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Rumbi Goes Back to the Drawing Board

Rumbi Island Grill slows expansion to tweak operations and build-out costs.

By Maya Norris, Managing Editor -- Chain Leader, 1/1/2008

Rumbi Island Grill
Because Rumbi targets professionals and double-income families, it prefers to open in inline locations in high-end shopping malls and lifestyle centers.
Rumbi Island Grill
Stores feature a relaxed, tropical decor with padded booths, bamboo, plants, tribal masks and statues of famed Hawaiian surfer Duke Kahanamoku.
Rumbi Island Grill took a step back last year to move forward. It slowed down growth in 2007 to concentrate on making the tropical, fast-casual concept more amenable to expansion. Now Rumbi believes the concept is ready to enter new markets and fill in its current markets.

The Sandy, Utah-based chain has 20 company and three franchised restaurants in Utah, Arizona and Colorado. Rumbi opened 10 units from 2000 to 2005 and eight in 2006. But it only opened five in 2007 as President Stuart Gee spent the last year trying to reduce the complexity and costs of the operations and lower build-out costs.

“Based on what we're finding with our restaurants and the financial model, we think we can do much better,” says Gee, former vice president of operations for Romano's Macaroni Grill. “So we just took a measured approach to say, 'Hey, let's slow down and make sure we have the right model for us and for a franchisee coming in.'”

Cost Controls

To make its signature rice bowls less labor intensive, Rumbi began using preportioned, precut vegetables, as well as teriyaki and orange sauces made to its specifications by a vendor. The company kept costs down by negotiating contract pricing for vegetables and vendor-made sauces.

Unit workers still make the jerk and peanut sauces and all the salad dressings on site. However, the company is looking into either having a vendor make them or buying them off the shelf.

Rumbi also re-engineered how to build the rice bowls and salads, which each make up 35 percent of sales. Previously unit workers tossed greens, proteins and other ingredients with dressing in chilled prep bowls. Now they put the salad ingredients directly into the customer's bowl and serve the dressing on the side. And today rice bowls no longer come topped with green onions and sesame seeds.

While the salads and rice bowls are easier to make, unit workers are spending more time preparing the pulled pork used in Rumbi's pork entree and sandwich. Previously the company used a prepared product. Now workers braise and boil the pork for four hours on site. By doing so and switching to a different vendor, Rumbi says it cut pork costs in half without sacrificing quality. “It's tougher for us to make, but the cost savings was astronomical,” Gee says.

These changes have kept food costs flat at 28 percent. They also lowered labor costs 4 points to 30 percent and shaved three or four hours of prep time daily.

Tropical Getaway

One of the biggest cost savings will come from a new prototype, which will feature a smaller kitchen thanks to the menu-engineering changes. Future Rumbis will be 1,800 to 2,000 square feet and cost $275,000 to $300,000; the old box was 2,500 square feet and cost $400,000 to $600,000 to open.

The prototype will debut in April 2008 in Provo, Utah. It will be one of five or six company units opening in Utah and Arizona in 2008; the company expects franchisees to open four or five in Arizona, Idaho and California. Then it will ramp up expansion in 2009 with 20 units in current markets plus California and Nevada.

Rumbi would like to have 100 to 125 stores nationwide in five years, equally split between company and franchised units.

 

Snapshot

Concept Rumbi Island Grill

Headquarters Sandy, Utah

Units 23

2007 Systemwide Sales $22 million

2008 Systemwide Sales $26 million to $27 million (company estimate)

Average Unit Volume $1.2 million

Average Check $8.25

Expansion Plans 5 or 6 company and 4 or 5 franchised stores in 2008

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