Arby's

Arby's
Privately held company
Industry Restaurants
Founded July 23, 1964 (1964-07-23)
Boardman, Ohio, US
Founder Forrest Raffel
Leroy Raffel
Headquarters Sandy Springs, Georgia, U.S.
Number of locations
 3,301
Area served
 Global
Key people
 Paul Brown, CEO
Products Fast food
Sandwiches (roast beef • Angus beef • chicken • turkey) • salads • french fries • onion rings • potato cakes • mozzarella sticks • soft drinks • ice tea • milkshakes • desserts • and a complete breakfast menu served daily from 6:00 am until 10:30 am
Services Franchising
Revenue Increase US$1.2637 billion (2007)[1]
Increase US$9.4 million (2007)[1]
Increase US$16.1 million (2007)[1]
Owner Roark Capital Group (81.5%); The Wendy's Company (18.5%)
Number of employees
 74,000 (2013)[2]
Website arbys.com

Arby's Restaurant Group, Inc. (/ˈɔːrbiz/) is the second-largest quick-service sandwich chain in the U.S. in terms of units with more than 3,300 restaurants system wide and third in terms of revenue.[3]

Roark Capital Group acquired the company in July 2011 and owns 81.5% of the company, with The Wendy's Company owning the other 18.5%. In addition to its classic Roast Beef and Beef 'n Cheddar sandwiches,[4] Arby's products also include deli-style Market Fresh line of sandwiches, Curly Fries and Jamocha Shakes.[4] Its headquarters are in Sandy Springs, Georgia.[5]

As of December 31, 2015, there were 3,342 restaurants. There are international locations in three countries outside of the United States: Canada, Turkey and Qatar.[6]

History

An Arby's franchise with vintage sign in Midland, Michigan. Very few locations still carry this sign.
Arby's former location inside Kilcawley Center on the campus of Youngstown State University in Youngstown, Ohio, Arby's home market. This location closed in July 2012 when construction began to convert the space into a Wendy's.[7]

Arby's was founded in Boardman, Ohio, in July 23, 1964 by Forrest (1922–2008) and Leroy Raffel (1927), owners of a restaurant equipment business who believed there was a market opportunity for a fast food franchise based on a food other than hamburgers. The brothers wanted to call their restaurants "Big Tex", but that name was already used by an Akron business. Instead, they chose the name "Arby's", based on R. B., the initials of Raffel Brothers.[8][9]

The Raffel brothers opened the first new restaurant in Boardman, Ohio, just outside Youngstown, on July 23, 1964. They initially served only roast beef sandwiches, potato chips, and soft drinks. Hoping to attract a more upscale clientele, Arby's interior design was purposely more luxurious in appearance than the typical fast food sandwich stand of the day. Arby's offered their roast beef sandwiches for $.69 at a time when hamburger stands were charging $.15 for a hamburger.[10] A year later, the first Arby's licensee opened a restaurant in Akron, Ohio. The famous Arby's "hat" was designed by the original sign makers, Peskin Sign Co.[11] Expansion to other states began in 1968, beginning in Pittsburgh[12] (the closest large out-of-state market to Youngstown) and Detroit.

During the 1970s, the expansion of Arby's took place at a rate of 50 stores per year. During this time it created several menu items, including the Beef 'n Cheddar, Jamocha Shakes, chicken sandwiches, Curly Fries and two signature sauces: Arby's Sauce and Horsey Sauce.[13] Baked potatoes were added to the menu in 1968.[14] Curly Fries were initially introduced as Curly-Q Fries in 1988.[15] It became the first restaurant in the fast food industry to offer a complete "lite" menu in 1991 with several sandwiches and salads under 300 calories and 94 percent fat free.[10][16]

The family-owned business tried to converting into a public company in 1970 by the offering the sale of stock,[17] but the IPO never went through when the stock market subsequently fell.[18] In 1976, the family sold the company to Royal Crown Cola Company for $18 million[19] and Leroy Raffel remained as CEO until his retirement three years later.[18]

