Growth | October 2013 | By Mary Avant

Home Sweet Home Office

Forget New York and Los Angeles. Quick-serve operators have all the resources they need in these four mid-American cities.

U.S. cities like Dallas provide fast food operators with resources to grow.
Dallas is one of four U.S. cities that have proved to be popular quick-serve headquarters. thinkstock
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When it comes to business, everyone wants to be in the middle of the action, which is why quick-serve brands like Shake Shack, Fatburger, and McDonald's establish their corporate headquarters in big cities like New York, Los Angeles, and Chicago, respectively.

But not every brand can—or wants to—deal with the hustle and bustle that these major metros bring. Instead, some quick serves are finding that other untapped cities across the U.S. offer a positive environment for headquarters, whether they've been there all along, just got their start, or recently made the move to the city.

Over the years, four such cities—Dallas, Denver, Atlanta, and Columbus, Ohio—have become de facto hubs for the quick-service industry by being home to several small and major brands alike, and more chains are discovering the riches these well-kept secrets have to offer, from local resources and talent pools to favorable tax climates.

 

Dallas

A central city

Though a quick-serve brand may not always have control over where it is founded, it can determine whether or not it makes business sense to relocate, keeping in mind that the more central the headquarters is to the system’s units, the better.

“You have to look at being able to get back and forth in the corporate office and directors being able to check on the units and keep the core value of the units in line,” says Andre Neyrey, president of Manhattan Restaurant Consultants.

Population: 6.53 million

Size: 871 square miles

Home To: Pizza Inn; Pizza Patrón; Mooyah Burgers, Fries, & Shakes; Dickey’s Barbecue Pit

Fun Facts:

  • The Dallas metro area is home to 23 of the 400 richest Americans
  • Dallas was ranked No. 3 on Forbes 2012 list of best places for women to launch businesses
  • Nearly 30 million Americans visit the city every year

Source: U.S. Census Bureau, Dallas Convention & Visitors Bureau

That’s why Red Mango, which has frozen-yogurt stores across the country, relocated to Dallas from its West Coast home in 2009. The Texas city’s central location means the Red Mango team can easily travel across the country to visit restaurants, vet potential franchisees, and conduct meetings. “You can get to Seattle in three hours, you can get to New York in three hours, and it’s something you can’t do when you’re on the coast,” says Dan Kim, the brand’s founder and chief concept officer.

It also doesn’t hurt that the Dallas–Fort Worth airport is one of the largest in the country, making it simple to get in and out of the city both domestically and internationally. Kim says the travel-friendly environment has helped Red Mango see the success it’s experienced.

“We’re at about 230 locations, and it didn’t really start to happen until we started to base things out of Dallas,” he says. “The ability to just meet with people and visit locations a lot faster than being on the coast … has been key to our ability to grow and support our stores.”

In Central Time, it’s also easy for chains in Dallas to communicate with franchisees and other businesses across the country. “We can deal with folks on both coasts relatively easily without materially extending or shortening our business day one way or the other,” says Blake Bernet, senior vice president of development for Dallas-based Corner Bakery Café, which got its start in Chicago in 1991 and moved to Texas in 2000.

Bernet says the abundance of quick-service and fast-casual players headquartered in Dallas—including Pie Five Pizza, Pizza Inn, and Dickey’s Barbecue Pit—means recruiting experienced workers to both the corporate team and the local units is a cinch.

“It’s relatively expensive to move folks, so to have the home-office talent, culinary talent, accounting and finance, development, real-estate construction, and design [talent] … nearby is important,” he says.

Not only is Dallas a restaurant hotspot, but it’s also home to 25 Fortune 500 companies and 268 corporate headquarters. With a population of 6.5 million people (as of 2011), the Dallas metro area has 2,015 small businesses per 100,000 people. It’s also the sixth-largest economy in the U.S., and the city’s unemployment rate sits below the national average.

When necessary, Kim says, Dallas’s stable real estate, relatively low cost of living, strong health-care system, and high-profile sports teams make it an easy sell when seducing outside employees to the corporate office. Add to this perks like no personal state income tax, and Kim says Dallas has been “a nice sell for us when we’re recruiting from other high-cost-of-living areas where there are really good restaurants.”

Also on Dallas’s side: The city is progressive and forward-thinking, Kim says, and the balance between urban and suburban communities helps with both opening restaurants and recruiting employees. And for Red Mango and brands like it, the population’s growing interest in healthy eating and living means the health-conscious restaurant segment is set to prosper in the future.