Free meals for kids have helped one franchisor attract more customers as small businesses deal with the threat of falling sales.
The 23-store, Greek food restaurant chain Souvlakihut has claimed a 14 percent increase in dining revenue following the introduction of a ‘kids eat free’ promotion in early January.
Designed as a casual Greek restaurant, outlets offer take-away and eat-in services. In the past quarter, the dining-in component has risen from 26 per cent to 40 per cent of the revenue due to the ‘kids eat free’ promotion and the introduction of plates and cutlery.
The business reported that the promotion lifted revenue 32.5 per cent, based on figures for three weeks from January 4 when the promotion was running in Victoria. This figure was benchmarked against average sales figures from stores that were open in 2007.
Bill Fotiadis, who founded the franchise with his brother John in 2004 attributed the upturn to further differentiating the dining-in service from the takeaway service. Previous eat-in meals were served the same way as takeaway food but the franchise introduced plates and cutlery at the same time as the ‘kids eat free’ promotion.
“Feedback from customers on the introduction of plate and cutlery is that they feel like they are having a proper restaurant meal at a fraction of the cost,” said John Fotiadis.
But lower pricing has also played a role. The menu has been revised to offer six meals under $6.
According to Bruno Ceraso, the franchise’s operations manager, research showed that restaurants offering meals costing more than $40 were finding it quite difficult.
“Whereas what we are finding is quite a big increase in our dining. People can have that dining-out experience without the price tag attached to it.”
Souvlakihut launched a $170,000 six-week television ad campaign created by Armchair Productions for the first time in January.
“We feel quite positive up till June that things will remain as they are for us,” he said when asked about his outlook for 2009.
Established in 2004, the company opened its 23rd outlet in Keysborough in late February but as a company store rather than a franchise outlet.
After setting up the head office infrastructure and focusing on supporting new franchisees, a company site will allow the chain to test various concepts such as a casual Greek restaurant with a drive-through service.
Turnover of the chain was $8.5million in the last financial year, when it only had nine stores.
With the extra 14 this financial year, turnover is expected to be about $20 million, which does not include the distribution business which operates separately.
There are 17 outlets in Victoria, four in Queensland and one in each Sydney and Hobart.
Four more are planned for Queensland, three more in Victoria and one in each Canberra and Sydney, and possibly one in Launceston. Also under consideration is the possibility of taking orders online.
