How Corner Bakery grew AUV by $200K in 6 months

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Early last year, Corner Bakery filed for Chapter 11 bankruptcy protection after years of struggling to overcome declines in office lunch traffic. Four months later, Pandya Restaurant Group — whose disastrous tenure as owner of Boston Market has resulted in a plummeting unit count, lawsuits and multiple bankruptcy filings — sold Corner Bakery to SSCP Restaurant Investors for $15 million. Now, after less than a year under SSCP’s wing, Corner Bakery says it is turning the corner.

“Sales really took off right after we took over,” said Chris Dharod, SSCP president and CEO of Corner Bakery. According to a Corner Bakery press release, its average unit volume grew by $200,000 over the last half of 2023. Dharod said the brand’s AUV is now around $2 million, and he expects it to continue growing thanks to a holistic effort to improve the brand by getting back to basics.

“Number one is just taking care of our guests and our customers — clean restaurants, food served fast, food made correctly — those are things that maybe we didn't focus on [under previous ownership],” Dharod said. 

Culture, training are key to brand’s revival

Corner Bakery improved these building blocks by hiring new leadership who quickly impacted the business’ culture, he said. The restaurant also implemented a new training program for its workers.

That training program, referred to as back-to-basics, includes a variety of initiatives: A revival of its Legendary Service program — a brand ethos focused on friendliness, speed of service and order accuracy; focus on food preparation; and the dedication of particular attention and resources to cafes most in need of assistance. Back-to-basics extends to employee communications, as well, according to a Corner Bakery statement emailed to Restaurant Dive. 

In particular, the company said, it has instituted a recognition program to reward teams that hit their targets and a “a Communication Cadence to keep the field up to date, educated and trained on current focuses and initiatives. This includes monthly, weekly and quarterly calls with the respective teams.”

Corner Bakery’s new leadership team has supported these operations improvements. Executive changes included the return of Erin Hasselgren, who spent 18 years at Corner Bakery from 1998 to 2016, according to his LinkedIn profile, and as COO in June 2023. Bob Hartmann, meanwhile, took over as franchise development head. Previously, Hartmann served as VP of real estate and franchise development of Corner Bakery from 2006 to 2014, and most recently worked as VP of development at Benihana. The leadership of these brand veteran executives provided continuity with Corner Bakery’s historic identity and a connection with the pre-COVID period, Dharod said.

Corner Bakery’s new training program and emphasis on employee culture has led the brand to a point where “we're seeing close to double digit sales increases every month,” Dharod said.

At the same time, the fast casual brand has equipped itself with technological tools to identify potential problems. Corner Bakery is working with Qualtrics, an experience management firm, “to measure and improve employee and customer experience across all touchpoints,” according to a press release. The tech went live at its corporate locations in December and will be deployed throughout its franchise system in Q1 2024. 

“The software provides visibility into every customer interaction and experience via survey intercepts both in-cafe and online,” the company said. 

This visibility gives the brand store-by-store insight into operational conditions and customer attitudes, which it lacked when Dharod took over, he said. The shift has already led to operational changes — for example, customers said they wanted Corner Bakery to be open later, so the brand is open in the dinner daypart until 9 p.m., across most of its system.

Dharod said the new hours have enabled the company to offer more working hours to its employees. More workable hours could help attract and retain workers in an industry where average weekly hours are between 22 and 24 hours, according to recent Bureau of Labor Statistics data.

Corner Bakery is looking at other initiatives to change up the customer experience, but Dharod declined to share specifics. In 2024, Corner Bakery anticipates its sales growth will come both at the counter and through its catering program, as that channel has seen considerable growth across the restaurant industry.

The revitalization of Corner Bakery’s sales is leading the brand toward a resumption of unit growth, Dharod said. Corner Bakery anticipates opening five to seven restaurants in 2024 and remodeling 10 to 15 more, though Dharod did not rule out the possibility that some existing units might close this year, which could offset some of the projected unit expansion.

Dharod said that unit growth is likely to be concentrated in existing markets, like Washington, D.C., or Chicago, and potentially Los Angeles and Dallas.

The projected remodels include “a fresh new look for the brand,” though Dharod did not offer specifics.