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Tampa-based Checkers testing delivery, aims for record expansion

TAMPA — Tampa-based Checkers Drive-In Restaurants continues to fly under the radar compared to dominant burger chains like McDonald's and Burger King.

But as new owners have taken charge this year — the third changing-of-hands in just over a decade — the company is trying new initiatives to jump-start sales and add more restaurants to its portfolio.

And a big part of that push is focused not only on expanding the menu but making it easier for customers to get their order — by testing a new delivery model, ordering ahead and mobile ordering.

"The same way Amazon impacted the retail sector, delivery is going to impact the fast-food sector," Jennifer Durham, chief development officer at Checkers and its sister chain Rally's, said in a recent interview.

Checkers' checkered flag design aligns with the on-the-go customer.

The store features compact double drive-thrus and small dine-in areas tucked along a 900-square-foot layout. An ongoing focus on "speed of service," will help the chain increase revenue, restaurant expert Aaron Allen predicts. He said Checkers — like many companies — must continue to improve drive-thru efficiency and invest in delivery options.

With almost 60 locations in Tampa and three times more statewide, Checkers is still relatively nimble compared to the fast-food giants, which allows it to make faster system-wide changes. Durham believes that's a "competitive advantage" as it tries to quickly implement new delivery practices.

PREVIOUS COVERAGE:Private equity firm buying Checkers restaurant chain for $525 million

In March, Oak Hill Capital Partners, a private investment firm, purchased the 850-plus unit Checkers and sister company Rally's, which is centered in the Midwest, for $525 million. The New York City-based equity firm wasn't new to the food industry with previous investments in Burger King and Dave & Busters.

Franchisee owner Shaji Joseph, who plans to open his tenth store by the end of the year, said he doesn't expect any changes under Oak Hill.

There were some positive signs even before the sale. Checkers posted a 7.9 percent increase in revenue sales to $837.4 million in 2016, according to Florida Trend. The previous year, the chain recorded $776.1 million in revenues a 2.6 increase year-over-year.

However, Checkers still lags behind the giants of fast food in getting the most revenue out of each location.

Checkers' revenue of about $1 million per unit is only one-third of an average Chick-fil-A location. The chain aims to increase that to $1.2 million in revenue per unit by 2020.

It's a no-brainer that retail is changing. The same way shoppers expect a better experience from hands-on, in-store classes to high-tech shopping assistant gadgets, customers will expect more from food delivery. They will want better packaging and food presentation, said industry expert Mark Kuperman, chief operating officer of Tampa-based business consultant Revenue Management Solutions.

Checkers is also considering adding a wireless ordering system. If implemented, an employee standing outside could take orders and payments from the drive-thru lane before the customer gets to the ordering speaker. A similar system intended to shorten wait times is in place at Chick-fil-A and other fast-food establishments.

RELATED COVERAGE: A Checkers fast-food success story takes the road less traveled

One of Checkers' key goals in its overhaul is to become more of a destination point for millennials — reacting to studies that show millennials eat more than four times a day while yearning for mid-day and late-night snacks.

New snack-sized items such as hot dogs, fried shrimp with the signature seasonal fries, wings with five different flavors, sweet treats and flavored drinks provide customers with "big flavor" within a frugal budget, Durham said. The new slogan to "Crazy good food," also markets the company's shift, which was founded on a limited menu of burgers, fries and colas.

"The edge is value," said Tyler Peterson, a real estate expert with Colliers International Tampa Bay. He said while fast-food operations formerly led in both speed and value, now it's more about value.

Restaurant expert Kuperman agrees and expects a revival of the "value menu."

As a final part of its strategy, Checkers' new owners intend to give their customers more locations to pick from. The chain plans to exceed its previous record of opening 37 new locations in a year — set more than 20 years ago.

So far this year, the franchise already has opened 33 stores. It plans to open up to 30 more by the end of the year. Checkers also has rolled out a new building design, called Model 4.0, which it hopes will attract more franchisees because it's quicker to build and less expensive.

"We are aggressively pursuing growth," said Durham.

Contact Tierra Smith at [email protected] tampabay.com. Follow @bytierrasmith.

Fast Facts

Company: Checkers Drive-In Restaurants

Headquarters: Tampa

CEO: Enrique Silva

Number of Locations: 850+

Employees: 1,750+

Source: Company data, Florida Trend

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