Red Robin will start cooking flat-top grilled burgers to improve its food and provide customers with a better experience, CEO GJ Hart said on Monday.
The upgrade is part of a five-point recovery plan that Hart detailed in a presentation at the ICR investor conference in Orlando, Florida.
In addition to delivering a better burger, Red Robin will enable operators to make better decisions and work to reduce costs, increase guest engagement and strengthen their finances.
The 511-apartment chain also said it is considering selling up to 35 of its properties and leasing them to investors to help pay off debt, fund capital investments and buy back shares.
The North Star network’s three-year plan aims to address the effects of spending cuts over the past five years. These include the elimination of waiters and kitchen managers in restaurants and the closure of remote training centers. These moves left restaurant workers inexperienced and overworked, resulting in a decline in revenue that Red Robin has yet to fully recover.
But Hart, who was named CEO in July, believes Red Robin’s foundation as a high-quality, customer-focused brand remains intact.
“There are some fundamental things about this brand that are powerful and we can bring them back to life,” he said. “There’s a lot of work to be done here.”
One of them is his burgers. Red Robin plans to update its signature menu by replacing its existing conveyor cooking system with flat top grills. According to Hart, this will improve the quality and appearance of burgers and the speed of the kitchen, as well as open up other menu options.
In an effort to change the way its restaurants operate, Red Robin will become an operations-focused company. Operators will have more say in company decisions and will have more control over how they run their restaurants. According to Hart, they will attend every company meeting “to make sure we stay honest.”
To justify a bottom-up approach, Hart points out that today’s best network operators are resisting the detrimental changes the company has introduced over the past five years. In his opinion, this is proof that greater local autonomy is good for business.
The company said that Polaris has the potential to double its adjusted EBITDA margin (earnings before interest, taxes, depreciation and amortization).
Red Robin’s same-store sales rose 2.5% year-on-year in the fourth quarter ended December 25. The 40 percent increase, or $2.8 million, came from the remaining funds on outstanding gift cards.
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