Sroka Group Restaurant Intl. Inc.
In 2004 the Sroka family purchased Lavtor Holdings (Lavtor), an Alberta-based company that operates eight Smitty’s Family Restaurants (Smitty’s). Soon thereafter, Don Sroka purchased the food, beverage and gaming operation at an East End Edmonton Hotel; Don named the operation Tyson’s Grill, after his first grandson.
Don, known as the family’s patriarch, attended the University of Alberta before moving into a career in the food service industry. Prior to becoming a Smitty’s franchisee, Don’s previous decades of experience include several leadership positions, including 20 years as general manager of food services at Edmonton Northlands and a seven-year run as president of Groupex Systems Canada Inc., a hotel and restaurant buying group. Don also served a number of terms in the volunteer role of president of the Alberta Restaurant and Foodservices Association, as well as chairman of the board of the Canadian Restaurant and Foodservices Association.
“When the family isn’t busy keeping nine restaurants running smoothly, we like to travel and relax together with our children and their spouses, Rob and Kim and Barbara and Norm, as well as grandchildren Tyson, Karly and newly born twin granddaughters Sydney and Lindsey,” Don says proudly.
The family’s continued presence in the business offers a unique business model, with Don, Barbara and Rob remaining highly involved in the company’s day-to-day operations. Above all else, Don’s priority is first-class customer experience, where customers are treated like kings and queens.
Don credits an unpleasant exchange between airline staff and his children several years ago on a flight to Hawaii with the inspiration for his approach to customer service. “The service was terrible, and certainly not what we had experienced on this airline in the past,” Don recounts. “Our 5-year-old daughter, Barbara, was very excited to be on a 747 for the first time in her life when one of the flight attendants knocked my daughter’s elbow with her service trolley, and then complained about the little girls’ elbow sticking slightly out into the aisle. When we returned home from vacation three weeks later, I called to lodge a complaint and to my surprise, I was directed to the president and owner of the airline, Max Ward of Wardair, who told me he was in charge of complaints.”
Don immediately adopted that role in his position as general manager of Foodservices at Northlands. Today, Rob continues the tradition, giving Smitty’s customers a 100 percent guarantee, and speaking to customers via phone or email directly relative to any issues. “Customers pay the bills and deserve to be heard by ownership wherever possible,” Don says.
Raising the Bar on Food and Décor
“Walter Chan started the Smitty’s family restaurant chain in 1960 and his dedication to quality, service and value have grown the chain to be Canada’s largest family restaurant chain some 53 years later,” Don explains. “There are almost 100 Smitty’s family restaurants coast to coast and SGR is the largest franchisee. One of the main attractions to being part of Smitty’s was the flexibility in the business franchise operations. Shortly after I purchased these locations, we decided as a family to embark on a major renovation program of all eight restaurants. We improved the décor to include raised booth seating, higher percentages of tile flooring, more high-end wood décor and bulkheads, with contemporary wall hangings and pictures similar to higher end restaurants. Over the past eight years we have renovated all locations. Customer reaction has been extremely positive and sales are soaring.”
Shortly after leaving the University of Alberta, Don worked with Canada Packers in management for four years. “I got to know a lot about pork and beef,” he continues. “One of our customer complaints in the first few weeks I owned the company was that we were not serving Alberta beef, a product that has been recognized around the world as one of the best beef products anywhere. At that time the Smitty’s in Edmonton was serving New Zealand beef. Similarly, several restaurants, even those not part of Smitty’s, serve a product they call Canadian back bacon, but it’s not Canadian back bacon.”
According to Don, he elevated the company’s quality to Alberta beef and real Canadian back bacon. “Both were much more expensive and the menu prices did not rise, so this move was a huge financial gamble.”
However, Don, known as a gambler, moved forward believing that customers would notice the difference. “Sales took off when customers saw the better quality,” Don continues. Shortly after switching to Alberta beef, Don and Dolores were walking through one of their restaurants when a server stopped them and introduced herself saying, “thank you.”
“I said, ‘You’re welcome, but why?’” Don continues. “The server said, ‘For switching to quality Alberta beef. We servers were not receiving gratuities when we served the lesser quality beef and now customers are happy and leaving gratuities.’”
The Srokas Next Move
In order to control costs, Don calls on his seven years as president of Groupex, wherein he negotiated many contracts for members that were significantly better priced than most chains could receive.
“We believe that one of the keys to our success and growth is a result of our partnerships with our suppliers,” he says. “It’s a win-win situation, they give us better prices, we sell more to customers, they sell more to us and everyone is happy.”
Don believes that customers are getting more sophisticated day by day, and operators must understand what customers want and provide it, or face declining sales. “Serving restaurant customers in 2014 and beyond is going to change dramatically and operators must realize they can’t ignore this fact,” he says. “Customers want a say in how they eat and what they eat. Health and nutrition are very important and must not be ignored by operators.”
In the SGR restaurants, customers have seen improvements outside of physical appearance and menu upgrades. “I believe in learning from others and that imitation is the best form of flattery,” Don says. “A few years back, Rob was attending a seminar by one of North America’s gurus in restaurant marketing and learned of a new loyalty card system.”
Shortly after returning to Canada, Rob and Don agreed to partake in the loyalty program and have seen nothing but growth and happier customers since. “This program gives customers a rebate of $10 for every $200 they spend,” Don continues. “The program sends an email to the customer shortly after they dine with us. The email is signed by Rob and customers are very pleased that someone in top management [vice president] cares about their opinion. Rob personally calls or emails every customer that has any concern and always extends the companies 100 percent guarantee, which all customers love. Recently one customer who dines with us three or four times each week felt that the selection of vegetables was the same too often. She conveyed this to Rob and we are now changing the selection more often.”
Another reason why the restaurants are enjoying double digit sales increases often is the many promotions that Rob and Douglas Bisset, director of operations, are instigating. “Mondays are free pie Mondays, Tuesdays are double point days, Wednesday is all you can eat fish and chips and on and on,” Don explains. “Many customers love the promos and come looking for what the promotion is that day. All our lounges feature 14 cent wings and many daily specials. Customers love promotions and once again; it’s a win-win.”
With a growing repeat customer base, SGR is ready for expansion, and Don hopes to expand his franchise to 20 locations over the next few years. “In addition to adding a few locations in the Edmonton area, we are also looking to expand to Las Vegas and Phoenix,” he says. “Lots of snowbirds from Canada go there in the winter.”
In the distant future, Don and Dolores plan to hand over the reins to their son and daughter, marking a second-generation of Sroka ownership. “With four grandchildren, who knows this may become a many generation company,” Don says. As time goes by, Sroka Group Restaurant International Inc. will continue to spread a philosophy of being a leader in the industry.