The new prototype was revealed in November after almost two years of development. The first Captain D’s Express will be operated by existing multi-unit franchisee, Anil Dossani. The store is expected to open Q2 in Atlanta. The franchisee will follow that with two more Express models in the same market in the coming years.
“It substantially affords us the opportunity to situate ourselves on a smaller piece of real estate, reduce our construction costs, substantially reduce the labor that is required, and substantially reduce the food costs with a limited menu,” Greifeld says.
“This economic model will produce some industry-leading cash-on-cash returns,” he continues. “We have our first one that will open up in Georgia in a matter of two months. I think from there, when existing and new franchisees see the returns from this concept, it’s going to be a big growth driver for Captain D’s.”
The Express unit expands upon Captain D’s flexible selection of store designs. The chain has options for 62-, 44-, and 22-seated locations based on demographics and demand in the market. The chain is also poised to capitalize on conversion opportunities as closures continue to pile up nationwide.
Greifeld explains these multiple offers are available because Captain D’s knows it can operate profitably in different types of towns, from rural America to dense, inner city markets. Additionally, history shows wide acceptance of the brand from a variety of income levels, ethnicities, and backgrounds.
“So armed with that, it affords us the opportunity to go to many different types of towns where maybe you don't need a lot of seating or maybe only need 22 seats or 44 seats and that 60 seats or 80 seats, or maybe only need a drive thru-only channel,” Greifeld says. “So based on who we are as a company, who we are as a brand, and the needs of our guests, we offer franchisees a variety of different development opportunities, and it's received very, very well. On a prospective basis, we certainly see ourselves building more 22 seaters or 40-seat restaurants.”
As franchises expand, so will the company portfolio, Greifeld says. Currently, Captain D’s is about 55 percent company-owned and 45 percent franchised. The CEO estimates that this year’s openings are about 90 percent franchise and 10 percent corporate.
Greifeld says there’s nothing wrong with the asset-light model, and that he could’ve done it in the past. He even indicated it may be deployed in the future. But he hasn’t chosen that path yet because of his belief in the operations team. The CEO also notes the method completely aligns the company with franchisees in terms of restaurant profitability.
“So if we are going to do investment spending of a dollar, that dollar is going to be spent at a company restaurant and franchise restaurant, as well,” Greifeld says. “… I think our franchisees greatly appreciate that. It makes us operate our business being highly, highly sensitive to not just sales and sales volume, but also the profitability for the restaurant based on those sales volumes. It serves our franchisees very well. Franchisees that have joined us from other franchise systems are highly appreciative of that.”
Greifeld isn’t certain as to whether the chain will venture into trends such as ghost kitchens or virtual brands. However, the Captain D’s leader is confident about the brand being poised to take advantage of a post-COVID landscape that will see fewer restaurants and consumers moving away from delivery and grocery consumption.
If the whole world was vaccinated tomorrow and everyone returned to their pre-pandemic dining habits, Greifeld feels Captain D’s would be well-positioned to maintain and grow its market share.
“I think there's more opportunities out there to capture more guests that maybe stayed at home as well as new trial that we garnered during this pandemic,” Greifeld says.