Sunny side up: how The Breakfast Club regained its mojo

By Joe Lutrario contact

- Last updated on GMT

Jonathan Arana-Morton on his The Breakfast Club restaurant and bar group

Related tags: The Breakfast Club, Jonathan Arana-Morton, Be At One, Steve Locke, Breakfast

The restaurant and bar group is entering an ‘accelerated growth’ phase following the appointment of Be At One founder Steve Locke as managing director.

On 17 November 2020 Jonathan Arana-Morton put a post on LinkedIn that was part job advert part mea culpa. “I need an MD because I’m not quite good enough for us right now. In fact, I haven’t been quite up to it for a few years,” the 700-word post began before setting out the strengths and weaknesses of his then 12-strong restaurant bar businesses The Breakfast Club, his expansion strategy and why he was not the right person to lead the brand to its target of 30 sites.

The post generated a significant and unanimously positive response on the business networking platform, with users from many different sectors praising Arana-Morton’s honesty and lack of ego. A few months later, it also netted The Breakfast Club a talented managing director in Steve Locke.

The founder of bar group Be At One was initially brought in on an interim basis but is now permanent, albeit on a two days a week basis. “He sets the direction of the ship. I’ve never met anyone as single-minded or focused as Steve. If anyone can get a five day a week job down in two days, it’s him,” says Arana-Morton, who received over 70 applications off the back of his LinkedIn post (it’s no coincidence that he used to work in recruitment prior to founding The Breakfast Club in the mid noughties).

“Steve is exactly the person I needed,” he continues. “I’m a stereotypical entrepreneur. I bounce around. I’m creative and not overly disciplined. Our sales were good but our conversion of sales to profit was less so.”

Locke has already implemented some major changes at the group, including taking its people team from one person to nine and applying more rigour to site selection. “I went with my gut. To be fair I usually got it right, but Steve is more analytical. He is the yin to my yang in that sense. But I still lead the business. Getting an MD in gives me more time to do the things I love, such as being in the restaurants and working on the food and drink, the branding and the identity.”

Caf culture

We’re sitting at the group’s London Bridge site, which opened in 2014. It is completely full - not bad going for 10am on a Wednesday – although Arana-Morton admits that this is not currently the case at all The Breakfast Club’s locations, or ‘cafs’ as he calls them.

So, what exactly is The Breakfast Club? While the name suggests a specialism in morning dining, the brand is difficult to pigeonhole because it combines a focus on breakfast with all-day dining and a strong cocktail offer. A number of its sites have separate bars, most notably The Mayor of Scaredy Cat Town at its Spitalfields site, which is accessed via a bright red Smeg fridge. The venue is so well known that The Breakfast Club has had to think carefully about the placement of fridges front of house at its other sites.

“People regularly try and gain access to non-existent bars through our fridges,” says Arana-Morton, who launched his first The Breakfast Club site on Soho’s D’Arblay Street with Alison Rooney in 2005. Now his sister-in-law having married his brother, Rooney is no longer involved in the ops side of the business but retains her seat on the now 13-strong group’s board, which is chaired by Draft House founder Charlie McVeigh. 

While the business isn’t named after the 1980s coming-of-age film, it is inspired by it to some extent with the venues taking many of their stylistic cues from the era, not least the playlists. “We’re both children of the 80s. It’s a great name. It led us to where we are now in the sense that we didn’t really have a concept until we came up with it.”

Both originally from a small village in Yorkshire, the pair had some experience in hospitality prior to launching The Breakfast Club, but not much. “We compensated for our lack of experience in food and drink by creating something that was welcoming and nostalgic. We want people to feel like they’ve been here before even if they haven’t.”

Full-Monty-2

Mid-morning matters

Almost by accident, Arana-Morton and Rooney had identified a gap in the market for morning dining in the branded space (at the time only a handful of casual dining chains were open for breakfast). Their success has, in part, been responsible for other companie following suit, with many casual dining brands now seeing breakfast as a key part of their offer.

Key breakfast items include American-style pancakes, French toast, breakfast hash and – of course – a number of riffs on the full English including the £15 The Full Monty (bacon, sausage, homestyle potatoes, Portobello mushrooms, hash browns, black pudding, beans, roasted cherry vine tomatoes toast and a choice of egg). While breakfast-focused, the menu manages to also tick off other casual dining staples including burgers, wings and even a burrito.

