Slim Chickens CEO: Pandemic won’t blunt growth potential

by Paul Gatling ([email protected]) 1,125 views 

In July 2019, the growth potential of Fayetteville-based restaurant chain Slim Chickens attracted an investment from 10 Point Capital, an Atlanta-based private equity firm.

The capital is expected to help the company expand and open more than 600 new locations over the next 10 years.

One year later, despite the COVID-19 pandemic, those plans haven’t changed. In a recent interview, co-founder and CEO Tom Gordon said the company has tweaked growth plans but not significantly.

“Certainly, this has slowed us down a little bit,” he said. “But I can tell you that all of our franchisees are happy with our performance. None of the new franchisees or prospective franchisees that have come to see us have said they don’t want to do it. It’s more like, ‘Let’s pause for three or six months and see what it looks like.’ We haven’t lost our pipeline of stores and new franchisees.

“Being realistic, though, this may set us back another year to get us where we want to go.”

Gordon said Slim Chickens — which finished with $96.6 million in systemwide sales in 2018, according to the Franchise Times Top 200+ — has fared well during the pandemic and is still opening stores. Franchise locations opened in Florida in June and Utah in July. He said drive-thru orders are, not surprisingly, up significantly this year. Investments in curbside and delivery options have also produced excellent results. Those numbers are offsetting losses due to the closing of dine-in service.

Tom Gordon

“We’ve been fortunate,” Gordon said. “We’ve done well through this. Certainly, we feel bad for those that don’t have a drive-thru [window], like fine-dining restaurants. I’ve got friends in the industry who are struggling. But as you look forward, we ask ourselves all the time, ‘How can we be more prepared?’”

Since its founding in 2003, Slim Chickens has grown into a franchise system with nearly 100 stores in 17 states and international locations in London and Kuwait.

Following mandated closures to help slow the spread of COVID-19, most stores are now back open with dine-in service, albeit with limited seating capacity to enforce social distancing.

In Northwest Arkansas, however, Gordon chose to suspend dining room service  on July 22 at seven company-owned stores in Benton and Washington counties and another store in Fort Smith. He said the decision was solely his, guided by discouraging data indicating an increase in COVID-19 cases in Northwest Arkansas.

“We need to be part of the solution,” he said. “With the rise in cases, we wanted to be proactive to protect our team members and our [customers].”

Gordon said the corporate guidance offered to the company’s franchise partners about dining room service is to follow state or local guidelines, but the decision is ultimately theirs.

Slim Chickens has 37 franchise partners operating a combined 73 restaurants. The company owns 24 stores.

“In many of our markets, we haven’t seen the amount of [COVID] cases that we’ve seen in Northwest Arkansas,” Gordon said.

Gordon said Slim Chickens has improved its service capability through updates to its mobile application. He said the mobile app has been “hugely important” in the company’s success during COVID-19.

“This new system, working in conjunction with our existing online app, will further allow Slim Chickens to give our guests a superior experience when ordering online, a higher level of service at the restaurant, and reward points to use toward future purchases,” Gordon said.

Gordon said he’s hopeful the dine-in suspension won’t be long-term. The stores will reopen based on healthcare data, not financial considerations.

“I’d like nothing better than to be open 100%, but it’s not all about the dollar,” he said. “I think when we see a sustained decline in [COVID-19] cases and hospitalizations, we’ll make the call to reopen at whatever municipal regulations will allow. It was my call [to suspend], and it will be my call when we open back up.”