Sizzler Plans 25 New Units

SHERMAN OAKS, CA-The 313-unit Sizzler chain will return to a growth mode with commitments from franchisees for 25 new restaurants worldwide, according to the chain’s parent company, Worldwide Restaurant Concepts Inc. The new locations are slated for California, Las Vegas, Puerto Rico and China, involving four existing franchisees and one new one.

The franchisees include Salt Lake City-based Sizzling Platter, which is planning to build its 22nd Sizzler restaurant in Boise, ID, for its first new Sizzler in 12 years. Sizzling Platter was the chain’s original franchisee, opening its first restaurant in 1963. The Boise location is the first of at least five new units Sizzling Platter plans to open over the next few years.

Another of the franchisees is BMW Management Inc., which is Sizzler’s largest franchisee with 25 restaurants. BMW, which operates Sizzlers throughout Southern California, recently signed a development agreement for four new restaurants in both the southern and northern portions of the state.

A Sizzler franchisee in Las Vegas, Witman’s Food LLC, has one restaurant under construction and has agreed to develop three more. Witman’s already operates two Sizzler locations in Greater Las Vegas.

In Puerto Rico, franchisee Multi Systems Inc. recently broke ground on its 12th restaurant and has signed a commitment to open at least one more. Sizzler’s international joint venture is currently developing its fourth location in the Beijing, China, area, part of a 10-restaurant agreement.

The new franchisee is Mitchell Family Properties LLC, a Denny’s franchisee, which is scheduled to begin construction on the first of three restaurants planned for Northwest Arkansas. The restaurants will represent an expansion east of the Rocky Mountains, which “is a key part of our US development strategy,” according to Todd Peterson, VP of development for Sizzler.

Sizzler is pushing the expansion in tandem with a change in strategy and format in recent years. Throughout the last three years, the company has worked to eliminate its all-you-can-eat buffet and returned to its original service style. Customers order and pay for their meals when they arrive, with servers delivering their food. The chain also has overhauled its menu and marketing, designed a new prototype and implemented a system-wide remodeling program.

Sizzler’s 313 units include 227 franchised and 86 company-owned restaurants.

Ken Cole, president and CEO, says the commitments from the franchisees not only will help the company to grow but the commitments indicate that the franchisees have confidence in the Sizzler brand.

In its latest annual report, for the fiscal year that ended April 30, the parent company reported that Sizzler’s total revenue for fiscal year 2005 was $84.4 million, compared to $97.8 million in fiscal year 2004. It attributed the decrease in restaurant sales primarily to a reduction of company-owned locations throughout the year, but that reduction was partially offset by an increase in same-store sales. On a comparative basis, at Sizzler restaurants that were open for more than 15 months, sales rose by an average of 2.5% per restaurant.