Golden, Colo.-based Good Times Restaurants was poised for a major Midwest expansion in 2007 but pulled the plug after the first capital markets for franchise financing dried up. The burger and custard chain refocused, channeling its resources toward initiatives that would help the homegrown chain stand out from the pack, says CEO Boyd Hoback. The downturn took a toll, but last month Good Times booked its 17th consecutive month of same-store sales growth, and the chain expects to have sales back to pre-recession levels, improved profitability and no debt on the books by the end of the year.
I spoke with Hoback this week about how Good Times, which today operates 44 units, mostly in Colorado, weathered the recession and what’s on tap now that things are turning around.
On the recession
The recession hit us very hard. We came into [it] with 16 straight quarters of same-store sales growth but gave that up in the last half of 2008 through the first half of 2010. Denver is also the highest penetrated fast-casual market per capita in the country, and because we operate at the top end of QSR, we were affected by the dramatic growth in units along the Front Range of Colorado on top of the downturn. We took a hard look at our value proposition and price choice across our menu and made fairly dramatic changes to every category to raise the quality side of the value equation and to offer a wider price choice. We stayed away from any $1 or value menu but rolled in Craver Combos for less than $3.
We also put a deeper stake in the ground around our core equities: innovation, high-quality handcrafted food, fresh regional ingredients and brand partners. We introduced hand-cut fries; moved to hand-spun custard shakes and raised the price; introduced both permanent and limited-time products that no one else has; and began to tell our brand story under the theme of “Happiness Made to Order,” which came out of consumer research. People feel better about themselves when they choose Good Times over other competitors because of our all-natural, high-quality, fresh ingredients and because of a connection with our brand personality and friendly service. We’ve increased our average check and our transactions by upgrading our burgers, fries and shakes.
On social marketing plans
We are early on in our efforts but have engaged [Boulder-based social media agency] Room 214 to take our brand story, voice, personality and product offerings into the social media realm. We plan to connect those efforts with a new loyalty program that is in test so we can do more direct one-to-one marketing to existing customers and give them new reasons to spread our story by word-of-mouth. With our limited media budgets, we believe we can tell a much deeper brand story in social media, make a better connection with Good Times loyalists, reward them for their patronage and drive trials of new menu initiatives. Historically, we have pushed the envelope with our creative, and we intend to do the same in the digital world, with an irreverent but approachable, funny, full of surprises, anti-fast food approach.
On the impact of the “better burger” trend
The fast-casual better burger concepts affect us for about the first six months [when] they open near us, then our volume returns. The concept that affects us the most is Chick-fil-A, I think because our customer base is more similar. Denver is home to not only Smashburger and Five Guys franchisees, but many other local better burger concepts — some that have done well and some that have already gone away. I believe the better burger guys have affected casual theme more than they have QSR. We are clearly QSR; however, we’ve sacrificed some speed of service in order to focus on better, made-to-order products. We have in test a new “5280 Lifestyle Menu” with everything under 528 calories, which is performing very well, a new line of Mile Hi Sliders that helps restructure our low price tier and are working on a new platform for our entire chicken category that better supports our brand position, all of which will be rolled out by this summer.