Brand Finance’s annual report on the most valuable and strongest restaurant brands once again, for the seventh year in a row, named Starbucks the most valuable restaurant brand. (Move over, McDonald’s). In 2023, Starbucks’ brand value rose 17%, topping the charts at $53.4 billion. Comparatively, McDonald’s brand value diminished by 7%, resulting in $36.9 billion.
What may or may not surprise some of you is that Texas Roadhouse achieved a 56% brand value increase in 2023, which means it’s one of, if not the one, fastest-growing restaurant brands. It operates 700 units and hopes to raise that to 900 in the coming years. Jollibee came in a close second. This Filipino brand was up 53% from the previous year and has plans to open 500 units in the coming years.
Of course, these restaurants are just a few of the many making headlines in 2023. Angry Crab Shack, with locations in six states, recently headed across the pond and set up shop in London. The Melting Pot plans to open one remodeled restaurant a week through 2023. In 2022, 74 of their 94 restaurants achieved all-time sales records.
Is your brand ready to expand? When you hear numbers like these, many restauranteurs must hold themselves back. It’s a clear and present danger, growing too quickly or not seizing the moment when the stars align. Then, the question becomes, to franchise or not to franchise? To maintain the reigns of independent ownership or become a franchisor and minimize your capital investment.
It’s a tough decision.
Here, we’ll explore the essential features of any successful expansion process. The dos, don’ts, and really wish we hadn’t.
Minimizing Restaurant Expansion Risks & Maximizing Profits
As a strategic partner of leading restaurant and entertainment concepts, our team at Emerging Concepts has had front-and-center experience watching our partners take the helm and set sail to uncharted territory. From our experience, we can unequivocally say that there are a few key elements you need in place to minimize expansion risks and maximize profits.
Minimizing risk means taking all the necessary precautions to ensure a successful expansion. It includes the following:
- Customer Analysis: Do you know who your current VIP and core customers are? It’s a critical component and a determining factor in your future success. Like any successful business, it’s learning your target market. Where do they live, work, and spend? What are their dining, driving, and buying habits? And do they live in the areas you’re considering?
- The Most Profitable Locations: We identify where you’ll find the most profitable locations in the country through data science and strategic site selection. It’s a team effort comprising data engineers, data scientists, analysts, business professionals, and real estate experts. By combing through extensive data, we’ll determine the location that will provide the highest profitability and the lowest risk, maximizing sales while ensuring you don’t cannibalize yourself by opening too many new units in your city or state.
- The Menu & Supply Chain: Are you expanding your well-known concept or breaking out of the chains that bind you? While flying free can set you soaring, it also comes with some potential pitfalls, such as jet engines and great eagles. Our expertise in supply chain management, operations, and spending management develops customized resources and support programs to reduce costs and increase productivity.
- The Labor Pool: Before you expand, you need to know you’ll have the staff to ensure an optimum guest experience. One of our divisions, Target Workforce, uses advanced geo-location to connect you with the highest quality restaurant workers.
Once we’ve narrowed down the prospects, we’ll do what we do best, negotiate with developers and landlords to ensure the optimum outcome. We’ll help you explore several years down the road, working as your offensive line and protecting you as you take aim at your goals.
How do you expand your restaurant?
Some operators may decide it’s not the right time to expand to a new location. That doesn’t mean you can’t keep growing in new and profound ways. Some open food trucks and pop-ups, a great way to test a new menu item or different location.
If you’re booked to capacity on a regular basis, you may consider increasing your current restaurant’s capacity. This may translate to expanding to the outdoor reaches, including patios and roofs. It may also mean moving to a new, larger space.
How do I create a new restaurant concept?
The world is full of hospitality groups that opened new restaurant concepts. Like any other expansion, it’s all about analyzing the right data to devise a plan that minimizes risks and maximizes gains.
Are you ready to join the team of successful brands that have made the leap with the help of Emerging Concepts? To learn more or to schedule a consultation, contact Emerging Concepts today.