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Urban Flats – How to Fix this Failing Restaurant

last edited: December 7, 2011, 9pm [added recommendation on beer & wine]; also edited on December 13, 2010, 1:05am [improved a few poorly worded sentences]

I’ve noticed several franchised “Urban Flats Flatbread & Wine Co.” closing this year in the southeast, such as Orlando FL, Winter Park FL, Lawrenceville GA,  and Atlanta GA (pictured to the right).  Something clearly isn’t resonating with potential and repeat customers.   Many franchises suffer from this ‘surprise’ problem leaving execs scratching their heads about what is going wrong.    I’ll put on my pundit hat and give you my opinion and recommendations.

HOW RESTAURANTS ARE JUDGED BY CUSTOMERS:

People will instinctively judge a restaurant on three elements, and to draw repeat business you need to excel in at least two of these (and be at least average in the third) in the eyes of your local customer base:

  1. FOOD:  Is the food memorable and superb all around?
  2. PRICING: Is the pricing at or below the competition; does it provide value?
  3. AMBIANCE/EXPERIENCE:  Is the customer experience superb with a unique and comfortable interior design?

A restaurant could succeed by satisfying only two of three criteria.  For example, you could provide an excellent customer experience and have great food, but prices are too high.   Cheesecake Factory and J. Alexanders are examples of this but both still generate excellent sales.

HOW URBAN FLATS RATES:

According to most of the reviews I’ve read online, Urban Flats rates as follows:

  1. FOOD: Average food, flats are minimalistic…not bad but not excellent either
  2. PRICING: A bit high – $10 cheeseburger, $8.50 Loaded Potato appetizer, $10 “flats” pizza
  3. AMBIANCE/EXPERIENCE: Average, some described it as trying too hard to be cool.   Music is too loud to talk.  If you have to describe your restaurant as hip in advertising, you probably are not.

Other repeat comments are that visitors expected a walk up ordering counter and self seating, but it’s a sit down wine bar.   The menu is surprisingly diverse for a “flats” restaurant.  It showcases very high end salads and entrées ranging from salmon and tandori chicken.  People understandably describe the “flats” as “pizza” even though there is no mention of pizza on the menu.

Also see: Urban Flats Menu

FIXING THE BUSINESS

I could see this concept get on the path to profitability by switching to a limited menu of “flats” priced at the fast casual norm of $6-$8.  And, only selling sides that support the “flats” sales such as  salads.  The service style should be fast (under 5 minutes to receive your order) and be located in storefronts where you’d find fast casual restaurants like Panera Bread, Go Roma, or Noodle & Company.

Ditch the waiters and table service, ditch trying to be a hip bar.  Ditch the menu items that do not support the “flats”, shrink your footprint to under 3,000 square feet. Make the seating comfortable to individuals and groups.  Try to infuse “authenticity” into your brand story, focus on the unique “flats”, don’t fight the pizza comparison.   Hire a new chef consultant (you need outside unbiased help right now) to restructure the menu, and rework foods to get the food costs well under 30%.   Hire an experienced research firm to test and improve the menu (email me if anyone wants research firm recommendations).  Let the chef consultant work closely with the research firm for best results.  Since stores already have bars and liquor licenses, have a couple of low-cost wines and decent draft beers with the pizza, but I’d drop the hard liquor permits if possible and just do beer and wine.  Flipper’s Pizzeria and Go Roma do this successfully while keeping it family friendly.  You may be tempted to go the sports bar route but I wouldn’t recommend it in this instance because you’ll get lost in the shuffle as most sit down pizza places already pseudo try that.

Currently, there is little unique about Urban Flats other than their “flats” pizza.  Luckily, there is a market void for quality under-5-minute pizza restaurants (Red Brick Pizza is currently trying to exploit this niche with high-temp stone hearth ovens that cooks pizza in 3-4 minutes…I’ll do a review of Red Brick Pizza soon because I think they’re screwing up too).   If I owned Urban Flats, I’d bet the farm on branding the restaurant entirely around the “flats”.   Try being more kid friendly with the menu and seating in your suburban locations and you’ll get many more of the coveted large family groups.   Gimme’ a combo that includes a flat, salad or side and drink for $10.

The foundation and sole goal for this turnaround is getting people in the door, returning every week, and encouraging their friends to check it out.  Once customers consistently fill the seats and gross sales are high enough to at least reduce prime costs under 60% and rent under 10%, then owners/managers can pontificate on increasing profitability by increasing average liquor sales, optimizing labor schedules, table turnover times, and getting their friends posh jobs at the bar.

