Technomic: Multiunit concept owners have best of both worlds

Aug. 1, 2011

Multiconcept operators, those companies that own and operate at least three unique restaurant concepts with annual sales of $10 million or more, find themselves in a best-of-both-worlds scenario. These companies are able to take advantage of the economies of scale and efficiencies characteristic of chain restaurants, while also enjoying the local patronage and menu flexibility of independent restaurant operators.

Such operators run the gamut from industry giants like Lettuce Entertain You, Levy Restaurants and Wolfgang Puck Companies, to smaller operations such as Kalamazoo's Millennium Restaurant Group (six concepts), Cincinnati's Tavern Restaurant Group (five concepts and 15 units), and Denver's Sage Restaurant Group (nine concepts).

In order to help operators and suppliers better understand this vital restaurant segment, Technomic introduced “The Top 200 Leading Multiconcept Operators Restaurant Report,” which includes rankings and detailed profiles for 200 of the nation's leading multi-concept operators. The report is based on Technomic's ongoing tracking of chain and independent restaurant operators, as well as interviews with operators. In addition, the report draws from a number of recent Technomic studies dealing with the foodservice industry's composition and trends, as well as secondary research conducted through Technomic's Knowledge Center, one of the most comprehensive foodservice libraries in the world.

While the companies may not command market share comparable to the country's largest chains, they do occupy a potentially important niche for foodservice suppliers and distributors, with 116 of the top 200 multi-concept operators (MCOs) having annual sales of at least $30 million. Overall, the top 200 MCO companies represent 1,448 concepts, 2,367 units and over $5 billion in annual sales.

"There are a number of trends contributing to multiconcept operators' current success," said Technomic director Mary Chapman. "The Food Network has given a number of chefs celebrity status, and that has provided an eager customer base for their concepts. These concepts are more easily able to offer seasonal menus and focus on local relationships that make the experience feel unique to diners. Many customers may not even be aware of the relationships between concepts and think of these restaurants in the same way they view other local independent restaurants in their area."

Chapman also points out that these companies can quickly rebrand units, utilize unused space within a particular concept to introduce a new brand, or easily change the allocation of resources between brands in order to stay ahead of the curve when it comes to industry trends.

Click here to read more on restaurant industry trends and statistics.

Topics: Business Strategy and Profitability , Franchising & Growth , Human Resources , Trends / Statistics

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