Volume 47, Number 11
Written By: Ian Harrison
[dropcap size=big]T[/dropcap]he Mr. Mike’s brand had grown stale from as far back as Brian Mulroney’s prime ministership. The steakhouse chain that began in 1960 by Bob and Nick Constabaris as a family restaurant on Granville Street in Vancouver — and that a generation of British Columbians grew up with — crested in the 1980s with 90 units across Western Canada.
With the country mired in recession a decade later, the brand was decimated, as much a victim of fickle tastes and a lack of innovation as the sluggish economy. All of a sudden, the notion of a self-serve steakhouse and salad bar was dated.
Faced with a decline in sales, it was gut-check time at the home of the iconic Mikeburger (“the burger that won the West”). But, as is often the case with brands in peril, Mr. Mike’s was left to sputter before it was put down and properly rehabilitated.
The force behind the current reclamation is Mike Cordoba, partner and CEO of the Vancouver-based RAMMP Hospitality Brands Inc. This man, who has led the charge to retool the brand, was a regular at a North Vancouver Mr. Mike’s in the 1970s. “Mr. Mike’s was a way for the family to go out and be together every Sunday. It was always a memorable experience,” he notes.
When it came time to make a play for Mr. Mike’s in 2010, the executive was not merely wistful about the fate of the castoff restaurant chain. He saw a viable opportunity for a brand that was part of the fabric of Western Canada. “RAMMP is a company of partners that buys and builds businesses. We’re a franchise concept. Bottom line, our mandate is to make franchisees profitable. That was the goal with Mr. Mike’s from day 1,” he says, of the chain.
When RAMMP took over Mr. Mike’s and rebranded it as Mr. Mikes SteakhouseCasual in a concession to the popularity of casual, mid-scale chains, it assumed responsibility for 19 outlets. The company has since sold 37 new restaurants, with concrete plans to expand in Regina, Winnipeg and well beyond. “Our goal is to go Canada-wide,” explains Cordoba. “We’ll look at Southwestern Ontario this year, the Maritimes and one day, maybe, Quebec. But our core focus is on Western Canada. We’re bullish on all of Canada, but it takes time to find real estate and franchisees.”
The executive most intimately involved in the soup-to-nuts approach to source and develop new franchisees is Rick Villalpando. Before RAMMP, the VP of Business Development held positions at Mississauga, Ont.-based Boston Pizza, Vancouver’s White Spot and Vaughan, Ont.-based East Side Mario’s. Villalpando says that Cordoba’s track record managing a portfolio of public and private companies in various industries won him over.
A wholesale demolition of the heritage brand was never the plan, explains Villalpando. RAMMP wanted to be sensitive and tactical. “We had all the elements in place to be successful — brand awareness, a strong core menu group of steaks and burgers. What we did was add branded beer, wine, signature sandwiches, soups and salads,” says Villalpando. This included items such as a vegetarian burger, a prawn and scallop salad, shrimp tacos and a Thai steak and noodles dish.
In fact, the food is often re-examined. “Last year we re-merchandised the menu, simplifying it, adding quality photography and bringing on items that we tested throughout the year,” says Cordoba. “Menu development is a collaborative process between various departments within the company, including the ownership group. Every quarter we bring out new items and everyone on our team, our different departments, franchisees and customers test them. [Moving forward] we’re going to make a major push on revitalizing the menu in terms of new items and presentation.”
With menu changes came a physical transformation of extant franchises led by RAMMP partner Al Cave and external designers soon after the purchase of the brand. As of 2011, everything was changed. Today, the restaurants are much more laid-back, with comfy booths and kitschy poster art on the walls. Each unit features a section called the UrbanLodge, an adult rec room-cum-lounge area. The company’s somewhat playful radio and newspaper campaigns complement the turn to a more casual, laid-back vibe. A deliberate effort was made to promote the ‘steakhouse-casual’ identity in new markets.
RAMMP targets towns in Western Canada that serve as anchors in key economic areas — think Lethbridge and Red Deer, Alta. and Dawson Creek, B.C. “We do a lot of research and cast a wide net,” says Villalpando. “We want to find people who have strong business acumen.”
The majority of Mr. Mikes Steakhouse- Casual franchisees own multiple units, which cost anywhere from $1.4 to $2.4 million to open. Dave Nussbaumer, a former farmer and insurance broker is part of a group of Saskatchewan investors, which introduced the chain to the towns of Yorkton and Prince Albert. The businessman, who had no knowledge of RAMMP prior to a cold call from Villalpando, has plans to open franchises in Regina and Brandon, Man as well.
This is a notable commitment from someone who initially thought the Mr. Mikes brand was “cheesy and low budget.” Times have changed. “You can sense RAMMP is on a mission. I was convinced after I met Mike Cordoba in Vancouver for the first time. And the proof is in our sales,” says Nussbaumer of his numbers which are said to be above the system average. “We are approaching $4,000,000 at the Prince Albert, Regina and Yorkton stores.”
And, as much as the bottom line is important, giving back is also vital. As Cordoba puts it, RAMMP is “big on community drives” for children’s hospitals, children’s sports and the like. The company also started an initiative called Deeds Done, whereby head-office employees give back and volunteer on their own and on company time, often anonymously.
That collaborative spirit is a big part of RAMMP’s corporate culture. “Because we are a community-based concept we align a site with a prospective franchisee. We have the franchisee review the site in advance, provide feedback, and in a few cases start over to look for a new site. With his or her local knowledge, the prospective franchisee is an important piece of the growth in the particular city we want to open in,” Cordoba says, adding that it’s a priority to get lots of face time with franchisees. “We have a Franchisee Advisory Council (FAC), which represents franchisees in regions. The FAC is a sounding board for us to discuss new ideas and regional issues. Once per year we get franchisees together to discuss and review new initiatives and current issues affecting the business.”
For example, Yorkton — and most of the smaller towns where RAMMP opens Mr. Mikes SteakhouseCasual franchises — is culturally distant from Vancouver. So, although a franchisee has to stay on brand to ensure consistency across the network, regional differences sometimes throw curveballs. Nussbaumer illustrates this delicate tension with this anecdote. “Original 16 beer is popular in Saskatchewan. It made good business sense to add it to our menu. But RAMMP had a problem with that, because they have contracts in place with other brewers. We didn’t do anything intentionally wrong, but we understood that we should’ve checked with them first. Eventually they found a loophole in the contract that allowed us to carry one local brand of beer,” he says.
RAMMP’s CEO acknowledges that these relationships can be tricky but is quick to stress that in the franchisee game, you must “have consistent brand standards.”
“And yet you have to recognize certain regional differences. Franchisees need to have some latitude. The key to growth is to constantly innovate and change and solicit feedback from customers, employees, franchisees and suppliers. That’s what makes a great brand,” he says.