Hooters: Spencer Shaw

Hooters: Spencer Shaw

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It took some convincing but Spencer Shaw, CEO of SG Shaw Foods, explained to the American owners that South Africa was unlike any other market and that things needed to work differently.

The first outlet, Hooters on the Rocks, opened in Umhlanga in December 2009. Shaw customised the marketing to make it relevant to South Africa; he also came up with his own design, and had his construction company build the outlet. The Hooters headquarters in the US had to approve the design however, and dictated the fittings and finishes to be used. Shaw had to make use of the training and operations manuals provided. Hooters has specific layouts for its outlets on which Shaw based his designs. He had to stick to the guidelines provided for the brand. Shaw says they are “pretty strict” but when an employee travelled from the US to assess the South African stores, he rated them excellent.

In the beginning stages, Shaw sent some of his employees to the US to train, but also trained them the “South African way.” According to Shaw, the American level of service is of a very high standard, which is why he brought in a US Hooters girl to train her South African counterparts.

Shaw says Hooters succeeds in South Africa because it is a totally new concept, something South Africans have never experienced before. Despite the image most people have in their minds about Hooters, Shaw says it is a family restaurant, complete with kiddies items on the menu and the girls get special training in dealing with children.

Local Flavour

The menu is 80% American and 20% South African. Shaw says it had to be tailored as some items like Alaskan snow cones wouldn’t work in South Africa. He removed them from the menu and added some South African favourites, including fillet steak and the soon to be launched boerewors roll. The menu consists predominantly of big burgers, but Hooters is famous for its chicken wings and curly fries, as well as its ‘Big Daddy’ one litre beers.

The US stores are usually located in smaller towns and target the ‘everyday American’, says Shaw, but in South Africa the market includes a range of customers from businessmen, students and bachelor and bachelorette parties, to sports teams and sports lovers.

One of the main differences is the style of service. South Africans, unlike Americans, don’t like having a waitress constantly checking in with them. In the US, around 68% of sales are from food, 4% from merchandise, and 28% from beer, wine and spirits; while in South Africa sales are usually around 75% alcohol and 25% food. Shaw says this also has to be taken into consideration when studying the South African market. He relied on existing businesses for insight into the local consumer and studied the locations of McDonalds’, Steers and other recognised restaurant brands.

“There is always a vibe here,” says Shaw. The target market ranges from kids to adults during the day. Hooters recently hosted a 90th birthday party. At night, the clientele ranges from 18 to 45 and this is when alcohol sales surge. “We sell cold beer and a lot of it,” Shaw says. Hooters is where people come to enjoy good American food and cold beer, and to meet people.

As Seen On TV

Without doubt, the popularity of the Hooters brand is partly because of the self-proclaimed ‘nearly famous’ status it has. Many South Africans who had never been to an outlet would have seen it featured in many American movies and TV shows. But Shaw says that while the brand brings clients to the outlets at first, good service keeps them there. “People know about Hooters from TV but this is a South African Hooters. A brand can only do so much; if you don’t have the correct infrastructure, you’ve got nothing,” he explains.

Shaw says the tongue-in-cheek approach is present in all marketing campaigns carried out by Hooters. The marketing team keeps the brand edgy and will often play on words. Hooters girls are seen at outside events like Splashy Fen, the Durban July, matric Rage events and the cage fighting event, Fight Force. Shaw believes that these appearances provide another way of educating the market on what Hooters is.

“We have had a really warm response from South Africans. The public is open to the brand and likes it. It is a great brand.” Shaw emphasises that Hooters is not a sleazy outlet and is open to anybody.

The Girls

“The Hooters girls are the brand,” says Shaw. He describes them as being the “captains of the ship” as they are basically responsible for running the store. The element of female sex appeal is synonymous with the Hooters brand. Shaw says Hooters girls are as socially acceptable as a Sharks or Bulls cheerleader.

