Back Yard Burgers Returns from the Brink

This Southeastern chain was hit hard by the Great Recession, but an updated menu and more upscale design could help it thrive again.

 BYB3A raised set of booths in the middle of the dining area breaks up the space, distinguishing it from QSR operations.The best year in Back Yard Burgers’ history was 2007. The Nashville, Tenn.-based better-burger chain posted records for store count, sales and profitability.

Then came the Great Recession and a major change in the company’s fortunes, says president and CEO David McDougall. “As 2008 rolled around, [the private equity firm that previously owned the chain] realized that a number of the franchise owners were not in really good shape. As the economy tanked, they went with it. They didn’t have the wherewithal to deal with the difficulties that came upon us.”

The following several years saw a major decline in store count, with Back Yard Burgers going from nearly 180 locations to fewer than 60. By the time McDougall joined the company in 2013, things were so bad that franchisees had lost all confidence in the concept. “When I first got here, none of them — and I say zero — had any interest in putting another dime into Back Yard Burgers. If you’re in a franchise business, that’s bad.”

McDougall and his team were brought in by the company’s new ownership group, Pharos Capital Group, to right the ship.

One of McDougall’s first moves was to conduct a brand architecture study, which included interviews with employees, vendors and customers. The study’s key takeaway was the disconnect between the quality of the restaurant’s food and the experience it offered its guests.

Back Yard Burgers’ offerings, says McDougall, place it squarely in the fast-casual sector. Burgers include blue cheese and bacon, chipotle with haystack onions, and mushroom and Swiss, all featuring 1/3-pound Angus patties cooked on a chargrill. The chain offers sides of fried pickles and two types of french fries. Other items rounding out the menu include salads, veggie and turkey burgers, chicken sandwiches and hand-dipped shakes.

BYB5Design elements, like subway tiles and overhead wooden beams, help move the POS station away from a QSR look. Photos courtesy of Back Yard BurgersDespite the menu, the customer experience offered by Back Yard Burgers had a much more fast-food feel. To move away from quick serve to something more fast casual, the chain first reorganized its menu, says McDougall. The numbered combos were eliminated, replaced by a more a la carte menu with descriptions of the food.

“From a guest services standpoint, people don’t have to ask what comes on that burger. … That ended up being a benefit to us by eliminating some of the questions from light to first-time visitors of what a particular menu item was,” McDougall says.

The chain also changed its overall branding, developing a new logo, packaging and even employee uniforms.

The biggest change came in September 2016, with the rollout of a new design at a franchised store in Gulfport, Miss. While the previous look was both dated and too QSR, the new design is modern, comfortable and Millennial friendly. It’s one of the last major steps McDougall has taken to unify Back Yard Burgers’ food and its customer experience and, hopefully, to turn the chain’s fortunes around as a result.

FOH

Back Yard Burgers’ move away from the QSR look starts from the outside of the restaurant. That’s the place, says McDougall, where “100 percent of your guests or potential guests are going to see you. Initially, what’s the impression they get when they’re driving by and they see your building?”

With this in mind, the designers gave the building a modern look with corrugated metal and a faux wood facade. The new design also features a covered outdoor patio, reinforcing the backyard concept while communicating to guests that the restaurant is more than a spot for a hurried lunch.

The interior of the space also puts Back Yard Burgers firmly in the fast-casual category. It has a color palette dominated by wood tones with splashes of yellow, red and orange. Drum-style fixtures illuminate the dining area, while the top of the walls is lined by a mural banner depicting people enjoying backyard activities.

BYB1The new exterior at Back Yard Burgers features corrugated metal, wood-style paneling and a covered patio.Seating includes solid wood tables with red metal chairs, as well as multiple booths with upholstered backs and seats. One set of booths in particular stands out. Located in the center of the dining area, they sit on a raised pedestal. According to McDougall, these booths help break up the dining area. Notably, this is not a set feature for the chain’s new design. In other restaurants Back Yard Burgers uses a community table in this spot. The company will continue testing both the booths and community tables going forward.

BOH

Back Yard Burgers’ new design also features significant changes in its kitchens, including the removal of the wall between the production and dining areas. Today’s customers, says McDougall, simply want to see how the restaurant makes their food.

The kitchen’s food production process starts on the back wall of the kitchen, home to the eight-foot gas-fired chargrill, used for both burgers and chicken. Next to the grill sits an upright freezer, which stores these proteins. “We tried the undercounters. I used to be a cook and thought those were pretty easy, but our team members prefer the stand-up so they’re not bending over all the time,” says McDougall.

After cooking the proteins, staffers turn 180 degrees and place them in a hot food holding unit, which stores the menu items for a maximum of 10 minutes. This piece marks the beginning of the sandwich station, an island in the middle of the kitchen.

The sandwich station itself has two identical lines placed back to back. On the right, team members assemble sandwiches for dine-in customers, while the left side handles the drive-thru. The key piece on the assembly lines is a sandwich table, with refrigerated wells on top holding vegetables, cheese and sauces. Refrigerated drawers below the wells store backup sandwich fixings.

