The Palm is trying to attract more women and younger guests with a new cocktail program and bar menu that it launched earlier this year.

“You can't rest on your laurels. The restaurant chain that is just on auto pilot is headed for extinction in today's society,” says Craig Weichmann, managing director of Mastodon Ventures Inc., an Austin, Texas-based investment banking firm that specializes in restaurants. “It's about concentrating on what you can do within the four walls to stimulate some customer excitement.”

The Gentle Palm, which features whiskey, black tea, pomegranate juice, strawberry puree and maple syrup, is one of the five new cocktails The Palm debuted this year.

Woodland Hills, Calif.-based Daily Grill, a 24-unit, upscale-casual chain, began offering a prix-fixe value menu in November 2007. Customers have the option of soup or salad, an entree, and dessert or wine for $20 to $24 depending on the entree. About 20 percent to 25 percent of entrees sold come from the value menu.

“We want to give the impression that we have a depth of menu. So if you're a value shopper, you can walk in and out for around $20 at a Daily Grill,” says Philip Gay, president and CEO of parent Grill Concepts. “Or if you still want the filet or some other items, they're there on the menu.”

Atlanta-based Bugaboo Creek Steak House is also trying to play up a value proposition. It debuted two limited-time promotions in spring to drive traffic on weekdays. The Kids Eat Free Tuesdays special offered children 10 and younger a free meal from the children's menu with the purchase of an adult entree on Tuesday nights. The $12.99 Ribs Day gave customers a deal on Wednesdays on Bugaboo's signature Smoked Baby Back Ribs, an item that is regularly priced at $17.99.

According to President Kristi Nyhof, guest counts increased during these promotions, but she won't provide exact figures. The 30-unit chain is offering the limited-time offers again from July through August.

While discounting is a viable means of driving traffic, it can also backfire if a restaurant relies on it for too long, disrupting food costs and average checks, Weichmann warns. “You have to make sure that what you're promoting is consistent with the image of where you're trying to drive the chain,” he adds.

Grill Concepts debuted In Short Order in February. The 450-square-foot, fast-casual unit features soups, sand-wiches and salads from its upscale-casual sister con-cept, Daily Grill.

Taylors, S.C.-based Fatz Cafe launched a cocktail program in January that features more wines and new specialty cocktails, and a new dessert menu in March. The mid-priced, 44-unit chain, which opened five units this year and plans to open another three by year-end in the South, wanted the new menus to bring in more adults and couples. “When folks were going out for family get-togethers, Fatz was a great place,” says President and CEO Steve Bruce. “But if a couple of folks were going out before the theater or whatever, Fatz wouldn't be the place they'd go to have cocktails or those desserts.”

The alcohol and dessert menu seems to be working in metropolitan locations like Charlotte, N.C., more so than small towns, Bruce says. The dessert offering makes up 4 percent of sales. Bruce says the cocktail program has also driven incremental sales but will not quantify.

The Palm, a 29-unit, white-tablecloth steakhouse chain, also created a bar program to diversify its customer base. The Washington, D.C.-based company introduced five hand-crafted cocktails in April and a small bites menu in May to appeal to more women and a younger clientele. It doesn't have data on whether the new program is bringing in more women and younger customers, but early results show the specialty cocktails make up 3 percent of beverage sales and the small-plates menu accounts for 1 percent of food sales, says Executive Vice President Bruce Bozzi Jr.

Last year Abuelo’s created a new menu with more food photography to prompt guests to order items that have better profit margins. “That’s certainly part of the game,” says President Bob Lin.

The Palm recently upgraded its 837 Club, which customers join for a $25 fee. Members not only earn points for rewards, but they also receive a $25 gift certificate upon joining, invitations to special events and members-only dinners, and complimentary wine selections and entrees.

This year The Palm redesigned the marketing collateral for the first the time in five years and added new rewards to the 15-year-old program. To cater to its younger customers, the company now has experiential rewards such as trips to Napa Valley, ballooning and race-car driving.

With 100,000 members in the 837 Club, The Palm says it enrolls 2,000 to 3,000 new members monthly. Those members make up about 42 percent of The Palm's sales, and they spent $1 million more this year over last year, says Bozzi.

