Max & Erma's Refreshes Its Restaurants

What's old is new again for Max & Erma's, as the 73-unit casual-dining chain debuted a new look last week that will be the basis for a systemwide remodeling program and resumed growth.

Max & Erma's new prototype in its headquarters city of Columbus, Ohio, blends many of the chain's quirky design elements with modern décor, said Hazem Ouf, chief executive of Denver-based parent company American Blue Ribbon Holdings LLC, or ABRH.

New interior elements include a brick fireplace, more flat screen TVs and draft beer taps to build business in the lounge area, and more varied seating areas to break up a "sea of tables," Ouf said.

The 7,200-square-foot space holds the same number of seats as a typical Max & Erma's unit, which is about 500 square feet smaller, Ouf said. Future locations will total about 6,500 square feet.

The fireplace separates the dining room from the lounge and group-seating rooms, but the prototype retains an open floor plan, allowing families, couples and bar patrons to use the restaurant simultaneously, Ouf said.

"We've divided the restaurant into several sections, with 'date night' seating or 'movie night' seating, as well as more high tops for groups in the bar," he said. "We wanted to give the consumer the ability to come here several times a month and not feel like it's 'been here, done that' and that it looks like every other restaurant in the marketplace."

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The new prototype shows the brand has "evolved," Ouf said, but Max & Erma's characteristic touches from its 1958 founding and expansion through the 1970s remain. Antlers mounted on the walls hold old-fashioned hats, decorative shoes adorn banquettes, bar stools have human-looking legs and the sundae bar sits in an old bathtub next to "Erma's Cookie Wall."

"We were trying to bring Max & Erma's back to its heritage, and the look and feel of this prototype absolutely fit the bill," Ouf said.

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He added that ABRH recognized when it purchased Max & Erma's out of bankruptcy in September 2010 that the chain's outdated interiors obscured an underlying brand experience and menu that customers still liked, giving the chain a lot of upside potential on reimaging.

"One reason the company went sideways was because, rather than update its image and protect its brand personality, it tried to be somebody else," Ouf said. "They tried to look like The Cheesecake Factory, which customers didn't embrace. ... We got back to the heritage of burgers, fresh-baked cookies and fun employees with a great attitude. It's not too complicated."

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Since the acquisition, Max & Erma's also got back to basics with its menu and marketing. In late August, the chain won two awards at the National Hamburger Festival, including "best cheeseburger in the nation" for its namesake cheeseburger and "fan favorite" for the Tortilla Cheeseburger. The brand also began its Free Cookie Wednesdays promotion in September, which offers two free fresh-baked cookies with the purchase of any food item.

ABRH's other big push was an exterior remodeling program at 11 locations in the Detroit market, where new signage, new paint and a new awning incorporated Max & Erma's classic black and yellow sign and logo. The brand's Detroit restaurants will have their interiors remodeled next to look like the Columbus prototype, Ouf said. Max & Erma's will start remodeling its whole system inside and out starting next spring.

"We're hoping to have the entire system remodeled in the next 24 to 36 months," he said.

Three new units opened this year, and Max & Erma's hopes to grow its unit count by 10 percent annually over the next several years, Ouf said.

"All in all, when we bought the chain a year ago, it was declining in sales by double digits, and today we're up in the high single digits," Ouf said. "There's been a favorable reaction from consumers about the changes we've made so far. In the past week we've seen some changes to the top line, but of course it's still too early to tell [the final impact of the new design]."

Max & Erma's operates restaurants in 10 states. ABRH also operates and franchises the Village Inn and Bakers Square family-dining chains.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN