Brand Tactics: Bennigan’s New Game Plan

Bennigan’s leaps into the crowded sports-bar marketplace to defend against shrinking sales.

By David Farkas, Senior Editor -- Chain Leader, 8/1/2007

Bennigan’s officials spent $400,000 to convert a Bennigan’s Grill & Tavern in Addison, Texas, to a sleek sports bar that includes 20 beers on tap.

Where’s the remote? Comfortable couches and chairs maintain the relaxed tavern feel Bennigan’s is known for.

To smoke, or not to smoke? That was one question for Clay Dover as he pondered a site last year for Bennigan’s Sport, a brand extension of Bennigan’s Grill & Tavern that opened May 20 after the conversion of one of the chain’s oldest units in Addison, Texas, a suburb of Dallas.

Flagging sales at the 27-year-old unit were also an important consideration. “The restaurant was in the bottom quartile [of the 20 units in Greater Dallas,” says the executive vice president and chief concept officer for Metromedia Restaurant Group.

The sports-bar segment is an increasingly competitive field, spurred partly by the rapid growth of 442-unit Buffalo Wild Wings, which rings up an average of $2.7 million per unit.

"The local and corporate-run sport-theme bars are doing well," says Rick Pastorek, a Baton Rouge, La.-based Bennigan’s franchisee who is thinking about opening a Bennigan’s Sport in Louisiana. "From what I have heard, [Bennigan’s Sport is] doubling the sales in that unit," he adds.

Dover won’t disclose Bennigan’s Sport’s weekly sales. He allows the company initially set a sales goal of $2 million, or $62,500 a week, for the eight months it would be open in 2007, but now believes the sports-bar concept will finish 2007 ahead of budget. Bennigan’s units average about $3 million in annual sales. "We feel we have a winner on our hands," Dover says.

Sales Dip

Bennigan’s could use one. Same-store sales are flat to slightly down over the prior year among the 160 company units. Franchisees here and abroad operate the remaining 150.

MRG spent $400,000 to convert the aging unit, which hadn’t had a facelift in seven-plus years. Dover predicts franchisee conversions should cost less and expects the company or a franchisee to open another Bennigan’s Sport later this year.

The sum the company spent includes about $60,000 worth of technology including 26 large-screen high-definition TVs, a new sound system and satellite hook up that broadcast European soccer and rugby games.

Dover says keeping "core values" but creating something that "wowed" guests was a challenge.

A new signature dish, Irish Ale Queso, $4.99, is a best seller. Ten-inch pizzas, $9.99, baked in a new wood-fired grill are also popular, Dover claims. Several original items remain on the menu, including the popular Monte Cristo sandwich, $8.49.

On Tap

Bennigan’s Sport offers 20 tap beers instead of three. Beer accounts for 50 percent of beverage sales; spirits make up 40 percent. Beverages account for roughly 40 percent of total sales, Dover says, about 20 points higher than Bennigan’s.

Still, former MRG executive Frank Steed, now a consultant in Dallas, contends it’s going to be hard to create a point of difference in a marketplace crowded with sports bars: "No matter how well they execute, I’m not sure this is a great answer."

CEO Vince Runco concedes Dallas is a crowded sports-bar market. "But there are plenty of other markets for Bennigan’s Sport that have no sports bars at all," he says.

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