Fox Restaurant Concepts starting 2021 off strong

04 | 05 | 2021

After a tough 2020, Phoenix-based Fox Restaurant Concepts started 2021 off right, reporting a profit and its largest revenue numbers in more than a year.

Article originally posted here.

FRC, which is owned by Calabasas Hills, California-based The Cheesecake Factory, reported revenue of $36.2 million for the first quarter of 2021 and a net profit of $3.9 million.

First quarter revenue was just slightly higher than the $35.6 million the company brought in during Q1 a year ago, but earnings were significantly better than the $70 million loss the company posted in the year-earlier period. FRC and Cheesecake (Nasdaq: CAKE) had to close down all of its restaurants in mid-March of 2020 because of the Covid-19 pandemic.

Even though things picked up the second half of the year, for the entire year of 2020 FRC posted a loss exceeding $77 million.

A year since the pandemic started, FRC appears to be heading out of it in a strong position.

“The FRC concept sales have also continued to build while off-premise volumes remain solid,” Cheesecake President David Gordon said on a call with investors on April 28.

Even during the pandemic, FRC was able to grow its brand. In Q1, the company opened a handful of new restaurants both in the Valley and in other markets across the U.S. Stores in Nashville and Oklahoma City actually have performed better than expected.

Flower Child a top performer

Cheesecake CFO Matt Clark pointed out that the new Blanco Tacos location in Nashville is something distinct in that market and has caught the attention of consumers there. During its first seven weeks in operation, it was the top performer among the Blanco-branded restaurants, Clark said.

FRC’s Flower Child brand is another one of its top performers. The company doesn’t count Flower Child’s revenue with all the other FRC brands because it will be spinning it off as its own brand in the future. But just by itself, Flower Child brought in $18 million in revenue during the first quarter of 2021. Cheesecake plans on opening two more locations of the healthy food concept this year.

“It’s done well outside of Arizona, whether that’s Texas, Oklahoma City, Florida, California, you name it,” Cheesecake CEO David Overton said. “We think that it will continue to grow and is working in different geographies.”

The Cheesecake Factory acquired FRC from its founder Sam Fox in 2019 for more than $300 million. Fox has stayed on with the company and Cheesecake uses FRC as a restaurant incubator. In January it started operating a pop-up ghost kitchen version of Flower Child in Tempe. While that has now ended, Cheesecake’s leadership said what was learned during the process could impact the future of the Flower Child restaurants.

“The in-restaurant kiosk technology that was tested, enable the faster ordering experience and also features artificial intelligence that learns individual guests behaviors in order to provide an even better experience,” Gordon said. “FRC plans to incorporate this technology at future Flower Child locations – complementing the traditional ordering mechanism.”

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