Growth | January 2012 | By Daniel P. Smith

The Growth 40

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Market #3:

Portland, Oregon

Seattle isn’t the Pacific Northwest’s only gem. It shares the stage—and promising development potential—with Portland.

Portland ranked top in average transaction size with 7 percent growth and claimed the second spot in spending growth. Population in the Portland metro area, which also includes Vancouver, Washington, has grown 15 percent in the last decade. Total population is now more than 2.2 million.

John Hamilton of the Oregon Restaurant & Lodging Association calls Portland “a culinary destination.” The Rose City is home to more than 5,000 restaurants, many of them mom and pop operations supported by a vibrant foodie crowd.

“From new upstart burger concepts to upscale sandwich shops, artisan ice cream, and Northwest-inspired deli concepts, the area is rich with culinary delights, yet Portland’s appetite for more restaurants is never satisfied,” Hamilton says.

The Portland-area restaurant and hospitality industry employs 180,000 people, making it the single largest private-sector employer in Oregon.

“Restaurateurs looking to grow their brand in Portland will find a culture that embraces food and a workforce ready to show that hospitality means business in Oregon,” Hamilton says.

Much like Seattle, Portland is also experiencing strong Gen Y growth. The area’s youthful, hip culture lends itself to culinary-driven brands and growing, entrepreneurial concepts, such as Nestlé Toll House Café.

“We’ll have an aggressive plan for growth at the start of 2012,” Milburn says of his brand’s Portland-area development objectives.

Market #4:

Riverside, California

“We thought Riverside was our little secret,” CiCi’s Evans says.

CiCi’s opened its first outlet in the Riverside market in early 2011 and has added two more since. With the area’s rebounding economy and wealth of young families, CiCi’s wants to add another five to seven restaurants within the next five years.

Often taking a backseat to its flashier California brethren like Los Angeles, San Francisco, and San Diego, the Riverside metropolitan area has plenty cooking.

“People know L.A. and Orange County, and those are key markets for a lot of folks, but Riverside’s a sweet spot for CiCi’s … and a metro area we pegged off the bat,” Evans says.

Located immediately east of L.A., metro Riverside added nearly 1 million residents in the last decade, an influx that pushed its population to more than 4.2 million.

“As a growing brand, growing areas represent new opportunities … and that’s the story in Riverside,” Popeyes’ Vojnovic says.

The area features a thriving arts scene, as well as the University of California at Riverside, a 20,000-student college that ensures Riverside’s youthful vibe and strong ties to Gen Y.

Recognizing Riverside’s potential, Popeyes has heightened its development attention to the area. The company plans to bring another 24 restaurants to the market on top of the nine already in place.

“We feel there’s unmet demand [in the Riverside area], and that it can support revenues above our hurdle,” Vojnovic says. “We see it as one of our biggest opportunities.”

Market #5:

Austin, Texas

Austin, much like top five counterparts Seattle and Portland, is often called the “next frontier.”

In population growth over the last decade, Austin trails only Las Vegas and Raleigh, North Carolina. The Austin area added more than 466,000 residents from 2000 to 2010, a 37 percent increase, to propel its overall population tally to 1.7 million. Employment, meanwhile, jumped nearly 14 percent.

Austin also claims the fourth-best average transaction size according to American Express Business Insights’ data. Its healthy consumer economy is driven by a number of factors, including a strong Gen Y presence and corporate growth. Home to the 51,000-student University of Texas, Austin has a lively landscape that includes a robust entrepreneurial and start-up culture bolstered by an increasing corporate base.

“The Austin region has a strong ecosystem to support the growth of a range of industry sectors, including quick-service brands,” says David Porter, senior vice president of economic development for the Austin Chamber of Commerce. “Our success in attracting jobs to the region supports the growth of industry sectors that serve a growing employee base.”

With a history of proactive development rather than awaiting calls from prospective franchisees, Popeyes has turned its eye to Austin. The chicken concept features a dozen restaurants in Austin. Within two years, an additional four units will be in place.

“Austin’s a dynamic, rapidly growing market, and it characterizes the growth going on throughout Texas,” Vojnovic says.

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