In 1984, Victor Posner obtained Arby's via a hostile takeover of its then parent Royal Crown[20] through his DWG Corporation.[21] Nine years later, with a new owner of DWG Corporation and a new name, Triarc Companies, Inc.,[22] a former PepsiCo executive, Don Pierce, was brought in to "resurrect" Arby's.[23] With $100 million additional funding, Pierce moved to a new "Roast Town" concept, similar in format to Boston Market, in 1996.[24] The Roast Town concept received poor marks in market tests and was quickly discontinued. Pierce and his team left the company and it sold all of its 354 company-owned locations to RTM Restaurant Group, an existing Arby's franchise, for $71 million.[25] Another marketing concept that was tried was a dual-brand venture that was started in 1995 with ZuZu's Handmade Mexican Grill.[26] The marketing venture was a failure resulting in lawsuits being filed by each company against the other.[27]

In 1992, Les Franchises P.R.A.G. Inc. opened the first Arby's franchise in the Canadian province of Quebec.[28] It was also the 100th location to open in Canada and joins other locations that were then operating in the provinces of Ontario, Alberta, New Brunswick, Nova Scotia, Manitoba, British Columbia and Saskatchewan. The Quebec location also sold the uniquely French-Canadian dish called poutine.

In 2002, Arby's returned to operating restaurants by purchasing the second largest Arby's franchisee, Sybra Inc., with 293 locations out of bankruptcy outbidding RTM so as to prevent RTM from becoming too large.[29] RTM was purchased by Arby's on July 25, 2005.[30][31]

In 2008, Triarc purchased Wendy's, and changed its name to Wendy's/Arby's Group, to reflect their core businesses.[32][33] In January 2011, it was announced that Wendy's/Arby's Group were looking into selling the Arby's side of the business to focus on the Wendy's brand.[34] It was officially announced the companies would split on January 21, 2011.[35] In 2009, the Wendy's/Arby's Group signed a franchise deal with the Al Jammaz Group of Saudi Arabia to open dual-branded Wendy's/Arby's through the Middle East[36] with the first location opening in Dubai in the United Arab Emirates in May 2010.[37] the Wendy's/Arby's Group also signed a similar franchise deal in June 2010 with Tab Gida Sanayi ve Ticaret to open dual-branded restaurants in Turkey.[38]

There were two different attempted to operate franchises in the United Kingdom. GSR Restaurant Group opened their first Arby's franchise location in London in 1992 followed by a second location the following year in Glasgow.[39] These were also the first locations to open in Europe, but both were forced to close by 1994. In 2001, Barown Restaurants open two Arby's franchise locations in Southampton, Hampshire, and Sutton, Surrey, but both were forced to closed after operating for a few months.[40]

On June 13, 2011, Wendy's/Arby's Group Inc. announced that it would sell the majority of its Arby's chain to Roark Capital Group while maintaining an 18.5% stake in the company.[10][41] At the time of the sale, Arby's was experiencing an operating loss for the year of $35 million with 350 Arby's franchisees were more than 60 days late in royalty payments and 74 low performing franchised units and 96 company-owned units were forced to closed.[42] Despite its cash flow problem, Arby's also reported that it had six months of sales growth at established stores in the United States which it had attributed to its new turnaround plan that it had recently launched.[43] The new owners turned the company around by closing more underperforming locations, changing the company's marketing strategy, and by introducing new products on a regular basis. After four years, Arby's was able to issue a $300 million in dividends, which result in Wendy's receiving $54.9 million for its minority stake with the remainder paid to Roark.[44]

Products

Arby's medium roast beef sandwich with curly fries
"Beef-n-Cheddar" sandwich

In addition to roast beef, deli style sandwiches, called "Market Fresh Sandwiches," are sold at Arby's. The original lineup of sandwiches included Roast Beef and Swiss, Roast Turkey and Swiss, Roast Ham and Swiss, and Roast Chicken Caesar. With the exception of the Chicken Caesar, all Market Fresh Sandwiches came with the standard toppings of spicy brown honey mustard, mayonnaise, red onion rings, green leaf lettuce, tomato slices and sliced Swiss cheese. Additions to the Market Fresh lineup included Roast Turkey Ranch and Bacon and the Ultimate BLT. Market Fresh Five-Star Club, served on Harvest White Bread, was introduced in 2003 for a limited time.[45]

The Ultimate BLT was released for a limited time in 2002[46] and later in 2012.[47]

In 2003, the line was again expanded to include other styles of specialty sandwiches that were served on baguettes that included the Italian Beef 'n Provolone,[48] French Dip 'n Swiss, Philly Beef Supreme,[49] and Pot Roast[50][51] sandwiches.

