Franchisee Turned Owner Revives Mama Fu's
Murphy Adams Restaurant Group is betting on new training, support and service programs to set Mama Fu's on the path to profitability.
By Maya Norris, Managing Editor -- Chain Leader, 7/2/2008 8:42:00 AM
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| Murphy Adams Restaurant Group President and CEO Randy Murphy, COO Steve MacManus and General Partner Mark Adams are laying the groundwork in areas such training and purchasing to make Mama Fu's profitable. |
Mama Fu's Asian House is the latest brand from Atlanta-based Raving Brands to find a new home. Austin, Texas-based Murphy Adams Restaurant Group purchased the concept from Raving Brands for an undisclosed amount in March. As the largest franchisee of Mama Fu's with five stores in Texas, Arkansas and Florida, Murphy Adams believes it has the operating experience and infrastructure to revitalize the struggling fast-casual Asian brand. President and CEO Randy Murphy spoke to Chain Leader about his plans for the 17-unit chain.
Why did you want to buy the Mama Fu's brand and become a franchisor?
So many people love Mama Fu's, including us-people who have run them, people that have been customers in them. We love it and we love the brand. And as a franchisee, I saw for a few years that Raving Brands did a wonderful job creating concepts and getting a lot of energy and top spin around those concepts. Where they didn't have the best execution was on really supporting and putting infrastructure behind those concepts. And we very much felt that with the right infrastructure, with the right leadership and the right capital, we could really take Mama Fu's to the level that all of us as franchisees when we first got into it thought we could get it to.
As the franchisor, what's your plan to make Mama Fu's both profitable and easy for a franchisee to operate?
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The company says training should help cooks master wok cooking and therefore consistently produce items such as Pad Thai. |
We've completely revamped and relaunched our food and beverage manual. So we're able to have better training, better consistency, better execution at the ground floor inside Mama Fu's units. So that was a huge component.
We're completely redoing the operations manual, and all of our training processes are being completely revamped and being re-rolled out. Those are some of the core pieces from an operations standpoint.
We're completely redoing the whole accounting side of how a franchisee can run their business and give them examples of standard P&Ls and tools like that to help them be better operators, which really didn't exist before.
From a cost perspective, we are completely re-evaluating and re-aligning our supply chain and distribution chain. It really wasn't something that was in the best of health. And we spent an enormous amount of time looking at areas where we could consolidate products with particular suppliers, get better distribution agreements and overall really reduce our cost of operations from a product side or cost-of-goods side.
Utilities are a big issue with any restaurant. So we've had a big initiative to share information across to our operators to recognize areas of utility inefficiency. That's been a major, major initiative.
And then some of the prep procedures that we were able to pull costs out of, like some of our protein preparation. We were able to institute some new methods that are really dropping some good amount of money to the bottom line for our current operators.
What else are you doing to make the brand profitable?
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Murphy Adams expects the check average to increase by $4 when Mama Fu's stores begin offering guests a full-service experience at dinner. |
We're also rolling out two new service programs for our current operators that we do here in Austin that not everybody in the system does. About half of the Mama Fu's do what we call a mixed service model, where it's fast casual during the day. So we understand people have 30 minutes for lunch, and we want to accommodate that. So it's counter service or fast-casual service during the day. And then at night it's full service. We see much higher ticket average [$4 more] when we do that. And our customers love that. Typically a fast-casual place is a great place for lunch, but traffic tends to decline during the dinner daypart. So we kind of feel like we are blazing the trail and really differentiating ourselves from our competitors.
The second part of that is we're starting delivery. We see that as another major differentiator and ability to increase revenue for our current locations. There are two main things that people already associate with takeout or delivery and it's basically pizza and Asian food. We have a lot of demand for our food leaving our four walls through takeout and catering. It's a natural evolution to roll out a delivery program. So what we've done is spent the last three months putting together this turnkey delivery program that is optional for our franchise partners. We are now testing it in the Austin market.
When I spoke to [Raving Brands Chairman] Martin Sprock last fall, he told me one of the reasons Mama Fu's was a difficult brand for Raving Brands was that the concept required a high level of cooking skills for a fast-casual concept. Is Murphy Adams doing anything in that area to make it easier to cook some of the dishes or make them less labor intensive?
I'm going to try to put this as nice as possible without making this sound as bad as it might sound. It's not a difficult restaurant to run. It just needs good training programs in place. It's that simple. It doesn't need to be dumbed down. It doesn't need to be made simpler. It just needs good training programs in place to train wok cooks. That's it.
Raving Brands, to their credit, like I said, they create wonderful brands. But if you look at how they evolved, they were a smoothie concept. They did Moe's, which for all intents and purposes, it's a Chipotle or a Mexican Subway. It's cooking some stuff and then preparing it when ordered. Mama Fu's is a real restaurant. It's a true restaurant with moving parts and pieces. And it was something that was a little bit more than they had experience for in the past. [Raving Brands is] really good at a lot of things they do. This was a little bit more than they had ever done before.
In December 2006, a group of Mama Fu's franchisees and investors filed lawsuits against Raving Brands alleging, among other things, that the company didn't provide the support, training and marketing the franchise agreements required and that Raving Brands was involved in a kickback scheme with third-party vendors. I know Murphy Adams will not be inheriting those lawsuits. But your company will have to contend with some disgruntled franchisees. How will you repair and rebuild that franchisee relationship as well as ensure that something like this doesn't happen to your company in the future?
We've met with every single operator--some multiple times now even in just the three months. They're very excited that we took the brand. And when you have something that you love like a Mama Fu's and you have a significant investment in time and money and you find that someone who knows how to operate the brand is coming in to do good things, do better things--they have know-how, they have people, they have time and they have capital--that's an exciting thing. So hands-down we have been so welcomingly received.
But you bring up a good point of some of the other things that Raving Brands is being accused of right now with kind of the under-table dealings and the kickbacks and stuff. We as a company have a policy where we do not hide income. We do not tack on additional things on the backs of our franchisees. We don't mandate a particular brand or manufacturer or distributor because of a kickback. If we would ever mandate a franchisee to use a particular distributor or food product it's because it is the best product for our brand and the best cost for all of our franchisees. So we very much understand where this brand has been with some of the things that may or may not have occurred with the franchisees. So we're very, very knowledgeable about that, and we're very careful to make sure that everything is in the open and is a complete pass through.
What are your expansion plans?
Our whole intention was grow it to 100 units in five years. We are going to grow from Texas to Florida, maybe as far north as Kentucky. We are going to grow in our footprint that we currently exist in, and we're going to focus initially mostly on medium- to small-sized cities. There's the Mobiles and Savannahs, Chattanooga, Birmingham, Tulsa--those types of cities. Those are the ones that Mama Fu's has been very successful in before. Those are cities that franchise partners can put up three to four stores quickly, get good traction, good top spin, leverage costs in the market. That's our strategy.
