Article

To stay or to grow? That was the question at Fast Casual Executive Summit

"Should I stay or should I grow?" is one question that many restaurant brands struggle with regarding expansion plans.

October 21, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

For British punk rocker, Mick Jones of The Clash, the question, "Should I stay or should I go?" was a dilemma that he sang about in the band's 1981 hit song, and plenty of restaurateurs are still asking themselves a similar question, "Should I stay or should I grow?" It's doubtful, however, that many are inspired to sing about the painful decision-making process, although it can be the source of the same kind of consternation that ol' Mick screamed about all those years ago.  Luckily, three operators with three very different approaches to growth were willing to discuss their strategies during a session at this year'sFast Casual Executive Summit in California.

The panelists included Mario Bauer of Vapiano Franchising International, which strongly focuses on global growth; Nekter Juice Bar's Steve Schulze, whose 6-year-old chain seeks to reinvent the juice space and Andrew Thengvall of Freddy's Frozen Custard & Steakburgers, which began franchising 12 years ago and is now 90-percent franchisee-operated. Below are a few questions they addressed. 

Q: How do you prioritize for next markets?
Schulze: We believe in organic growth. We start with three to five (locations) per city and then we work to own that market and grow that city. … To hone in on the first site in a market, you have to understand that market, then find the best local broker. … We have certain things we look for, too … because you can't just go with a location because a franchisee believes in it.
Thengvall: We started slow into franchising. In 2010, we had 30. Today, we have 220. … We have to have proof of concept in (each) market. We find we play better in some areas — Philadelphia and Florida tend to be good. But it should be a slower process.
Bauer:We are spread out across 31 countries with 181 restaurants … and we're driven by entrepreneurs who have a connection to that area. … But we still say we only sign with people we want to go on holiday with.

Q: What do you look at as far as sites go in a market?
Bauer: We are ambience-driven. We want high ceilings and a big space  -- 8,000 to 10,000 square feet, which is hard to find in an urban environment and then find a local partner. … From there, lunch is the easiest to build on so the area has to have strong lunch potential. 

Q: What are some of the biggest challenges in getting that next location open?
Bauer: Just getting it open on time and on budget, which is often complicated by deciding whether it's best to import, versus going with a local supplier. 
Schulze: Not to let architects and designers talk you into things. 

Q: What about technology and POS systems and online ordering. Are you incorporating that into growth plans?
Thengvall: I'd say first we look at tenant mix and traffic counts, but definitely also whether new technology (works) on that site. 
Schulze:We launched online ordering in January and the data you get from online ordering and mobile about your audience; we consider that in our new site selection process, too. 

Registration is now open for the 2017 Fast Casual Executive Summit in Nashville with an early-bird rate.

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.