As I write this I’m reminded of the reality show “Kitchen Nightmares” starring Chef Gordon Ramsey.  Ramsay doesn’t come out and say it but his formula for saving restaurants from bankruptcy hinges on fixing the three criteria above.  He (1) reduces the complexity and size of the menu, (2) reduces the prices to encourage repeat business and match competition, and (3) remodels the interior design and employee’s attitudes.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
10 comments
Lou
Lou

I'm a little late here but wanted to add my two cents. Arm chair restaurateur maybe Ryan ? Your solution is to take one concept and turn it into another. Dropping hard liquor is a mistake, lots of money in cocktails. Your idea is, have a dollar menu, happy meals Have the food in less then 5 min! Really! Let's just call it flato bell . Just cause you work in part of the zoo does not make you zoo keeper. You have some valid points , but you my friend paint with too broad a brush. Lower music Simplify menu Add more items they can relate to at affordable price point If they are going to lounge, then you have to move cocktails, not beer Stop acting cool, be cool

Trin
Trin

Your analysis is spot-on. The "hip and trendy" vibe tends to appeal to a specific demographic of young 20-somethings who are fresh out of college or about to leave; coming to place that sounds like a place to enjoy a great vibe, but having to pay way too much for the experience, is just not a great combination. Particularly since "hip" is more casual than swanky, and Urban Flats seems to have mixed these two connotations up. Best of luck to them, I think they have a lot of potential.

David Downs
David Downs

Ryan, Your evaluation is very interesting to say the least, but have you ever eaten in an Urban Flats? I see by your bio, that you are a valuation specialist, but am not sure of your background in evaluating restaurants, so I will assume your point of view is from a consumer, which is the foundation of any restaurant - and one that is valued! I am a franchisee with Urban Flats. My location is in Winter Garden, and I have many times shared your '3 element' view of how to be successful. When I initially was attracted to this concept is was because of the uniqueness of the product and the energetic environment. However, unlike you, I think there is success in the offering of this concept under it's current venue of wine, cocktials and food. But the brand lacks the leadership and vision necessary to refine it and take it to the next level. This restaurant, just like any other requires dedication by the ownership to make it work! Having the right management and staff that enjoy what they do and translate that enjoyment and professionalism to the guest. Having said all of this, I do believe this concept needs a renewed direction, and a focus on 'Flats' and quality of product. The restaurant is 'loud' which is a turn off for many, but energetic for others. This can be solved by a simple investment in acoustical dampening, but a pricey one. The price point, that you mention being too high, I agree with some items, but by comparison with other 'pizza' places that offer gourmet pizzas, some which come in at the $20 + range (Pizza Fusion). And other places that offer flatbreads as appetizers that start at the $8.50 range (i.e. Season's 52) puts me at odds with the overall comment. In our area, it's hard to find a meal with an average ticket of $15 per person. So, as I agree with some of the things your write about, due to the fact that we have already made the investment in the infrastructure we will continue to strive to put the best product to our guest and attempt to improve where we can. This isn't to say we don't mess up, because we do! But we try to correct any issues and not make them in the future. My ownership plan is to continue to push for changes that bring us better guest experiences, better work environment for staff and decrease COGS. We currently operate at a prime cost of just below 65% which is not bad given the concept, but can always get better. Any additional thoughts or comments can be directed to my personal email as I welcome any ideas on improvements. Regards, David D

Laura Yogurteur
Laura Yogurteur

I think there is room in the market for an upscale pizza. In the south Anthony's Coal Fired Pizza is basically a bar that serves great coal oven baked pizza. It is kind of a sports bar like Buffalo Wild Wings but sells pizza rather than chicken. My point is I think a wine bar that serves great flatbread can be profitable mix, just don't get lumped into the Italian restaurant crowd.

