Chain Leader

Lane Cardwell

Houlihan's 2.0
May 7, 2008

My first experience with a chain casual dining restaurant in the grill and bar category was a TGI Friday's in Dallas in the early '70s. The experience was so shockingly novel that there was little to compare it to. The original was opened in New York in 1966 by Alan Stillman. The Dallas location was the first unit of what was to become the TGI Friday's chain under president Dan Scoggin. A few years later, and not far away from the Dallas TGI Friday's, another pioneer in the category, Houlihan's, opened a location. They had very different personalities. Friday's was for the partiers. Houlihan's was for those who wanted a casual, but more innovative food experience. Houlihan's was fun. Friday's was really, really fun.

At the time, the category was called "fern-bar"; probably because of all of the hanging fern plants and the fact that they had bars. Go figure. The term "Tiffany lamp bar" never really caught on, although the lamps probably outnumbered the ferns 5 to 1. These casual dining concepts revolutionized the full service restaurant industry. Combining an active bar scene with a casual menu gave new options to a customer that was looking for more than another steak or seafood experience from Steak and Ale, Red Lobster, or the other dinnerhouse chains of the day.

While the focus with the early Friday's was as much on the bar as the food, Houlihan's had carved out a distinctive positioning with its creative approach to food. They popularized the spinach salad, and it was the first place I ever had a London broil. Houlihan's was part of the Gilbert/Robinson organization in Kansas City, MO. For many years they flexed their creative muscles by launching a number of concepts.

The grill and bar category has matured over the past three decades, and what seemed novel at the time has become mainstream. The category today consists of some of the casual dining industry's largest concepts: Applebee's, Chili's, Friday's, Ruby Tuesday's, Red Robin, Bennigan's, and many other smaller chains. 30 years of familiarity, and their presence in almost every neighborhood and community across the country, has left these chains working overtime to maintain their own unique positioning within the category. The "scratch kitchens" that most of these chains started with have evolved into something more manageable. There is a lot of nostalgia about cooking from scratch, but talk to the people who used to execute it every day and they will tell you that it was hard work to turn out the menu, and that it just can't be done easily in today's chain environment.

Houlihan's has decided that its future will be in following the road less taken. Bob Hartnett, CEO, has launched Houlihan's on a path that is reminiscent of the early glory days of the category. He has touched everything representing the brand: food, uniforms, music, menu format, and prototype design. His overall strategy is rooted in the belief that a scratch kitchen will separate them from their competitors. The menu skews toward contemporary foods with intense flavors, updated versions of familiar foods, and more ethnic foods. Bob has updated the prototype design to reflect modern styles, materials and colors. He has brought a key component of the early fern-bar category, music, into the forefront. Music selections are much more contemporary than is the norm for a chain, and the playlist for the month is listed on both the menu and the website. The bar is a focal point without dominating the diners in the restaurant. The patio is designed to be used, not viewed from the inside.

The old Houlihan's in Dallas was quietly put to sleep many years ago. The new version of Houlihan's opened in Addison, Dallas's town-that-restaurants-built, in September. It is proof that new thinking can keep old concepts young. Bob Hartnett is a former Bennigan's executive, and worked for Outback founders Chris Sullivan and Bob Basham when they were running Bennigan's. 

Houlihan's 2.0 is a breath of fresh air in a category of older concepts that are struggling to stay relevant as customers are exposed to new ideas. They have 92 units in 21 states. They have opened over a dozen new prototype units and have retrofitted this up-to-date look and feel in over 30 units. However, it is the scratch kitchen that will forever differentiate them from their former close competitors. And where do they find all of these skilled kitchen employees? From the concepts that used to cook from scratch, and are now following the road more frequently taken.

Posted by Lane Cardwell on May 7, 2008 | Comments (1)