Like one of Roy Roger's famous songs, the franchise that bears his name is back in the saddle again. It's hard work bringing back to life a chain that is down to 55 stores after a height of 648; especially in the competitive fast food market with a brand built around a bygone celebrity. However, Peter Plamondon Jr. and his brother Jim believe they are up for the task.
“We have invested all this time and dollars (into the brand) over the years,” says Peter Plamondon Jr. “We certainly have a legitimate passion for running Roy Rogers. We looked at converting to other concepts, but at the end of the day Roy's works for us.”
Buying the Roy Rogers trademark in 2003, the brother's firm, the Plamondon Cos., plans to double the chain's store base in the next five years largely through franchises. They are now trying to regain a foothold in Roy's original domain around Baltimore and Washington, D.C.
“I think a developer here would be very excited to have them back,” says Tom Papadopoulos, president of D.C.-based commercial real estate broker Papadopoulos Properties, Inc‥ “The name brings something new to a center.”
However, the current number of 55, which includes 15 owned by Plamondon Cos. and another 40 by franchisees, may drop before the chain grows again. In fact, when the Plamondon Cos. originally bought the franchise rights in 2003, there were 63 stores. That number declined as some lesser quality stores dropped from the portfolio. All of which is fine with the Plamondons. “We have a quality brand and we are really protective of it,” says Jim Plamondon.
If the Plamondons are so insistent on quality, it is because their history with Roy Rogers starts at the beginning, in 1968, when Peter and Jim's father, Peter Plamondon Sr., helped create the chain.
As an executive vice president for Marriott International Inc., he shaped the brand's focus on three types of food; roast beef, chicken and hamburgers. It was then decided that Western film star and performer Roy Rogers would be the spokesman. “He (Roy Rogers) had a wonderful reputation,” says Plamondon Sr‥ “He was a natural fit, because the concept was initiated as a western-looking building.” Over times, the chain also developed its signature “fixin's bar”, which allows customers to choose their toppings.
Plamondon Sr. left Marriott in 1979 to become a Roy Rogers franchisee opening his first restaurant in Frederick, Md. Today, Plamondon Cos. is also a hotel franchisee with four Marriott brands.
During the 1980s, Roy Rogers continued to grow, reaching a peak of 648 stores by 1990. In the end, however, it wasn't a reduction in food quality or a missing finger that caused the chain's downfall. It was what many now call a bad business decision by rival Hardee's. “It didn't fail because of the brand, but failed because of a bad real estate play by Hardee's,” says Plamondon Jr.
Hardee's, which was then owned by Canadian company Imasco Ltd., bought the chain in 1990 from Marriott for $335 million. For Marriott, the sale was an attempt to focus on its hotel business and get ready cash for a major project in San Francisco. Hardee's saw it as a way to expand into the high-barrier Northeast, where about 80 percent of Roy Rogers were located. It proved a blunder.
“I think Hardee's didn't understand the strength of the Roy Rogers brand,” says Jim Plamondon. “The customers looked at Roy's as a cut above the typical fast-food chain.”
Losing about $800 million in the deal, Hardee's sold the restaurants to other fast food chains. In New Jersey, Roy's was sold to Wendy's and Burger King. The 180 chains around Baltimore and Washington, D.C. were sold to McDonald's. With no support from a corporate parent, many franchisees sold or converted their Roy Rogers.
However, Plamondon Sr. and several others stayed the course. Eventually, the Plamondon Cos. became leaders in the franchise community for improving the brand, say franchise consultants. “We started doing many things ourselves such as training,” says Jim Plamondon. “In the old days, you would send your manager to corporate to have them trained, but we started to do that. We encouraged other franchises to send their manager to us.”
Plamondon Jr‥ joined the company in 1993 and then Jim in 1995. They bought the business from their father in 1998.
Hardee's ended up being sold to CKE Restaurants in the late 1990s, which has since had some success turning the chain into a higher-end establishment. Imasco kept the Roy Rogers chain. Then in 2002, the Plamondon Cos. bought the trademark rights for an undisclosed amount. There are now 55 stores in nine states as the former franchisee turns into the franchiser.
