Turning A New Look Into Dough

Thursday, March 05, 2009

Some Atlanta Bread franchisees invest in makeover to update decor and menu to entice diners to stay longer.

Jerry Couvaras, Atlanta Bread Co.'s president and chief executive officer, sat down for coffee on a recent weekday morning at the chain's south Cobb County location.

As he started to talk, Couvaras stopped and pointed to a booth where a young man was typing on a computer. The patron had been there for an hour and a half during the normally slow stretch between breakfast and lunch.

"That's the second apple croissant he's had," Couvaras said. "He's spent probably $3 or $4. That's a good thing. We encourage this." For about two years, Atlanta Bread Co. has been remodeling stores, adjusting service and tweaking the menu to attract more customers like the man in the booth. The chain figures it can increase sales by getting customers to linger longer, particularly during down times.

About a third of Atlanta Bread Co.'s 105 outlets have completed the makeover, but the process also has led to a fallout by some franchisees.

Last year, Atlanta Bread Co. had 25 store closings, losing about 20 percent of its outlets. The chain also opened three new stores and expects six or seven of the closed stores to reopen at new locations.

Couvaras said the changes were necessary. Atlanta Bread Co., started in 1993, had taken on a "fuddy duddy" feel, he said.

The old stores featured a gold and black color scheme. They had big open spaces with wooden tables, chairs and hard benches.

The new stores use red and green earth tones, soft benches and curving partitions that divide the space into smaller sections.

They offer free Wi-Fi and more outlets for plugging in laptop computers. The company also adopted a new logo called the "bread man," representing a character who travels the world looking for new cuisine.

The changes appear to borrow a page or two from the playbooks of Starbucks and Panera Bread, restaurants that have benefited from the notion of a "third place" to hang out apart from the home and office.

Atlanta Bread has a stronger international flavor than Panera and will bring the order to your table, Couvaras said. It has a much broader menu and more space than Starbucks, he said. "If all these people were in a Starbucks right now, we'd be claustrophobic," he said.

The decision to remake Atlanta Bread Co. started four years ago with intensive market research, Couvaras said.

About two years ago, over the course of a couple of months, the chain brought every franchisee to its Smyrna headquarters to tell them changes were coming, he said.

Depending on the location, the remodeling costs $80,000 to $250,000. Some franchisees bought in immediately, some said they didn't have the money for the changes at that time and others chose not to participate at all, Couvaras said.

It was the "beginning of the catharsis," he said. Atlanta Bread needed a dramatic makeover to meet consumer demands.

"Ultimately if you don't [change], it's not us taking your store away," Couvaras said he told the franchisees. "It will be the market." Jeff Massey, a franchisee for a Greenville, S.C., store, said he was excited about the makeover. Massey and his wife, Amber, bought an existing Atlanta Bread Co. outlet about seven years ago. They remodeled their store last fall.

The menu upgrades have helped, Massey said. A Chicken Waldorf sandwich, previously offered for a limited time, has been a hit. The redesign has helped the store attract more customers from nearby Furman University, he said.

"Right now, midterms are going on at Furman," Massey said. "And last night, during the dinner hour on a Monday night, we had probably 12 to 15 college students in here studying." After rising sales in the first few months of the remodel, sales have dipped recently, he said.

"We've seen our numbers drop some, but I'd be scared to see what our numbers would have looked like if we hadn't done the remodel," Massey said.

Dino Bylos, who owns four metro Atlanta and one Columbus outlet with his brother George Bylos, has remodeled one of his stores, a Snellville location. He said he regrets not moving more quickly.

Sales for the Snellville outlet are up about 14 percent since the remodeling, Bylos said. The staff at the Snellville store also has been re-energized, he said.

"It was the excitement of opening a new business without the anxiety of thinking ‘Did we choose the right brand? Did we choose the right location?' " Bylos said.

Atlanta Bread said across the chain sales in January were about 6 percentage points higher at remodeled stores compared to stores under the old design.

Couvaras, Atlanta Bread's CEO, said he expects some stores to be relocated to better sites.

The chain is confident the moves strengthen the overall brand, Couvaras said. As he wrapped up the interview, he pointed to the guy in the booth, still sitting there with his computer. "If he stays here long enough, he's going to get hungry again," Couvaras said.

ATLANTA BREAD CO.

Headquarters: Smyrna Founded: 1993 Outlets: 105 Background: Known for its sandwiches and baked goods, the chain grew quickly in its early years but 25 stores were closed last year as a makeover was rolled out.

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Atlanta Bread Company International Inc.
1200 Wilson Way Suite 100
Smyrna, GA

Phone: (770)432-0933
Fax: (770)444-1991

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