Krystal finds a winner in NASCAR sweepstakes; chain extends new-and-improved promo in hopes of enticing customers

Nation's Restaurant News, May 18, 1992 by Carolyn Walkup

Chain extends new-and-improved promo in hopes of enticing customers

CHATTANOOGA, Tenn. - The Krystal Co., known for its 1-ounce, square-shaped steamed hamburgers, has beefed up a NASCAR racing-themed sweepstakes to lure more customers into its restaurants.

In other marketing and advertising news, company officials said new commercials involving "Bob" the talking "spokeshead," the rollout of a new menu item and the development of promotional events tied to the chain's 60th anniversary were in the works.

Krystal, celebrating its anniversary in October, is running the stock-car-oriented Krystal 600 scratch-and-win contest in almost all of its 250 units through May. The grand prize is a 1992 Ford Thunderbird.

"Last year's Krystal 500 was one of the most successful promotions we've ever had," said Tom Whitley, marketing vice president. "We decided to bring back a new-and-improved version of the sweepstakes this year to help celebrate Krystal's 60th anniversary and to offer our customers an extra incentive to visit our restaurants."

Whitley noted that the sweepstakes contributed to an 8-percent increase in same-store guest counts for the period last year. He said the chain hoped the 1992 edition would help drive same-store traffic counts up by 10 percent for the period.

To entice more customers into the restaurants this year, the company and its promotion partner, Citgo gasoline, are offering better prizes.

The smallest cash prize has been increased from $10 to $60, with a total of $77,000 to be awarded. Other prizes include 20 one-year supplies of Citgo gasoline; 100 remote-control model cars; 20 gas-powered mini cars and 7 million free and discounted Krystal food items.

Marketing support includes three weeks of television and two weeks of radio advertising featuring spokeshead "Bob." In-store point-of-purchase materials include menu board pictorials, crew buttons, counter cards, door decals, banners and posters.

Bob will appear this summer with his "twin brother" to promote some new combo meal specials, Krystal officials said. Current commercials end with the tag line "Head to Krystal."

Another summer promotion will center around the sale of 32-ounce insulated plastic drink containers or Krystal Coolers for hot or cold beverages. They will be sold with Coca Cola orders for $1.99 and will be refilled for 59 cents. Coca Cola is helping with the costs of the promotion.

The container is an improved design over last year's model, a polystyrene foam-covered squeeze bottle. Krystal sold roughly 1 million of the former model during the last three years, Whitley said, and expects to sell another million of the new version.

Krystal will roll out a new product in July that Whitley calls "the most exciting one in several years. We are sure it will blow the doors off our restaurants." He would not reveal what that product will be.

Chili Pups, miniature hot dogs covered with chili and cheese, and Krys Kross waffle-cut fries with a spicy coating and nacho cheese sauce topping were last year's new product introductions.

Another secret project Krystal is developing for September involves a special event leading up to its 60th anniversary. "It will be a high visibility event for public relations as well as actual advertising," Whitley said.

In connection with the anniversary, Krystal is planning a gathering of ex-employees and a search for the oldest living former employee, who will be honored at the reunion.

Currently, Krystal is in the preoffering stages of an initial public offering. The company, believed to be the second-oldest fast-food hamburger chain, plans to continue expanding through franchising, which it began in 1990.

Twenty of Krystal's 250 units are franchised. To date, Krystal operates in Alabama, Florida, Georgia, Kentucky, Mississippi, Tennessee and South Carolina.

Annual sales in 1991 were $203 million, a 5.3-percent increase over 1990, attributed primarily to the opening of new franchised units.

Krystal operates two sizes of restaurant - the Krystal Kwik, a double-drive-through with a limited menu of burgers, fries, breakfast sandwiches and soft drinks - and full-size restaurants with indoor seating and a larger menu, including Chili Pups and breakfast items.