Chattanooga, Tenn.-based Gordon Biersch has also seen success with its loyalty program. The 39-unit brew-pub chain's Passport Program has about 55,000 members. While customers like earning points for prizes such as a brewer's dinner or a trip to Hawaii, surveys indicate they particularly like one perk of the program: moving to the front of the line when there is a wait at the restaurants.

According to the company, Passport members average 1.7 visits per month vs. 1.2 visits for the average Gordon Biersch customer. Eight percent of sales come from members of the loyalty program, whose average check is in the $30 range; the average check of a nonmember is $24.

Newport Beach, Calif.-based Ruby’s Diner, the 45-unit, 1940s-themed family-dining chain, has a fast-casual prototype for airports called Ruby’s Dinette with a limited menu of burgers, fries and shakes. Smaller than Ruby’s typical 4,500-square-foot restaurant, the Dinettes are 1,500 to 2,000 square feet, cost $800,000 to open, and generate $3 million in sales per unit.

Il Fornaio CEO Mike Hislop says such information is critical to building brand loyalty. Because the Corte Madera, Calif.-based company only opens one or two units a year, driving frequency and top-line sales is key for the Italian dinner-house chain, which has an average unit volume of $6 million and has seen comp-store-sales increases for 22 consecutive quarters. “The key has been to always be focused on the guest, to always be focused on building the relationships and really be able to take the guest from a first-time guest to a loyal guest,” Hislop says.

Abuelo's has also invested in technology. Since the upscale-casual Mexican chain decided to slow expansion because of the tight credit market, it has spent the past year developing an IT infrastructure. The company will roll out an integrated business-management software system to its 39 units by the fall. The system links data from the central office, POS systems and suppliers. A single source of data that houses information about each store's sales and ordering history, the program can help unit managers accurately project their sales mix, determine how much food they need to order, schedule labor and reduce paperwork. Abuelo's expects to reduce food costs by 2 points and labor by 1 percent with this new system.

“Putting something like this together doesn't make sense for a seven-unit chain or an eight-unit chain, maybe a 10- or 13-unit chain, because the savings that you're going to get aren't worth the initial cost of setting up the program and maybe even the cost of running the program itself. You have to buy it and license it and maintain it,” says Bob Lin, president of Lubbock, Texas-based Food Concepts International, parent of Abuelo's.

Charlie Brown’s Acquisition Corp., a steakhouse chain owned by New York-based private-equity firm Trimaran Capital Partners, purchased Bugaboo Creek Steak House last year for $24 million from Rare Hospitality. Bugaboo halted expansion this year to ease the transition and focus on the guest experience.

In February, Grill Concepts debuted In Short Order, a fast-casual concept that features sandwiches, soups and salads from Daily Grill, in the lobby of the Sheraton Hotel in Seattle. The 450-square-foot test unit is generating more than $1,000 per square foot.

The company expects future units to be 700 to 800 square feet without a kitchen if a Daily Grill is nearby. It will cost $500,000 to open. If the unit requires a kitchen, it would be about 1,200 square feet, but the company is not sure how much it would cost to open. It plans to expand In Short Orders in nontraditional locations such as hotels, office buildings and hospitals.

Irvine, Calif.-based Yard House opened a smaller footprint of its high-volume, big-box concept in Chino Hills, Calif., in June. The Yard House Bar & Grill, which is 6,800 square feet and cost $4.5 million to open, features about 50 draft beers and 60 dishes—about half the menu of a typical Yard House. The Bar & Grill is also about half the size of a Yard House, which averages 10,000 to 12,00 square feet, costs $4.5 million to $5.5 million to open and has an average unit volume of $8.5 million.

Unlike Yard House, which is a destination restaurant in mixed-use  projects, the Bar & Grill concept was designed as a neighborhood bar. So the company prefers to open them in freestanding pad sites in B markets. According to CEO Steele Platt, the Bar & Grill in Chino Hills is on track to generate between $6.3 million and $6.8 million.

“Unfortunately with today's cost of real estate, with today's cost of construction, there needs to be more attention given to the ways to reduce the size of the box,” Weichmann says. “Smart growth may indeed mean you have to have a different format size that's smaller because the abundance of locations at Main and Main isn't there.”

Creative tactics like these are the hallmarks of regional chains positioning themselves for disciplined national expansion, says Weichmann: “[They're] striving to achieve and trying to break down the factors that cause you to lose in this industry.”