Real estate strategy plays a critical role in the increasingly competitive restaurant industry, where success is often dictated by location and customer experience. For restaurant operators, leveraging real estate strategy effectively to meet your brand growth and unit sales goals is pivotal and can be the difference between thriving and merely surviving. Here’s how restaurant developers and operators can harness the power of real estate to fuel growth.
Location, Location, Location
Site selection is critical in setting your restaurant up for success. Choosing the right location can drive customer traffic, increase brand visibility, and enhance your ability to fuel future growth. When selecting a location, you should consider factors such as:
- Customer Insights—the area’s population should align with your brand and target market
- Traffic Patterns—high traffic areas, such as shopping districts or nearby offices, can drive spontaneous visits from potential customers
- Site Accessibility—easy in and out, ample parking, nearby public transportation, a step-free entrance or wheelchair ramp can increase convenience for customers
- Anchors and Co-Tenants—market analysis of consumer behavior in the area is key; being near complementary businesses can be beneficial, as can being nearby restaurants that serve different fare but attract the same customer lifestyle habits
When selecting a site, I always say to exercise discipline by always being in active search mode, knowing your sweet spot, and grinding out the details and data on each site. The market is competitive, and inventory is limited, but it’s important to ensure that the site you’re considering fits your brand; don’t try to fit it into a site. Just because something is cheaper or seemingly ready to go, doesn’t mean it’s the right fit for your restaurant and you’ll likely be setting yourself up for lower performance right from the start. If you’re part of a franchise system, many franchisors offer site selection support and have resources and a dedicated team to help you choose the best site for your restaurant.
Consistency is Key
Expanding on the topic of site selection, you must also be resourceful in today’s restaurant real estate landscape—continuously being on the lookout for new opportunities or ones coming soon. In today’s current environment, more inventory and second-generation spaces are coming back into the market because of recent bankruptcies, locations closing, and companies restructuring. Inventory is always churning and often you have to seize an opportunity quickly.
Relationship-building is a key component of securing an ideal site. Cultivating a network of developers, brokers, and landlords in your target market that have a pulse on where the opportunities are is how many deals get done. Some of the best opportunities never hit the street because they’re relationship based. Developers and landlords are motivated by lease signings so being “in” with the right people at the right time to strike quickly is imperative.
This is another advantage to being part of a franchise system because most franchisors have these relationships in place already, alleviating the demand placed on you, the operator. At The Great Greek, we have a complete construction and real estate team as part of our affiliation with United Franchise Group who are aligned with our franchise owners’ goals and needs and have established relationships that allow us to be the first to learn of prime opportunities in each market.
Embrace Tech & Trends
Because real estate can be extremely limited in certain markets, adapting to technological advancements and industry trends can enhance customer experience and operational efficiency.
At The Great Greek, our sweet spot is our 1,800-square-foot restaurant located in a dynamic retail area, but we developed other formats to leverage opportunities in the market to bring our incredible food to customers in areas that have been difficult to reach. We’ve deployed a digital kitchen model that has allowed our brand to expand into high-density urban and metropolitan markets where the barrier to entry in commercial real estate is higher. Our digital kitchens allow us to reach more customers while giving our franchise owners opportunities to more cost-effectively seize opportunities in prime areas while capturing more market share. We’ll also be opening our first special venue location this year.
Other trends that could be leveraged include pop-up restaurants to test new markets/concepts without long-term commitments as well as automated ordering systems such as self-order kiosks and mobile ordering to help streamline operations and reduce wait times in smaller spaces.
Strategic Expansion
Effective real estate strategies are crucial for the growth and success of restaurant operators and can set the foundation for long-term growth. In a dynamic industry, leveraging real estate can provide a significant competitive edge and drive sustained profitability.
Expansion strategies might include franchising which is a proven model in helping scale and grow businesses; acquisitions of existing restaurants which can provide an instant market presence and customer base without having to develop a concept from scratch; partnerships with nearby local businesses, hotels, or event venues; and more.
Careful planning is essential for successful expansion. When considering new locations, conduct thorough market research and feasibility studies. This applies to both opening a new location of the same concept or expanding your portfolio with a new concept.
Bob Andersen is the president of The Great Greek Mediterranean Grill, an award-winning restaurant concept and a leading franchise within the Greek, Mediterranean, and Middle Eastern fast-casual restaurant industry. The Great Greek has 55-plus locations nationwide and is forging its own path in the booming Mediterranean category by offering a ‘fine’ fast casual experience.
