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    The Growth 40

  • In the second-annual Growth 40 report, QSR ranks the markets best poised for quick-service restaurant growth.

    Market #1:

    Orlando, Florida

    Orlando claimed first honors in this year’s Growth 40 thanks to top-six rankings in population growth, spending, and average transaction size.

    With the addition of nearly 500,000 residents in the last 10 years, Orlando’s metro population now tops 2.1 million. Some estimates, meanwhile, have the Orlando metro area, which includes Kissimmee and Sanford, growing another 10 percent within the next five years.

    In addition to its residential base, Orlando has the added benefit of being a destination market with heavy out-of-home dining needs. Between Disney World, Universal Studios, Sea World, and a thriving convention business, Orlando attracts more than 50 million visitors each year. Toss in one of the nation’s largest universities, the 56,000-student University of Central Florida, and it’s easy to see Orlando’s robust potential.

    Carol Dover, president and CEO of the Florida Restaurant and Lodging Association, calls Orlando “electric” and cites the area’s family friendly attractions as a driver for quick-service growth.

    “With Orlando’s attractions, it brings large numbers of families who are not exactly prime candidates for white tablecloth restaurants. That opens the doors for quick serves to perform well,” Dover says, adding that most quick serves can often beat the attractions’ dining options on price.

    Furthermore, Burger 21’s Stone says Orlando’s tourist base makes it a great test market for emerging concepts, as it embraces a cross section of the American population.

    “Many of our Melting Pot guests across the country are familiar with the restaurant because of its Orlando presence, and we suspect a similar phenomenon will take place as we open Burger 21 stores in Orlando,” Stone says.

    Wingstop recently inked a four-store Orlando deal with an operational team led by NBA player Drew Gooden. Wingstop’s vice president of franchise sales, Dave Vernon, says the Orlando market can easily hold more than 25 stores in the next five years.

    “It’s a dense area with a growing, young population and comparatively affordable real estate prices,” Vernon says.

    Although Popeyes Louisiana Kitchen has not added to its 21 Orlando restaurants since 1995, that will soon change. Popeyes vice president of development Greg Vojnovic says the Atlanta-based brand has plans to build an additional 18 units in the coming years.

    “Orlando is a profitable and busy market for us already, but it’s also one of the most rapidly growing markets in the United States and has fundamental strengths for the long term,” Vojnovic says.

    Market #2:

    Seattle, Washington

    There’s plenty to rave about in the Emerald City, where a 13 percent rise in population over the last decade has pushed the area’s overall population near 3.5 million.

    Seattle topped the American Express Business Insights’ spending list with 34 percent growth, while claiming runner-up spots in transaction count and average transaction size. It’s a sign that consumer spending remains strong in the Puget Sound region.

    Niessen points to the area’s significant rise in Gen X and Gen Y consumers as a particularly positive note and a characteristic favoring quick-service development. Nearly 55 percent of the Seattle area’s residents are younger than 40.

    Younger generations are growing in economic importance largely because they have time and earnings potential on their side. These are realities that bode well for quick serves entrenched in youthful areas, where an open-mindedness to try new foods and products prevails.

    “With more optimism about the future and therefore more interest in continuing spending versus economizing, [Gen Y is] expressing itself in several ways, one of which is more rapid spending in quick serves,” Niessen says.

    The Seattle metro area also benefits from an educated and available workforce and a stable economy bolstered by large-scale employers such as Microsoft, Boeing, and the University of Washington.

    Wingstop recently signed an 11-store agreement with its Los Angeles franchisee to bring the emerging wings brand to Seattle. Vernon says Wingstop, with more than 500 stores across 30 states, has long had eyes for Seattle given its expansion, economy, and lack of direct competition.

    Another emerging concept, Nestlé Toll House Café, has targeted Seattle as one of its top growth priorities. Seattle’s existing coffeehouse culture combined with Nestle’s success in nearby Vancouver, Canada, make Seattle prime for growth.

    “With its size, youth, and stable economy, we believe Seattle can support multiple stores,” Nestle Café vice president of franchise development Ted Milburn says.

    Washington Restaurant Association president and CEO Anthony Anton says Seattle’s suburbs, where more than 50 percent of metro area residents reside, is best positioned for quick-service development.

    “The things occurring inside the city, such as construction projects, fast-transit expansion, and leadership activities, are creating more opportunities outside of the city,” Anton says.