It's full-speed ahead for Quaker Steak & Lube

The office walls of Quaker Steak & Lube Franchise Corp.'s CEO are decorated with hubcaps and car memorabilia, much like its restaurants' decor.

“I'm not a motor head or even a car guy,” said the aptly named John Longstreet. “But our offices have the same feel as our restaurants: a place that's different and fun.”

The company is different, too, from most of its casual-dining industry peers: Quaker Steak & Lube is expanding at a rapid clip.

Based in Sharon in Mercer County, the car-themed national restaurant chain has 63 locations. Eleven opened last year, and 12 will open this year, Longstreet said. That included a location that opened inside Pittsburgh International Airport on May 15 and planned openings in State College in October and in Mechanicsburg in November.

“We opened more restaurants last year than any year before that,” Longstreet said.

The company, founded in 1974 in an abandoned gasoline station in Sharon, had fewer than 10 restaurants as recently as 2000. It is owned by 44 shareholders who bought into a private offering 10 years ago when the company started franchising.

The company is famous for its wings, and its menu includes steaks, sandwiches, burgers and other standard American fare.

Industry experts think Quaker Steak & Lube is wise to expand these days to capitalize on the improving economy that is encouraging consumers to dine out.

“Now is the time to put your foot down and grow, and Quaker Steak & Lube is doing a good job of it,” said Ron Sofranko, principal at Sofranko Advisory Group, a hospitality industry consulting and investing firm in Wexford.

“Consumer confidence is better, and the stock market is doing better,” said Sofranko, a nearly 30-year restaurant industry veteran. “There's pent-up demand for new concepts. And a niche player, like Quaker Steak, can do very well.”

Quaker Steak has prospered despite the recession and tough economy in recent years that claimed many in the casual-dining industry. Its fortunes are underscored by its aggressive expansion and revenue growth — up about 14 percent to $144 million last year.

Others haven't been so fortunate.

The Bennigan's chain of pub-themed restaurants, for example, closed its 150 company-owned locations when the parent company went bankrupt in late 2008. It restructured in 2010 but has only about 30 sites now.

Damon's International Inc., the ribs chain franchisor, declared bankruptcy in late 2009 when it had 53 locations and pared back since then. The last of the seven Damon's restaurants in the Pittsburgh region closed in 2012.

According to research firm NPD Group, the average American adult dined out 82 times in the year ended February 2008. That fell to 74 times in the year ended this past February.

“It's the economics of eating out,” said Harry Balzer, chief industry analyst for NPD in Chicago. “Nothing will change your eating habits faster than higher prices.”

Casual dining restaurants such as Quaker Steak & Lube learned that lesson last year with chicken wings. The cost of the once-cheap fun food soared from as low as $1.10 a pound in 2011 to as high as $2 a pound last year, which made wings higher-priced even than chicken breast meat, Longstreet said. “Wing sellers like us had to raise prices,” said the CEO.

A bucket of 10 wings that Quaker Steak & Lube sold for $9.99 in 2011 went for $11.59 last year. But the price increase ruffled patrons, and they clipped their wings purchasing. So, Quaker Steak ate some profit margin and knocked the bucket price back to $9.99.

“It's what we needed to do to keep our ‘Lubies' happy,” said Longstreet, referring to Quaker Steak & Lube's frequent customers.

Patrons are drawn to more than the chain's wings, which have won several regional contests over the years. Restaurant interiors are stuffed with classic-car and race-car memorabilia — including entire vehicles.

Company buyers peruse the Internet for interesting cars they can buy, gut and hang from restaurant ceilings. In addition, Longstreet said “Lubies” often lend their prized cars to the restaurants whose hydraulic lifts position the cars overhead.

Quaker Steak & Lube restaurant exteriors are neon-lit and situated at high-visibility locations, often near interstate highways.

“You can almost follow us on interstates across the country,” from Brick, N.J., to Denver, said Longstreet, a Sharon native.

Longstreet, whose first job was at a local A&W Restaurant at 16, took the top job at Quaker Steak & Lube in 2010 after years developing restaurant concepts in Dallas for the hotel industry.

Last year, he mounted what the company called its “Texas Takeover” — opening three restaurants to date in towns outside Dallas, one of the nation's highest-growth markets. Two more Quaker Steak & Lubes are planned in the next year or so outside Houston, another growth market.

Quaker Steak & Lube's ties to motoring, lubricants and Pennsylvania's oil heritage runs deeper than outsiders realize, Longstreet said. When the original restaurant's founders in the 1970s were pondering names for their venture, one oil-linked wordplay they floated was “Gulp.”

Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at tolson@tribweb.com.