Carlson Restaurants Worldwide History

Address:

4201 Marsh Lane
Carrollton, Texas 75007
U.S.A.

Telephone: (972) 662-5400
Toll Free: 800-374-3297
Fax: (972) 307-2822

Wholly Owned Subsidiary of Carlson Companies, Inc.
Founded: 1965
Employees: 20,000
Sales: $2.4 billion (2004 est.)
NAIC: 722110 Full-Service Restaurants; 533110 Owners and Lessors of Other Non-Financial Assets

Company Perspectives:

The credo of T.G.I. Friday's is to treat every customer as we would an honored guest in our home, and it is reflected in everything we do.

Key Dates:

1965:: Alan Stillman opens T.G.I. Friday's in New York City.
1975:: Carlson Companies, Inc. purchases T.G.I. Friday's chain.
1985:: Friday's Hospitality Worldwide lays groundwork for international expansion.
1986:: T.G.I. Fridays opens in Birmingham, England.
1994:: Friday's Restaurants Worldwide is organized into three divisions; first T.G.I. Friday's Front Row Sports Grill opens in Texas.
1998:: Company changes its name to Carlson Restaurants Worldwide.
2001:: Company acquires Pick Up Stix chain.
2002:: Company begins revitalization plan for the Fridays chain.
2003:: Carlson Worldwide divests e.Brands division; company partners with Atkins Nutritionals to create low carb menu.
2004:: Carlson Restaurants earns Golden Chain Award and CEO is named Operator of the Year.

Company History:

Carlson Restaurants Worldwide boasts a roster of 820 restaurants in 55 countries, with annual sales exceeding $2 billion. It is one of the largest international restaurant chains. With headquarters in Texas, the company is a private subsidiary of the Carlson Hospitality Worldwide division of Minnesota-based conglomerate Carlson Companies, Inc., a global leader in the fields of hospitality, travel, and marketing. The company's three restaurant divisions are T.G.I. Friday's U.S.A., T.G.I. Friday's International, and Pick Up Stix. The principal brand is T.G.I. Friday's casual dining restaurants, with both company-owned and franchised stores. Friday's restaurants have a 21- to 49-year-old guest base, and offer a wide selection of appetizers, entrées, salads, and pasta dishes in a vibrant bar-like atmosphere. The Friday's restaurant concept has also evolved to include Friday's Front Row Sports Grill and Friday's American Bar.

The company's inception was in 1965 when Alan Stillman opened the first T.G.I. Friday's restaurant in New York City. The Friday's brand has grown steadily as company leaders have worked to maintain the original energy and innovation upon which it was founded. It was one of the first American restaurant chains to penetrate the European market. The company acquired Pick Up Stix, a "fast-casual" chain of Chinese restaurants, in 2001, providing another avenue for corporate growth.

Opening a Festive Place to Meet, Eat, and Drink: 1965

Manhattan's upper east side was the location Alan Stillman chose to open the first T.G.I. Friday's restaurant in 1965. An experienced salesman, Stillman designed his restaurant to be the ideal place for men to meet local single women. He created a "jazzed up" restaurant and bar, designed to appeal to a professional crowd, with the latest food and beverage selections offered in a friendly, vibrant, and energetic atmosphere. Stillman's restaurant concept was an immediate hit with the locals. T.G.I. Friday's soon became a hot spot for the city's single professionals, and some credit it with bringing about the country's singles bar scene that would continue well into the 1970s and 1980s. First-year revenues for the bar and eatery reached $1 million.

The concept worked, and five years later a second T.G.I. Friday's opened in Memphis, Tennessee, followed two years later by a Friday's restaurant in Dallas. The Texas Friday's sales reached $2 million that first year. A year later another Friday's opened in Houston. Catering to the American fascination with astronauts and space exploration at the time, the grand opening of the Houston T.G.I. Friday's restaurant featured seven NASA astronauts, including Alan Shephard.

