Dave Anderson, founder of Famous Dave’s barbecue restaurants, found himself in a place last month that he hadn’t been in nearly 16 years — the company’s boardroom in Minnetonka.
“They’re finally listening to me again,” he says.
Anderson left the company in 2002 when President George W. Bush appointed him to lead the Department of the Interior’s Indian Affairs office. His stint in government didn’t last long and Anderson went into other business ventures afterward, including another barbecue concept, Old Southern BBQ, that started in Wisconsin and came to Minneapolis last year.
Famous Dave’s thrived for several years after his exit, growing to about 200 locations mainly through franchising. And then, it went into the pits.
Growth plateaued as fast-casual dining chains broadly came under pressure from new competition, ranging from grocery stores to online delivery services. After the departure in 2012 of the executive who led the company through the recession, Famous Dave’s experienced a revolving door at the top — five chief executives in five years, none staying longer than 18 months.
The latest, Jeff Crivello, took charge in November and brought Anderson, who had been given a consulting contract two years earlier, back into the office.
“The past CEOs knew they had to refresh Famous Dave’s, but instead of talking to me they went and hired these fancy marketing companies, literally spent fortunes, and hired marketing people who had to study barbecue,” Anderson said. “I’m saying, ‘Hey, I’m in the Barbecue Hall of Fame. Don’t you think you should talk to me?’ Jeff is the first one who did.”
“Dave is a brilliant guy. He’s a savant with food,” Crivello said. “We’re often on the phone at midnight discussing this and that.”
With Anderson’s advice and recipes, Crivello is starting a broad makeover to a chain that had previously seen tweaks. The pair is experimenting with its Twin Cities locations, owned by the company rather than franchisees, in hopes of finding a menu and look that will lead customers to visit more frequently.
Last month, they opened a remodeled restaurant in Coon Rapids, ditching the cabin-like man cave vibe for a modern dining room that’s bright and welcoming.
“It typically takes a year to get the product ideas, supply chain and training in place. We did it in two months,” Crivello said. “We went from dark and dreary with depressing music to a 180 degree shift.”
Crivello, 39, asked Anderson, 64, to come up with new recipes with wider appeal beyond barbecue. Anderson added sweet potatoes, mac n cheese, creamy coleslaw and corn muffin tops. “These are all new recipes, well, my family’s recipes from over the years,” he said.
In the month since the Coon Rapids location reopened with its new look, sales are up 20 percent. The company is already exploring how to encourage franchisees to adopt the new look by providing materials and financing options.
Famous Dave’s is starting the refresh at a time when the $2.53 billion barbecue industry is making a comeback, growing at a faster pace than many segments of the U.S. restaurant industry. Major fast-food chains like Arby’s, KFC and McDonald’s have all made recent barbecue additions to their menus.
“It’s younger consumers, millennials and Gen Z, moving toward spicier flavors with more adventurous palates,” said Darren Tristano, chief executive of CHD-Expert, a market research firm in Chicago. “They’re looking for hipper, cooler concepts.”
Famous Dave’s saw increases in foot traffic and sales at its corporate-owned stores during the first three months of the year. In a report released last week, the chain showed a profit of nearly $1 million, reversing course from a string of quarterly losses. The company continues to close unprofitable locations and is down to 150 compared to 194 in 2013. Its stock price, hovering around $8 per share, has nearly doubled since Crivello’s arrival.
Famous Dave’s has also hired noted Kansas City pitmaster Travis Clark to ensure consistency with brisket and ribs. He’s working with the chain to open new concepts under the Famous Dave’s umbrella.
To expand its appeal, the company is paying new attention to female customers with more variety and smaller portions. Crivello said he hopes a few smaller entree portions will lead customers to try new side dishes, such as sweet potato soufflé and Brussels sprouts.
Of the 23 new items added in Coon Rapids, only about 10 are expected to make the final cut for rollout to other locations.
Jim Kielb of Otsego, picking up a takeout burger, fries and coleslaw for lunch last week in Coon Rapids, said he’s happy about the menu changes. “My girlfriend doesn’t like barbecue,” he said. “She’d rather have salad or something lighter. Now I can bring her here and we’re both happy.”
Longtime customers Mary and Dennis Conley of Champlin like the new ambience. “We’ve been coming here since the ’90s, but I like the new TVs, the colors, and the country music,” Dennis said. “I noticed a decline when Dave left and they got rid of the cornbread. Now it seems more like it was when they first opened up.”
After the Coon Rapids test is completed in a couple of months, the Maple Grove location will be the next restaurant to get the refresh.
Store remodels may be a big physical change, but there are other significant changes on the company’s agenda. With nearly one-third of sales now coming from delivery and takeout orders, executives will be adding small commissary locations for delivery and catering only. The first one will open later this year in California.
Barbecue’s advantage is that it travels well, making it a perennial favorite for outdoor celebrations, let alone delivery and takeout. “We want to broaden our demographic to a younger audience,” Anderson said. “Millennials do a lot of takeout and delivery.”
About half of Famous Dave’s existing restaurants have access to a delivery service, but some franchisees are resisting it. Delivery companies charge the restaurant 20 to 30 percent, which many believe is too steep. “They’d rather have the customer in the store where they can offer a drink, appetizer or dessert,” Crivello said. “We’ve got the data. I think buy-in will eventually come.”
Anderson said his first clue that things were changing at Famous Dave’s was when he saw Crivello pick up a mop during the Coon Rapids remodeling. “You don’t usually see CEOs doing that,” Anderson said.