Company of the Year: Browns Restaurant Group

Photo by Ian McCausland

It debuted 13 years ago with a name randomly selected from a phone book, but nothing in the Browns Restaurant Group (BRG) journey since has been left to fate.

Today, the Vancouver-based company finds itself closing in on annual sales of $150 million, with several new additions to its flagship chain, Browns Socialhouse, on tap and a series of complementary concepts in various stages of development.

Along the way, it has become a beacon for would-be franchisees attracted by an enticing combination of steady year-over-year revenue growth and a dining concept — premium casual — that analysts say possesses considerable upside.

From its conception to its current success, the company’s course has been assiduously charted by its founder and CEO Scott “Scotty” Morison, a veteran restaurateur and a member of the B.C. Restaurant Hall of Fame’s Class of 2014.

It was the mid-2000s when Morison — one of the founding partners of the enormously successful Cactus Club restaurant chain in 1988 — came up with the idea for a new chain of casual restaurants. Based on a smaller footprint (between 2,500 and 3,000 sq. ft.), it would be a cross between a restaurant and a neighbourhood pub; franchisee-led, not corporately owned; and the chain would target mid-sized markets such as Kamloops, B.C. and Moose Jaw, Sask. in addition to major centres. Most importantly, it would emphasize quality and a distinctive customer experience, best exemplified by a “snowflake” approach to design that ensured no two restaurants were alike.

But, while Morison had a clear vision for this new company, he still didn’t have a name. Then he flashed back to a CNN interview with the founders of upscale U.S. steakhouse chain Smith & Wollensky — who revealed they arrived at the name by each flipping to a random page in the phonebook and choosing the first name they pointed to. Intrigued, Morison adopted the same approach — only to immediately inform his wife Elizabeth that he needed a do-over. The first name he pointed to has long since faded from memory, although Morison jokes that it would have likely required his new restaurants to offer a terrific matzo-ball soup.

The second name he pointed to, “Brown,” had no such associations — essentially providing a blank slate upon which Morison could imprint his fledgling chain’s values and identity. “Browns didn’t mean anything, which is why I really liked it,” he says.

More than a decade later, BRG means plenty to customers, employees and a growing list of would-be franchise partners all clamouring to be part of a success story that is still being written.

BRG is forging a singular path in the premium-casual category — a format boasting a “long runway for growth” according to a 2015 report from U.K.-based research firm Euromonitor International.

Browns Socialhouse has grown quickly — it now boasts 65 locations, primarily in Western Canada — while maintaining double-digit revenue growth and posting EBITDA typically more than double the industry average.

The company plans to open 20 new restaurants in Western Canada over the next two years, while Ontario is very much on senior management’s radar. It currently has one corporately owned restaurant in Oakville, with a new location slated for Ottawa.

Its continued business success is an undeniable factor in a terrific 12 months that have seen it overhaul the Browns Socialhouse menu, the ongoing development of two new chains — including a pizza-led concept called Liberty Kitchen — and continued corporate social-responsibility initiatives.

Fittingly, for a career restaurateur, many of Morison’s decisions relating to BRG are based on a gut feel. He’s openly disdainful of what he calls the “paralysis-by-analysis bullshit” employed by Browns’ competitors. “We don’t believe that’s the nuts and bolts of the business,” he says. “If you can’t feel it and you can’t smell it, you don’t know what you’re doing. I don’t care what the spreadsheet tells you. [My approach] is more intuitive, but grounded in practical experience.”

Morison is content to leave the cold, hard business numbers to a seasoned senior-management team led by his two trusted lieutenants: president and COO Scott Ward and executive vice-president, Business Development Bruce Fox.

Morison’s personal focus, refined throughout his more than 30 years in the business, is on creating a singular dining experience. “There’s really nothing that hasn’t been thought through or [is] done by chance, whether it be design, music, lighting, or service,” he says with a hint of pride. “Everything is well thought-out.”

Case in point: Morison is personally involved in selecting every song heard by Browns Socialhouse customers, whether it’s a dinner playlist featuring a combination of Sergio Mendes, Pitbull and Stevie Wonder, or a late-night playlist boasting Queen, Keith Urban, Johnny Cash and Ray Charles. “I categorize it and decide where it goes and what time of day it plays,” says Morison, who is known for his habit of “Shazaming” songs that intrigue him so they can potentially be added to the playlist. “I always look for what I call ‘eater-friendly’ music.”

He also keeps a series of binders overflowing with clippings from trade magazines around the world, which he uses as inspiration for everything from Browns Socialhouse’s light fixtures to its fabrics and floor coverings.

“Scotty’s view of the business is ‘If you can see it, touch it, hear it, taste it or smell it, then he owns it,’” says Fox, who joined BRG in 2008 after spending nearly 18 years as president of the franchise-development consulting business Catalyst Hospitality. “When you talk about attention to detail, he’s way down in it. It’s details, details, details.” One of Morison’s habits is walking through a restaurant, noting not just what customers are eating and drinking, but gauging the mood at their table and looking for the tell-tale signs that provide a window into their dining experience. If guests are wearing a coat, for example, the temperature inside the restaurant is probably too cold; if they’re constantly scanning the room looking for a server to take their order, then the service might not be up to snuff.

