On the Technomic’s list of the 500 largest U.S. restaurant chains for 2018, Arooga’s Grille House & Sports Bar squeaked in at number 500. Nonetheless, it’s a chain on the move as its revenue spiked over 28% in 2018.
It launched in July 2008 in Harrisburg, Pennsylvania, where it is based. Since then, it has expanded to 20 locations, split evenly among company-owned and franchised. But it opened five new locations in 2018 and is planning on adding at least three franchised outlets in 2019.
It’s mostly located in the Northeast in seven states with 11 locations in Pennsylvania and the rest sprinkled among New York, New Jersey, Massachusetts, Connecticut, Rhode Island and Florida.
Because it’s primarily a sports bar, alcohol generates a huge part of its income, namely 30% to 40% of revenue, depending on the outlet.
Arooga’s most popular dishes include wings, wagyu burgers, scratch-made pretzels and hand-breaded mozzarella triangles.
Some of its chief competitors include larger chain sports bars such as Miller’s Ale House, Buffalo Wild Wings and Bar Louie.
Here’s what president and co-founder Gary Huether, Jr, who is 39-years-old, said about Arooga’s growth:
Arooga’s revenue spiked 28% in 2018. What were the key factors?
Huether: Last year we opened five locations; that helped growth. We also offered a new menu, ingredient improvements, and added delivery through third-party vendors including Uber Eats, Grubhub and DoorDash, depending on location.
Why specialize in food like wings, burgers and pretzels?
Huether: Those types of items sit in our environment and sports theme. And a lot of those go great with beer. But we do some of them different from what most people expect. Having chicken raised with no antibiotics is different.
What can a customer order beyond wings and burgers?
Huether: We have a section of our menu that is plant-based including the Impossible burger, faux wings, which are plant-based boneless wings, served with our award winning sauce, and Beyond Sausage, plant-based sausage.
You compete against larger chains such as Buffalo Wild Wings, Miller’s Ale House and Bar Louie. If you were all located in proximity, why would a customer choose Arooga’s?
Huether: I think our innovative menu will stand out. We make most of our items from scratch, and we have a commissary, where the majority of our products are delivered fresh. For example, we’re making our pretzel dough from scratch; we’re not buying a frozen pretzel that is being microwaved. We call it elevated bar food. We serve a wagyu burger, which is a derivative of Kobe meat. It’s a premium burger, really juicy, great fat content, but a higher quality burger.
You generate 30% to 40% of your business from alcohol sales, which is impressive. What do you do to boost that?
Huether: On the beer end, we work with a lot of craft partners to get limited fresh new beers that are constantly changing. From a cocktail perspective, we offer our Arroogarita, our signature margaritas made with fresh lemon juice and lime juice, water and sugar, not a mix, but real fruit.
You’ve kept your dinner prices to about $12 to $14 a person. How?
Huether: Our wagyu burger starts at $11, with a choice of sides including fries, and with a beer, for a price of $14. We believe that we’re in the value-oriented segment; we can provide value by keeping quality.
Who’s the target audience?
Huether: It ranges by time period. At lunch, it’s mostly business lunch. Dinner is families, but we have a separate bar area where you’ll see a 21-year old next to a construction worker, next to a lawyer, next to a mother.
You’re split between company-owned and franchised. Why franchise?
Huether: We thought it was a great way to partner with other entrepreneurs and grow the business in a less capital dense way. Our build-out costs millions of dollars. We did our first deal with the Mohegan tribe in Connecticut.
How do you ensure that Arooga’s quality stays strong when franchising?
Huether: It’s always something you’re working on. We do quarterly audits. We also work with a lockdown order guide form our food purveyors, which only carries approved items. For example, you can’t order a different gouda cheese.
When you look for locations for new outlets, what are the criteria?
Huether: It’s based on demographics in a one-to-five miles radius. We’re looking at density, income levels, traffic counts, who are our neighbors, and are we in a mega-center?
You’re growing at a rapid rate of expansion. How avoid the traps?
Huether: For many years, we opened up two locations a year. Five is a lot for us. But we have over 700 employees we can pull from.
Two years from today, what would you expect?
Huether: Two years from today, I’d expect to be at least at 30 to 40 locations, to continue growth. But we’re looking at different sizes as we’ve been shrinking the footprint. You might see more locations but smaller. And we’re working on testing a model of counter service with a full-service bar in more labor dense markets.
Describe the three keys to your growth.
Huether: 1-Menu innovation, 2) Our people, 3) Balance. We like our customers to be from age 8 to 80, so we’re not pigeonholed, and we appeal to vegetarians to people with celiac disease.