Most articles in QSR and other trade pubs cover growth stories of brands that are expanding in large and midsized metros. It makes sense since most people live and work there. Instead, this story addresses a fast-casual model that focuses on growing in small metros.

Nearly all The Works Cafés are located in small metro markets where we generate industry-leading AUVs and profits. Throughout our company’s 35-year history, we have learned how to leverage the numerous advantages and overcome most of the daunting challenges that come with operating in small cities in the Northeast.

We are not the only chain that sees opportunities in these markets. Some large fast casuals like Chipotle have recently discovered the benefits of locating stores in small metros, yet struggle to overcome the challenges. Others, like Panera, have long leveraged the advantages, but many of the local Paneras we compete with, are still struggling with operational and food-quality challenges.

Here are some of the strategies that have brought The Works Café eateries success in small metros.

Location, Location, Location

First, we locate most of our stores in the heart of communities with vibrant downtowns. Most people who live in or near these metro hubs are engaged with their community’s center and often shop or work there. 

For our “community-minded cafes,” downtowns offer six key advantages: 

• Very low marketing costs
• Downtown rents are usually much lower compared to the increasingly expensive prime locations in major metros.
• Since our stores are typically located in the geographic center of these metros, they are ideal locations for our substantial digital delivery and take out businesses. Plus, customers and delivery drivers rarely face traffic issues. 
• These Locations offer the potential for strong morning, mid-day and early evening day parts, year-round.
• Our typical downtown locations have heavy foot traffic which results in attracting walk-in customers all day.
• We have relatively little direct competition due to our unique and varied menu. From an ROI perspective, this could be the most important advantage for us.

Main disadvantages—and they are major —include: 

• Not having opportunities for drive-thrus 
• Needing more customized build-outs in often older buildings
• Various ops challenges, especially recruiting quality DMs, GMs, and ADMs

However, in the last 10 years, we have turned these last two disadvantages into strong competitive advantages, and this has greatly contributed to our success.

Community, Community, Community

Strong, tightly knit communities tend to be much more common in small metros than in larger cities, so we begin by focusing on becoming part of each individual community the day we sign the lease. While most chains rely on rigid, cookie-cutter store designs and branding, we have developed the creative expertise to design each store to match its specific community. 

Customized storefronts give our company a distinctly local branding that is very much appreciated by those who live in or near these metros. In addition, our substantial tourist business also benefits from this community-focused approach because visitors often prefer to sample local cuisine rather than settle for standard chain food.

Other ways we assimilate into communities include paying our employees to volunteer for local non-profit organizations, sponsoring “good works” projects to help people in need and donating food to local non-profits. 

Our Menu Selection is Designed for Small Metros

Large cities offer a wide variety of niche and ethnic fast casuals that may not have enough variety nor the right type of foods to thrive in small metros.

Our menu, which continues to feature the fresh-baked, all day, New York style bagels we launched with, has expanded well beyond this specialty. Over time, we have developed and perfected a wide variety of healthy foods like organic whole grain bowls and relatively healthy comfort foods like Vermont cheddar mac and cheese that appeal to customers of all ages.

Moreover, our eat in, take out and catering businesses are thriving partly because we offer a variety of foods that have something for everyone in families and businesses. Most importantly, we have developed this variety of offerings very carefully over the years to limit SKUs, as well as line and prep complexity, without slowing throughput.

Very Low Marketing Costs 

As mentioned, our central locations expose us to most residents and workers in town and the surrounding communities in the metro area. From a marketing perspective, this convenience and exposure are very effective.

The large free food sampling parties we host are our largest grand opening marketing expense. At these events, we invite large numbers of community leaders and influencers to enjoy half-portions of most items on our menu. In no time, word spreads throughout the metro area with praise for our high-quality eatery, both by word of mouth and social media. Thereafter, marketing costs remain very low except at our one location near Albany, a major metro market.

On going marketing costs are primarily basic social media interactions, in-store branding and promo signs, our expanding loyalty program and Chamber of Commerce-type functions.

Environmental Sustainability

People who live in small metro communities tend to appreciate businesses that are serious about environmental sustainability—especially because store locations are close to nature. Many residents in these communities chose to live there to avoid the numerous environmental hazards that are common to large metros. In fact, some of our best customers are “refugees” from large metros who live in small towns to escape air, water and noise pollution (and excessive traffic).

Regarding sustainability, The Works Café is well positioned and fortunate that its founder and CEO has been a pioneer in composting, recycling and local sourcing for decades. Many other chains are only beginning to take these impactful issues seriously.

This strong branding gives our stores a competitive edge both with customer loyalty and recruiting/engaging employees. Environmental sustainability is a very important issue among the Gen Z workers who are the majority of our workforce.

Major HR and Operations Challenges are Becoming Competitive Opportunities for Us

Staffing these locations with well trained, high quality, engaged workers and managers in towns that are far away from each other creates complex challenges we’ve been working on overcoming since we opened our second eatery 33 years ago. Most of our locations are about 90 minutes apart. This makes it difficult to transfer workers from one location to another and build a management bench. 

We do not have all the solutions, but we are proud of the progress we have made, especially in the last ten years. For us, overcoming the distance challenge has become a powerful competitive advantage over most chains in our markets. For example, we have created a mobile “pro team” consisting of the best, most experienced staff from all our locations that can be pulled together at a moment’s notice to help open a new café or invigorate an existing one.

In contrast, a Chipotle in Maine was closed last year by the company because its workers went on strike. Employees weren’t primarily seeking higher wages; they wanted a manager who had the talent to hire enough workers because the under-staffed employees were being overworked as they struggled to deliver “food with integrity”. Competing with Panera in the small metros used to be difficult for us, but not anymore. We attribute this to the HR-related ops problems Panera is experiencing. Today, we look forward to competing with Panera as we explore new markets to grow our chain.