CASE STUDY: PDQ

Who and What Is PDQ 24

PDQ is a fast casual chicken sandwich and salad chain that wasstarted by Bob Basham, co-founder of Outback Steakhouse and NickReader, chief executive of MVP–holdings in Tampa, Florida. Thefirst PDQ restaurant opened on October 30, 2011, and currently, thechain includes four quick-service restaurants in and around theTampa Bay area. The name PDQ stands for “pretty darn quick” to mostpeople, and the restaurant maintains a dedication to the speedyproduction of food items; however, PDQ also means “people dedicatedto quality,” which serves as the foundation of its operation. PDQwas founded on some of the same principles as both casual diningrestaurant chain Outback Steakhouse, as well as fast-foodrestaurant chain In-N-Out Burger. Both chains are dedicated tosimilar core beliefs, such as quality products, simplicity of menu,and a slow-growth approach in the beginning of the company’sexistence. The idea for PDQ came when Basham was approached by theowner of a small restaurant in Cornelius, North Carolina calledTenders, which offered chicken tenders and other items similar towhat is now offered at PDQ. The owner of Tenders believed that hisvision and beliefs were similar to those of Outback’s, and hewanted to create a franchise of restaurants with the samephilosophy in mind. Who better to get invested in this project thanOutback’s very own Bob Basham, who eventually took over the dailyoperations of Tenders, reinvented the concept, and built a newstring of restaurants in Tampa. PDQ owners pride themselves in theway they differentiate their concept from typical fast-foodrestaurants. They are conveniently located in the samehigh-trafficked business districts and neighborhoods as many oftheir biggest competitors, but they believe that they have createda niche that makes them unique.

Competitive Advantage

PDQ has an advantage in curb appeal, with buildings that arefashioned more like fast-casual restaurants than fast food. Thebuilding décor is trendy with vibrant colors and contemporaryarchitecture. Also, there is a commitment to traditionalhospitality components that are near and dear to the owners, whohave taken them from casual dining and translated them to the QSRbusiness. At PDQ, there is no squawk box at the drive-through,because they believe that a warm greeting at the door can beconceptualized by having a welcoming greeting at drive-through.Additionally, there is a sense of personalization of service byasking customers to provide their name when they order food, andthen delivering their orders by name when ready. One of the biggestreasons PDQ has been successful thus far is that the ownerscontinuously look at some of the common things QSRs struggle withand prevent these things from occurring at the onset. Theirphilosophy for success is generated from three major components,including a commitment to the quality and freshness of the productoffered, speed of service delivery, and the cleanliness of staffand the establishment. According to Basham, “The idea of fast-foodhas gotten twisted and you are seeing long lines in the restaurantas well as in the drive-through during peak business hours, whenworking people are in a hurry to grab a bite to eat.” Unlike otherfast-food restaurants to date, PDQ has an openly visiblehandwashing sink with a sign above it affirming “cleanliness andquality go hand in hand.” This provides customers with physicalassurance that the people who work with their food maintain anacceptable level of cleanliness. The kitchen area is also openlyvisible to allow customers to see their food being cooked andserved, which inspires a sense of trust. While PDQ has beensuccessful since opening in 2011 under the leadership of veteranoperators, such as Bob Basham and company, it still faces manychallenges with being a new restaurant concept in a very demandingmarket full of firm competition. Many other establishments in thearea have been in operation much longer and have already carved outa loyal customer base. Originally, the first PDQ was opened inSouth Carolina. The food was similar to what is now being served atthe popular PDQ chains in Tampa; however, the building and décorwere more like the typical fast food chains such as Dairy Queen,McDonald ’s and Chick-fi l-A. The business never took off at thatlocation, and over time, the restaurant was forced to close itsdoors. The fact that the first PDQ failed accounted for anincreased degree of risk in transferring the idea over toTampa.

Challenges and Goals

Basham stated that “one of the biggest challenges of opening anew restaurant is making the unit level economics work. You mighthave a model for your concept, but the question is whether or notthat model is feasible.” The owners of PDQ aim for a slow-growthapproach in southern markets, while maintaining focus on therestaurants it currently has. Basham said, “Many times, owners makethe mistake of wanting to expand too quickly, and when they do,they lose focus on the current operation because their focus shiftsto the execution of the new operation, and the previousestablishment could suffer.” One of the biggest goals movingforward is achieving the capacity to establish an environment thatis grounded by opportunity for internal growth. Basham believes inrewarding employees for their hard work by guaranteeing them anarray of growth opportunities based on their performance. It isessential to put people first, which includes your employees andyour customers. Success is measured by sales and profits, and theseare the people that make that happen.

1. How does PDQ differentiate itself from itscompetitors?

2. What are the benefits of PDQ’s food productionprocess?

3. How does PDQ maintain a reputation of cleanliness andgood sanitation?

4. What is slow-growth expansion?

Why or why not?