Famous Dave's said its profits fell this spring, but it saw progress from the franchised locations that make up the bulk of the barbecue chain.
Comparable sales at its franchised units rose for only the second time in since 2011. The gain was small at 0.7% in the second quarter, which ended June 30.
However, it represented an important step forward for executives who have wanted franchisees to adopt some of the innovations taken earlier at corporate-owned locations.
"The franchisees are starting to reinvest and refresh their stores," Famous Dave's Chief Executive Jeff Crivello said Monday. "They saw what happened when a franchisee with five stores in Seattle and Utah saw a 20% lift after a refresh."
Crivello, since taking the helm of the Minnetonka-based company in November 2017, has experimented with menu and decor changes that have yielded some gains at Famous Dave's 33 company-owned units, including many in the Twin Cities region.
Famous Dave's has also steadily reduced its location count to cut losses and improve efficiency.
As of Monday, the company operated 134 restaurants, compared to 150 a year ago.
Revenue increased to $21.1 million from $14.5 million a year ago. Corporate-owned locations saw a sales decrease of 0.8%.
The company said it earned $1.44 million, adjusted for ongoing operations, a 15% decrease from $1.7 million a year ago. Its adjusted per-share profit amounted to 16 cents, above analysts' forecasts of 7 cents.
In July, the company closed the Calhoun Square location that it had operated since 1996. Originally, it planned to downsize the restaurant to fit into its new smaller footprint of one-third the size of its typical footprint as more customers nationwide choose takeout or delivery than dine-in.
Crivello said the restaurant was operating without a lease for two months and could not get a response to their requests to reconfigure the space. Calhoun Square has been for sale since early this year.
A new location in Uptown is expected to open later this year just a few blocks from the former location, Crivello said, but the plans are not yet final.
Two more locations will open in October. Provo, Utah, will get the company's second smaller-footprint store, which also has a downsized menu. On the other end of the scale, a 7,200 square foot flagship of a new concept called Clark Crew BBQ will open in Oklahoma City. Travis Clark, a Kansas City pitmaster, joined Famous Dave's a year ago to focus on brisket and ribs consistency. The new restaurant will be a test of the company's "best" restaurant in its good-better-best quality scale.
The Maple Grove location will be one of four restaurants to test an assortment of Beyond Meat faux meat products. BBQ street tacos, burritos, BBQ nachos, BBQ bowls and a tropical burger will be added later this month, a much larger assortment than most restaurants that have added the plant-based meat alternatives.
"We did it because of customer demand," Crivello said. "Our goal is to draw as many families as we can and you need to cast a wide enough net to provide offerings."