TGI Friday's CEO Ray Blanchette Talks Fast Casual Dining

SPEAKER_1 (0:02)

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Romaine Bostick (0:07)

Casual Dining has produced some of the strongest corporate turnarounds of late, and investors have noticed. Outback Steakhouse owner, Bloomin Brands, whose shares plunged 77% over the last two years, up 90% since March. Cracker Barrels rallied 170% in the past year from a 16-year low. Brinker, the owner of Chili's, up 40% this year. And Cheesecake Factory, Cake, has more than doubled to a record high. For privately held companies, classic names like Red Lobster and Sizzler, they've risen from bankruptcy and are hotspots once again. And now TGI Fridays under CEO Ray Blanchette is trying to get some of that flare back as well, staging a revival under new ownership, an all-franchise system, a $12 value meal bundle, and an ambitious target of more than 1,000 locations globally by 2030 Ray Blanchette joins us right now, the CEO of TGI Friday. Ray, great to have you here on the program. Talk to me about this story. Obviously, you just had a big ownership change, a bit of a restructuring, a bit of a rethink. Where exactly does TGI Fridays actually fit into the casual dining space today?

Ray Blanchette (1:12)

Well, I think we're, first of all, thanks for having me, Romaine. It's great to be on with you.

I think we're squarely in the middle of it, right? I mean, we're providing really interesting value options for our guests, high-quality food, high-quality experiences. I think you hit the nail on the head in your intro that certainly what we're seeing is that our guests are very interested in the overall service experience. Obviously, high-quality food is critical, but service is what sort of distinguishes and separates it out.

Romaine Bostick (1:44)

Well, I do want to get to that too, because I mean, for those of us of a certain age, of course, we all remember, I mean, there was a kind of a spectacle to TGI Fridays from the decor to the bottle flipping that of course, everyone was kind of immortalized in a cocktail Tom Cruise movie that unfortunately, none of my producers are too young to remember that. They all were looking at me like I was crazy when I was planning for this. But it gets to that idea, what is the primary focus that you're putting on? Is it on the food itself? Is it on the service and the spectacle and the decor? What's the priority to getting more revenue, more customers in the store?

Ray Blanchette (2:15)

Without a doubt, it's food, service and atmosphere.

We just had our global conference last week in Orlando. We had owners and operators in from all over the globe, and we did our World Bartender Championship. Actually, Ron from the Philippines won, which was just super fun. We're bringing a lot of energy back into the business. We're focused back on scratch cooking in the business, and doing things that our guests are obviously recognizing us for.

Romaine Bostick (2:45)

Well, give me a sense though too, that when I see a number like whatever it was, your thousand stores that you're trying to get to here, I mean, right now, I mean, you're basically at 70-something stores, down from 300-plus stores a few years ago. That's a huge gap. I mean, I know you're at a franchise model now, but where does that growth actually come from? Is that going to be primarily in the US? Is it going to be overseas? Where?

Ray Blanchette (3:08)

It's going to be all over the globe. We're actually at approximately 400 restaurants globally, with 70 in the US. We just signed a new development agreement domestically here in New York. We've got several other development agreements that we're looking at. And we've signed new countries all over the world. We're going to sub-Saharan Africa for the first time, the Maldives.

We're going to the Balkans. So we have a lot of growth that's happening. I think we have close to 300 stores now committed for growth over the next several years. So we really do believe in this one, two, three plan that we can get to a thousand restaurants. But I think it's important to remember, the guest doesn't experience your strategy, right? They experience what you deliver in the restaurants. And now that we've pulled our franchisees together, we're really focused on delivering a great experience in every country that we compete in.

And everyone's aware of the plan, everyone knows and is going in the same direction.

Romaine Bostick (4:09)

Well, give me a sense here about also pricing. I mean, there's been a lot of talk about your 1199 three for all program. And we've seen other casual dining chains also sort of move into that value space if they weren't already there. I mean, how much can you hold the line on that? Because when I see $12, that's great if you're a consumer, but if you're an operator, I mean, how do you make $12 profitable?