The fry station sits on the kitchen’s left wall. While the old kitchen had three fryers, the new design has four. This change accommodates Back Yard Burgers’ expanded menu, which includes onion rings, fried pickles and two types of french fries (seasoned and waffle). Next to the fryers sits an expanded dump station to accommodate these additional menu items.

BYB4Back Yard Burgers’ ice cream station (seen above to the right) is directly in diners’ lines of sight, while the chargrill sits against the kitchen’s back wall.The kitchen’s opposite wall, toward the POS counter, plays home to the dessert station. While Back Yard Burgers’ desserts include cobblers, this section of the menu focuses most on ice cream treats, including shakes, sundaes and banana splits. The dessert station, then, centers on a freezer for holding tubs of vanilla ice cream. Syrups and toppings, which allow the chain to offer several different shake flavors, sit on top of the dipping cabinet, along with the shake mixer.

While the dessert station in the new kitchen sits close to the ordering counter, the previous design had it further away from customers. The shift to the front was made “so people could see the activity, so they could literally see our team members making those great milk shakes and great desserts. A lot of times that will be the thing that sells rather than someone trying to sell them to you,” says McDougall.

Once complete, all the menu items — sandwiches, sides and desserts — meet at the expediting station, which sits on the sandwich island’s endcap closest to the point-of-sale counter. Staff then bag drive-thru orders and send that food to the window on the left, while other team members deliver trays to customers in the dining area.

While this kitchen serves the revitalized Back Yard Burgers better than the previous design, McDougall stresses it is not the chain’s “kitchen of the future.” McDougall aims to design and deploy a more forward-
looking kitchen by the end of 2017, provided that the right real estate for such a project opens up.

The kitchen design will likely be even more visible than the current one in the future. “That’s clearly what consumers want to see now,” says McDougall. “They want to see what’s going on in there, whether it’s [by us] adding additional windows down the side hallway or drive-thru so people can see in and see the activities of our team members working.”

Along those same lines, the kitchen of the future will also likely make its dessert station even more visible, with a setup that encourages customers and the employee working that station to interact with one another.

The biggest potential change, though, could be in how the chain handles its proteins. Currently Back Yard Burgers gets its proteins delivered frozen. McDougall is exploring a move to fresh proteins. Implementing such a change will have a major impact on the chain’s operations. This will include reworking refrigeration in both the prep and production areas, installing new handwashing sinks and perhaps even going from one char grill to two separate units (one for beef and one for poultry) to prevent cross contamination.

“There are a number of regulations and requirements we’re going to have to build into any new kitchen if we’re going to go that route,” McDougall says.

Closing

BYB2The chain’s new design features an open kitchen. Future stores may expose operations even more through windows that allow dine-in and drive-thru guests to watch food being produced.While Back Yard Burgers may continue to evolve its kitchen in the coming year, the chain’s new look and feel are essentially set. Next come the refinements. With earlier changes to the company’s menu, along with a stronger economy, several franchisees are showing interest in refurbishing their existing stores to match the new appearance. That alone is a great sign for the future of a chain that had once lost the faith of its franchisees.

At the same time, the company hopes to build a ground-up prototype with the new design in the near future.

These projects, says McDougall, should help Back Yard Burgers find ways to drive down the cost of building a new store or refurbishing an existing one. “One thing I know about franchisees is that they will be very resourceful at being able to find fixtures or tiles that don’t cost as much. It’s important to leverage that and not think as a franchisor that you’re going to have all the answers, and know that the franchisees don’t expect you to.”

Along with refurbishments, next on the agenda is actual growth. While three years ago no franchisee wanted to put any more money into Back Yard Burgers, today about a half dozen franchisees are actively looking to open new locations, McDougall says.

This growth will focus on the chain’s existing footprint in the Southeast. New openings, McDougall says, will likely focus on midsized cities such as Nashville, Tenn., Birmingham, Ala., and Charlotte, N.C. These are places where Back Yard Burgers either currently has a presence or had a presence prior to the Great Recession. It will be easier to succeed in markets where the chain has some level of name recognition, states McDougall.

“Considering that just a few years ago Back Yard
Burgers seemed destined for a slow, painful demise, the fact that franchisees are now putting money into the concept and are seriously discussing growth strategies is impressive itself,” says McDougall.

“This has definitely been a work in progress. I’m very excited to finally see the fruition of this. It’s creating a nice momentum and a good feeling about the brand and where we are, particularly from where we’ve been.”

 Key Players

  • CEO: David McDougall
  • Interior Design: Creative conceptual design by Cakewalk Creative; design intent drawings by Louis + Partners
  • Equipment Dealer: Dykes Foodservice Solutions

Facts of Note

  • Chain Headquarters: Nashville
  • Year Founded: 1987
  • Signature Menu Items: Back Yard classic burger,
    blackened chicken sandwich, seasoned fries, hand-dipped milkshakes
  • Number of Units: 57
  • Unit Size (Prototype): 2,300 square feet
  • Seats per Unit: 40 to 50 seats
  • Location Type: Freestanding; stores must have a
    drive-thru
  • Total System Sales: $50 million
  • Average Sales: $900,000 annually
  • Unit Growth Projections: four units in 2017
  • Check Average: $10
  • Equipment Package Cost: $300,000
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