Where You’ll Eat Next: The Tasty New Restaurants Big Brands Are Cooking Up
Concept: “Fast-Fire’d Custom Built Artisanal Pizzas” — Customers choose their ingredients and the pizza cooks in two minutes.
Who’s behind it: Elise and Rick Wetzel of Wetzel’s Pretzels
When/where founded: August 2012; Irvine, Calif.
Units open so far: 2
Plans: 2 more southern California restaurants are under development and it’s expected 15 units will be open by end of 2013. Blaze has registered to franchise the concept in 34 states.
What’s an established restaurant chain to do once it’s opened an eatery — or a few hundred — in every major city in America? For Starbucks, White Castle, Red Robin and many other mature brands, one key growth driver lies in developing new restaurant concepts.
Big restaurant chains have been busy at this lately, sometimes developing their own new ideas and other times buying up independent startup chains. For instance, Starbucks just snapped up its second indie chain this week, buying 300-store shopping-mall chain Teavana for $620 million.
Its November 2011 purchase, Evolution Fresh, is garnering buzz for its all-natural smoothies and fruit drinks, which it sold in groceries before the Starbucks acquisition. The first retail store opened in March, in Seattle‘s Bellevue neighborhood, and the fourth store opens this weekend in north Seattle’s tony University Village mall. Bottled Evolution juice drinks are also available in 2,000 Starbucks stores.
Evolution’s angle: They fresh-squeeze and chop all of the fruits in the restaurants, rather than relying on frozen and pre-processed ingredients as many smoothie chains do.
In general, these new concepts don’t present huge innovation — more like a fresh twist on what you’ve already seen in cuisine or restaurant format. For instance, four of the ten concepts I’m spotlighting here are pizza concepts and two are burger-based.
For its part, revered sliders chain White Castle has two in-house ideas it’s incubating, The Laughing Noodle and sandwich-concept Deckers. The first Deckers opened within a White Castle store in 2010, and the company took it up a notch this past June by announcing it will soon open the first stand-alone Deckers in a former White Castle store site in Louisville, Ky. Deckers serves up double-decker panini sandwiches in varieties from the usual turkey-mozzarella-pesto to unusual entries such as peanut-butter-and-jelly or chocolate.
Laughing Noodle offers a wide range of noodle cuisine from traditional teriyaki to taco macaroni & cheese. As with Deckers, the first Laughing Noodle was incorporated into a White Castle store in Springfield, Ohio, in 2010, and the company announced in September that the first separate unit is under construction in Sharonville, Ohio.
Some big brands are looking to create a downscale version of their bigger, sit-down restaurants to take advantage of the trend towards more casual, lower-cost dining. Two examples are Famous Dave’s BBQ Shack, a downsized version of the larger Famous Dave’s restaurants, and Red Robin’s Burger Works, a quick-serve burger entry from Red Robin.
Could one of these new ideas become bigger than the original brand that spawned it? The odds are against it in the always-tough restaurant sector, but often these grow into substantial chains in their own right and allow the parent company to notch more revenue when their core business is flat.
Another important angle: For the chains that franchise their stores, new concepts mean there’s something new franchisees could buy into that diversifies their portfolio. Creating a new restaurant with a different type of cuisine means a franchise owner could have two different restaurants in the same mall. This offers some conveniences in terms of management and staffing.
Creating a smaller-footprint restaurant gives a chain more location options beyond ones that have room for a cavernous, sit-down eatery. Smaller restaurants are also lower cost for franchise owners to build and start, which increases the pool of possible franchisees.