McAlister’s Leans on Shared Services, Off-Premise After 400-Unit Milestone
Courtesy of Focus Brands
When Paul Macaluso took over as president of McAlister’s Deli, he didn’t have a big learning curve, but maintaining the trajectory of the growing sub concept did mean a few tweaks.
The president was promoted from within Focus Brands' shared services, where he oversaw brand strategy at all the brands under the umbrella, including Auntie Anne’s, Carvel, Cinnabon, Moe’s Southwest Grill, Schlotzsky’s Bakery Café and McAlister’s Deli.
Now as president of McAlister’s exclusively, he’s still celebrating the latest milestone of 400 locations reached in April.
“It’s a huge milestone for us, we’re really excited about it. It’s operated by the Saxton Group, which is one of our largest franchisees; this is their 69th location,” said Macaluso.
He said it’s the 26th location in the Dallas area and the 75th in Texas, a major focus for the brand.
“Texas is our No. 1 state in number of restaurants, and the brand just does really well here. The food resonates well here, the variety of menu, the portion size and our consumer proposition is about hospitality,” said Macaluso.
To celebrate, he said the company is thanking its franchisees, but also using the 400-unit milestone to push a new app to consumers, enticing them to download with a free club sandwich. The new app is a part of the brand’s push for more off-premise dining and greater efficiency for those off-premise diners.
“The app is important for a couple reasons: it’s an investment for people to put an app on their phone so we want to make it worth while. And we know if we can get people to order from us once, and see how easy it works, they’ll do it again in the future,” said Macaluso. “So we have a really aggressive offer to get them to put us on their phones.”
He said the push for off-premise efficiency has proven to be a revenue and margin benefit since there aren’t any refills or cleaning required. Above all it’s access, and customers have proven that they want it. Macaluso said he’s seen a slight shift to off-premise. And while they don’t need to change things yet, he and the management team are pondering smaller-format locations to cut overhead more in the future if off-premise continues growing.
“We do have a new design for people to come pick up their food and a nicer cabinetry section,” said Macaluso. “That’s a big part of the growth in the future is getting food to-go. And I think there’s a high level of incrementally on stealing share from others who might not make it so easy.”
He’s also looking to lean harder on the shared services Focus Brands provides. Given his history in the role, he said he’s been expanding McAlister’s use of shared services further since he took over as president in December 2016.
“With a the total of six brands that we operate, we’re over 5,000 restaurants, so there’s a lot of synergies and leverage from vendor contracts and our shared services, real estate design and construction. All of those are shared across the brands,” said Macaluso.
Serving in the shared service environment previously, he said he was able to quickly transition into the position without losing the momentum that attracted franchisees in the first place (on top of the $1.6 million AUV reported in 2016).
“You don’t want to lose any momentum. That was really what worked out well with my transition, I was familiar with the brand already and was familiar with the initiatives. I didn’t change anything; I simplified a few things that we focused on,” said Macaluso, the biggest simplification he said was maximizing the shared service model. “It takes a little while to get used to if you haven’t been in a shared-service organization before—who to go to, how to operate. So it’s really worked out for me to have a really quick transition and for the team to have a quick transition.”