I am working on often and in real-time.”
As it all matures, O’Reilly says he’s going to continue working on the internal piece. His goal is to make Ascent a great place to work with contagious culture. And again, it’s not just about the intrinsic values—he wants Perkins and Huddle House to stack up victories.
“Because there’s never been a better time to be in the restaurant industry,” he says. “I believe, biased of course, there’s never been a better time to be in the family dining segment, and we’re looking ahead, investing, and that culture of excitement and that winning spirit is something I’m really focused on with the team and really enjoy building.”