Skip to main content

Famous Dave's looks at bigger portions, cheaper lunches to win back customers

  • Author:
  • Updated:
    Original:

Beleaguered Minnesota-based Famous Dave's blamed its significant drop in profits on poor management under its previous regime – and hopes happy hour menus, cheaper lunches and bigger portions can turn it around.

What was already a turbulent year for the barbecue restaurant chain, based in Minnetonka, got worse Wednesday when it announced restaurant sales fell by 9.8 percent in the third quarter and its net income tumbled to $708,000 – compared to $2 million in 2014.

As a result, the company is in breach of a "key" credit agreement with Wells Fargo, which it is in the process of discussing with the bank.

Much of the blame has been laid at the feet of the "mistakes" made by previous management. This past summer, the chain saw its CEO Ed Rensi step down following just 16 months in the role.

For some context about the company's performance in those months: Nation's Restaurant News says someone who bought $1,000 in Famous Dave's stock in June 2014 would have just $363 now.

Interim CEO Adam Wright said the company is now implementing changes it hopes will bring revived fortunes in future years, but has told shareholders they will need to be patient while they "win back customers" at its 179 restaurants.

Dave's return, more food and happy hours

One of those changes was announced at the end of last month, bringing back the company's founder, (Famous) Dave Anderson, as part of a leadership shakeup. He had left after a falling out with the previous management, also remarking that taking the company public had been "the worst decision of my life."

Since returning, Famous Dave himself has been having an impact, developing beef short rib and fried chicken dishes that will serve as "limited time offers."

Other ongoing changes include increasing portion sizes, bringing back "iconic" menu items such as cornbread muffins and sauces, implementing new uniforms and improving staff training, swapping out its "bar bites" for a happy hour menu, and testing "lunch value" offerings.

"While we are now confident in the direction of the company, the changes will take time to take effect as we undo the mistakes of prior management and attempt to win back customers we disappointed while at the same time acquiring new customers," Wright said in a press release. "We expect to see an improvement in our financial performance in the next few quarters, after we implement our changes."

The company saw a drop in overall revenue to $31.8 million, from $37.7 million in 2014 – which it says was in part down to the closure of four company-owned eateries and five others being re-franchised. Its restaurant in the Mall of America was among those that closed.

Next Up

Screen Shot 2022-09-27 at 2.51.49 PM

Surgery clinic proposed to replace 111-year-old farmhouse in Eagan

A developer is proposing to transform the remnant farm property.

Hurricane Ian

Why Hurricane Ian could be catastrophic in Florida

Hurricanes are the atmosphere’s biggest show of force and energy, and Hurricane Ian is no exception.

image

Suspect arrested after man and dog shot on St. Paul's East Side

The shooting happened around 12:45 p.m. Tuesday.

MissingBemidjiTeenBCA

Bemidji police appeal to find missing teenager

Tahlia Poitra was last seen Wednesday.

PacoAndLime

Crisp & Green owner launches new chain, with 12 MN locations planned

Steele Brands already owns and operates Crisp & Green and Stalk & Spade.

0

New vendor to open at Rosedale Center food hall

POTLUCK Food Hall offers a rotating collection of local restaurants and food retailers.

MadelynHowardMugMonroeCo

Woman charged in drunk driving incident that killed Minnetonka HS alum

Nate Stratton, 20, died from his injuries on Sept. 18.

LeeIGHGoFundMePhoto

Inver Grove Heights father killed during suspected burglary

Three people were arrested in connection to the homicide.

image

St. Paul's upcoming Spring Break restaurant will celebrate the 1980s

The restaurant is one of two new concepts bring brought to downtown St. Paul by local Chef Brian Ingram.

Screen Shot 2022-09-27 at 11.19.05 AM

Man found shot dead on south Minneapolis sidewalk

The victim was found dead on a sidewalk in the Bryant neighborhood.

Related