T.G.I. Friday's restaurants sprang up in other cities around the country, with the eatery's signature red and white awnings, blue exterior, interior wooden floors, Tiffany-style lamps, brass rails and fixtures, and stained glass décor. By 1975 T.G.I. Friday's had evolved to 12 restaurants in nine states. The chain caught the attention of Minnesota-based hospitality giant Carlson Companies, Inc., which purchased the Friday's line, with plans for expansion. Carlson Companies operated the chain as a private subsidiary, Friday's Restaurants Worldwide. T.G.I. Friday's continued to grow with the surge of the singles scene, expanding to Colorado, Florida, Illinois, and Missouri by 1978.

Beginning International Expansion: 1980s

By 1984, the nearly 20-year-old company had grown exponentially to 105 restaurants, and continued to refine its menu with innovative food and beverage selections. In 1985 the company began exploring the possibility of European expansion, forging business relationships in Great Britain. A year later British partner Whitbread & Co. PLC opened the chain's first international locale in Birmingham, England, followed a year later by a Friday's in London's Covent Garden district. That restaurant soon became the highest dollar volume store in the chain. By 1989, the Friday's concept had reached Asia.

Steady and consistent growth of the Friday's chain continued into the 1990s. In 1990 there were 169 restaurants in the T.G.I. Friday's system. By 1993 there were 243 Friday's in the United States, and 20 more restaurants abroad. T.G.I. Fridays had plans and a signed agreement for developing a presence in China in the mid-1990s. To improve brand identity and recognition within the United States the company began to invest in national network media for advertising exposure, first using radio, to promote increased traffic into restaurants as well as penetrating new markets. Their advertising later expanded to billboard, local and national print, and coast to coast exposure through network television ads. The advertising appeared to be effective at generating interest in Friday's restaurants.

In the mid-1990s, Friday's Restaurants Worldwide organized into three divisions: T.G.I. Friday's, T.G.I. Friday's Front Row Sports Grill, and Friday's American Bar. They were three slightly different models of the Friday's concept.

Creating New Friday's Concepts: 1990s

The company's first Friday's Front Row Sports Grill opened in Texas in 1994. The sports grills were generously decorated with sports memorabilia, often depicting favorite American pastimes. They also featured state-of-the-art technology and media equipment for patrons to view a variety of televised sporting events. The active, dynamic sports grills also offered video games, billiards, and boardwalk games for adults and children. Through the mid-1990s the Front Row Sports Grill concept expanded, with the largest opening in Orlando in 1995, and the first international venue in Jakarta, Indonesia, in 1997. Others cropped up within major league sports stadiums such as the Diamondbacks' home field in Phoenix, and the Brewers' Miller Park in Milwaukee,

Friday's Restaurants also extended its brand into a neighborhood "corner bar" type of gathering place through opening Friday's American Bar in several locations. The intent was to replicate the small corner bar feel and infuse it with the festive energy, decorative ambiance, and high quality menu and service of the Friday's brand. This Friday's concept was a smaller, more intimate, yet still dynamic venue. The menu was an abbreviated version of T.G.I. Friday's restaurants, with a wider variety of beverage choices than most neighborhood bars.

By 1995 Friday's systemwide revenues had exceeded $1 billion. The company had opened facilities in eight foreign countries, including Australia, Brazil, China, Indonesia, and Switzerland. The following year Friday's continued with international expansion, with restaurants cropping up in Honduras, India, South Africa, Turkey, and elsewhere. The company's domestic growth curve climbed as well. In 1996 Success magazine ranked T.G.I. Friday's among the top 100 franchisers for the second year in a row.

Friday's was the first American casual eatery to open in Moscow, Russia, in 1997. At home in the United States, the company achieved other milestones, reaching $1 billion in domestic system sales. In 1997 Fridays had 101 international restaurants, posting $260 million in international sales, with hopes of adding 50 new restaurants abroad each year. That year the company had established 65 new restaurants, the majority opening overseas.

