Jolly Roger Charts Upscale Course : New Sales Tack for Restaurant Chain
The Jolly Roger’s pirate has walked the plank.
The buccaneer, long the logo of the Jolly Roger restaurants, has been consigned to Davey Jones’ locker as part of a drastic image change aimed at capturing today’s upscale diner.
A $15-million renovation program also has seen Irvine-based Jolly Roger Inc. give the heave-ho to its restaurants’ nautical furnishings and coffee shop food.
The company hopes the upgrading of its 39 Jolly Rogers will enable it to hang on to its traditional customers--Mom, Pop, Grandma and the kids--while joining the crowd of eateries chasing after the high-profile diner who is the industry’s new darling: the Yuppie.
The 37-year-old company--a subsidiary of privately held Trans/Pacific Restaurants Inc. of Irvine--finally has come to grips with the fact that its market, exclusively in California and Hawaii, is youthful and big on freshness and frills.
Such changes have been hard for the traditional, family-owned company to swallow.
But with competition knocking loudly at its door, Trans/Pacific, which also owns 10 Monterey Bay Canners Seafood Restaurants and operates seven Sizzler Family Steak Houses in Hawaii, has decided to broaden its market.
More Money in Teriyaki Steaks
It is going after the young professionals who not only eat out often, but have expensive appetites. Jolly Roger can make a lot more money selling higher-margin items such as teriyaki steak and a bottle of wine to an upscale couple than it can rake in serving hamburgers, French fries and colas to a family of four, the company said.
But some industry analysts say the big changes at Jolly Roger may be too unsettling for some customers. They said an operation long-recognized as a spot to grab a quick burger and a malt may confuse customers by suddenly serving champagne and gourmet entrees.
Still, Jolly Roger officials say the numbers speak for themselves. Sales are up an average of 35% in the last year at its new-look stores. And dinner checks that averaged $7.50 per person a year ago now average upward of $10 a diner.
“We took a long hard look at ourselves four years ago,” said Ronald F. Higgins, Jolly Roger’s president and chief operating officer, “and we decided to bring ourselves up to the standards of the ‘80s.”
Actually, executives of the chain--which began as an ice cream shop in 1948--saw the writing on the wall after the success of Trans/Pacific’s first seafood house, a Monterey Bay Canners that opened in West Covina in 1976.
The liquor sales and average dinner checks at the seafood restaurants far exceed those at the average Jolly Roger.
Jump in Sales at Irvine Outlet
Startled by the success of the seafood house, Trans/Pacific decided in mid-1983 to spend $500,000 to completely redo the menu and look of its Irvine Jolly Roger. Within a year, sales at the location had jumped 35%, Higgins said. That encouraged company officials to begin revamping the 38 remaining restaurants.
Higgins, who joined the company in 1976 as controller and was named president in 1981, oversaw the changes, which he admits were tardy.
“We’re a bit late, but that’s why we’ve moved as rapidly as we have.” In the future, however, the company won’t wait so long. “We can’t sit around and wait 15 years before we do something again,” said Higgins, who was vice president of finance and administration for Carl Karcher Enterprises before joining Trans/Pacific.
Until the recent remodels, customer counts at the Jolly Rogers were down and sales at older units had been declining at an annual rate of 2% to 3% for three years, Higgins said.
But in fiscal 1985, with a number of remodeled Jolly Rogers in operation, Trans/Pacific posted record pre-tax profits of $6 million, up 47% from the year before. Fiscal 1985 sales of $76.8 million were up more than 12% from 1984. The company projects fiscal 1986 pretax profits of nearly $7 million on sales of $87 million, Higgins said. He declined to reveal net earnings for the company.
Besides feeding its old menu to the sharks, Jolly Roger has also tossed its dated look overboard. Entire walls have been knocked out and replaced by glass facades for a greenhouselike effect. Plants and flower baskets now hang in place of nautical knickknacks. Even the taped music that some customers found more conducive to sleeping than eating has been replaced by popular hits broadcast through state-of-the-art speakers.
Some in the industry are skeptical about Jolly Roger going head-to-head with the dinner-house set. “A restaurant company’s culture is hard--if not impossible--to change,” said Lee Hanley, vice president of marketing at Hungry Tiger Inc., a Van Nuys restaurant chain with which Jolly Roger is trying to compete.
The public still perceives Jolly Roger as a coffee shop, Hanley said. “Whether the Jolly Roger likes it or not, they’re more comparable to a Denny’s.”
Deserving of a ‘Gold Star’
But one restaurant consultant insists that Jolly Roger has successfully recast its image.
“Somebody there deserves a big gold star on the forehead,” said Daniel Durick, president of Culinary Stylists International Inc., a Brea-based consulting firm. “I was stunned,” he said, following a recent meal at a Jolly Roger. “I have clients that I wish could do that well.”
About the only thing that remains the same at Jolly Roger is its name. And without a pirate in sight, even the nearly 40-year-old label is now a misnomer. The restaurant chain was named after the black pirate flag with the white skull and crossbones.
To re-educate the dining public about its new look--green ferns in brass pots--Jolly Roger will spend nearly $1 million this year on advertising. That is three times the amount it has spent in previous years, Higgins said. And despite the temptation to attract customers with discounts or giveaways, the restaurant instead is concentrating on promoting its new image. “We want to sell it as the new, fresh Jolly Roger,” Higgins said.
Hungry Tiger’s Hanley says that a restaurant’s advertising is only as good as the product behind it. “Regardless what the ads say, they’ll have to execute,” he said.
Jolly Roger did no advertising back in 1948, when it was just an ice cream stand on Balboa Island.
Its founder, Art Salisbury, remains the chairman of the holding company, which now oversees a work force of 3,800; his son Douglas, 38, is chairman and chief executive of Jolly Roger.
Salisbury took his first crack at the restaurant business in 1945, when he opened an ice cream parlor in Big Bear. But when the lake nearly went dry the following year, he closed the shop and moved to Balboa Island. He named his place the Jolly Roger in 1948.
Customers at Salisbury’s Balboa Island shop kept asking for more than ice cream, so he obliged them and converted it into a Jolly Roger coffee shop the next year. With the success of the first, more Jolly Rogers soon followed, primarily at shopping malls. Today, however, the company is building only free-standing restaurants which tend to attract higher-scale diners and are not limited to shopping center hours.
Despite plans to open seven more of his radically changed Jolly Rogers this year--including five in Hawaii--Salisbury has adamantly refused to franchise or go public. “I’ve spent 40 years building a corporation that’s still family owned,” he said.
