Restaurant Development & Design

September-October 2017

restaurant development + design is a user-driven resource for restaurant professionals charged with building new locations and remodeling existing units.

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6 6 • r e s t a u r a n t d e v e l o p m e n t + d e s i g n • S E P T E M B E R / O C T O B E R 2 0 1 7 How To really strong return on investment, but if we could also have a return on time, that's important, too," Durham says. "The ease of being able to grow is really important," Durham explains. "It's about taking the friction out of it. The construction part can be nerve- racking and daunting, so bringing back the modular option was important." The three designs are identical in- side with the exact same floor plan and no dining since that's all on the patios. The first 4.0 Checkers & Rally's opened in June and saw sales of almost $50,000 in its first weeks. By the end of July, the brand expected to have two more operational 4.0 designs. Twisting Large and Small If Philly Pretzel Factory finds a space that's 125 square feet or more, it can operate out of it — though a typical store is 800 to 1,000 square feet. The brand is all takeout with no seating. "We are pretzels and we're a snack and meal-replacement concept, so we can go into any size space," says Chief Development Officer Tom Monaghan. The three smallest spaces the 171-unit, Bensalem, Pa.-based chain operates out of are 125-square-foot ki- osks that run in an amusement park, an aquarium and a train station. The larg- est is a 4,000-square-foot drive-thru. "We continue to look for oppor- tunities despite real estate limitation and because our model allows us to be anywhere," Monaghan says. "In some areas, we are a part of the community because the store there is so large." In general, the chain has three models: the traditional store (of varying sizes), the store-within-a store (such as within Walmarts) and 125-square- foot kiosks. The small units, Monaghan says, don't have a B2B component. "A significant portion of our traditional loca- tions is what we call pretzel accounts," he says. This is product made to sell to schools, hospitals, nursing homes and similar institutions. In the small units, the menu items are virtually the same as in the large ones, and there's no difference in the customer experience from a product standpoint. Conversely, in the large units, the concept focuses on display cases and production, so there's an entertainment factor. "We like our cus- tomers to see the twisting and baking of the pretzels," Monaghan says. Betting on Success Philly Pretzel Factory recently opened a 290-square-foot restaurant on the Las Vegas Strip. "We're expecting huge business," Monaghan says. However, given the diminutive size of the operation, Philly Pretzel Factory has had to rent addi- tional freezer space nearby and expects to have to truck its supplies back and forth every other week. Storage and refrigeration are an issue in a few of the chain's smaller stores as well, "so we have to be even more effective in our distribution to get the products to the stores in time," Monaghan says. "We need much more frequent deliveries." Even though Philly Pretzel Fac- tory has had to be creative in both its production environment and the retail space in Las Vegas, it was an important location and worth being adaptable with the sizing. "Some three to four million people a year pass by the front end of this space, so we really wanted to be there," says Monaghan. This also allows the concept to showcase the brand to potential future franchisees. Philly Pretzel Factory only goes into larger locations if the location makes it a no-brainer and volume will make it financially viable, Monaghan explains; it can be hard to fill the space. One trick is adding a party room. The brand can also work with scaled-down versions depending on the finances of franchisees. The different-size locations come with diverse price tags. A traditional store around 800 square feet requires an investment of $290,000, which means the franchisee needs to have at least $100,000 liquid, says Monaghan. A store-within-a-store concept is significantly less, around $160,000, and the kiosks total $100,000 or so. Contrary to popular opinion, for these three chains and many others, size does not matter. Having a concept that can scale up or scale down and still offer the same brand experience to customers is the key to growth and success. + Checkers & Rally's most popular prototype employs a modular model. Photo courtesy of Sanford Myers Photography Nashville

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