Where should restaurant chains go to expand? Look at these states.
Restaurant expansion can be a risky, tricky business.
In many instances, large restaurant companies dig deep into analytics, spending extensive time, energy, and money on selecting the right areas in which to develop.
Along with the science, however, resides the art—gut instincts and real-world insights that can round out the picture.
When evaluating investments, Hooters of America CEO Terry Marks says his casual restaurant brand, which has more than 370 domestic locations spread across more than 40 states, looks to regions of the country well positioned for long-term growth in population and Disposable Personal Income (DPI). Equally important, however, is a state’s growth orientation.
“We are much more likely to be interested in opening new restaurants in states with policies that are supportive of business,” Marks says, a nod that the political and social climates, as well as the experience of current entrepreneurs, are just as important as the numbers.
With that in mind, Restaurant Management delivers the 10 states that present the greatest opportunities for full-service restaurant expansion.
This special report assembles data from a number of public and private agencies, including the U.S. Census, the U.S Department of Labor’s Bureau of Labor Statistics (BLS), the National Restaurant Association (NRA), the Small Business & Entrepreneurship Council (SBEC), and ProximityOne, a Virginia-based developer of demographic estimates and projections.
While some states are seemingly obvious choices, others are a touch more off the radar. A close look at each state’s profile, however, will reveal favorable metrics and real-world insights that justify its place on this elite list and highlight compelling characteristics that can spur restaurant expansion.
Listed alphabetically, Restaurant Management’s Top 10 are:
Projected Population Gain by 2020: 17.7%
Number of Full-Service Restaurants: 3,479
Full-Service Restaurants per 100,000 Residents: 54.4
Arizona Restaurant Association: www.azrestaurant.org
Projected 2012 Growth in Restaurant Sales: 3.3%
Business Tax Index: 33.177
Median Household Income: $47,279
The Melting Pot claims four locations in Arizona, including one in Glendale.
Bolstered by weather and tourism, Arizona’s dining landscape has been blessed with consistent year-after-year sales growth, including an $800 million jump in 2010 sales alone, says Arizona Restaurant Association president and CEO Steve Chucri.
“Restaurants in this state are certainly pushing food out the door,” Chucri says.
Jeff Flancer, who owns Flancer’s in Gilbert, Arizona, identifies Arizona’s surging population numbers–the state is expected to add more than 1 million residents from 2010 to 2020–as the driving force behind the state’s 21st century restaurant growth.
New residents, Flancer says, “are looking for the same sort of great food establishments and convenient location of restaurants just like they had in their previous home states.”
Both Flancer and Chucri tout Arizona’s opportunity, esp ecially as the state holds but 54.4 full-service restaurants per 100,000 residents, among the nation’s least-saturated states.
As an added bonus, the Arizona Restaurant Association sponsors Arizona Restaurant Week each May and September. Nearly 200 restaurants across the state participate in the multi-day event that showcases the state’s expanding restaurant landscape and promotes culinary tourism.