Restaurant Franchising & Innovation Summit
Long John Silver’s, Blaze Pizza, Slim Chickens execs talk expansion, real estate
Restaurants executives from Long John SIlver's, Moxie, Slim Chickens and Blaze Pizza talked about expansion and the state of restaurant real estate at the Restaurant Franchising and Innovation Summit in Kansas City.
April 8, 2024 by Mandy Wolf Detwiler — Editor, Networld Media Group
While establishing a strong domestic presence is typically seen as a prerequisite for international expansion, a growing number of brands are defying tradition by venturing abroad from the outset. These companies, often born in the digital age, are finding success by strategically targeting overseas markets alongside domestic growth.
At the Restaurant Franchising and Innovation Summit in Kansas City in March, brand executives who spearheaded such forays shared their insights and lessons learned. A common thread emerged: the importance of thorough market research. Data analysis is crucial for identifying countries, cities and even specific neighborhoods with a strong fit for the brand's offerings.
The summit, run by Networld Media Group, draws executives from leading brands to share successful ways to build and manage restaurants.
Networld Media Group is the parent company of Fastcasual, Pizza Marketplace and QSRweb. Its next foodservice event is the Fast Casual Executive Summit being held October 13-15 in Denver, Colorado.
The expert advice was shared in a breakout session called "Time to Fly: Exploring Unfamiliar Lands," a panel sponsored by Placer.ai and moderated by R.J. Hottovy, head of analytics research. Speakers for the event included Nate Fowler, president of Long John Silver's, Kevin Moran, COO of Blaze Pizza, Glenn Moon, VP of U.S. development for Moxies and Sam Rothschild, COO of Slim Chickens.
The real estate game
Hottovy asked the brand executives where their brands are in terms of real estate with new restaurants.
"At Slim Chickens, we're very fortunate. We have a really strong group of franchisees. They're all motivated operators of multi-unit brands. We don't teach people the restaurant business. We teach people the Slim Chickens business, which also affords us a lot of opportunity, because our franchisees are very adept at developing real estate," said Rothschild.
He added that Slim Chickens opens about a restaurant a week, and that real estate and development does have its challenges.
The supply chain has caught up, he added, making it easier to service his franchisees.
Moon, whose brand is entering the U.S. from Canada, is trying to buy spots in dense, urban markets with high foot traffic like class A office buildings or multi-family buildings with access to luxury retail.
"In most of these deals, there's a percentage rent, so we're taking a ton of square footage — 8-10,000 square feet — and then we aspire to be taking space where we think we can do $15 to $20 million in topline," Moon said. "There's not a ton of restaurants that can do that."
Moran said credit is not flowing like it used to. Blaze Pizza is looking for smaller footprints.
"COVID swung a pendulum so far that everyone stayed hard and if you already had third-party delivery (and if) you already had drive-thrus, you were ahead of the game," he said. "Now the pendulum is swinging back and guess what? No one's coming back to work."
He ponders whether or not to open in urban areas, where lunch is a bigger business, or in the suburbs, where dinner is the busier daypart.
Fowler said Long John Silver's once had 1,400 locations. There are now 540.
"We've had to segment what we prioritize from a development standpoint," he said, "so our biggest project now is, and we don't hide from this … if you drive around to Long John Silver's, our assets are terrible. So we have a big project right now just upgrading assets. And what comes along with that is we have the benefit as a brand — and because it's 55 years old — people are coming to us and saying 'please bring a restaurant back to our town."
He cites Amarillo, Texas as an example: City officials want the Long John Silver's brand back in town. The brand does have a team that looks at companies like Placer.ai that helps find good markets from a demographics standpoint.
Long John Silver's isn't having trouble finding land because they're opting for rural and suburban communities.
Making a plan
Hottovy asked how Blaze Pizza is balancing losing stores while opening others, and Moran admitted it's a tough situation that his brand is in trying to balance the two. The brand hasn't had a refresh since its inception 11 or 12 years ago, and traffic and comps have been down. Moran likened it to driving 100 mph while trying to change the tires.
"What we've put forth is a plan (that's a tiered) remodeling plan," he said. "We're approaching those franchisees. It's not a Draconian approach because it says it in the contract. … We know times can be tough, especially right now with traffic being down and comps being down, etc."
Blaze Pizza is going to look at its franchisees' restaurants and decided what tier the remodeling will be, be it paint and counter tops or a more extensive overhaul.
"The whole goal is to have the system revitalized in about three years," Moran said.
Hottovy asked Rothschild about managing the competition in Slim Chickens' own backyard. "You've got to run the hell out of your restaurant," he said. "Restaurant operations, taking care of the guest, running the business well is paramount for competitors coming in. Restaurants win or lose by how the restaurant's being run. You cannot blame any other external factors."
Moon said Moxies is only looking at a handful of locations in the U.S. in a given year. Hottovy asked him how the U.S. market seems to his brand, and Moran said Moxies is going where the density is, so his brand is competing with the big brands with lots of buying power — and therefore name recognition — in urban areas.
Moran leans on technology to help his brand find the best locations in cities like Los Angeles, Dallas, Houston and New York City.
What these brands all have in common is the need for real estate, whether it's a small plot of land for ownership or a big location with a big lease to match. Finding those locations is paramount to brands' success, as is finding good franchise partners, especially when expanding outside the U.S.
About Mandy Wolf Detwiler
Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living.
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