If everyone who calls me talking about taking advantage of second-generation restaurant space moves forward with their plans, I predict second-generation space will soon be in tight supply.
Remember when there wasn’t any second-generation space?
Not anymore.
One of the tragic outcomes of this COVID-19 crisis? The number of restaurants that have been forced to close – the National Restaurant Association pegs it as 17% of all units being closed either permanently or long term.
I expect another wave of closings in January regardless of whether the government injects money into the industry.
Time to Plan Your Next Opening
We all feel for the people who owned, worked at, supplied, or dined at these restaurants – even their landlords.
If you see an opportunity here, you notice pesky or encouraging thoughts about opening a new restaurant next year
Yes, I typed, “open a new restaurant.”
This is about opportunity, not mere optimism.
My clients are moving forward with seven different openings, all planned before this mess.
Despite the crisis, none of them have put on the brakes.
The Dallas Morning News even ran an article last week listing 25 new restaurants that opened in September and October in Dallas-Fort Worth.
Clearly, more than optimism is in play – people see a great future in restaurants even if the starting point of that future remains unclear.
Establish Your Four-Point Strategy Now
To paraphrase the father of modern management, Peter Drucker, strategy eats tactics for breakfast.
Position yourself to pick up the pieces and win by covering these issues:
- Site Criteria: Establish specific criteria that tells you and your real estate team where to look and where to not waste your time.
- Flexibility: The more flexibility you have, the more you will save in second-gen space. How much existing floor plan can you tolerate? How do you adapt your concept to someone else’s footprint?
- Management Power: How will your organization grow? During the crisis, you may have pared down your management strength or just diverted it to crisis work. How will leadership and unit management prepare to open a new unit or units?
- Cost: Compared to your first-generation units, what will your second-gen spaces cost to develop? What mechanism will finance these units?
Top operators dream of second-generation deals before they have to wake up the next morning to hustle all day so they can survive, and stabilize.
The winners of the second-generation sweepstakes will become the brands that truly dominate when this ends.
Over to you. Stop and create an unbeatable strategy now so you stand ready to act and take advantage of low development costs.