Plamondon Cos. has opened two stores in Montgomery County, Md. with one in Germantown in December 2001 and another at Gaithersburg in April 2004. It plans to announce another Roy Rogers store in the Washington, D.C. Baltimore region in the next few months.
While Roy's seems to have been missed around the nation's capital, it may be harder to succeed in markets where the chain didn't have such a huge presence. “You got a brand that is well known, but the store base has shrunk so you don't have an awareness with the younger customer,” says Wendy Farina, principal with consulting firm Kurt Salmon Associates. “You have a knowledge with an older consumer that may not be as interested in fast food as they used to be.”
To reeducate the public and developers about Roy Rogers, the Plamondon Cos. has hired D.C.-based advertising firm +SmithGifford. The firm is trying to create a unified advertising campaign for all Roy Roger's restaurants. “What's happened in the last 10 years is that the target audience for each store is different,” says Matt Smith, President of +SmithGifford. “Lacking any umbrella marketing, they've had to rely on local demographics.”
The firm is currently searching for a target demographic for Roy's. It also has decided to stick with the image of Roy Rogers as the face of the brand. While many below 40 may not know who Roy Rogers is, his cowboy image still reverberates deep in the American psyche. “The image of Roy and what he stood for and his value systems are stronger than Roy as a celebrity,” says Smith.
One encouraging sign is that annual volume at the stores is more than $1 million a year, says Plamondon Jr‥ With a loyal, cult-like following in the Washington, D.C. — Baltimore region, the company plans to begin rebuilding there and then spread out. Shooting for 100 stores by 2010, the company hopes to have 15 to 20 percent of the store-base corporate and the rest franchises. Currently, it owns 15 stores, which is about 27 percent of the chain. So to meet its corporate goals, the company is heavily focusing on franchises in the future.
The company's preferred real estate is a building with 3,300 to 3,400 square feet, with some visibility and access near retail. The company can build in freestanding locations or shopping centers. “Shopping centers are great because you have the draw of the anchor,” says Jim Plamondon. “But you can't have a formula in today's marketplace. There is simply not enough real estate to fit high demands.” Because the brand is focused on quality and not coupons or price, higher-income markets are more compelling, according to the Plamondons.
Some skeptics remain. “They have so much competition in the fast-food market, says Michael Seid, managing director of Michael H. Seid & Associates LLC, a franchise and advisory firm. “If you look at the roast beef, I wouldn't want to compete with Arby's (which has over 3,450 franchises). In the chicken segment, you are competing with half a dozen chains.”
Jim Plamondon says it has an advantage in that its roast beef sandwich is made from U.S.D.A. Choice beef, rather than processed beef.
Roy's revival, though, will require strong interest outside of the capital region. “To bring back a brand you got to have a passionate following and a uniqueness of a product,” says Seid. “I don't know if Roy's has it.”
The Plamondons believe that there is a place for Roy Rogers. “There is no reason it shouldn't be a great brand again,” says Plamondon Jr‥ “There is a reason there were 655 stores at one time.”
RESTAURANTS
CHALLENGE:
How does a small company bring back a once-prominent fast food chain that was sold 15 years ago, lost more than 600 locations and significant market share and only has a handful of independent franchisees left?
SOLUTION:
Buy the franchise rights and recreate the brand's presence in its core market. The Plamondon Cos., one of the few franchisees left after the brand was sold to Hardee's in 1990, is trying to expand in the Washington, D.C — Baltimore region. It is also seeking franchisees to open stores in the mid-Atlantic region.
BUZZ:
Since 2001, it has opened two new stores in Montgomery County, Md. Opening day signs were encouraging with lines 30 to 40 people deep. Annual unit volume at each store is about $1 million. The company is also looking to open a third store in the near future.
DATA:
Of about 648 stores in 1990, there are only 55 left. About 15 are run by the Plamondon Cos., while the rest are owned by franchisees. The company plans to have 100 stores by 2010. Discussions are also under way with an operator to possibly expand the store's presence in New Jersey.