Change of Heart for Love’s Chain : Butterfield Plans Major Overhaul of Barbecue Eateries

The big red heart that has been the centerpiece of the Love’s Woodpit Barbecue Restaurants logo for more than 15 years is about to be excised as the restaurant chain’s owner begins performing major surgery aimed at revitalizing the ailing Southland eateries.

And Butterfield Equities Corp. of Santa Ana, which owns the Love’s chain, also said Monday that it plans to launch a new chain of smaller, fast-food barbecue restaurants, with 15 of the quick-service, limited menu facilities scheduled to be built during 1986. Butterfield, a diversified holding company, also owns a savings and loan association and a real estate syndication business.

With the changes in its restaurant division, Butterfield is following much of the California restaurant industry, which is moving from starches to salads and lighter fare. Butterfield hopes to upgrade the “coffee shop” atmosphere of the existing Love’s restaurants by featuring light and airy interiors and a menu that will attract the calorie conscious as well as hearty barbecue fans.

Plans for the 32 existing Love’s restaurants include a new name, major exterior and interior face-lifts for at least some of the facilities and an expanded menu that will still feature barbecued ribs and chicken but will add lighter fare, including salads and sandwiches.

The new name hasn’t yet been decided on but will probably be “something like ‘J. D. Love’s Rib Eatery,’ ” said Raymond Johnston, chief executive of Butterfield Hospitality Group, the Butterfield subsidiary that operates the Love’s chain as well as a large Wendy’s Old-Fashioned Hamburger Restaurants franchise.

The new fast-food barbecue outlets haven’t been named yet but definitely won’t use the Love’s identification, company officials said.

The Love’s restaurants have posted quarterly losses since long before Butterfield purchased the company in September, 1983, Johnston said. But the picture has improved from a $694,000 loss in the quarter ended March 31, 1984, to a loss of $286,000 for the quarter ended last Dec. 31, he said. Johnston said he expects that the Love’s chain will begin posting a small profit in the last two quarters of 1885.

Johnston said Monday that, while the Love’s chain is still losing money, the 10 Wendy’s restaurants in Butterfield’s franchise are finally posting a modest profit.

After more than two years of consecutive quarterly losses, he said, the Wendy’s operation showed a profit of $53,000 for the quarter ended last Dec. 31.

Johnston projected that the Wendy’s operation, in which Butterfield sells franchises to limited partnerships, will continue to be profitable and that net earnings will rise to $75,000 by June. He said Butterfield also plans to build and franchise four new Wendy’s facilities this year.

He said that, to improve earnings, three of the eight Love’s facilities owned directly by Butterfield (the rest are operated by franchise holders) will be closed this week for extensive remodeling that will take about three months and cost nearly $180,000 per restaurant.

Johnston said that, if customer response is as great as expected, the remodeling could be carried out throughout the chain.

At nearly $180,000 per unit, remodeling all 32 restaurants would cost about $5.7 million. But Johnston, who ran Campbell Soup Co.’s restaurant group before being recruited by Butterfield last year, said that, if the decision is made to refurbish every facility, operators of the 24 Love’s franchises will be allowed to remodel in stages. That will enable them to spread out the cost and avoid temporary closings.

The plans, according to Johnston, will place Love’s restaurants “squarely in the 1980s,” and enable the chain to expand its customer base without driving away its existing core of supporters.

Johnston said that he expects sales in the three company-owned Love’s to increase 80% or more once they open with their new look and new menues.

“What they are doing makes some sense,” said Mike Mueller, a restaurant industry analyst with Montgomery Securities of San Francisco.

The barbecue market is regional, Mueller said, but the expanded menu “isn’t pure barbecue, and I view that as an advantage in terms of appealing to more upscale customers.”

Mueller said that restaurant customers have fickle loyalties and will quit a place simply because they get tired of the decor, even though they still like the food. “Remodeling is the least risky way of expanding sales,” he said.

A successful example of a chain operation that combined menu expansion and physical alterations is Sizzler Restaurants.

“They went from a traditional budget steakhouse with an average $4 check and added new items and salad and soup bars, redid the interiors,” Mueller said. “The effect has been to up the average check to $6.40, and they also succeeded in broadening their customer base without alienating the old customers.