CINCINNATI — In March, they established a goal of opening more than 50 restaurants in Southwest Ohio. Five months later, they are struggling to get to seven.
Big Boy Restaurant Group, a Michigan-based company that entered the Cincinnati market by leasing empty Frisch’s locations, is facing low customer counts in its four Hamilton County locations, based on social media commentary and site visits by the WCPO 9 I-Team.
In addition, Frisch’s former landlord has told investors it has yet to finalize leases for 28 Dolly’s locations it announced in February. And Hamilton County inspection records show a Dolly’s customer tested positive for salmonella in June, but the health department did not find “conclusive evidence” that Dolly’s was “the causative facility.”
WATCH: The WCPO 9 I-Team looks at Dolly's results so far
The I-Team made several attempts to reach Tamer Afr, CEO of the Big Boy Restaurant Group in Southfield, Mich. He did not respond.
But he outlined big goals for the company when he attended Dolly’s grand opening on Beechmont Avenue in March.
“We’re planning on at least opening another 50-plus (locations) in the area. But I think that number could grow,” Afr said at the time. “To me, the real story is about all these employees that have been here for 30, 40 years, serving customers, and being happy to come back and have a job."
The I-Team first asked Afr to comment on customer counts in an Aug. 15 e-mail. We also requested interviews with store managers when we visited five Dolly’s locations in Hamilton County. The managers declined to comment.
Each visit offered evidence that Dolly’s is operating at far below its capacity when it comes to attracting customers.
At the Delhi Township location, for example, the I-Team found one car in the parking lot and one diner inside at 6 p.m. on Sept. 3. A drive-through customer said the restaurant was “out of everything” when he placed an order with no one behind him and waited more than 10 minutes for his food.
In Blue Ash, six people were inside the store at 11:20 a.m. on Sept. 4. Before the manager declined to comment, we noticed three “Grab a lollipop for the kids” boxes were empty, and a floor near the cash register was sticky.
The Colerain Township store had four cars on the lot and five diners inside at 12:35 p.m. on Sept. 4. The Beechmont Avenue Dolly’s had five cars on the lot and six people inside at 12:55 p.m. on Sept. 3.
“The people were nice,” said Everett Burchett, who gave passing marks to the burger and fries he sampled that day. “I missed the Big Boy out front.”
Frisch’s restaurants typically have between 100 and 150 seats per location, according to a 2012 profile of the company by Chain Store Guide. So a lunch crowd that fills less than 5% of those seats obviously isn’t ideal.
But it also isn’t clear how much foot traffic is needed to break even, said Jim Moehring, a veteran Cincinnati restaurateur who owns Holy Grail at The Banks.
“Everybody’s financial structure is different,” Moehring said. “Some people can get away with doing $400,000 a year in sales if it’s a smaller footprint. Some people need to do $2 million a year in sales just to break even. It’s truly all over the place.”
But Moehring has also noticed the empty parking lots at Dolly’s locations and wondered how long the company can survive.
“I don’t know what they are,” Moehring said. “Their curb appeal, there is none. I don’t see signage. I don’t see an advertising campaign. I don’t see anything that identifies what they are, other than people knowing that it used to be a Frisch’s location.”
Dolly’s new landlord offered some new insight in an Aug. 5 earnings call with Wall Street analysts.
NNN REIT Inc. CEO Stephen Horn said the company is “working with a tenant on releasing” 28 former Frisch’s locations. That’s subtly different than what the company told analysts in February, when CFO Kevin Habicht said the 28 locations had already been leased. Horn and Habicht didn’t mention Dolly’s during either call, but it’s clear from court records that NNN REIT is leasing former Frisch’s locations so they can reopen as Dolly’s.
NNN REIT did not return the I-Team’s call to clarify additional details about the Dolly’s leases.
In the Aug. 5 earnings call, Horn said the NNN REIT is in “active negotiations” with potential buyers for 24 former Frisch’s locations that aren’t reserved for new leases, while four have already been sold.
“Frisch's was in business for 60-plus years, so they had a lot of infill locations,” Horn said. “Convenience stores, car washes, collision repair. There's still a lot of demand for those assets.”
Hamilton County Public Health records also offer some insight into the state of Dolly’s business affairs.
That’s because the county approved a food-safety license for what could be Southwest Ohio’s seventh new Dolly’s restaurant on July 18. Six weeks later, the former Frisch’s location at 4227 Bridgetown Road in Cheviot has Frisch’s signs covered by Dolly’s name, but a handwritten sign on the front door says it is “CLOSED TO THE PUBLIC!”
Inspection records show the four Dolly’s locations in Hamilton County had a combined 20 violations and three complaints since March 10, including a June 2 report that indicates someone tested positive for salmonella after having a Dolly’s cheeseburger at the Delhi location.
That inspection led to five citations, including “spoiled” beef patties that the restaurant immediately threw away and a “freezer not working” that caused food to thaw.
Inspectors didn’t order the restaurant's closure or take administrative action against it because “there was no other conclusive evidence to support this was the causative facility,” said Jeremy Hessel, the county’s director of environmental health.
