It would be fair to say that business rebranding can be a controversial topic. There are occasions where a business most certainly needs to keep its identity, but there are also other times where it needs a refresh in a bid to build on its success, or get a better foothold in the market.
When Sun Capital purchased Johnny Rockets several years ago, there were few raised eyebrows. This was a business that seemingly ticked all of the boxes for this private equity firm.
As Marc Leder has said before, Sun Capital tend to assess a business on several core elements. One of this is the company being a market leader, or having a solid customer based and considering the hundreds of stores, and the thirty year history that Johnny Rockets had, it’s fair to say that they satisfied this comfortably.
Another reason for them to invest in a company is potential. In other words, if it’s clear that it could be performing much better than it really is, it’s a sure-fire sign that Sun Capital should pledge their faith in it.
It appears as though it could be this second issue which made the difference with Johnny Rockets – and was potentially linked to the huge rebrand that the company has just experienced.
Firstly, let’s give a little background on Johnny Rockets and their former brand. This was a restaurant which prided itself on a 1950s theme. Restaurants were filled with jukeboxes, playing music from the 50s and 60s, as well as the traditional dining experience.
Such a style remained for approximately thirty years, although the company are now attempting a major rebrand to potentially capture a new audience, and rejuvenate their loyal customer base.
Surveys found that while customers resonated with the brand, many were starting to tire from the style and thought it wasn’t as relevant as it was back in the day. The upshot was that the restaurant has opted for a much more contemporary feel – one that suits the 2016 customer much more effectively.
It’s probably one of the best examples one can find of a private equity firm using their knowledge of an industry to implement change.
Sun Capital’s history with the restaurant market is vast – they have invested in umpteen businesses in this field and have tasted remarkable success. It appears as though the opportunity in a Johnny Rockets rebrand seemed just too good to turn down and within three years, the chain is now looking significantly more contemporary.
Of course, there are behind-the-scenes changes as well – which are part of the group’s bid to improve operations within the businesses they acquire. They have implemented technology which makes the burger cooking process much faster, while drinks are also made much more quickly.
Again, as Sun Capital already had experience with other restaurants, they were able to use this to their advantage and implement changes that other private equity firms perhaps wouldn’t be able to.