HOMETOWN: Boise, Idaho
EDUCATION: bachelor of arts in psychology from Duke University, Durham, N.C.
PERSONAL: married, two children
EXPERIENCE: chief executive of Sticky Fingers, Charleston, S.C.; chief executive of Dakota Steakhouse and Sirloin Saloon, Burlington, Vt.
As head of the New York-based turnaround specialist Restaurant Management Group, industry veteran Jim Balis has been working with Cafe Enterprises, parent company of Fatz, for nearly two years. His mission at RMG was to revitalize the ailing 49-unit casual-dining brand. In February, though, Balis made the atypical decision of accepting the post of permanent chief executive at the Taylor, S.C.-based Fatz, relinquishing his position at RMG.
Balis and RMG have helped to steer the chain through a major rebranding initiative and into more positive financial territory, logging 20 months of positive same-store sales and traffic growth. Changes include a new name — from Fatz Cafe to Fatz — a fresh remodeling program, the addition of updated and lighter menu items, and the appointment of several new executive team members.
Balis discussed recent changes with Nation’s Restaurant News:
Previously, you served as interim chief executive or chief restaurant officer during the turnaround process at other chains, but always remained with RMG. This time, you’ve transitioned over completely into the Fatz camp. Why?
We have so much happening here. It’s a full-time job. Also, there is such opportunity [to grow Fatz], I felt it was the right decision to go full time here.
Also instrumental in the decision was our partnership with [private equity firm] Milestone Partners in Philadelphia [the owner of Cafe Enterprises since 2008]. If not for Milestone’s support, the decision might have been different.
What’s been happening at Fatz over the past year or so?
When we first took over, we conducted a formal assessment and developed a five-year critical action plan. The chain had had a number of periods of challenged sales and traffic counts. We discussed what we wanted to achieve department by department, and decided we wanted to address multiple initiatives simultaneously, not piecemeal, and try to identify areas of opportunity.
Once we understood the business better, we implemented the plan and started making changes. We revamped our marketing, which included naming a new agency. We continued to develop our service program. We launched quarterly LTO items. We improved menu ingredients — we rolled out Certified Angus Beef and never-frozen items like chicken tenders and salmon. There was no couponing or discounting, and we only took a minimal price increase.
We also have spent time getting the right executive team in place. We have a new CFO and have promoted others internally.
What else?
We’ve taken some of the great elements of Fatz and developed a new [casual-dining] concept with a bar focus. We also have developed a fast-casual Fatz concept that we plan to launch in June. We want to open two new casual locations and two new fast-casual concepts this year.
How do you plan to grow?
Possibly by converting existing stores to the new casual concept. We’re hoping the new casual concept is a growth vehicle. Whether we will continue to grow the core brand or not will depend on the success of the new casual concept. It will be more economical.
We don’t plan on converting all of the existing locations to the new concept, though. A lot of Fatz locations are great as Fatz, and we’ll just improve upon those. Some elements just work well in certain communities. But if the new casual concept is successful, we probably would not open more [existing core] concept stores. But you never know.
What do you see as the chief challenges for Fatz going forward?
Finding the right sites continues to be a challenge. The real estate market has not bounced back yet. Also, maintaining traffic counts with higher gas prices is a challenge. And we’re in some states with continuing high unemployment. It’s also a challenge to stay ahead of the curve when it comes to keeping the guest engaged. We have to maintain our point of differentiation when it comes to our competitors.
But I’m excited about what we’re doing here. We have a lot of things happening.
Contact Paul Frumkin at paul.frumkin@penton.com