As one would expect given its name, breakfast is available throughout the day. Yet being so strongly associated with mornings has its downside with many of the group’s venues shutting up shop in the late afternoon. While the cocktail side of the business usually goes a long way in making up for this, pandemic-related lack of demand and lack of staff has forced Arana-Morton to press the pause button on much of The Breakfast Club’s bar business.

It’s possible to get cocktails at all of the brand’s restaurants during the day but at the moment only three of its sites are open in the evening, compared with eight pre Covid. Though far from ideal, this isn’t as devastating to the business as it might sound with the company’s Brighton restaurant – which has never been open in the evening – its highest grossing site last year.

Another positive to come from the pandemic is the launch of a delivery business that has so far turned over an excess of £3m. “I did not believe breakfast delivery could ever be a thing. Breakfast doesn’t travel well either – getting scrambled eggs from one place to another is not an easy job. But it’s something we’ll always do now.”

The Breakfast Club is working with both Deliveroo and Just Eat, which have both worked hard to normalise couriers charging around with lattes and breakfast baps. A limited version of the menu is offered, with the most popular items including pancake-based dishes and full English breakfasts.

Every site functions as a delivery kitchen and the group also launched its first delivery-only kitchen, in Chiswick, last year, although this is currently out of action due to a lack of staff.

“Our kitchens weren’t designed to do takeaway and delivery and inevitably the peak periods for breakfast delivery are the same as our peak periods eat-in, so we only offer a handful of dishes,” says Arana-Morton. “But they are the same core dishes that make up 80% of our restaurant sales so we’re still covering most bases.”

The busiest time for delivery is between 10am and 12pm but the business says it gets a surprising number of sales in the afternoon as well.

Chelmsford

Back on the expansion trail

Even with the addition of delivery, The Breakfast Club’s most recent set of yearly results makes for sobering reading. Turnover halved during the year ending 31 March 2021 resulting in a pre-tax loss of £1.4m.

“To make it through the pandemic is the first step,” says an upbeat Arana-Morton. “We’re still here and we have money in the bank. The pandemic has shown that we’re only ever four to six weeks away from a total crisis. We had to borrow a lot of money to be here. But I am confident about this year.”

Despite these challenges, The Breakfast Club is entering what it calls an ‘accelerated growth’ phase. Towards the end of last year, the group opened its first ever ‘high street’ site in the Essex town of Chelmsford. It’s the first The Breakfast Club site to open since 2017 with Arana-Morton putting the hiatus down to a combination of the casual dining crunch, over investment on a site in Canary Wharf and, more recently, the pandemic.

Arana-Morton admits that he would have never considered a former Café Rouge in Chelmsford as a possible location for The Breakfast Club but that Locke felt otherwise. “I had never been there and knew very little about it. I took some convincing, but Steve was – of course – absolutely right. Anyone who thinks the high street is dead needs to go to Chelmsford.”   

Locke and Arana-Morton are now hoping to launch around four sites a year. Further regional sites within striking distance of London will likely come first with Cambridge and Bristol mooted as areas the brand is currently looking at. After that The Breakfast Club will turn its attention northward.

“We work well in red brick university towns and also locations where there are a lot of tourists. In normal times I’d say about 90% of the people that come and visit us at our original Soho site aren’t from the UK.  We tick that traditional English breakfast box.”

But the core plan is towns and cities, with The Breakfast Club planning to create small clusters as it grows. While there are some good deals to had, both Locke and Arana-Morton believe that there hasn’t been that much of a drop when it comes to the really prime sites.

“There are a fair few businesses that have come out of the pandemic in a really good position. And if a site really is great, it’s not just going to be us that wants it. Landlords are therefore holding their ground, why wouldn’t they?

“Luckily, we’re quite flexible, our original Soho site is only 900sq ft. But the sweet spot is about 3,000sq ft.”

Airports and other travel hubs are also likely to form part of The Breakfast Club’s growth strategy. “People like getting breakfast at airports and a lot of people like a drink with it too, so it’s a good fit for us,” he adds.

It would be a fitting manoeuvre for the company – one to which Arana-Morton inadvertently alluded in his 2020 LinkedIn post. “I need someone to help me fly this plane through 2021 and land it at ‘30 Caf Airport’” he wrote. With its co-pilot now installed and pandemic almost behind it, the business will no doubt be hoping for a strong tailwind. 

Related topics: Business Profile, Casual Dining

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