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Emerging Brands

Emerging chains see opportunity amid the pandemic

Leaders of BurgerFi and Walk-On’s Sports Bistreaux are optimistic about their continued growth and said operational changes made during this crisis will become table stakes going forward.
BurgerFi
Photograph: Shutterstock

A year ago, BurgerFi President Charlie Guzzetta said he was seeing rising rent prices and falling inventory as he sought new locations for his better-burger brand. The pandemic has changed that, he said.

“It was very hard to find prime real estate for a fast-casual brand,” Guzzetta said on a webinar during the Restaurant Recovery Summit, run by Restaurant Business parent company, Winsight. “Now, in 2020, we’re seeing a complete reversal. We see rent prices and occupancy costs reducing and we see inventory growing.”

Scott Taylor, president of full-service chain Walk-On’s Sports Bistreaux, said he recently came back from a scouting trip in which he OK’d the conversions of five restaurants that had been national chain locations. Taylor said he is seeing 7,000- to 8,000-square-foot buildings going for the same price as ones several thousand square feet smaller would’ve rented for pre-pandemic.

“We’re ready to grab them,” Taylor said on the webinar. “It’s sad to think they’re second-generation. But we’ll surely make sure those locations open again with a Walk-On’s.”

Both Taylor and Guzzetta said the pandemic, initially, slowed their brands’ growth trajectories.

Taylor had planned to open 20 new units in 2020 and instead will open 15, with some new store launches pushed into early 2021. Walk-On’s is slated to open 25 new restaurants next year and has 13 currently under construction.

“We’re not scared, man,” he said. “We’re gonna go.”

Similarly, Guzzetta said some of BurgerFi’s new stores got pushed back to early 2021. By the end of this year, though, the chain plans to have 10 new locations, plus 10 new ghost kitchens. In 2021, BurgerFi is on track to open 30 new restaurants, he said.

“It’s a pretty aggressive growth strategy,” he said, adding that the chain was not holding franchisees to their development schedules during this unpredictable time.

Emerging chains have had some advantages in navigating the pandemic because their small size allows them to be more nimble than the giant players, Kathryn Fenner, a principal with RB sister company Technomic, said during the webinar.

Many of the operations changes made during the coronavirus crisis will continue post-pandemic, Fenner said.

“Safety won’t go away,” she said. “People aren’t going to stop wanting to use apps to order and pay ahead. We continue to see a desire to be creative for meals brought to the home, like make-your-own DIY taco kits or grilling kits.”

Cleanliness has always been a guiding part of BurgerFi’s mission, Guzzetta said, but it is even more crucial now. The chain has added plexiglass and is rolling out handwashing stations inside dining rooms at some locations.

“For the first time in our industry’s history, cleanliness is the new ambiance,” he said.

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