Chain of Home-Style Eateries Due in County : PoFolks Ready to Spring Okra on Yuppies
A San Diego company is betting that Orange County yuppies will be willing to swap their steaks and sushi for some real Southern-style cooking like okra, catfish and fried chicken livers.
Po-Lar Systems Inc., an 8-month-old San Diego firm, announced plans Tuesday to open up to 25 PoFolks restaurants in Orange County within the next five years.
The restaurants will be developed under a franchise agreement with PoFolks Inc., a company based in Nashville, Tenn., that now operates 168 of the home-style, family restaurants in 24 states.
Orange County’s first PoFolks should open its doors by the summer of 1988 and probably will be in Anaheim, said Po-Lar President Larry Greenberg, who organized the company to develop PoFolks here.
Each restaurant will be about 6,000 square feet. Most will anchor strip shopping centers averaging about 250,000 square feet, said Greenberg, also president of Mesa Realty in San Diego. Initial plans are to use existing buildings for the first restaurants, he said, then eventually to build new restaurants in shopping centers.
Despite increasing concern about calories and cholesterol, Greenberg believes that the mostly fried, down-home-style cuisine will have a big appeal for Southern California diners. “It’s the only national chain . . . with big portions of home-cooked food at reasonable prices,” Greenberg said. The menu includes such non-nouveau California fare as red beans and rice, pork chops and, of course, fried chicken, with diners paying average tabs of about $4.50 each.
The chain’s growth here will occur at the same time that Po-Lar is developing PoFolks in San Diego County, Greenberg said. The company, which negotiated the Orange County franchise two weeks ago, completed a similar agreement with PoFolks Inc. for San Diego County nine months ago. In the San Diego area, Greenberg expects to develop as many as a dozen PoFolks over the next seven years, with the first to open in January.
PoFolks’ appearance on the West Coast is the latest effort to revive a company that has been in the financial doldrums for several years.
The 12-year-old firm, which went public four years ago, has two divisions. It operates 40 company-owned and 128 franchised PoFolks units. And it is the nation’s largest franchisee of Wendy’s International, operating 141 of the fast-food hamburger units in the St. Louis and Washington areas.
Until the last year or two, “PoFolks never made any money for them at all. Wendy’s was the profit-maker,” said Barry Stouffer, an analyst with Equitable Securities Corp. in Nashville. Company results hit an all-time high in its 1985 fiscal year, which ended Sept. 30. Revenue from the two divisions totaled $142.6 million that year, and the parent company reported a profit of $3.6 million.
Lost $7.6 Million
For fiscal 1986, PoFolks Inc. lost $7.6 million on revenues of $166.2 million. The PoFolks division generated revenue of $66 million and an operating loss of just under $1 million, said Craig T. Weichmann, managing director of Memphis-based Morgan Keegan & Co.
PoFolks Inc. hopes to turn its financial problems around with the expansion of PoFolks restaurants in the West. In addition, the company recently announced plans to sell all of its Wendy’s franchises, which have been struggling since a disastrous attempt by the national chain to introduce breakfast items.
John A. Scott, vice president of franchising for PoFolks, estimated that each of the new units in Southern California will draw at least 8,000 diners per week, generating weekly sales of about $40,000.
Industry analysts aren’t quite as optimistic: “The key to the concept is to keep their initial investment relatively low” by taking over existing restaurants, said Weichmann.
On the other hand, he noted, Orange County “real estate is still fairly costly. Only time will tell,” he said.
The company’s stock, listed on the over-the-counter exchange, remained unchanged Tuesday, closing at $3.25 per share.
POFOLKS INC. AT A GLANCE Nashville, Tenn.-based PoFolks Inc. became a publicly held company in October, 1983. Today, it has 40 company-owned restaurants and 128 franchise units in 24 states. In Southern California, the first PoFolks restaurant is scheduled to open in January in San Diego. Under a new franchise agreement, 25 PoFolks are planned for Orange County strip centers over the next five years.
(in millions) 1987 1986 1985 Revenue n/a $166.2 142.6 Net income n/a (7.6) 3.6
