Location, location, location. The expression is clichéd, but it holds true for restaurants nonetheless.
The success or failure of a business can often depend on the region, the market and the street corner on which it operates, and nothing is more important than defining the local customer and determining:
• Will they spend on dining out?
• How much and how often?
• How far will they travel to eat out?
• What kind of cuisine plays in the market?
Nation’s Restaurant News’ West Coast bureau chief Lisa Jennings dives deep into the strategies behind restaurant growth plans and the hot markets attracting the attention of emerging brands. This is no laundry list of top markets for expansion based on real estate prices or census figures, but rather a look at a handful of consumer themes — and the markets that play them out — driving today’s growth.
The best cities for expansion have: Millennials, like in Washington; consumers looking for healthy living, as in Denver; office and development workers flocking to urban markets, like we see in Chicago; warm-weather climates, as in Phoenix; and families and professionals building fast-growing cities, like in Dallas.
Of course, there is no new restaurant growth without fresh franchise operators and new, local employees. It is the opening of new restaurants that drives the surge in restaurant industry employment — the latest numbers from the National Restaurant Association show growth of 3.1 percent this year through June, nearly double the 1.7-percent gain in total U.S. employment.
That new growth will be driven more and more by new leaders. I had the privilege late last month of joining the Multicultural Foodservice & Hospitality Alliance’s annual Operators’ Conference, and a few light bulbs went off for me while there. It wasn’t just about how much farther — still — the industry needs to go when it comes to building diverse teams. I was most struck by how powerful some of the industry’s new faces are, and will be, as brands leap into new markets and target new customers.
Karim Webb, a Buffalo Wild Wings franchisee, operates two units of the casual-dining brand in two of the toughest areas of Los Angeles. He spoke passionately about the myths that businesses can’t make money in urban and sometimes dangerous markets. He discussed the untapped potential of local, minority talent in new markets like Crenshaw — a neighborhood in Los Angeles that many passed over, he said, and where today he posts high-double-digit same-store sales results. He expressed optimism for the restaurant industry’s potential as an employer of choice. This leader, make no mistake, is ready for prime time.
“The community pays attention, and they choose to come to your business because of the culture you create,” he said. “From a competitive perspective, it’s hard to compete with a business that’s on fire in terms of the young people. It begins with dynamic leadership [and] a commitment to help people see their worth.”
While restaurants look to fulfill promises made to shareholders, investors or owners with new units in new markets, smart operators will also look to keep promises to the communities they serve. It is the people employed, the charities championed and the local economy supported that drives success — hot market or not.