The perfect plot of land

Depending on where you place your restaurant, customers can blow the doors off or blow right by them. Location, as everyone knows, is key.

 

"If we pick a bad location, no amount of hard work or marketing can overcome that mistake," said Dave Moore, Taco Del Mar's master developer for Arizona.

 

Eric Jacobs, a franchisee owner, attorney and real estate broker with E2 Properties in Hollywood, Fla., shies away from that extreme, but he does believe that fast casuals that lose the placement game must up the ante in other areas of the budget.

 

"You have to spend a lot more money giving people a reason to come back and convince people to drive past the place with the better location," he said. "On the other hand, if you select the right property, many of the other missteps may be overcome by the power and draw of the location itself."

 

 

John Mamey, the real estate manager for Firehouse Subs in Jacksonville, Fla., looks for end-cap locations in strip centers built up close to the road. Ideally, the spot offers three rows of parking between the door and the street, has a limited number of site line disruptions and is in an area that supports a daytime population. There's no magic size for the shopping center, but it should boast a traffic signal entrance, he said.

 

For Taco Del Mar in Arizona, separation from competition is a huge factor in the real estate equation. If pitched on a location near a Chipotle, Moore said, "That's a deal-killer for me," he said. "Maybe three years from now if I have 50 stores, and if it's a great site, I'll do it."

 

Next, Moore needs great visibility, which in Phoenix translates to "they will see my sign when they're driving by at 55 miles per hour. It's very dry here and the roads are straight, so people tend to go about 15 over the speed limit." The third prong on his checklist: good traffic numbers. According to Jacobs, most fast casuals need a minimum traffic count of 50,000 cars daily, and they want to be on the going-home side of that directional flow.

 

But no matter the activity counts, Moore prefers to lease across the street from Wal-Mart than in the store's parking lot because the price is usually 20 percent less and is more convenient. Jacobs doesn't get that specific, but he, too, judges a location by whether drivers can zip in, get their order and get out. "Anything that slows them down from that will be a reason to go elsewhere," Jacobs said.

 

 

Just how many "A" locations remain available in North America?  Not many, assures Douglas P. Fisher, president of FHG International, a foodservice consulting firm in Toronto. Franchises like Firehouse Subs feel increased pressure because they have to spot their ideal address before merchandise and big-box retailers grab the space.

 

"The size of the city has a lot to do with it, and in some cases bigger is better because there is more opportunity," Mamey said. "A lot of municipalities restrict development to the degree we'd like to be in."

 

Moore admits no site will meet all his conditions, but he has the patience to wait for both a patch of ground that suits the majority of them and is priced affordably. At one point, he ceased trolling in Phoenix for six months because supply and demand sent lease contracts skyrocketing. "Franchisees are short-term thinkers. They need positive cash flow in three to six months, so they can't make a mistake," he said.

 

Nor can franchise operators be so stubborn as to never take a chance, Jacobs said. Simply waiting for developers to roll out their blueprints for the next new plaza is the passive route, he said. "Tomorrow's hot spots will be places people haven't seen yet," he said. Fisher believes those new worlds could lie inside the big box stores like Home Depot, where fast-food chains have already begun setting up shop.

 

Likewise, Moore sees a case for latching onto the ground floor of an office building in metropolitan areas like Seattle or Chicago, which offer daytime employment density.

 

Either way, expect real estate experts like Mamey to tire-kick the possibilities. "It's better to wait for a good site than to jump into a marginal site or compromise," Mamey said. "Once you sign a lease for a location, it's really cost-prohibitive to change that."