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Focus on: Real Estate Tools


Up until recently, when an Old Chicago restaurant or a Rock Bottom brewery scored a high-traffic, high-performance location, the reason for the success couldn’t be quantified. In order to grow strategically, parent company CraftWorks Restaurants & Breweries knew it had to get to the bottom of the site-success formula.

Chattanooga, Tenn.-based CraftWorks was founded in 2010 when Rock Bottom Restaurants and Gordon Biersch Brewery Restaurant Group merged, creating a 180-unit company, of which 140 restaurants are corporate-owned and 40 are franchises. The three primary brands are Rock Bottom, Gordon Biersch and Old Chicago.

Old Chicago, with about 100 corporate and franchise restaurants and counting, has plenty of room to grow, as do its CraftWorks counterpart concepts.

“CraftWorks has aggressive plans for the expansion of our brands,” said VP strategy and development Ben Brown. “The process is underway with a ‘refresh’ of our existing stores in 2013 to re-invigorate those brands and lay a foundation for future growth.”

The company, Brown said, is particularly focused on Old Chicago, with plans to direct capital toward corporate development in the coming years, as well as toward an aggressive franchise growth plan. In order to do that, however, CraftWorks must understand what makes each Old Chicago location tick.

“Our previous [real estate] model was a ‘black box,’ ” said Brown. “We had no visibility into why a site scored — we just received a number.”

Brown and his team also questioned the accuracy of the existing real estate solution’s predictions, and the user interface of the technology was outdated.

In 2011, CraftWorks decided to examine its real estate options. After a comprehensive due-diligence process, it selected Fort Worth, Texas-based customer analytics firm Buxton to tap into the type of customer and market data that CraftWorks needed to identify its best prospects and opportunities for growth.

“We first started with the site analysis piece for the Old Chicago brand,” said Charles Wetzel, CEO, Buxton. Beginning in latter 2011, the firm studied the Old Chicago customer and also created an aspirational customer profile — a “youthful woman with disposable income,” said Wetzel. Interestingly, Buxton found that Old Chicago’s previous site strategy dovetailed with the aspirational customer, and the team developed a marketing approach geared toward current customers, along with that newly defined aspirational patron and implemented it around existing Old Chicago locations to great success.

The Buxton model has also helped toward growing future locations and markets. “Buxton — and its Web-based SCOUT tool for real-time analysis — helps us identify new markets and trade areas to support our brands,” Brown said.

For Old Chicago — and more recently, for its other primary brands Rock Bottom and Gordon Biersch as well — Buxton created a sales prediction model that allows CraftWorks to analyze every trade area in the country to determine how best to build density and capture market share.

“In this capacity, the model is a complement to our ‘boots-on-the-ground due diligence,’ ” Brown explained. “Being able to balance our on-site perspective with data-driven analysis gives us great confidence when making real estate decisions.”

CraftWorks also uses the Buxton model to set franchisee development agreements, as it provides an objective assessment of capacity within desired markets.

And, added Brown, the company has used the customer data for marketing purposes as well. “Because the model determines the household profiles most likely to fit our brands, and because Buxton has identifying data for those households, we can send highly targeted direct-mail pieces,” Brown said. “This reduces our customer acquisition cost by using a rifle shot rather than a shotgun blast, and so far we have seen some phenomenal response rates.”

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