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In the U.S. casual dining segment, Friday’s is the fourth-largest player, trailing Applebee’s, Chili’s and Golden Valley-based Buffalo Wild Wings, in that order, with 3.6 percent of the market in terms of sales, down from 4.7 percent five years ago.
But following a rough go that most restaurants experienced during the Great Recession, Friday’s has returned to profitability. From a loss of $4.8 million in 2010, the chain showed a net profit of $14.9 million in 2011 and $34.5 million in 2012.
The game plan now is to remodel existing locations and build new ones in the image of the Nashville model over the next three years. About 20 will be done by the end of this year.
Richardson called the cost of remodeling “a meaningful investment” but did not go into further detail.
“The Friday’s experience, when done well, is unique and differentiating,” he said.
Friday’s is also upgrading its menu which features Jack Daniel’s-accented meats and sauces as well as salads and shareable appetizers. Drink options have been expanded, too, ranging from a muddled cucumber cocktail with Hendrick’s gin to a strawberry basil margarita.
“It’s more about expanding the appeal than changing the appeal of the brand,” Richardson said. “The restaurant consumer nowadays is a much-more-aware dining consumer than anytime in the past.”
But it’s uncertain if Friday’s can compete with a Figlio, which was a dormant brand for three years before it was re-invented and reopened at its new location last September.
“We see ourselves as upscale casual,” said CEO Kam Talebi of Kaskaid Hospitality, which owns Figlio as well as Crave, Urban Eatery and Union. “Our menu is chef-driven and seasonal. We also have handcrafted cocktails and a diverse beer offering from local breweries. TGI Friday’s is perceived as a national chain.”
Analyst Tristano said Friday’s needs innovation and money to upgrade its brand if it wants a larger market share.
“Brands that differentiate themselves will be in a better position, not only in decor and efficiency but also with modern amenities like Wi-Fi, flat-screen TVs and lounge seating,” Tristano said. “By investing in remodeling, you can incorporate new technology. Friday’s is generally in the top tier of the chain restaurants, and that is a good place to be.”
David Phelps • 612-673-7269