After record growth last year and the unveiling of a new cafe prototype, Corner Bakery Cafe plans to double its store count in the next 3 years.
BY KATIE LEE
After a record-breaking 2014 in which Dallas-based Corner Bakery Cafe doubled its number of new stores built in 1 year, the 23-year-old fast-casual chain looks to the future, capitalizing on the rise of the fast-casual segment nationwide, its own growth momentum and an efficient new prototype.
In 2014, Corner Bakery Cafe was a force to be reckoned with in the fast-casual segment, adding 27 new cafes and an additional nine franchise development agreements. Last year also saw the hiring of key executives Mike Nolan as chief development officer and Salil Bapat as chief financial officer, as well as technology upgrades and an increased focus on energy efficiency. In 2015, the company plans to open 33 new units, as well as continue rolling out its new cafe prototype, a design set to improve overall efficiency and reduce costs.
“2014 was a turning point for our brand. We experienced success in years past but never of this magnitude,” says Gary Price, president of Corner Bakery Cafe. “We put in an all new IT infrastructure and upgraded our IT systems at the unit level and the corporate office. We set the stage for rapid growth to give us the data that we need to make good decisions.”
Corner Bakery originally launched in November 1991 as a production bakery for Maggiano’s Little Italy. “Many of the ristorantes in Italy have their own production bakery,” explains Price. “On the first day of operations, all we sold was bread and coffee. That was the entire menu.” As people typically faced long waits for a table at Maggiano’s next door, they would often drift over to Corner Bakery Cafe. Eventually the menu expanded as customers began asking about sandwiches, salads and more and “Cafe” was added to the name. In 1995, Brinker International purchased the chain and began developing it as a fast-casual concept, often co-locating the brand with Maggiano’s. In 2006, Brinker sold the company (but still owns Maggiano’s), and Corner Bakery Cafe began franchising a year later. After a slowdown during the recession, the company was sold again — this time in 2011 to Atlanta-based Roark Capital, which owns it today. After Roark took over, Price was brought on as president, with the Number 1 goal being to double the 129-unit store count, primarily through franchising. Today the company has more than 185 units and 34 franchise partners — and seeks to sign up at least another 20.
In 2013, Corner Bakery Cafe partnered with Profitality, a restaurant consulting company that specializes in efficiency. Price wanted Profitality to look at existing buildings and find ways to simplify the model and build a more efficient prototype.
“They have been instrumental in the development of the kitchen for the new prototype,” Price says. “They did efficiency studies, time-in-motion and helped us build a new labor matrix. If a cook needed to make a Chicken Pomodori Panini, Profitality literally recorded every function needed to make that menu item and assigned a time to it. Every menu item has an exact labor time.”
Previously, Corner Bakery Cafe’s more generic labor matrix was based on sales per hour, not activity-based time in motion. The new labor matrix works hand in hand with Corner Bakery Cafe’s new back-office food costing system called e-Restaurant through Altametrics, which partnered with Corner Bakery almost 2 years ago.
One key finding from Profitality’s study was that 80% of all parties entering Corner Bakery Cafe were parties of one or two people. The older building prototypes were 3,900 to 4,000 square feet and featured too many four-top tables. Dining room utilization had gotten low with parties of one or two sitting at four-top tables. Profitality recommended shaving square footage off the front of the house; the previous prototype offered 110 interior seats and 36 parties. The reduced 3,600-square-foot prototype better utilizes its dining room with 90 seats and a comparable number of parties: 35.
Another area of reduction was travel paths. In a typical fast-casual restaurant, you order at a counter, and then it’s a full-service model after that: a server brings you your food at the table, clears your dishes and so forth. “But the travel paths in our old prototype were very, very long,” says Price. “With our new prototype, we were able to reduce those travel paths by 47%. That gets the food out quicker but also helps with labor staffing. If you’re in a peak time, you might need three servers to handle delivering food in a timely manner; we can now do that with two.”
In addition to being more operationally efficient, the new prototype is efficient from a construction/design perspective. Using unique construction, new units can be built much faster. “The pad gets poured, the exterior walls are literally Styrofoam blocks and they go together like Legos,” explains Price. “The whole four walls [can be] raised in 5 days. Plus, the Styrofoam is so energy-efficient that we were able to go from three HVAC units down to two.”
To date, 10 units feature the new ‘5X’ front-of-house design (seven new builds and three remodels). Core States Group Architecture teamed up with Corner Bakery Cafe’s in-house design and marketing departments to create the new look. Front-of-house changes include a lighter millwork package to brighten the feel for Millennials but also not lose Corner Bakery Cafe’s Italian heritage. Floors and booth backs were lightened. Older floors featured small Italian-style hexagon tile, wood or even carpet. “In the new prototype, we’re building one floor type and it’s a light, large format Travertine tile that runs throughout the building,” says Price. “It really lightens the space up a lot, and it’s much easier to care for.”
The new look also brings Corner Bakery Cafe’s coffee program — which used to be hidden in the back — front and forward. “We have a great coffee program, but we were burying it,” says Price. “The quality of the bean that we use is equal to Starbucks.” Today, Corner Bakery Cafe is enjoying a significant uptick in business during the mid-afternoon ‘chill’ hours, especially among Millennials, thanks to its great coffee, bakery fresh sweets and free Wi-Fi. Dinner business has picked up about 10% as well, with some stores doing upwards of 30% of their business now at dinnertime.
While the 3,600-square-foot 5X prototype attacked the front of the house with new efficiencies, lighter colors and greater emphasis on coffee, the even newer Proto 6 design addresses the back of the house as well, including the kitchen. “Our older prototypes had 56 pieces of custom equipment in the kitchen, and the new Proto 6 cuts that down to four,” says Price. “One of our strategic goals is to lower the cost to build, the cost to open and the cost to operate. You take out these custom pieces and it dramatically reduces the costs to open and the costs to operate.”
The first 3,300-square-foot Proto 6 model, which has not yet been released to franchisees, opened in late February 2015. “We’re very cautiously optimistic,” says Price. “Two of the three stores that we’re building for the company later this year are planned Proto 6’s. We will build those from the ground up and if that goes well, then in early 2016, we’ll spec these buildings to the franchise partners.”
[NOTE: This article originally appeared as the cover story of the April/May 2015 issue of Restaurant Facility Business magazine. Email the editor at [email protected].]