Big Boy grows brand with expansion plans, new retro prototype

Nation's Restaurant News, Jan 13, 2003 by Carolyn Walkup

WARREN, MICH. -- With the scheduled Jan. 13 opening of a new building prototype, Big Boy Restaurants International is poised to jumpstart expansion that has been on hold while the 67-year-old family chain rebuilt its infrastructure.

According to Big Boy's leaders, the opening of the chain's first "classic," semiretro-style location, in Grand Rapids, Mich., marks a significant step in a rebuilding process that began when Detroit media mogul Robert Liggett Jr. acquired the chain in 2001 from its bankrupt former parent, Elias Brothers.

With several new units already under construction, Big Boy sees itself as being on its way to boosting market share. Big Boy opened three units in 2002 and plans to open six more this year. The current domestic total is about 290 locations, according to chief executive Anthony Michaels.

He cited a positive systemwide same-store-sales increase of 1 percent in 2002 as a sign that the company is starting a turnaround. "We have been able to hold our own in a very tough market," he said.

Big Boy's domestic systemwide sales were $387.2 million in 2001, and estimated annual sales per unit were $1.36 million. Figures for 2002 were not available at presstime.

The 4,400-square-foot prototype in Grand Rapids contains 148 seats and is more cost-efficient than older units, Michaels said. He estimates that the new design will cost, on average, $300,000 less to build than the chain's former standard structure. The building's new look will help "play up the equity of our products," including the Big Boy burger, hand-breaded onion rings, ice cream and a breakfast and salad bar, Michaels said.

The prototype showcases some of the signature products in new ways. Carryout is receiving more emphasis, with a separate pickup counter and improved packaging. A small ice-cream soda fountain with a quilted stainless-steel counter has a prominent new area near the entrance, where customers who choose to sit on the five stools can watch their shakes and malts being hand-dipped the old-fashioned way.

Soups will be served from the kitchen instead of at the salad bar. Maintenance of the soup area, where spills are common, had been an issue in some units in the past, according to Michaels.

"It's not a retro design, but it has some retro touches," he said, explaining that the image Big Boy hopes to achieve is that of a modern but classic all-around restaurant that is as suitable for family dining as it is for business occasions.

"We're setting out to create our own niche. We aren't looking at all the other players in the family segment," Michaels claimed. He expects checks this year to average about $4.50 for breakfast, $6.50 for lunch and $8 for dinner.

"We're not giving our food away, although we have specials. Our signature products are holding up strong," he said.

The prototype features a small retail-sales area for packaged Big Boy products, including coffee, pancake mix and candy. A few signature clothing items also will be sold there, and Michaels expects cartons of ice cream to be added later.

Big Boy's foods are remembered in many localities that no longer have Big Boy restaurants, Michaels said, and the company is targeting several regions where the brand once was strong, including California and the Southeast. Two new franchised units with the new prototype design already are slated for the Phoenix market.

The company said its hiring of a new vice president of franchise sales was imminent. That individual would be the newest member of a reorganized management team that includes Roger Zingle as chief operations officer and William Hadden as vice president of marketing. Zingle formerly was chief executive and president of C.A. Muer Corp. of Southfield, Mich., whose dinnerhouses were acquired by Landry's Restaurants last year.

Big Boy also just opened a quick-service express unit at Ford Field, the new Detroit Lions stadium, in downtown Detroit. The walk-up outlet features a vastly scaled-down menu that includes the Big Boy burger, the Slim Jim ham-and-cheese pressed sandwich, fries and milk shakes.

The company also is continuing to test a fast-casual variation at a movie-theater complex in Southfield, Mich., and on the Michigan State University campus in East Lansing. "We are thinking about where this works the best," Michaels said.

"We have strengthened our infrastructure and have done what we believe are the right things to begin to grow this brand, which has great equity," he added.