Lettuce Souprise You revamp gets back to roots, turns profits

Nation's Restaurant News, May 5, 1997 by Jack Hayes

Jack Hayes

ATLANTA - Four months into a turnaround bid, the new owners of Atlanta-based Lettuce Souprise You, a chain that once operated 10 stores, including three in the Houston market, are pruning the concept back to its 'utility' roots and restoring profitability.

Robert Hill, a former banker, Sonic franchisee and Burger King region manager, who in 1996 was president of 50-unit San Antonio-based Souper Salad Inc., has cut double digits from the chain's runaway food-and-labor cost with a rewritten menu and a fine-tuned kitchen and dining-room strategy.

'We bought a company that was a couple of days away from bankruptcy last November, and by January we were making money,' said Hill, who installed three former Souper Salad staffers - Richard Chrisco as operations vice president, Kim Williams as area manager and Cary Taylor as catering director - to execute the Lettuce Souprise You remake, which is still in progress.

Weekly traffic counts now are hitting 1,800 to 2,000 at lunch and 1,100 to 1,700 at dinner among the four units that remain in operation. With a per-person check average of $5.50, the units seat between 145 and 200 patrons. Founded a decade ago by Atlantan David Dubrof a year after his graduation from Florida State University, Lettuce Souprise You became an overnight success, growing to seven locations here plus three Houston sites by 1992.

But while its former owners, Dubrof and his father, were plotting a franchised-store rollout, the concept sputtered, triggering a number of changes in operations, marketing and menu. The Houston expansion added a heavy financial anchor in the meantime.

'On a small-store basis, the soup-and-salad business can be inordinately profitable, but when you start growing the menu and piling on fixed costs, you get away from the idea of utility and you lose your profits,' maintained Hill, who believes there is a broad market for the concept. He added that menu tampering and fixed-cost padding have been the chief flaws of operators in the soup-and-salad segment.

Lettuce Souprise You, for example, expanded to cookies, pasta, pizza, frozen desserts and rotisserie chicken. At one point its owners tested a $2.99 breakfast bar as well as a hot-food bar for the lunch-and-dinner segment. Pasta, the only item remaining from the expanded menu, is being phased out.

'We're going to be a soup, salad and potato bar, catering to customers who want not only convenience but low price points. Utility dining means the customer isn't looking for an experience but views the food as basic, wholesome fuel,' Hill said.

In another tactical shift, Hill is removing cashiers from the end of his salad bars and placing them near the exits to eliminate peak lunch-and-dinner-hour backups on the customer line. Along with that move, the LSY group has introduced a token service staff to work the dining room, answering questions, pricing guest tickets and refilling beverages. That allows customers to modify their choices, selecting any two of the soup, salad and potato categories or all three.

'I call it the unbundling of Lettuce Souprise You's pricing,' said Hill, who also is considering a meal choice without the dessert.

Having promised an equity position to his key staffers, Hill has instituted a monthly profit-based bonus package for general managers and will extend that to assistant managers. Under those efforts the chain is operating with a 31-percent food cost and a 28-percent labor cost. The focus is turning to enhanced cleanliness and guest service - 'four walls marketing' as Hill calls it - to boost repeat and referral traffic.

Hill believes that with no national players yet competing, the soup-and-salad niche is wide open for a well-crafted, well-executed concept such as the redefined Lettuce Souprise You. The Southeastern region, where suburban office parks are clustered near residential development, is particularly inviting, he noted.

'We know we appeal to a subset, and we know we have high loyalty and frequency among that population. We just want everyone in the utility dining group to have us on their weekly or biweekly rotation,' Hill said.

A profitable gross for a small soup-and-salad operation is $800,000, according to Hill, who expects that private investors will help his new group, LSY Holdings Inc., open its first 'utilitarian-looking' prototype this year in Atlanta's northern suburbs between Dunwoody and Roswell.

'Once we hit 12 units, the chain will be self-financing,' Hill said.