Worth the move
After calling one town home for 79 years, operators may find it a hard sell to uproot the entire brand and move more than 120 miles away. But that’s exactly what burger brand Krystal did when it made the transition from Chattanooga, Tennessee, to Atlanta earlier this year. Doug Pendergast, the brand’s president and CEO, says the decision to move was based on four factors: logistics, access to partners and suppliers, economics, and access to talent.
“We call our corporate office the ‘Restaurant Support Center,’ and as we think about truly fulfilling that mission, it’s critical that we can quickly and cost-effectively access our markets,” Pendergast says. “We have 60 restaurants in Atlanta and only 20 restaurants in Chattanooga, and all of our markets can be reached with direct flights from Atlanta,” thanks to the busiest international airport in the world, Hartsfield-Jackson Atlanta International Airport.
Not only do quick-serve companies like Chick-fil-A and Focus Brands abound in The Big Peach, but its growing population means the talent pool is deep. Atlanta’s metro-area population grew by 20 percent, to 4.1 million, between 2000 and 2010, and it’s estimated to expand by another 20 percent this decade.
Population: 5.38 million
Size: 8,480 square miles
Home To: Chick-fil-A, Tin Drum Asiacafé, Moe’s Southwest Grill, Wing Zone
Source: U.S. Census Bureau, Atlanta Convention & Visitors Bureau
“Because there are so many restaurant companies, [quick serves] in particular, that are either headquartered in Atlanta or have large regional offices in Atlanta, that creates a source of talent that, as we build and grow the company, we can draw from,” Pendergast says. He adds that Krystal is now able to connect more easily with some of its biggest partners and suppliers in the area, Coca-Cola being one of them.
But Krystal isn’t the only quick serve to pack up its stuff and head down South. Arby’s made the move in 2005 after acquiring its largest franchisee, Atlanta-based RTM. Chief operations officer George Condos writes in an e-mail to QSR that the city’s infrastructure is some of the best in the world, which comes in handy when supporting 140 restaurants in the area and throughout the state of Georgia.
Atlanta is known for having a relatively low cost of living, Condos says, as well as a favorable economic landscape. The Georgia Quality Jobs Credit, for example, offers tax credits to companies headquartered in the state that pay employees above the average county wage in which the company is based. “The credits are first used to offset the company’s Georgia income tax liability, but any unused credit can then be used against the company’s payroll tax liability,” he says.
Pendergast says Krystal was able to secure a corporate-office location with lower rent than it was paying in Chattanooga—good news for everyone down the line. “Since we sell 70-cent hamburgers for a living, every penny we’re not spending in rent means we can pass on lower prices to our customers,” he says.
To leverage its home base, Krystal recently formed a sponsorship with the Atlanta Braves. “There’s some great promotions that we’re doing that help drive business in our restaurants, but that also give us access to tickets,” Pendergast says. “We provide those for folks in the Restaurant Support Center, folks who work and support our Atlanta-based restaurants. So there’s amenities and access to events that were just not available in Chattanooga.”
Though traffic can be a headache, Condos says, Atlanta’s culture makes the city a perfect fit for the brand. It also boasts high-quality education, a good housing market, and a wealth of events and activities.
“While Atlanta is a large metropolitan city, it’s also rich in history and culture. The people that live here are business savvy and hard working, but there’s also a charm and genuineness to them,” he says.
Pendergast says the city’s Southern history and tradition—combined with its modern feel and a clear, forward-looking vision—resembles the way Krystal wants to be seen moving into the future. “That’s part of what we want to do with the Krystal brand—to take advantage of this great 80-year heritage, but also keep an eye on moving forward with innovation on the menu to appeal to a whole new generation of customers,” he says. “The Krystal brand is all about family, friends, and Southern goodness, and Atlanta, I think, is a combination of all the best of the old South.”
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