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Homegrown franchises see success despite downturn
Franchises with local ties come up with ways to survive and thrive in the economic downturn
BY CATHY JETT
Date published: 3/23/2008
BY CATHY JETT
The current economic downturn has given Rick Ivey's business a boost.
The former executive chef who founded Virginia Barbeque says his franchises are being snapped up because they're small and relatively inexpensive to start.
And it doesn't hurt that developers such as W.J. Vakos Companies are willing to help shoulder build-out costs so they can fill their shopping centers.
"Our restaurants are 1,200- to 1,500-square-feet," Ivey said from his office in the Beaverdam area of Spotsylvania County. "That's a nice strip-center location, and they're available everywhere."
Ivey opened his first Virginia Barbeque in 2000 and now has nine of the fast-casual franchises across the state and one in Delaware. Two more planned for Arizona and Maryland, and one will open soon in Isle of Wight County.
AREA HAS TWO FRANCHISERS
His restaurant company is one of two with Fredericksburg-area ties that have franchised their businesses. The other is Vinny's Italian Grill Corp., which is owned by the Vitale family. The family opened its first Vinny's Italian Grill & Pizzeria in Leavells Square in Spotsylvania County in 1998.
Vinny's Italian Grill Corp., now based in Lexington, has five of its family-friendly, sit-down restaurants in the Fredericksburg area and 10 others around the state.
"We have seen a difference in the business [due to the economy]," said Vice President Vince Vitale, "but we're still meeting our numbers. People still have to eat. We've managed to maintain our customer base. Our reputation also helps us."
Despite the increasing cost of food and gas, the restaurant industry in Virginia is expected to show a 4.8 percent increase in sales growth this year, according to the National Restaurant Association's 2008 Restaurant Industry Forecast. That's nearly a half percent higher than the projected industry average increase of 4.4 percent.
"While 2008 will bring some economic challenges, consumers remain hungry for the variety, convenience and socialization restaurants provide," according to a prepared statement from the association.
REINING IN COSTS
Ivey, who was named the Fredericksburg Regional Chamber of Commerce's Entrepreneur of the Year in 2006, has come up with a number of ways to keep his franchisees' expenses down.
These include using a federally inspected smokehouse in Siler City, N.C., to prepare all of Virginia Barbeques' meats and ship them to the restaurants. That not only ensures that the chain's pork, beef and chicken barbecue is cooked according to Ivey's specifications, but eliminates the need for each restaurant to have its own expensive smoker.
"We've found that we've really trimmed down what's inside the restaurant kitchens," he said. "We have a convection oven to heat up the product, and the autofry, our most expensive appliance at $9,000, eliminates the need for [an exhaust] system. It's a state-of-the-art fryer."
He also uses the Virginia Barbeque in Ladysmith as a training center for new franchise owners and their employees. That may shift to Southpoint II unless he can find a franchisee to take the space Vakos Companies is offering him there.
Date published: 3/23/2008
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