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Shakey's taps nostalgia in comeback try
6/21/07 - Richard Slawsky
Nearly everyone has a Shakey's memory, says Shakey's Pizza chief executive Tim Pulido.
For years, the Sacramento-based pizza chain, renowned for its "Bunch of Lunch" buffet, Mojo potatoes and striped-shirted banjo players, served as a gathering place for birthday parties, family reunions and Little League teams after a big game. At its peak, Shakey's boasted close to 400 restaurants around the United States.
"There is an enormous amount of warmth and nostalgia, and fond memories, about the brand that people tap into," Pulido said. "It is amazing. Everyone has got a Shakey's story."
Pulido, a 14-year Pizza Hut veteran who was appointed CEO of Shakey's in February 2006, hopes to leverage that nostalgia into a rebirth of the Shakey's brand, which has fallen on hard times over the past 20 years. Currently, Shakey's operates just 55 restaurants, mainly in California.
In part because of the brand's near-universal awareness, the number of restaurants could quadruple within five years.
"We get these wonderful stories of Shakey's' memories from peoples' youth," Pulido said. "This brand has so much latent power that hasn't been effectively leveraged. I think once we get it right, it will soar."
Hard time blues
Shakey's was founded in Sacramento, Calif., in 1954 by Sherwood "Shakey" Johnson and Ed Plummer, just a few blocks from where Pulido grew up. Johnson's nickname stemmed from nerve damage he suffered following a bout of malaria contracted during World War II. He often played Dixieland piano in the restaurant to entertain customers.
A second Shakey's opened in Portland, Ore., in 1956. The company was a pioneer in franchising, first selling the rights to operate under the Shakey's brand in 1957.
Johnson sold his interest in the company in 1967 to Colorado Milling and Elevator, and Plummer followed suit the following year. By that time, there were nearly 300 Shakey's Pizza Parlors in the United States.
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By 1975, the company had expanded to Canada and the Pacific Rim, including Japan and the Philippines. However, a series of sales followed over the years and the brand began to falter
"Unfortunately, due to that, there wasn't quite the attention spent on how to grow the business," Pulido said. "Over time, a lot of competition came into the marketplace and the brand shrunk."
By the time the Alhambra, Calif.-based Jacmar Cos., a 19-unit Shakey's franchisee, bought the company in 2004, the brand had dropped to less than 70 units.
Defining the brand
Pulido said his first step in rejuvenating the brand was to define exactly what the brand stood for. The next step was to translate that definition into an update of the architectural design.
He defines the new Shakey's as "family fast-casual," with an emphasis on food first and entertainment second.
"It is somewhat a throwback to where the category actually started, but we really feel there is a very defensible niche that Shakey's can hold on to," he said. "I can come here and have a good time with my wife or some friends, and the kids have their place to play, too."
Architectural changes include an updated logo and color scheme. And game rooms in new locations are separated from the dining room by a glass wall.
"We've got a nicer seating area, new lighting and an upgraded ambience and décor," Pulido said. "It's not pretentious, but on the other hand it feels nice."
The company also is revamping its menu, adding gourmet salads, sandwiches and pizzas, while retaining the tried-and-true favorites such as Mojo potatoes and the "Bunch of Lunch" buffet.
Pulido is slated to discuss the company's repositioning at the Fast Casual Summit in Dallas in September. The event, presented by Fast Casual magazine, is a two-day invitation-only gathering of executives from the restaurant industry to discuss issues facing fast casual restaurants.
Earlier this year, the company unveiled four remodeled restaurants in the Los Angeles area that Pulido hopes will carry the brand into the 21st century. Sales at the upgraded restaurants are trending up about 20 percent, he said.
"After all these years, Shakey's is definitely on the right track," said Nizar Patel, owner of a Shakey's franchise in Palmdale, Calif. "When I stepped into the newly remodeled location in Alhambra, I was pleasantly surprised. It far exceeded my expectations."
Looking to the future
Shakey's has three new corporate stores in the works for 2007, along with two franchise stores. The company also is eyeing three to five corporate stores and 12 franchise stores in 2008.
Beyond that, Pulido sees 80 percent of the company's growth through franchising, with the remainder coming through company-owned locations.
"Initially we want to make sure we demonstrate proof-of-concept," he said. "So, as a potential investor coming into the business, I can look at the new corporate stores and really get a feel for if this proposition is on track."
The company will focus its growth efforts on Southern California, mainly for ease of support, but the company also is open to exploring opportunities in other markets as well.
"I can open a restaurant in Auburn, Ala., or Lexington, Ky., and people know about us, Pulido said. "Because of that, that will allow us, we feel, to accelerate very rapidly."
