This article was originally published by FSR Magazine.
Learn the rules so you know how to break them properly, so the saying goes. What was once basically taboo for traditional full-service restaurants—like integrating drive-thrus and other off-premises channels into operations—became essential during the pandemic to survive. And the restaurants and executives who come out on top aren’t lagging behind in trends, but are leading the way for others to follow.
Investing in and implementing the latest technology—or not doing so—is one of the key differences separating NextGen Casual restaurants from competitors. Smokey Bones Bar & Fire Grill, an affiliate of Sun Capital Partners with more than 60 locations across 16 states, is one such example. Since 2020, the casual-dining chain more than doubled its off-premises business, launched two virtual brands, opened two ghost kitchens, and added its first drive-thru in 2022.
“We made a lot of tech investments to drive business and be an innovator and category leader,” says James O’Reilly, a former Long John Silver’s and Sonic Drive-In executive, who joined Florida-based Smokey Bones in May 2019. Among an array of benefits, those investments importantly led to an improved guest experience.
The guest experience was the driving factor for Smokey Bones when first considering implementing a drive-thru, O’Reilly says, as it asked itself how the majority of restaurant guests want to access off-premises.
“Nobody ever said casual dining can’t [have drive-thrus],” he says, “so obsessively focusing on the guest and taking more of an outside-in view leads you to thinking, from a guest point of view, why wouldn’t a drive-thru be a good idea?”
The virtual brand world emerged as a large growth opportunity for Smokey Bones to explore.
In addition to increasing digital orders, a purposefully designed off-premises operation also improves the on-premises experience, since it leads to less interruptions from delivery drivers walking in when a guest is inside trying to enjoy their meal, O’Reilly notes.
The virtual brand world emerged as another large growth opportunity for Smokey Bones to explore. In October 2022, it launched BiteHall, a virtual food hall concept that took five brands—Smokey Bones, The Wing Experience, Burger Experience, plus two new virtual brands, Bowl Market and Tender Box—and combined them under one umbrella and website.
The idea stemmed from thinking about the guest experience (sound familiar?), and in this case, multiple guests who may not want to eat the same thing for dinner or have multiple delivery charges. BiteHall has one ticket, one delivery fee, and one service fee.
“We’re designing it to be an Amazon-like experience, where you can cross shop from different brands with different menus,” O’Reilly says. “It’s really exciting, and I believe it’s in its absolute infancy.”
BiteHall took a year to develop, and O’Reilly’s team started by looking at what menu categories could drive growth from a guest-facing standpoint while being relatively easy to execute in restaurants—without overcomplicating operations, importantly. For example, BiteHall would not add a virtual pizza brand at this point, since they don’t have pizza ovens at Smokey Bones restaurants, O’Reilly says.
“But restaurant operators are experts at preparing protein-based entrees, which is the majority of our business. Meat is what we do,” he says, which led to Burger Experience and The Wing Experience. “There’s no other restaurant chain that has 50 flavors for wings.”
Chicken-centric Tender Box, meanwhile, offers crowd-pleasing combos such as chicken and waffles, chicken and donuts, and Carolina dipped tenders.
“The way we’re managing it from the back of house and BiteHall standpoint allows us to efficiently execute all these items without compromising,” O’Reilly adds. That meant investing in back-of-house technology to essentially create a mini kitchen line with a dedicated flow for virtual brands, separate from dine-in entrees.
Changing off-premises packaging to BiteHall branding was an easy simplifying solution, and also allows for cross-promotion by featuring the logos and brief descriptions of all BiteHall brands. DoorDash Drive is the company’s fulfillment partner for all off-premises orders, though Smokey Bones does some in-house delivery for its catering business.
While on-premises orders comprised 80 to 90 percent of business in 2019 when O’Reilly joined, the brand has now grown its off-premises platform to nearly 50 percent over three years. And based on the early consumer response to BiteHall, O’Reilly plans on investing more into the platform in 2023.
“The blurring of the lines has been more of an outcome than a goal in and of itself,” O’Reilly says. “If trying to make a virtual brand experience less complicated for restaurants and for guests, then we’ll do that. If providing guests with more choices is what they want, then that’s something we can do.”
Condado Tacos prides itself on being able to serve guests quickly, or offer them a long visit if that’s what they showed up for.
Finding efficiencies, giving people time back
bartaco, a 26-unit upscale street taco and cocktail concept based in Arlington, Virginia, has always prided itself on a simple service model. In 2010 when the first restaurant opened, customers ordered by filling out a paper card like a sushi order, since most consumers were ordering four to five small bites.
When the pandemic required a more touchless ordering format, bartaco began playing around with a feature on Olo, a New York City-based company that develops digital ordering and delivery programs for restaurants, to create a QR code menu.
During bartaco’s busiest months in the spring and summer, peak patio season, restaurants would often have two-hour wait times. After implementing the new ordering method, the restaurant discovered food and drinks were moving significantly more quickly to tables, and guests appreciated the ability to continue ordering food whenever they wanted at the tap of a screen. And when tables turn faster and check averages go up, both customers and staff reap the rewards.
