Why Multi-Unit Operators Should Invest in Brands with Flexible Real Estate Options

Despite the challenges that have been brought upon the restaurant landscape these past several years, the industry has thrived with innovation across all categories. As a result, the level of competition between foodservice brands looking to expand their footprints has naturally increased. My team quickly learned that diversifying our portfolio with different real estate models was a critical part of adapting to the ever-evolving market. 

The market is rich with everything from traditional dining room formats in varying sizes to walk-up and drive-thru only prototypes and non-traditional spaces that fit within C-Stores, airports and universities. I first entered the foodservice industry in 2013, owning and operating Steak and Shake locations in Auburn, Alabama, before transitioning my business to Captain D’s in 2018. We targeted the Greater Atlanta region because the brand already had a major presence in Georgia, which made me even more comfortable exploring the different prototype options in its repertoire. My team now has two operating restaurants and three under construction throughout the Atlanta area. Our real estate portfolio spans from the traditional model to a new compact “off-premise only” Express design. Set to open this summer, it will be the first franchised Express location for Captain D’s and features both drive-thru and walk-up windows for ordering and picking up.

It’s important for franchise owners like myself to invest in brands that offer a variety of low-cost, scalable prototypes that meet the evolving demands of today’s customers and real estate markets. Here’s why we need the most flexibility possible to receive the best return on investment:

Obtain a Better Understanding of the Market

Throughout the years my team has spent in the foodservice industry, we’ve been fortunate to gather concrete insights from the wide variety of restaurant designs in which we’ve invested. This has given our group a huge advantage when seeking out different growth opportunities because we can leverage key learnings to decide what type of real estate works best for a given market. For example, we’ve observed that 22 percent of sales at our location in Norcross, Georgia, comes from delivery, and around 50 percent comes from drive-thru. From there, we can take that statistic and apply it to target markets with similar demographics. In this case, we’d conclude that communities like Norcross would make for a perfect prospect for a location that prioritizes off-premise dining.

Save Time and Money with Efficient Prototypes

Brands like Captain D’s have found a way to navigate the oversaturated market with a strategy that offers flexible prototype options for franchisees, and it allows us to tailor our restaurants to meet the criteria of the available real estate in the market in which we are looking to build. Additionally, operators can save significantly on startup costs by having prototypes that easily convert an available property owned by another brand into a thriving franchise. Not to mention, an efficient conversion process also allows the franchisee to get the business up and running sooner than a new build.

Maximize Available Real Estate 

There are properties becoming available as brick-and-mortar businesses downsize or shift to online sales. This has made it a buyer’s market in franchise real estate, and operators who are looking to expand their footprint need restaurant designs that can be easily incorporated into the given space. Most recently, we’ve begun to build a 30-seat location in Ellenwood, Georgia, that is cobranded with our BP gas station and convenience store. Due to the small footprint, we were able to save significantly on start-up costs.  The lower-end investment allowed us to begin developing a store that has a large reach with the amount of through-traffic the gas station convenience store creates. 

Consumer preferences will continue to shift with global trends and events. Right now, there is a high demand for off-premise dining as consumers continue to be motivated by convenience, accessibility and personalization. This has directly affected how brands and franchisees approach the real estate market and has made it critical for operators like me to invest in companies that are responding to the transformations throughout the industry. To be successful in expanding their portfolios, operators must prioritize the brands that have rethought their conventional models, embraced restaurant conversions and are creative with the possibilities for growth.