Corned beef and turkey Reuben sandwiches were added to the menu in 2005.[52]

In early 2006, Arby's Restaurant Group signed a contract with Pepsi, making Pepsi the chain's exclusive soft drink provider. When franchisees' contracts expire with Coca-Cola, they will be required to switch to Pepsi-Cola,[53] the only exception was the Arby's located at Youngstown State University because the University has its own separate contract with Coca-Cola for other university purposes, particularly the athletic department. This Arby's closed in mid-2012 when construction began to convert the location into a Wendy's.[7]

Toasted Subs, sandwiches served on a toasted ciabatta roll, were first introduced in September 2007. The initial line up included the French Dip & Swiss Toasted Sub, Philly Beef Toasted Sub, Classic Italian Toasted Sub, and Turkey Bacon Club.[54] Three months later, the Toasted Subs product line was extended to include the Meatball Toasted Sub and the Chicken Parmesan Toasted Sub.[55]

In October 2013, Arby's introduced a Smokehouse Brisket sandwich.[56]

In September 2014, Arby's introduced gyros to its menu for a limited time.[57] Gyros were previously offered in 2006.[58] They have since become a permanent menu fixture on the menu in April 2016.[59]

On an almost annual basis, Arby's had offered some sort of a flatbread melt sandwich for a limited time. In 1997[60][61][62] and again in 1978,[63] it was the Philly Cheesesteak and the Fajita Beef. The Beef Fajita returned with the new Chicken Fajita in 2009.[64] After a six-year hiatus, Steak Fajita Flatbreads were offered for a limited time in 2015.[65] The following year, Steak Fajita returned in 2016 with Chicken Fajita along with a choice between a hot and mild sauce.[66]

After a nine-year hiatus, a pork-beef mixture meatball sandwich was reintroduced in July 2016.[67]

In August 2015, Arby's introduced a series of five small sandwiches called Sliders starting at $1.29, with prices varied by location.[68][69] These new menu items lead to an increase in sales at many locations.[70] This is not the first time Arby's tried to market miniature sandwiches. Two years earlier, Arby's tried to sell a similar product called the Mighty Minis that were sold in pairs.[71] During the first month of national sales, the firm was able to sell 1 million or a ton of sliders.[70] To encourage additional sales outside of normal lunch and dinner meal hours, began to offer sliders and small size drinks and sides at the reduce price of $1 between the hours of 2 and 5 p.m. starting in October 2015.[72] Due to Arby's great success in the increase of sales created by the introduction of this new product line, Nation's Restaurant News awarded Arby's its MenuMasters Award for 2016.[73]

In late August 2016, Arby's introduced four chicken sandwiches that used a buttermilk-based breaded breast filet.[74]

Arby's will debut a new sandwich known as Smokehouse Pork Belly Sandwich in October 2016.[75]

In October 2016, word leaked through social media that Arby's was about to test a venison sandwich, which Arby's confirmed, selecting 17 stores in Georgia, Michigan, Minnesota, Pennsylvania, Tennessee, and Wisconsin (all major deer hunting states) to offer it during a four-day test during those states respective hunting seasons. Prior to the start of the promotion, USA Today published the locations of all 17 participating restaurants.[76] Both due to curiosity and heavy demand from hunters, the sandwiches sold out in all markets on the first day of the test.[77] Another USA Today article reported that the farm-raised venison was imported from New Zealand.[78]

Some locations also serve breakfast.[79]

Global locations

Current Arby's locations:

Former Arby's countries:

Legal issues

In November 2002, Access Now filed a lawsuit against RTM, then a franchise of TriArc, that some 800 of their stores did not comply with the Americans with Disabilities Act of 1990 (ADA). The lawsuit had no liability damages except for lawyer fees. In August 2006, the court accepted the settlement between RTM and Access Now. The result is every year 100 of the RTM stores are retrofitted to comply with the ADA. Accordingly, it is estimated that about $1.2 million will be spent to retrofit those stores each year.[1]

