Cavanaugh commissioned a national study of potential growth that said the country could sustain about 1,200 units. "But, we never want to go too fast. We've found that our customers have an emotional connection to Ruby's, primarily because of the importance we put on 'guest first'," he says, "and we don't want to erode that. Dedication to that is the most critical requirement of a potential franchisee." But, it's far from the only one.
Ruby's franchisees are "people with significant success in the restaurant business," he says. All sign multi-unit agreements with Ruby's and many also operate Applebee's and other expanding brands. The cost of opening a Ruby's "is about $1.5 million a print," he says, adding, "restaurants, by their nature, are just capital intensive –expensive."
Furthermore, while all Ruby's diners don't look alike, all are designed and built to replicate a true 1940s style diner with extensive graphic elements reflective of that era. Typically, they are 4,500 sf, but can range up to 6,000 sf. The initial one, which opened in 1982 and is still operating, is just 1,000 sf. In addition to the current 40 Ruby's Dinners, there are two, nearly three Ruby's Dinettes. The latter, 2,000-sf counter-service units, are at airports in Las Vegas and Los Angeles, with another underway in Houston. Philadelphia's airport is on the radar screen along with some others.
Not all the diners are free-standing or built from scratch. Many are in malls. "We've been converting a lot of other restaurants, especially Coco's," Cavanaugh says. "We can do that with other aging brands."
Acknowledging that most people lump Ruby's into a simple, generic "retro" style, Cavanaugh distinguishes between 1940s diners and diners of the 1950s. He should know. Although he was born after the 1940s, Ruby's takes its name from his mother. "The differences are subtle," he admits, but one distinction is the music: big band swing versus rock and roll.
"Swing's a better backdrop for family eating," he says. Much of the menu, however, is right out of today. Hold the gravy. In addition to traditional fast casual favorites, Ruby's serves up a generous selection of low-fat recipes, vegetarian dishes and what Cavanaugh calls "healthy eating choices." There is very little leeway in menus from one unit to another, although some include a regional favorite dish or two.
Regarding demographics, "we cut a broad swath," he says, from teens on their first date to empty nesters with a skew toward families. "We're at a price point that a lot of people can afford, and we're family casual between IHOP and PJ Chang's and Cheesecake Factory. We view everyone as our competition when the family gets in the car and makes a dining decision."
"There is room for expansion of diners," Ron Santibanez, head of Qualified Solutions Consulting, a restaurant start-up consultant firm based in Moreno Valley, CA, tells GSR. "Ruby's success will probably be related to geographic location. There's a lot of competition in major metro areas," he says, adding that North and South Carolina, the Midwest and Florida could be good opportunities for the chain. Ruby's concept, and particularly its menu, "has a bit of an upscale theme, which could be a competitive disadvantage in some locations," Santibanez says. "I haven't studied its mass appeal," he admits, "but expansion will surely require more advertising and promotion, particularly of its menu, which is not traditional diner food."
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