With a $20 million investment, burger chain seeks to capitalize on some pandemic-based, quick-service restaurant trends.
The pandemic took a big bite out of many restaurants, from chef-driven, fine dining establishments to McDonald’s. But Checkers & Rally’s, the Tampa-based, drive-thru burger chain recorded high same store sales gains in 2020, opened 36 new restaurants and amended its debt.
Its success while others struggle amid the pandemic — profits at McDonald’s, for example, were down 25% in the first nine months of fiscal 2020 over 2019, and sales fell 13% — has put Checkers, with more than 800 locations, in a unique spot: aggressively chasing market share and sales growth. It’s doing that several ways, from a “restaurant of the future” redesign to a new mobile app for online orders and enhanced delivery options. The attack is being fueled by $20 million in capital from the chain’s ownership, New York-based private equity firm Oak Hill Capital Partners, which acquired the burger chain for $525 million in March 2017. The injection of capital will be used to fund Checkers & Rally’s aggressive five-year growth plan.
'The goal is to make sure that we provide a real win for our employees and guests in a stress-free environment and that we deliver strong value to our franchisees.' Frances Allen, Checkers & Rally’s
“There is so much opportunity for our brand at this time,” says Frances Allen, the CEO and president of Checkers Drive-In Restaurants Inc., parent of Checkers & Rally’s.
A large part of that opportunity stems from people eating out less and ordering takeout to socially distance, which, in turn, has driven interest in drive-thrus and delivery services. Allen, who headed Boston Market before she joined Checkers last February, says the chain’s niche model is an example of how the fast-food industry can meet those challenges. “With e-commerce so much a part of our business, we have taken one of our two drive-thrus and dedicated it to an e-commerce lane for pickup,” Allen says. “The desire for drive-thrus during this pandemic is not going to go away, and our enhanced mobile app and digital delivery service also has a bright future.”
Along with enhanced drive-thrus, another major feature of the Checkers and Rally’s restaurant of the future are changes to its closed kitchen, which Allen says is the “engine” of the brand and much needed. The kitchen is designed to give employees a better, more comfortable work environment. Allen also says the new kitchen will have more space for quick and efficient order taking and service and a dedicated break room for employee comfort — which didn’t exist before. Plans also call for buying new equipment and positioning it in different areas to give the crew more agility and space to make the food.
“Our food will be made faster with new and better equipment,” Allen says. “We have used the kitchen redesign as an opportunity to make some menu innovations and ingredient upgrades that we weren’t able to do previously because we didn’t have the equipment to do it well. The goal is to make sure that we provide a real win for our employees and guests in a stress-free environment and that we deliver strong value to our franchisees.”
When planning the new kitchen, the company considered several risks, including revising safety procedures for employees and guests. The new external design was also planned to ensure customers who order outside will have a frictionless experience at the walk-up window and a fun and comfortable patio area to eat. Input for the new design was collected through surveys on Checkers’ social media platforms.
The first fully reimaged Checkers restaurant will be in Lakeland, where construction has been underway and the new, contemporary kitchen already complete. Crews are now working on redesigning the outside of the building with plans to open early this summer. After Lakeland, the company will upgrade seven more locations and eventually roll out the new design to existing company restaurants, as well as new company and franchisee restaurant development in the fall. The brand approved 40 new franchisees in 2020 and has added 72 new locations to the development pipeline.
Checkers & Rally’s has also launched a new, fully integrated mobile app and rewards program, allowing customers to place orders easily for delivery or pickup with third-party partners, such as Uber Eats and Door Dash, earn rewards with exclusive deals for loyal mobile users and locate a restaurant. Company officials project users of the app will visit their stores 10%-20% more often and when they return, knowing their dollars spent will go to rewards and future savings, will spend an additional 10%-15% per order.