References

  1. 1 2 3 4 2007 Annual Report (PDF). corporate-ir.net (Report). Triarc. February 29, 2008.
  2. ↑ Bramhall, Joe. "Arby's – Company Overview". Hoover's. Retrieved October 24, 2008. (subscription required (help)).
  3. ↑ Oches, Sam (August 2013). "The QSR 50 Sandwich Segment". QSR Magazine. Journalistic Inc. Archived from the original on August 11, 2013. Retrieved March 9, 2016.
  4. 1 2 "Arby's Foundation Invests $3 Million in the Fight To End Childhood Hunger in Georgia". PR Newswire (Press release). The Arby's Foundation. January 10, 2013.
  5. ↑ "Arby's Corporate Headquarters – Whitepages listing". Whitepages Inc. Retrieved July 13, 2016.
  6. ↑ "Arby's Locations". Arby's.
  7. 1 2 Alquist, Kevin (August 21, 2012). "Wendy's to replace Arby's in Kilcawley Center". The Jambar (Youngstown State University Student Newspaper). Archived from the original on January 13, 2013. Retrieved March 9, 2016.
  8. ↑ Peyko, Mark C. (October 9, 2014). "Arby's founder discusses legacy of fast-food chain that began in Youngstown". Metro Monthly. Retrieved March 9, 2016.
  9. ↑ Jakle, John A. & Sculle, Keith A. (2002). Fast Food: Roadside Restaurants in the Automobile Age. JHU Press. p. 174. ISBN 9780801869204. Retrieved March 9, 2016.
  10. 1 2 3 Smith, Andrew F. (2011). Fast Food and Junk Food: An Encyclopedia of What We Love to Eat. ABC-CLIO. pp. 16–17. ISBN 9780313393938. Retrieved March 9, 2016.
  11. ↑ Trax Page, Margie (November 23, 2009). "Hats Off to Arby's". Star Beacon. Retrieved December 2, 2009.
  12. ↑ Gallagher, Jim (May 13, 1987). "Puts Stakes on Supper Steaks". Pittsburgh Post-Gazette. p. 30 – via Google News.
  13. ↑ Machlin, Sherri (2011). American Food by the Decades. ABC-CLIO. pp. 153–154. ISBN 9780313376993. Retrieved March 9, 2016.
  14. ↑ Rouse, Edwart (February 19, 1985). "Baked Potatoes Rolled Out in Fast-food War". Spokane Chronicle. p. F1 – via Google News.
  15. ↑ Sanchez, Jesus (November 20, 1988). "Potato Redux : As the Dining Public's Interest in French Fries Ebbs, Industry Seeks New Ways to Prepare the Lowly Spud". Los Angeles Times.
  16. ↑ Lazarus, George (May 1, 1991). "Arby's Adds Lite Offerings To Menu". Chicago Tribune.
  17. ↑ "Arby's Combination Offering". Wall Street Journal. December 26, 1969. p. 7. (subscription required (help)). Alternate Link via ProQuest.
  18. 1 2 Erwin, Jane (October 22, 1989). "$40 Million Business // Franchise Is Made From Scratch". Tulsa World.
  19. ↑ "Royal Crown To Buy Arby's". Pittsburgh Post-Gazette. July 27, 1976. p. 23 – via Google News.
  20. ↑ Cole, Robert J. (January 26, 1984). "Posner Bid Gains for Crown Cos.". New York Times.
  21. ↑ "Triarc Companies, Inc. Company History". Funding Universe. Retrieved June 17, 2008.
  22. ↑ "Triarc Companies Is New Name for DWG Corporation". PR Newswire (Press release). October 27, 1993 – via The Free Library.
  23. ↑ Kolody, Tracy (June 5, 1994). "Triarc To Highlight Turnaround at Meeting". Fort Lauderdale Sun Sentinel.
  24. ↑ Lineberry, Patricia (June 24, 1996). "Arby's Chain Plans Major Changes, But Not Locally". Newport News Daily Press.
  25. ↑ "Arby's Sells 355 Restaurants". Orlando Sentinel. February 14, 1997.