Since the first outlet was opened, the uniforms have hardly changed, except on Fridays, when Hooters girls around the globe wear black. Otherwise, their uniforms consist of orange shorts and tank tops. Pantyhose and bras are a requirement. Girls have to fit the Hooters profile to be considered in this role and Shaw explains that the uniform comes in only one size. Each store manager is responsible for recruiting and selecting the girls who range from 18 to 30 years old and need to be independent and provide good service to customers.

Footprint

Hooters South Africa’s head office is based in Umhlanga and comprises about 30 executive employees. Including all staff at the outlets, the staff complement is over 400. Shaw says to date, Hooters South Africa has performed beyond expectation, even winning the Service of Excellence award presented by the Restaurant Association of South Africa (RASA) at the end of 2010. Hooters on the Buzz, the second outlet, located in Fourways, is the largest Hooters outlet in the world by square metre, and Shaw says it began turning a profit within seven months of opening.

While not revealing specific numbers, Shaw says Hooters South Africa is a multimillion rand corporation — one which he expects will reach  a nine-figure turnover by the end of the year. SG Shaw Foods purchased the franchise rights to 20 outlets in South Africa, and Shaw says he plans to open all 20.

The third outlet will be opening this month in Durbanville, Cape Town and by the end of September Shaw hopes to have opened a fourth at Emperors Palace. Pretoria is the next town he has his eye on, and will hopefully be the site of the fifth Hooters by the end of 2011. “We will open new stores as quickly as locations become available. If I find the right location, I’ll open a store,” he says.

To find these locations, Shaw relies on agents and word-of-mouth. “We like buying sites with existing restaurants and redoing them according to our design.” Shaw looks for locations in highly residential areas as Hooters is a family restaurant.

Challenges

Shaw has experienced two main challenges in the establishment of the Hooters concept in South Africa: critics and staffing. He says people often criticise the brand before they actually see what it’s about. “It’s easy to change a critic’s mind. Once they walk through the doors they see what we are actually about,” he adds.

Shaw says it is critical to have the right staff, particularly managers, in place. “I encourage the managers to run their outlets like they are their own, so it is important to have a good manager.”

There is also a strict policy in place to avoid staff fraternising with the Hooters girls, explains Shaw.

He brings eight girls from the US and six training co-ordinators to South Africa to train his staff, which is particularly important when opening stores. Shaw says some of the girls have attended 24 store openings which is a huge benefit as they know how to deal with customers in these circumstances and can pass on this know-how.

The concept

Delightfully tacky, yet unrefined

With the above as its slogan, Hooters is clearly a brand unlike any other. During its history, the Hooters concept has undergone very little change. The current logo, uniform, menu and ambience are all very similar to what existed in the original store in 1983. This lack of change is understandable given the tremendous success the Hooters concept has enjoyed. The casual beach-theme establishments feature ‘oldies’ jukebox music, sports on television, and a menu that includes seafood, sandwiches, salads and spicy chicken wings. The ‘nearly world famous’ Hooters girls are the cornerstone of the Hooters concept. The chain has acknowledged that many consider ‘Hooters’ a slang term for “a part of the female anatomy”, but said that it does have an owl as part of its logo to allow debate to occur over the meaning’s intent. The company has no plans to alter the concept and feels doing so would be a tremendous disservice to its franchisees, employees, and customers.

Lessons learnt

  • Leveraging off a successful brand. Using the globally recognised Hooters brand has been a huge benefit for SG Shaw Foods. With 27 years’ experience, the Hooters South Africa team is able to call on Hooters of America for advice on the brand and has done so extensively for opening procedures.
  • Surround yourself with good people. Success is possible with a strong team, from having a good lawyer to a good chef.
  • A higher level of professionalism. Meeting with Hooters of America exposed Shaw to a new level of franchising. He was made aware of operational professionalism and he knew from his experience in the US that the standard of service had to be high and that Americans are used to doing everything by the book.
  • Research, research, research. Shaw says when dealing with a large company like Hooters it is essential to do as much research as possible. “Don’t go in cold. You actually have to anticipate all the questions they will ask and have the answers ready.”