“I call it ‘old-school restauranting,’” he says. “I haven’t looked at a check average for my business in 30 years — nor will I. For me, the metrics are, are my franchisees and customers happy?”

Based on BRG’s 2017 numbers, they are. The company is on track for a record $150 million in system-wide sales this year, despite economic headwinds in key markets such as Alberta (where it operates 18 restaurants) and a general downturn for the casual-dining sector as a whole.

In July, BRG announced it had secured a multi-product loan facility from CWB Franchise Finance that will be used to consolidate and refinance existing corporate debt as it looks to grow its Western-Canadian footprint and readies itself for a long-anticipated move into Eastern Canada.

Morison says he is heartened by the warm reception Western Canadian chains such as Moxie’s, Earls and Joey have received in Ontario and anticipates franchisee demand will be high in Canada’s largest province.“Everybody loves what [West-Coast chains] do, collectively, so we can’t wait for restaurant operators to discover us and say ‘I’d like to become part of your team.’ If we get the same foothold in Ontario as we did in the west, we’ll do it all over again; it’s going to be hyper-speed.”

Fox says there’s an informal hierarchy within BRG as it relates to its expansion strategy: B.C. first, Western Canada second. The company views Ontario as a “completely new country,” he says, while any plans for possible expansion into Quebec and the Maritimes are “off in the distance for us.”

Closer to home, a new team headed by culinary director Damon Campbell and culinary development chefs Michael Steh and Kristian Eligh, has retooled the Browns Socialhouse menu, introducing new items while retooling customer favourites such as pizza. “It took about three or four months [for the new culinary team] to calibrate, which was understood to be part of the plan, and they started to introduce flavours, ingredients and new techniques and have evolved the [menu],” says Ward, who joined BRG as VP of Operations in 2009 and is now just a little more than a year into his new role as president and COO. Campbell, who was previously executive chef at Bosk restaurant in Toronto’s upscale Shangri-La Hotel, says much of the acclimatization period was spent determining the abilities of the cooking teams across the Browns Socialhouse network, while simultaneously learning an entirely new customer base. “The goal remains the same — putting out delicious food — but I do think that you’re cooking for a different audience, at a different price-point, so that’s an adjustment,” he says. “You’re essentially learning your consumer all over again.”

Campbell and his team have also worked its way through the menu, making a series of subtle tweaks and changes, such as the addition of a new Ancient Grain & Kale salad and a Chili-Lime Fish Sandwich made with Icelandic cod. They also started making the white sauce for pizzas in-house and have changed the dredge mixture for the Spicy Crispy Chicken sandwich and the tortilla shells used in the Crispy Chicken Taco and Baja Fish Taco. Campbell is also keen to introduce what he describes as “more composed” entrée items. The process got underway in October with the addition of three sirloin-steak-based entrées and Campbell hopes to add additional cuts based on customer acceptance and how well the culinary teams adjust to the new cooking requirements. “Introducing steak is a whole other skillset for the cooks, so I don’t think introducing four different cuts at once is the way to go,” he says.

Next year will see an emphasis on both entrées and bowls for the lunch crowd. While Campbell is wary of making any substantive changes to the #28 Dragon Bowl — the best-selling item on the Browns Socialhouse menu — he hints patrons could see a “2.0 version” of the popular favourite.

From a business perspective, meanwhile, a carefully managed growth plan is very much front and centre. Browns Socialhouse recently opened its newest restaurant in Winnipeg, across from the MTS Centre, while the parent company is currently developing a new pizza-led concept, Liberty Kitchen, with the first location set to open in Surrey, B.C. next spring. BRG is also developing a third concept, called Browns Crafthouse, which Ward says will emphasize craft beer and cocktails, scratch cooking, et cetera. The new concepts are designed to complement the Browns Socialhouse model and, in some cases, will be situated in close proximity to existing restaurants.

Fox describes BRG’s approach to franchising as “guided ownership,” designed to help its partners succeed in an industry where roughly 60 per cent of all new restaurants fail within the first three years. He credits the high success of BRG restaurants to the company’s insistence on working with experienced restaurateurs; BRG, he says, is “ruthless” when it comes to selecting franchisees. Fox typically receives anywhere from five to 10 franchise inquires a week, with only three or four a year ultimately ending up as a franchisee.

“Guests deserve it,” Fox explains. “How would we dare put a franchise in the hands of someone who doesn’t know the business and say ‘You can learn it at the expense of the customers?’ There’s no way.”

Currently, the 65 Browns Socialhouse locations are in the hands of approximately 20 franchisees, many of who are keen to add to their portfolio. One franchisee group owns seven locations and is in the process of building three more, while another is at five and is building another five.

“We’re headed for 100 restaurants through internal growth,” boasts Fox. “We don’t need any outside parties to come in — we have enough momentum within the system to get us to that mark.”

Morison insists he will continue adding to the story that began more than a decade ago. “I still feel like I’m in the first chapter of what this company is going to be one day,” he says. “We’re just getting warmed up.” He’s adamant, however, that Browns will continue to forge its own path in a business defined by copycats and conformity. After all, it’s too late to start doing things by the book now.

Written by Chris Powell

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