  26. ↑ Kolody, Tracy (July 12, 1995). "Arby's, Mexican Fast-food Chain Plan Partnership". Fort Lauderdale Sun Sentinel.
  27. ↑ Tannenbaum, Jeffrey A. (August 12, 1997). "Mexican-Food Venture Gives Arby's Some Serious Indigestion". Wall Street Journal.
  28. ↑ Duffy, Caroline (October 27, 1992). "Arby's Opens First in Quebec". Business Wire (Press release). p. 1. Link via ProQuest.
  29. ↑ "Triarc to Acquire Sybra, Inc.". QSR Magazine. November 26, 2002.
  30. ↑ "RTM Restaurant Group: Private Company Information". Bloomberg BusinessWeek. Retrieved August 1, 2011.
  31. ↑ "Triarc Completes Acquisition of RTM Restaurant Group, Arby's Largest Franchisee; Arby's Restaurant Group, Inc. Enters into $720 Million Credit Facility". Business Wire (Press release). July 25, 2005.
  32. ↑ "Triarc, Owner of Arby's, to Buy Wendy's". The New York Times. April 24, 2008. Retrieved August 17, 2011.
  33. ↑ "Triarc and Wendy's Shareholders Approve Merger". corporate-ir.net (Press release). September 15, 2008.
  34. ↑ Alazraki, Melly (January 20, 2011). "Wendy's/Arby's Group Considers Spinning Off Arby's". AOL News. Retrieved January 20, 2011.
  35. ↑ Gross, Daniel (January 21, 2011). "American Fast Food: From Supersize to Downsized". Yahoo! Finance. Archived from the original on 2011-01-24. Retrieved January 21, 2011.
  36. ↑ "Wendy's/Arby's expands in Middle East". Atlanta Business Journal. June 16, 2009.
  37. ↑ "Wendy's/Arby's opens in Dubai". Atlanta Business Journal. May 11, 2010.
  38. ↑ "100 more Arby's coming to Turkey". Atlanta Business Journal. June 3, 2010.
  39. ↑ "Arby's undaunted by London closure". The Caterer. November 24, 1994.
  40. ↑ Walker, Ben (August 6, 2001). "Arby's backers go bust after second launch". The Caterer.
  41. ↑ Jargon, Julie & Gasparro, Annie (June 13, 2011). "Wendy's Parts With Arby's Roast-Beef Chain". The Wall Street Journal. p. B8.
  42. ↑ Saporito, Bill (June 14, 2011). "Why Wendy's Can't Stomach Any More Arby's". Time.
  43. ↑ "Wendy's/Arby's Group to sell Arby's to Atlanta-based Roark Capital Group". Atlanta Journal-Constitution. June 13, 2011.
  44. ↑ Maze, Jonathan (November 16, 2015). "Arby's sale keeps paying off for Wendy's". Nation's Restaurant News.
  45. ↑ "Arby's Introduces New Market Fresh Five-Star Club". Business Wire (Press release). July 7, 2003.
  46. ↑ "Arby's Introduces Ultimate BLT". QSR Magazine. July 8, 2002.
  47. ↑ Ayrouth, Elie (June 6, 2012). "Arby's Launches a Limited-time 'Ultimate BLT' With 5-Strips of Bacon". Foodbeast.
  48. ↑ Hoffman, Ken (March 14, 2003). "Drive-Thru Gourmet: A beefy Italian to look out for: Arby's sandwich is no patsy". Houston Chronicle.
  49. ↑ "Arby's Introduces New Oven Roasted Sandwiches This Fall". Business Wire (Press release). November 20, 2003.
  50. ↑ "Arby's Introduces a New Homestyle Pot Roast Sandwich". Business Wire (Press release). April 18, 2003.
  51. ↑ Hoffman, Ken (May 23, 2003). "Drive-Thru Gourmet: Arby's 'mom' cooks a better pot roast than most". Houston Chronicle.
  52. ↑ "Arby's Adds Classic Reuben Sandwich to Its Market Fresh Menu Line Up". Business Wire (Press release). April 15, 2005.
  53. ↑ "Arby's Restaurants Chooses Pepsi". corporate-ir.net (Press release). December 19, 2005.
