Newk’s Eatery, a 10-year-old fast-casual brand started by the founders of McAlister’s Deli, is on track to more than double in size in the next few years. With 79 locations as of April 2015, the company plans to expand to 225 restaurants by 2018, with at least 100 established by the end of this year.
“We want to get there with good sites and good franchisees. We have great franchisees currently in our system but are looking to to add to our future pipeline with great new franchisees that will roll out new stores in the years to come,” says Chris Cheek, Chief Development Officer at Newk’s. “Franchising is more like a marriage than a transaction. We want to make sure that it’s a good fit long-term.”
Newk’s is in the second generation of fast-casual restaurants that focus on fresh, high-quality ingredients, with all menu items prepared in-house. “We are just one level more complex on the operations side. That’s one of our differentiators,” Cheek says. “We make our salad dressings in-house; we slice all of our meats and veggies; we source our produce locally. We are more culinary-driven, more scratch-made. We have open kitchens so you see exactly what we’re doing. We bring your order to your table and we bus it when you leave.”
To fuel its aggressive growth, the company is looking for new franchisees who are already multi-unit franchisees with other brands in a different competitive set, and who have a track record of success. It is asking new franchisees to commit to build at least three units in their market, which should be in the southeastern United States. Franchisees must have at least $1,500,000 in liquid assets—the total investment for a single unit is estimated to be between $795,000 and $1,130,000.
A typical Newk’s location, based in an area with a lot of daytime foot traffic, will get 60 percent of its sales at lunch, 30 percent at dinner, and 10 percent through catering, often during the lunch day part. “We don’t serve breakfast, but we’re able to generate sales that take our competitors three dayparts to do,” Cheek says.
After signing a franchise agreement, it usually takes 10 to 12 months to open the first store. “Buildout takes 60 to 75 days, but finding and evaluating the right site, negotiating the lease with a landlord, submitting plans—all the things in front take longer than actually building a Newk’s,” says Cheek. “We like to say, ‘a bad location is the one mistake you can’t fix,’ especially the first store in a market.”
A training team is sent to a new restaurant five days before the opening, and stays five days afterward. Along the way, Newk’s also provides support with site selection, market analysis, and construction management. Franchise business consultants and field marketing managers are also assigned to each location by region, ensuring franchisee receive the help they need to succeed. “You’ve got two layers of support once you’re open, one helping you inside your four walls, one helping you drive traffic outside,” says Cheek.
For more information about franchising opportunities with Newk's Eatery, visit www.newks.com
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