To say that Racks, a restaurant chain that dishes out its famous “fall off the bone” baby back ribs, was the place to be in the early ’90s is an understatement. People would flock to the place as bees flock to honey, such that the brand eventually expanded to over 30 branches at the height of its success.
Fast forward to 2006, and it’s an entirely different story. From 30 thriving branches, Racks was down to its last one in El Pueblo, Ortigas Center. “Some of our management and people went into the restaurant one day to check out the place,” begins Leopoldo “Chukri” Prieto III, managing director of family-owned Cavallino, Inc. “The place was run- down and dilapidated, the manager and food servers weren’t performing up to par—it seemed like they didn’t even care enough,” he says, “and when we opened the menu, it was all P99 meals. You don’t want to do that with ribs. I felt the direction the current owner took was not the way for Racks. It’s not value meal stuff, because ribs is a premium product.”
Interestingly, for such a run-down restaurant, the food was still pretty good. And when Prieto’s group started asking their friends and family about Racks, feedback would always be positive and the brand recall was very strong. “Because of that, we decided to go for it. My father handled the negotiations with Willy Soong, the owner, and while he was quite reluctant at first, we were able to convince him after we shared our vision,” shares Prieto. “With our experience in the restaurant business and the people we have, we were confident we could revive the brand,” he adds.
Staging a renaissance
Since its acquisition by Prieto’s group (whose experience in the food business includes putting up Shakeys Pizza, Dunkin’ Donuts and Tia Maria), Racks has grown an average of three stores per year and is almost on the halfway mark toward achieving what the old Racks did in its heyday. “We just opened our 13th branch in Manila at SM South Mall, and our growth is 30 percent year on year. We’re pretty happy with that aggressive opening,” says Prieto.
Racks’ mission to be the number one rib chain in the Philippines has reached fruition as well. “If you look at size in terms of the number of outlets, we’re number one already. We also want to be known for serving American comfort food so we’ve added novelty items like biscuits, corn bread, Southern fried chicken, and we’ve got an extensive side dish selection, but the focus is still going to be on the ribs. It’s still our main product, we never changed the recipe and the sauce, and we just built around that,” Prieto shares.
More than fine-tuning Racks’ menu, Prieto’s group also did away with the old look. “I think that was also a key improvement because prior to purchasing Racks, everything was bright and monochromatic…which isn’t necessarily bad, but in a city like Manila, white won’t remain white after a while,” he says. Drop by a Racks branch today, and you’ll find a cozier ambience, with softer hues of creams and yellows. “Very different compared to the ‘operating room’ style that it was before,” jokes Prieto.
Prieto remains steadfast in his mission to make Racks the number one rib chain in the Philippines, and he shares that in the next few years, the focus will be on growing the chain in the Luzon area. “That’s as far as we want to go for now. We still have a lot of room to expand in Metro Manila and we’re going to concentrate on the spaces here,” he shares.
Expansion, Prieto adds, will really be toward its target market of families and groups seeing a more diverse menu. “We’d like to offer as much variety as possible. Currently we dish out a new product every two or three months, new and exciting things that will complement our ribs,” he shares.
Racks is also finding a lot of growth and opportunity in birthday parties, business meetings and event functions. “And we’ve got a strong delivery segment as well,” puts in Prieto. “When we purchased the brand, there were a lot of loopholes in terms of operations, labor and food. The design of the store, the menu, the manpower…we had to put up a central commissary where our ribs are smoked (and that takes very long to produce), and we had to reinvent the back of house system since many of our products are served freshly cooked. It was basically starting from scratch, but I think we’ve addressed all our initial challenges,” he shares.
Indeed, with excellent feedback from guests, a stronger brand recall, and a more streamlined operation system, it looks like the new Racks is here to stay.