Huddle House's Community-Focused Approach Pays Off

Sixty-year-old Huddle House is boasting unprecedented financial figures coming out of COVID, and it’s doing so with new prototypes and nontraditional franchisee experience. 

A restaurant in Decatur, Illinois, opened in January to record sales and traffic counts. The store earned more than $53,000 per week, which is the single-highest first-week sales under Huddle House’s newest 2,100-square-foot prototype. Brand president Troy Tracy attributes the success to franchisees, Chazaray Carson and Jessica Michael, neither of whom have typical operating experience. 

Both work in health care; Carson is at HSHS St. Mary's Hospital in Decatur and Michael is with Electric Powers Engineers. But more importantly, the two are longtime friends and know the area, fitting nicely with Huddle House’s emphasis on community, Tracy says. Michael went to the University of Illinois in Springfield, which isn’t too far away from Decatur, and Carson received his bachelor's and master’s degrees from Millikin University, a well-known institution in Decatur. Tracy commends their ability to follow systems, procedures, opening guides, and embrace Huddle House’s core tenets. The operators intend to open a second store, and maybe a third, sometime in the future. 

“You walk in there and it's just that involvement of the franchisees in the business and the fact that when they're in the restaurant, you can't be in the restaurant with them without some of their guests and customers recognizing them and saying hi to them and saying hi to the manager,” Tracy says. “So right out of the gate we got an invested set of franchisees that care about their community and they want to bring this restaurant service to their community and their community is rewarded for it.”

The store is based in Decatur’s rapidly growing northeast corridor, near I-72, a Pilot Flying J, and a lot of industry and manufacturing.

The prototype model used in Decatur ranges between 65 and 71 seats, depending on site layout. There’s an option to do a bump-out that can bring it to 80 seats and a dedicated third-party delivery area. It’s a rectangular building with an open kitchen, full-service fryers, and 7 feet of grill space. Tracy describes the back of house as a “pretty significant kitchen,” but one that has little wasted space. The store design offers a pickup window option, which the store in Decatur includes. 

READ MORE: Perkins, Huddle House in 'Strongest Position' Seen in Years

Huddle House’s other main prototype is called EVO 85, a roughly 2,500-square-foot building with a higher seating capacity. The characteristics are the same as the 2,100-square-foot iteration (including a pickup window), but more room. In between these two overarching prototypes are derivatives. Tracy estimates that Huddle House’s average systemwide is around 2,100 to 2,200 square feet. Some stores—based in endcaps or travel centers—can have seating up to 110 to 120.

Fourteen restaurants are using the 2,100-square-foot design and another is under construction. Three others are technically classified under this prototype, but are in a nontraditional space. In the pipeline, there are between six and eight stores that will move to the construction stage soon. As for Decatur specifically, Carson and Michael chose the slimmer prototype after a recommendation from Tracy and the development team. 

“It gave them the highest seating capacity with the most parking spaces with the drive-around capacity they needed on the piece of dirt they had,” Tracy says. “We probably could have put an EVO 85 on it but would have clipped them for I want to say it was somewhere between six and eight parking spaces, which would limit the revenue that they're able to produce out of the building. So long story short, it was really the best design for the site characteristics of what they have.”

The Decatur location is open for dine-in and to-go, but not delivery yet. Generally, Huddle House’s new opening plans extend 90 days. And within that window, a restaurant will widen its scope depending on how it’s performing. For instance, if there’s a big opening followed by a sharp decline, additional revenue channels would be turned on a lot earlier. But if the store is maintaining high revenue, volume, and guest metrics 45 days in, there may not be a need to do anything. On average, delivery is turned on between 30 and 60 days after a store’s debut. 

For Decatur, when the time comes, DoorDash is the primary third-party aggregator in the area. Uber has some coverage too. Additionally, virtual concepts will enter the fold. Several Huddle House locations—and sister chain Perkins Restaurant & Bakery—double as ghost kitchens with MrBeast Burger from Virtual Dining Concepts and proprietary brand Papa Corazón’s Quesadillas. 

“I think we'll have plans to do that from a tiered approach,” Tracy says. “Again, following that same conservative, but very strategic cadence of ensuring that we're able to provide a high-level service and execution in the restaurant as we add on revenue layers. … We'll layer those in, in such a manner and surgically that it's successful or has a high probability of success versus burdening the existing business.”

Huddle House has around 290 restaurants open or in development, which is down from May 2019, when it had 342 locations systemwide. Currently, Tracy says Huddle House is performing well in core markets and experiencing organic growth from existing franchisees filling white space. Some examples include a handful in Florida and Arkansas. The breakfast brand is tracking more than 35 franchisees—some of which have single deals and others that are multi-unit operators. 

Tracy also notes that Carson and Michael aren’t outliers in terms of being Huddle House franchisees without food and beverage experience. Ownership spans from multibillion-dollar petroleum companies out of Texas that have several restaurant franchises across multiple brands to local business owners that want to bring a store to their town. The differentiator, Tracy says, is Carson and Michael’s commitment, hands-on involvement, and trust in the Huddle House system right out of the gate. 

“The ones that do that in our industry and the other franchise organizations I've been in tend to come out of the gate stronger,” Tracy says.