Dixie Cafe plans upgrades, expansions.

DIXIE RESTAURANTS Inc., operator of The Dixie Cafe, is Arkansas' home-grown chain of down-home restaurants.

And it plans to keep growing, according to Frank Battisto, who was promoted to president and chief operating officer in January.

Over the past 17 years, the private company has expanded from two stores in Little Rock and one in Memphis to 15 stores in Arkansas, five in Oklahoma and three in west Tennessee. The company is eyeing additional sites in Arkansas and is planning to expand into Missouri, Texas and Mississippi--areas that will appreciate the chain's signature dishes.

"It's hard to sell chicken fried steak in Chicago and New York City," said Battisto, who was most recently director of operations.

Dixie management is hoping an increased marketing push later this year will boost sales and company awareness, snag new customers and impress the loyalists, Battisto said.

To do this, Dixie is setting aside 3 percent of its revenue--probably about $1 million a year--for radio, television and print advertising. The Allison Agency of Little Rock has had Dixie's marketing account since 2001.

Battisto said the company tightly guards its revenue figures; however, those figures are public information in the cities--Little Rock, North Little Rock and Fayetteville--that collect a "hamburger tax."

The Little Rock Advertising and Promotions Bureau's figures show that the Dixie Cafe at 10011 Interstate 30 brought in $1.17 million last year, while $1.91 million flowed through the register at Dixie on Rodney Parham Road. The Dixie Cafe on Rebsamen Park Road, next door to the Dixie Restaurants headquarters, grossed nearly $1.25 million last year.

The North Little Rock Convention and Visitors Bureau reports that the Dixie Cafe at Lakewood Village brought in more than $1.5 million in 2002. Fayetteville's Dixie Cafe raked in nearly $1.33 million in 2002, according to tax information supplied by the Fayetteville Advertising and Promotion Commission.

If those five are a representative sample, the company's 2002 revenue was in the range of $30 million-$35 million. (That is less than half the revenue necessary to place it on the list of the state's 75 largest private companies that begins on Page 22 of this issue.)

Expansion Plans

Jacksonville is a likely location for the next new Dixie Cafe, Battisto said, which could open in less than two years. Mountain Home, Pine Bluff and El Dorado are also on the list of possible new markets.

When Dixie does build new freestanding locations, they are often placed near Wal-Mart, another Arkansas-based company. The Bentonville retailer is a powerful magnet for Dixie Cafe, Battisto said.

Company officials are also planning to upgrade the restaurant's color scheme. The light blues and deep reds aren't very homey and comfortable looking, Battisto said. New awnings and special lighting will be added in the coming months.

Inside, doors were recently added to each kitchen, making the dining experience quieter and more intimate. Larger party booths and better lighting have also been installed.

Dixie is also working on a new site on the Internet. Dixie officials are negotiating with a Web designer to resurrect the company Web site, which was shut down last year because the developers couldn't update the online restaurant menu as often as the chain wanted, Battisto said.

And updating menus regularly is a big part of the Dixie Cafe business plan. Company officials believe variety is the key to keeping loyal customers happy, so they often change the menu twice a year.

The company plans to enlarge its variety of "dinner house"-style platters, which have become increasingly popular, Battisto said. The current Cajun dinner promotion will end shortly and be replaced by an "American classics" campaign emphasizing meat loaf, vegetables and pot roast dishes.

"We've tried to develop a place that's attractive to families but also to those people who want the dinner house experience without the dinner house prices," said Battisto. Dixie's least expensive meal is $6.10.

Using customer comments and wish lists, Dixie adds new entrees and dinner platters and drops nonperformers. But the one thing that will never change, Battisto said, is the wheat rolls that are made on site.

Limited Competition

Battisto said he hopes to improve upon the chain's position as a home-style food storehouse, which he doesn't see as a major challenge because competition within this, sector is limited. Aside from the mom-and-pop restaurants, very few companies compete for a piece of the home-style cooking market, he said.

Dixie Cafe made its debut in the absence of large Southern food vendors, a decade before Cracker Barrel Old Country Store opened. the first of its 10 Arkansas locations in 1996. Battisto considers almost any restaurant a rival, especially Applebee's, Chili's and Macaroni Grill.

"You can't be all things to everybody," Battisto said. But Dixie is a favorite to chicken-fried steak connoisseurs. That dish, along with the vegetable plate and hand-battered chicken tenders are the chain's top selling menu items.

The 23 restaurants employ about 1,100. There is little enthusiasm for taking Dixie public, Battisto said, because the management prefers the privacy that private companies can have.

"We operate our restaurants like a big chain when it comes to how we handle our people and the work environment we provide for them," Battisto said. "We operate our restaurants like a small company, but we think what we provide is more than competitive with a big chain."

RELATED ARTICLE: Dixie Cafe Locations

Arkansas

1301 Rebsamen Park Road, Little Rock

10700 Rodney Parham Road, Little Rock

10011 Interstate 30, Little Rock

2724 Lakewood Village, North Little Rock

2406 S. Caraway Road, Jonesboro

1212 Highway 62/65 North, Harrison

1101 Fendley Dr., Conway

3875 N. Shiloh Dr., Fayetteville

3623 Central Ave., Hot Springs

4600 W. Rozell St., Rogers

205 S. Poplar, Searcy

17306 interstate 30, Benton

302 S. Rockwood Road, Cabot

105 E Harreli Drive, Russellville

2904 W. Kings Highway, Paragould

Oklahoma

4515 E. 51st St. Tulsa

11101 E. 41st, St., Tulsa

3330 S. Peoria, Tulsa

4734 N. Kickapoo, Shawnee

3301 S. Boulevard, Edmond

Tennessee

2861 Bartlett Blvd., Bartlett

3895 Hacks Cross Road, Memphis

4699 Poplar Ave., Memphis

Far South of Dixie

DIXIE RESTAURANTS INC. was founded in 1986 by Allan Roberts and Gordon Gondek of Little Rock, who purchased three Black-eyed Pea restaurants from Andy's Restaurants Inc. of Mountain Home.

These locations are still in operation today in Little. Rock and Memphis.

After the purchase, CEO Roberts and EVP Gondek, who declined to be interviewed for this story, opted to keep the Southern-style comfort food theme but converted the Black-eyed Peas' bars into old-fashioned soda fountains.

While the soda fountains failed in their mission to lure children--the nostalgia was lost on them--it was a big hit with parents. Still, the concept didn't have the earning power Roberts and Gondek had sought, said Frank Battisto, who was named president of Dixie Restaurants in January.

In 1999, Dixie Restaurants hired Forza Marketing Group of Little Rock to redesign the chain's soda fountains, at a cost of $15,000-$20,000 each. The soda fountains were renamed South Pole and an entire menu was developed around the polar theme--Polar Burrgers, South Pole Meat Loaf Sandwich, ice cream and desserts.

Battisto said the company had hoped the alcove would become a destination spot unto itself for parents and children. It didn't work. Dixie's management has since axed the separate South Pole menu and plumped out its kids menu so that it is now almost as large as the adult menu.

Patrons now may opt to experience the Arctic atmosphere but aren't limited to the South Pole's fanciful menu. Now South Pole diners account for 13-15 percent of total sales, Battisto said.

In keeping with the family-friendly atmosphere, Dixie Restaurants has allowed its store managers to chose whether to restrict smoking. About half have banned smoking totally, Battisto said.

Most of the restaurants are alcohol-free, as well--even many of the ones that are located in wet counties. The remaining stores serve only beer and wine, Battisto said.

ALICIA STOGNER