New Focus on Smaller Emerging Brands

The company shifted focus a bit in 1998 when it changed its name from Friday's Hospitality Worldwide to Carlson Restaurants Worldwide and implemented a multiple-brand strategy indicative of a broader vision for the company. To diversify its portfolio of restaurants, Carlson Restaurants created three operating divisions: domestic restaurants, dining brands outside of the United States, and emerging brands, named e.Brands.

The new corporate strategy involved purchasing or creating a number of smaller, slightly more upscale brands for expansion. Company leaders believed that rather than developing a second large brand like Fridays, they wanted to pursue growth through smaller, more diverse restaurants. Management also felt the multiple brand strategy would benefit from strong in-house support resources and infrastructure.

Looking for more sophisticated dining concepts, the company purchased Star Canyon and Aqua-Knox upscale restaurants in Dallas and Las Vegas as part of its emerging brands. Carlson Restaurants Worldwide also planned to develop its own smaller brands, such as Timpano Italian Chophouse, a restaurant reminiscent of the classic restaurants and clubs of the mid-1950s to early 1960s, located in Rockville, Maryland. The company also had in its portfolio at the time 18 Italiani's classic Italian restaurants in the United States and abroad, the Samba Room in Dallas, and the Taqueria Canoñita Mexican restaurant open in Las Vegas, Nevada.

Nation's Restaurant News credited then CEO Wallace Doolin with energizing, extending, and transforming the 33-year-old restaurant concept into a business which could boast annual sales of $1.5 billion. Doolin's revitalization included continuing a strong corporate commitment to excellence which was admired by peers in the restaurant business. Carlson's restaurants also continued innovating with food and beverage selections, adding menu items to stimulate sales, such as Jack Daniels grilled entrées and non-alcoholic fruity beverages. Friday's restaurants had implemented a Frequent Friday's program to cater to repeat or regular visitors. The restaurants also installed booths and dividers to meet guests' needs for more privacy.

In 1999 Carlson Restaurants Worldwide had reached more than $1.5 billion in systemwide revenues. Carlson Restaurants hoped to double the number of restaurants on its roster by the end of 2000. Company leaders had plans to open 50 new restaurants internationally.

Over the years, T.G.I. Friday's had grown to become a popular spot for families as well as singles, and the company was committed to catering to both market segments. In late 2000 the company established a formal partnership with SocialNet.com, a "leading online social portal" whose members were interested in making connections for dating, activities, and networking. The partnership was intended to encourage connections online, on the co-branded web site, and offline at a local T.G.I. Friday's restaurant.

Acquiring a Second Large Brand: 2001

In 2001 Carlson Restaurants Worldwide acquired Pick Up Stix, a "fast casual" Chinese takeout business based in California. The company anticipated growth potential in the to-go market catering to the on-the-go American lifestyle. Fast-casual restaurants are characterized by menu selections that are of higher quality than fast food, and dining room atmospheres that are more comfortable and visually appealing.

The Pick Up Stix chain was founded by Charlie Zhang, who opened a Stix (Americanized Asian) restaurant in Laguna Nigel, California, in 1989. Zhang's restaurant provided the best of traditional Chinese food, adapted to American tastes. The restaurants featured exhibition kitchens where guests could watch their food being prepared. Meals were cooked to order in Woks using lighter, healthier fare with less oil and sodium and no MSG. When the Stix founder realized that 65 percent of his business was takeout, he adapted his concept to become Pick Up Stix, opening the first one in Rancho Santa Margarita, California, in 1990. When Carlson purchased the chain there were 51 Pick Up Stix restaurants, primarily in Southern California, with a few in Las Vegas. Zhang continued to manage the chain, but it was under the Carlson Restaurants umbrella.

The acquisition was beneficial for Pick Up Stix, giving the chain more resources to help finance growth plans in hopes of expanding nationally beyond the California and Nevada locations. The small company also could benefit from strategies Carlson had used to grow a large restaurant chain. Pick Up Stix became its own division within Carlson Restaurants Worldwide.