fuwafuwausagi
fuwafuwausagi

Lou, well than perhaps you can explain to us what the USP for this concept is? It is certainly eluding me. One location in Tennessee, one in Georgia and 3 (at the time of this writing) in Florida, so brand recognition dos out the window. Given the first one was opened in 2004, riding the largest crest of conspicuous consumption the retail food world has ever known, I would suggest the financials are strongly in doubt as the demand was essentially artificial, an anomaly of the times and circumstances. Circumstances we are likely never to return to. A glance at the requirements reveal you should have: • Experience in the food industry • Strong sales and customer service skills • Passion for excellent food quality and superior guest service • Well-developed people skills with in-depth experience in training • High personal standards of honesty and integrity Inquiring minds wants to know if you already have that level or industry experience what exactly is the zor bringing to the table? The concept is pedestrian, a hodgepodge mixture of ingredients that any commercial food consultant could equal without imposing the restraints of a franchise. More telling is the point that the menu items may vary by region, demonstrating that there really is little to the concept, as sourcing and local preference (i.e operators experimentation) may be need to fine tune the localized concept. In the end this may make a fine regional chain for a LLC or partnership, but there really seems to be little to recommend this as a franchise concept expect to the franchisor. If there is merit, please feel free to point it out to me. FuwaFuwaUsagi

Ryan Knoll
Ryan Knoll

I don't work for Urban Flats nor do I own a franchise, so yes I am arm chairing this. I am recommending a few substantial changes, and it will fundamentally change the restaurant's image and positioning. Getting rid of liquor is not necessarily required to fix Urban Flats. But liquor will sell better in a full service environment. I'm recommending to change the model to a more fast casual environment where beer and wine may fit better and be more complimentary to the menu. Are alcohol sales for Urban Flats are under 10% of sales? I'd be compelled to keep liquor if all alcohol sales were at least 15% of gross sales. People aren't coming to Urban Flats because you have Belvedere Vodka. They can get a vodka tonic anywhere. They are coming for the food first, and potentially some may order a drink. You've gotta fix the food quality and consistency to fill the seats with more returning customers.

John
John

To compare Urban Flats with seasons 52 is settling the debate.. Seasons 52 has the Flatbread as a appetizer. Urban Flats main focus is the Flatbread.. When you go to Seasons 52, you know that you are not walking into a night club feel, you are walking into a upscale restaurant that does not use butter to cook and portion controls are good for the healthy eater. Turning off the wrong customer due to the loud music is a mistake. The highest percent of customers are over 40.. They do not like loud music.. I think that this is something that needs to be looked at. The fact that some have closed in orlando does not really fall on urban flats feet, but a lot has to be blamed on some of the franchisee's.. To many times do people go into a store and see it before investing and get delusions of becoming rich! Then, they think they could do it all while sitting at home and hiring kids to do the work. Urban Flats could be succesful, David seems to have a grasp of what needs to be done.. But, Dont compare yourself to the other places.. seperate yourself from them.

Ryan Knoll
Ryan Knoll

Hi David. I do a lot of legal and financial consulting with restaurants, most often analyzing a restaurant's books with an eye towards a transaction. So I've worked with owners and franchisees on managing valuation drivers. I look at restaurants like any other business and focus on cash flows and return on investments, and what potential there is to improve customer traffic and profitability. Making strategic decisions is much easier once you know what your working with and what, if any, potential a location and concept has. Being a franchisee siphons off almost 10% of sales in royalties and advertising fees, so your internal budget ratios are under even more pressure. Restaurant failure at the end of the day is caused by lack of new and repeat customers, and repeat customers will brew more customers from word of mouth and reputation. Why would a group choose Urban Flats over restaurants like Mellow Mushroom, Season's 52, Chili's, or Bonefish Grill on a Thursday evening? That's a perspective I took in reviewing Urban Flats. I haven't eaten in an Urban Flats. I tried twice but both locations recently closed. I read reviews from 5 or 6 online sites and it paints a consistent picture. I reviewed the menu, neighborhood locations, and looked at locations' pictures. I'm sure I would have the same conclusions after eating there, as I always do. Pizza Fusion can command a higher premium ($18+ for a large plank) because they cater to the organic crowd and have a very well developed and branded concept. Season 52 can ride its great reputation for excellent healthy food, and most everyone reviews the food and atmosphere as excellent. It is highly likely to get more frequent revisits than the average restaurant. On the other hand, currently what reputation does Urban Flats have (see reviews)? Are customers likely to revisit often? Urban Flats experiences seem to be average at best, but most often it is not memorable. I summarized it in my article...it's an uphill battle for Urban Flats without dramatic change.

Brendon
Brendon

Laura, I have enjoyed Anthony's Coal Pizza for some time and I am researching opportunities with the company. I haven't found any other coal fired pizza franchises.