“It really resonated with customers. They liked the idea of on-demand hospitality, which is what we call it,” says Scott Lawton, CEO and cofounder of bartaco. “It also gave us a really scalable labor model, so that we can actually invest more in the people who are taking care of our customers in different ways, just by removing the remedial task of a waiter walking to tables and taking orders.”
Investing more in people isn’t just talk for Lawton, who raised wages for staff—including the back of house—to anywhere starting from $19 up to $36 an hour after tips. While many restaurant executives complained of so-called lazy younger generations and not being able to find any workers, one bartaco unit had a backlog of more than 2,000 job applications in the fall of 2022.
“Their lives changed. Some stopped working two jobs and were able to spend more time with their kids, and there’s no going back from that,” Lawton says. “We’re super proud of the fact that a dishwasher at our company makes $55,000 to $65,000 working 40 hours. We created a living wage, which is a big part of NextGen. We gave people time back.”
As the pandemic waned, bartaco found customers still craving human interaction and hospitality, which led them to creating a new manager position. At a prototypical bartaco that seats about 180 customers, six service leaders divide up the dining room in zones, making sure touch points are happening and guests feel taken care of.
And with 90 percent of customers ordering at tables on their mobile devices, the opportunity opened up to capture more data and continue customizing guest experiences. About an hour after dining at bartaco, guests receive a survey with five questions about their experience. If they fill it out, they receive a “taco token,” or a virtual free taco that goes into their virtual taco wallet, Lawton explains. That basically just means the next time they go to bartaco, they get a free taco.
“It’s a thank you for giving us the feedback and encourages you to come back again, so we think it’s worth it,” he says. “We don’t want to use the data in a way that we feel annoying to customers, constantly poking them, getting them to do things. We want to figure out how we can let the digital relationships be a continuation of the relationship we have with them in the restaurants, which is very genuine.”
Bartaco is finding labor efficiency with a QR-code-centric approach.
bartaco receives a report each day that scores every service leader based on guest feedback—with as many as 200 responses from tables per day—which determines leader bonuses and allows the brand to aggregate data to see trends and new opportunities. After instituting the measuring tool in June 2022, customer sentiment increased 25 percent within two weeks.
bartaco also polled about 50,000 customers last year to get a pulse on how they liked the service style pivot and found 86 percent preferred their format compared to casual full service—which shocked Lawton, he admits.
“There’s still a big place for a full-service, white tablecloth experience where the phone gets put away,” Lawton notes. “I think there’s always a place for that. But I do think there is this sort of interesting area that’s between quick service and full service that exists for the right brands and the right clientele, which is getting bigger and bigger, where they can have an elevated, experiential meal that also leverages digital in order to keep it affordable.”
Chris Artinian, CEO of 40-unit Condado Tacos, agrees with Lawton’s assessment. As another taco- and margarita-centric concept, Columbus, Ohio-based Condado Tacos learned to carefully thread the needle between creating a high-quality destination spot and marrying that with convenience.
“It’s such a new way to think about dining, being a full-service restaurant that can create an excellent dining experience, but also a fast to-go experience with high speed and accuracy,” Artinian says. “Not everyone has been able to create that and meet the needs of guests on both fronts. We’re seeing more brands trying to break through that opportunity, and it’s easier said than done.”
Boasting a 37 percent mix of spirits and beverages within in-house dining, Condado leans heavily on marketing itself as a go-to social destination to meet friends and grab drinks on Thursday, Friday, and Saturday nights. Graffiti art made by local community members covers the walls of the light-hearted restaurant, while upbeat music (and plenty of flowing booze) create a fun atmosphere.
“Given our price point and with all the things going on with the economy, we’re still really approachable. We say we’re the best time you can have for under $20,” Artinian says. “Most fast-casual locations don’t have a vibrant beverage scene.”
Every quarter, the restaurant launches a new featured beverage, taco, and dip to keep the experience fresh for customers, who can choose from a myriad of order and pickup options. Growing exponentially year-over-year, off-premises orders currently mix about 30 to 35 percent of Condado Tacos’ overall business, Artinian says.
“Leveraging the use of various different technologies available and implementing them quickly, we were able to create an excellent option for guests to choose us in an alternative way than dining in, but also for a quick lunch or dinner on the way to the soccer field,” he says.
Yet, Artinian also highlights the importance of hospitality and friendly interactions with guests as a key defining factor of being a NextGen Casual restaurant. At Condado Tacos, that culture is driven by celebrating staff members’ individuality by not requiring them to wear uniforms.
“It allows folks to be themselves,” Artinian notes. “We’re in hospitality; it’s supposed to be fun, and teams really appreciate that part, come as you are. It translates to our guests and helps in attracting better talent and great people in turn.”
As new technology emerges and consumers continue craving more convenience, restaurateurs of the future will continue evolving to meet the next generation’s speedy expectations, yet also deliver noteworthy experiences.