Divesting e.Brands Group to Refocus on Big Chains

After just three years, Carlson Restaurants decided to reverse its focus on the emerging brands it had acquired and created to reach a more diverse dining market. The company chose to divest the entire emerging brands sector. The decision also involved focusing more on its core concept Friday's and Pick Up Stix brands. A year later Carlson found a buyer for its 12-restaurant e.Brands group, a group of investors, E-Brands Acquisitions LLC, based in Orlando, Florida.

Despite the middle-aged feel of T.G.I.Friday's restaurants and growing competition from similar casual dining chains such as Applebee's and Chili's, Friday's was often a local favorite, winning awards and recognition in cities all over the country for best late night restaurant, best location for kids parties, best happy hour, best burgers, best kids menu, best gourmet burger, best appetizers, and so on.

Facelifts for Friday's: 2002

In 2002 Carlson Restaurants Worldwide implemented a revitalization plan for its Friday's restaurants under the direction of President and CEO Richard Snead. For an estimated cost of $200 million, Friday's planned a systemwide makeover featuring a more modern look--less brass and more chrome, less decorative clutter, and more class. The makeover included redesigning the look of each Friday's restaurant inside and out, new music, menu layout, and menu selections. Company leaders wanted to keep the brand's tradition of an energetic and comfortable image, while making it more contemporary to attract younger clientele. In its advertising, Friday's highlighted the tagline "Everyone could use more Fridays." The system-wide revitalization was expected to continue through 2006.

Friday's responded to the nation's fascination with low-carbohydrate eating in late 2003. Carlson Restaurants partnered with Atkins Nutritionals to develop low carb, high protein menu items. A survey of Friday's customers had revealed that more than 40 percent of them were dieters and 60 percent of those potential guests indicated an interest in an Atkins low carb menu. The partners created some totally new menu selections and altered other popular choices to make them more low carb. The goal was to make it easier for customers to maintain a low carb lifestyle, with low carb entrées, appetizers, and entrée salads. The selections eventually included low carb margaritas, wines, and even a low carb cheesecake. Atkins benefited through broad name brand recognition, including the placement of its trademark on the Friday's menu.

By 2004 Carlson Restaurants Worldwide had helped grow the Pick Up Stix restaurant chain to more than 90 sites in California, Arizona, Nevada, and Illinois. In November of that year Pick Up Stix opened a new prototype eatery in San Juan Capistrano. The new model had a warmer, more intimate, classy atmosphere, but supported quicker takeout service. Corporate leaders expected the new Stix model to be successful and had plans to establish 100 more restaurants like it over a three-year period.

The company also launched a new, more interactive web site that year, designed to strengthen connections to its customer base and make it easier for customers to find the information they needed. The site was user-friendly and highlighted special promotions. Carlson received an award for its redesigned website, the "Standard of Excellence for outstanding achievement in website development" award from the Web Marketing Association.

Company President and CEO Richard Snead also received industry recognition by being awarded the 2004 Golden Chain award by the Nation's Restaurant News. The company web site lauded Snead's selection: "Richard was recognized for leading the revitalization of the T.G.I. Friday's brand, including new restaurant and menu designs. He was also noted for championing development of the concept to 55 countries and launching a unique partnership between Fridays and Atkins Nutritionals." Snead also was chosen as Operator of the Year at the annual meeting of the Multi-Unit Foodservice Operators.

Carlson Restaurants Worldwide finished 2004 financially strong with $2.4 billion in sales, a nearly 8 percent increase over the previous year thanks in large part to strong international sales figures. At the start of 2005 the company had 820 total restaurants in its portfolio and was committed to continuing its revitalization of the Friday's sites and expanding both the Friday's and Pick Up Stix chains.

Principal Divisions: T.G.I. Friday's U.S.A.; T.G.I. Friday's International; Pick Up Stix.

Principal Competitors: Applebee's Neighborhood Grill and Bar; Chili's Grill and Bar; Brinker; Metromedia Restaurant Group.

Carlson Restaurants Worldwide History

Company Perspectives:

Key Dates:

Company History:

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