Mama Fu's Sees Costs Drop, Revenues Rise
Since Murphy Adams Restaurant Group bought out troubled Mama Fu's Asian House concept from franchisor conglomerate Raving Brands seventeen months ago, the franchisee turned franchisor says it has lowered unit-level start up costs by 20 percent, while showing an increase in company-owned and affiliated stores by more than 6 percent.There's more. Mama Fu's also announced that it has reduced overall operating costs for all company and franchised restaurants by nine percent.
The growth is attributed to a series of strategic modifications, including a new streamlined restaurant prototype and a menu reorganization that resulted in a higher average ticket price through added-value bundling opportunities, increased alcohol sales and a focus on higher-profit items. Additionally, Mama Fu's delivery service, launched only a year ago, has become 12 percent of the business' revenue, and more than one-third of revenue is generated from off-premise sales through delivery, catering and take-out offerings. A planned upgrade to the online ordering service, with new features such as text reorder, text confirmation and an iPhone application, is expected to further increase the restaurant's off-premise sales numbers.
Although the president plans to open three company-owned restaurants in 2010, he's hoping the changes made in more effective restaurants, where the franchisor operates in the business will spark interest among franchise buyers.
"In a tough economy, we knew we had to get our costs down significantly. Now we're very lean, we've increased our revenue and solidified our brand," said Randy Murphy, president of Murphy Adams Restaurant Group and Mama Fu's Asian House. "By redeveloping and revamping the restaurant prototype, adding delivery service and streamlining operations, we've been able to meet our goal of building a more successful business model without raising prices for the consumer."
Read the full story in Fast Casual magazine
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