  54. ↑ "Arby's intros Toasted Subs". QSR Web. September 27, 2007.
  55. ↑ "Arby's extends Toasted Sub line with LTO". Nation's Restaurant News. December 6, 2007. (subscription required (help)).
  56. ↑ Hanacek, Andy (January 10, 2014). "Arby's: Bullish on brisket". The National Provisioner.
  57. ↑ Madarang, Charisma (August 27, 2014). "Arby's Becomes Largest Chain Ever to Launch Gyros". Foodbeast.
  58. ↑ "Arby's Offers a Taste of Greece with Introduction of Market Fresh Roast Beef Gyro; Arby's is Largest QSR to Offer Greek Specialty Pita Sandwich Nationwide". Business Wire (Press release). April 24, 2006.
  59. ↑ Rocha, Isai (April 5, 2016). "Arby's Permanently Adds 'Mediterranean Tacos' To Their Meaty Menu". Foodbeast.
  60. ↑ "Arby's Introduces New Limited-Time Sandwiches". QSR Magazine. March 5, 2007.
  61. ↑ "Arby's Rolls Out Flat-Bread Sandwiches, Offers Trips to Country Music Awards". Nation's Restaurant News. April 2, 2007. (subscription required (help)).
  62. ↑ "Two More Hot Reasons to Get to Arby's®: Flatbread Melts and the Academy of Country Music Awards". Business Wire (Press release). March 2, 2007.
  63. ↑ Karapetian, Alicia (May 7, 2008). "Arby's Flatbreads Back on the Menu". The Food Channel.
  64. ↑ "Arby's Fajita Flatbread Melts Have Me Thinking Taco Bell". The Impulsive Buy. June 3, 2009.
  65. ↑ "Arby's Launches New Steak Fajita Flatbreads". Brand Eating. November 30, 2015.
  66. ↑ "Arby's Mild or Spicy Fajita Flatbreads". The Impulsive Buy. October 26, 2016.
  67. ↑ Wohl, Jessica (July 25, 2016). "Arby's Has the Meats, and Now It Has the Meatballs: Chefs Spend Year Getting New Item Just Right, Down to Details Such as When to Slice the Bread". Ad Age.
  68. ↑ Pham, Peter (August 20, 2015). "Arby's Releases An Entire SLIDERS Menu For Bite-Sized Appetites". Foodbeast.
  69. ↑ "Arby's rolls out 5 new meat slider sandwiches". Fox News Channel. August 25, 2015.
  70. 1 2 Maze, Jonathan (October 15, 2015). "Arby's sold a ton of Sliders in September". Nation's Restaurant News.
  71. ↑ "Arby's – New Mighty Minis with Limited Availability". Brand Eating. April 20, 2013.
  72. ↑ "Arby's Offering $1 Happy Hour Sliders at Some Locations". Brand Eating. October 17, 2015.
  73. ↑ Thorn, Bret (April 18, 2016). "MenuMasters 2016 Best Menu/Line Extension: Arby's sliders: Sandwich chain sells 100 million sliders within months of their debut". Nation's Restaurant News. (subscription required (help)).
  74. ↑ "Arby's Has The Chicken: Chain Introduces Buttermilk Line". QSR Magazine. August 29, 2016.
  75. ↑ Pham, Peter (September 21, 2016). "Arby's To Debut PORK BELLY Sandwiches And We're Foaming at the Mouth". Foodbeast. Retrieved 2016-09-23.
  76. ↑ Bowerman, Mary (October 26, 2016). "Arby's takes a stab at venison sandwiches in select locations". USA Today.
  77. ↑ Whitten, Sarah (November 8, 2016). "Arby's venison sandwich is a hit with hunters". CNBC.
  78. ↑ Myers, Jim (November 1, 2016). "rby's sells out of venison sandwich on first day in Nashville". USA Today.
  79. ↑ "Arby's nutrition facts" (PDF). Arby's. Archived from the original (PDF) on April 14, 2016.

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