The meticulous strategy of Checkers

Oct. 10, 2010 | by Alicia Kelso

Checkers Drive-In Restaurants, Inc. has been around since 1986, wooing customers with its convenient double drive-in units and extensive burger and shakes menu.
In 1985, the company merged with Rally’s and the co-branded restaurants spread from the south to the Midwest and west.
Solo Checkers units continue to exist, however, and the company is currently in the middle of its most rapid franchising expansion since 2000. Checkers hired Lynette McKee, former vice president of Dunkin’ Brands, to head up the development plans.
McKee is adamant about the company’s strategy, which she calls “conservative, but focused, and constantly in motion.”

The approach entails a franchise-centered growth in familiar markets, as well as expansion in nontraditional markets; a touch of reimaging; and marketing on both personal and mass levels.

The goal certainly isn’t exorbitant – the team simply wants to bring Checkers from about 800 units to 1,200 and there are no international markets in the picture right now.

“To be functional as a larger organization, we believe we need to get to 1,200 units,” McKee said. “We are laying a platform for next year through 2013, but our first benchmark is getting to that 1,200 equation.”
To help McKee and Checkers president and CEO Enrique “Rick” Silva execute its objective, the company brought in a team of seasoned professionals over the summer. 
They include Basil Kazepis, director of real estate; Greg Michael, director of franchising and new business development; Christine Elam, senior manager of franchise administration; and Shakon Turner, senior manager of recruitment.
Thus far, Checkers has opened about 42 new units this year. Currently, Checkers’ biggest growth concentration, according to McKee, is in New York and Florida. In September, Checkers signed a multi-unit store development agreement with Kalex Partners LLC for four new units in Brooklyn.
After those markets have been evaluated, the company will set up support staff to spread to adjacent markets; markets that offer a “natural progression,” according to McKee. Such cities include Philadelphia, Washington, D.C., Baltimore, Detroit, Chicago and Atlanta.
“Strategically, we want to make sure we have support in each region for testing and training, and then look at that progress over the next three years before deciding where else and how much to grow. We’re approaching this growth slowly and very strategically,” McKee said. 
The expansion will mostly be about 90-percent franchise-based. The company owns about 300 units, which McKee said is a “good presence.”
And, although the plans call for a heavy franchise base, Checkers isn’t offering extraordinary incentives to draw them in.
“We are going to focus on franchisee profitability and a strong support system. The incentives come secondary. We want them to join us because of our brand, because they’re loyal, not because we offer them incentives,” McKee said.
It seems that focus has paid off so far: throughout the past few years, 70 percent of the company’s growth has been with existing franchisees.
“The franchisees didn’t have obligations or contracts to grow, and they didn’t have incentives to get on board. So, the fact that they were still growing in a down economy says a lot about the brand,” McKee said.
Another phase of the growth strategy is a reimaging effort. Although McKee believes the brand is strong, the company is still flirting with some changes, which is not out of the ordinary for quick-service companies. 
Changes will include menu items, restaurant design tweaks and smaller detail changes such as employee uniforms. In June, the restaurant launched a new lineup of toasted sandwiches, and later moved into the breakfast daypart. 
“If we stay in constant motion, we don’t have to worry that the brand is getting stale,” McKee said. “We are in the early stages of our reimaging strategy and hope to be fully involved with that next year. Every brand has to look at itself over time, and how it looks and feels. Our goal is a reimage more than a remodel, it’s going to be more than paint on a building.”
Checkers will also step up its marketing efforts in 2011, with a boost in public relations and social media, as well as old-fashioned, in-person networking.
“We will have some social media initiatives moving forward, but the strength of this team is connecting on a more personal level,” McKee said. “I am old school with this and I believe people are starting to go back to a more personal way of doing things – having lunch, picking up the phone. Social networking may get you noticed, but it will not close the deal.”

Nontraditional locations, such as college campuses and airports, continue to be involved in Checkers' overall scheme, as well, to better provide new and existing franchisees with a greater range of development options.
"Both non-traditional and conventional restaurant development are key components for Checkers to sustain the growth we've recently experienced," said McKee. "We have the capability to venture outside of the box a little bit because our menu offerings tend to be a natural fit for nontraditional locations. Plus, they're a good fit for us and they keep everybody focused."
Keeping everyone's focus at Checkers has been McKee's favorite achievement since coming on board. She jokes about how she manages by routine processes, a method that stems back to her early career days as a second grade school teacher.
"I am conservative by nature and it drives the team crazy sometimes. But it's not about micromanaging or forcing people to do things. It's about giving them the guidelines and making sure everyone is on the same page," McKee said. "I go back to my teacher roots and keep it simple so we all know where our priorities are. We're focused and we're working hard, but that's when it all clicks and it becomes plain out fun to be part of this goal; this progress."
She adds that the team's efforts in embracing simplicity and patience have helped in following an aggressive growth plan despite a tumultuous and unpredictable economy, and it will pay off in the long run.
"If you're sharp on your game, like this team is, you take advantages of times like this. The real estate is not at its peak cost. Local banks are still looking to do business with solid operators. If you're smart, you're planning for this now because it will get better," McKee said. "As long as we're doing every single thing every single day while asking 'Is this good for Checkers? Is this good for the brand?' we'll be in a good place."

Topics: Burger/Steak/BBQ , Business Strategy and Profitability , Food & Beverage , Franchising & Growth , Marketing / Branding / Promotion , Operations Management , Restaurant Design / Layout

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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