Sonoma Chicken Owners Hatch Growth Plans

Friday, June 13, 2008

Sonoma Chicken Coop is spreading its wings. The popular chicken rotisserie restaurant is on track to open its fourth location next month and plans to expand the concept nationwide by partnering with a franchise development company, Fransmart.

Founded in 2002 by Jeff Starbeck, Bob and Bonnie Ray and MacKenzie Davis, the fast casual restaurant now serves between 1,000 to 1,200 customers daily and generates $4.5 million in sales annually at its two locations that have been open more than a year.

A third Sonoma Chicken Coop opened in Almaden in late 2007, a fourth on the corner of Skyport and Technology drives is scheduled to open in July and another location is slated for the new terminal at the Mineta San Jose International Airport.

San Jose Downtown Association executive director Scott Knies says the restaurant is a tremendous success story.

"The restaurant took off like a meteor from day one when they opened up in San Pedro Square," Knies says. "The coop pioneered this niche that struck a chord with the market and they've been printing money." Starbeck started with humble beginnings, owning six hot dog vending carts, and then opening Peggy Sue's in downtown San Jose in 1994. Gazing across San Pedro Square, Starbeck envisioned a courtyard oasis where an asphalt parking lot and drab office building stood. In 2001, Bob and Bonnie Ray visited a similar rotisserie chicken concept in Los Angeles and the four hired a chef to develop a menu that could serve a high volume of customers while keeping food and labor costs down.

Sonoma Chicken Coop goes by the slogan, "inexpensive excellence," and has no wait staff, quick meal turnaround, low prices and a broad menu selection.

The Campbell location opened in 2004 in a building outfitted to brew beer and is now the location with the highest volume. "Each store we open, we learn from our mistakes," Starbeck says. "When we opened the first location, we underestimated our volume by 200 percent." Starbeck says that Sonoma's kitchens have grown to accommodate the volume. The kitchen for the new Skyport site is three times the size of the original San Pedro Square location.

Even as restaurants face soaring food costs, the menu prices at Sonoma Chicken Coop have not increased in the past year. The check average is $22. Starbeck says instead of raising prices they've analyzed portions and cut back on labor to cope with the diminishing profit margins.

To take the concept to the next level, the four proprietors sold 70 percent ownership of their original San Pedro location and future franchise locations to Fransmart in February. But the four will still be actively involved in the roll-out of the brand and kept ownership of the Skyport, Almaden and Campbell restaurants.

"My husband is 72 and I'm 60 and we're not interested in growing this by ourselves," Bonnie Ray says. "We took it as far as we could and the franchise outfit brings more sophisticated procedures." Starbeck sees the biggest challenge with expanding the brand will be keeping the feel of Sonoma Chicken Coop.

"It will require finding qualified people with previous experience to operate the franchises," Starbeck says. "There are a lot of moving parts to this concept." Fransmart chief executive officer Dan Rowe says that the Sonoma Chicken Coop volumes are double what Chili's or T.G.I. Friday's does.

"It's the highest volume fast casual concept we've ever seen," Rowe says.

He says there are already four prospective franchisees in contract to open locations on the East Coast and there are plans to open two or three more company stores and two to three more franchises in the Bay Area.

The original founders came up with a formula and it really works," Rowe says. "We're very mindful of not messing up with what they created."

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