Long John Silver’s has been through a major transformation over the past two years, since LJS Partners LLC purchased one the nation’s largest fast food seafood chains from Yum Brands. SeafoodSource recently caught up with Mike Kern, CEO of LJS, to talk about the restaurant chain’s initiatives set forth in 2013, and how it is planning to grow in 2014.
Blank: What are the major initiatives you put in place in 2013 to boost LJS’s profitability and brand reputation?
Kern: Last year (2012), most of our focus was on the work we were doing to improve our core product quality and our operational fundamentals. We felt as a new organization it was important to make sure the foundation of the brand was as strong as possible. 12 months later, we have covered a lot of ground and feel much better about our metrics in those areas of the business. As planned, we have moved into a second phase whereby we are focused on filling menu gaps and really expanding the relevancy of the brand primarily from a menu standpoint.
Historically, our specialty and our reason for being was delicious fish and chips and that remains our bread and butter, but there is a lot more in the way of seafood variety and different consumer need states that we can respond to and deliver product in. So, we have been focused on a sandwich line, along with salads and soups. We are really trying to leverage seafood as an ingredient for entrees.
Sometimes it’s the center of the plate, but sometimes it’s an ingredient…in a rice bowl, on a bun, in a tortilla, on top of a salad. The versatility of seafood with various species and cooking methods, and its ability to serve as a great flavor carrier is historically something that the brand has not tapped in to. So we have been very focused on beginning that part of our journey and are getting very encouraging reactions from our core customers as well as our lighter customers.
Which menu items have been most popular with your customers?
Those that are smaller portioned than the full, plated meal with all the sides and all the fixings, which is a real sit-down meal, often for dinner. Now, we have other offerings that are a little smaller in portion and offer new flavors of eating seafood and some portability to them. Salads have performed most appealingly, but then we see some experimentation across the menu with these items.
How have LJS’s sales and profitability grown this year?
The restaurant industry has had a challenging year in 2013, compared to 2012. The restaurant industry as a whole has generally seen a flat growth environment. It really has been a share battle of a year. The consumer has been more guarded with their spending decisions and anxious about their economic future. We have been able to grow this year modestly on top of what was a record year for the brand in 2012.
How will you grow LJS in 2014? Do you plan to add stores?
For 2014, in addition to what we are doing with the menu, we are bringing our asset base up-to-date with a fairly robust remodel/ re-image program that, from the street, says Long John Silver’s is changing, is different, and is evolving, essentially contemporizing itself.
As we are getting the current store base updated and relevant in the market today…we are getting a pull from the investor marketplace on new franchisees and new franchise agreements from our existing franchisees. Our new store pipeline is at least a few dozen new units committed to that represent new points of distribution in the U.S. To a degree, we have been trying to hold some of the inquiries at bay until we have this new asset and menu design really vetted via testing and making sure the success formula there has been precisely defined.
Internationally, we’ve signed agreements for 50 new stores in one existing country and two new areas of the world. They came to us, probably ahead of when we were anticipating ramping up an international franchise sales program. We have a footprint today in Singapore with about 22 outlets. Southeast Asia and the Southeast part of the Pacific Rim are where we now have additional agreements for a total of 30 new restaurants over the next four years. There are a few countries in the Middle East that are economically and from a feasibility standpoint are doing quite well with QSR, quick casual casual and casual dining. We have signed an agreement for 25 stores there in the next four years.
