The casual dining space is highly competitive, with quickly evolving demographics, delivery systems and constantly changing variables in the supply chain forcing operational changes. A recent article in Nation’s Restaurant News titled “2018 Top 200: Casual Dining adapts to smaller markets” pointed out that “only distinct and adaptable chains will survive.”
East Coast Wings + Grill is way ahead of the game and has been for some time. Not only are we distinct – an unrivaled selection of 58 wing flavors along with eight heat indexes served in a family-friendly atmosphere versus the typical sports bar – but our target market development strategy drives our growth – just not in a typical franchise way. But, it works: Recently, East Coast Wings + Grill was recognized by Entrepreneur magazine as one of the top 200 food and restaurant franchises of 2018.
Here’s a peek at our target market strategy:
Targeting Third-Tier Markets is a First-Rate Strategy
We grow methodically, which goes against the typical franchising model of opening as many locations in as many markets as quickly as possible. Instead, we ensure each franchisee is profitable. That’s why we target areas beyond the typical primary markets for growth.
Rents and market saturation tend to be lower, while returns tend to be higher. Markets outside of metropolitan areas are also easier to penetrate.
East Coast Wings + Grill has had remarkable success in areas outside primary markets. In addition to lower capital expenditures and greater return on investment for franchisees, we also have the opportunity to generate powerful brand awareness in these markets where there are fewer competitors. Consumers in third-tier markets want more dining options, too, so they get excited when they see us open our doors.
In those markets, our average franchise partners experience above average results:
- 15 percent average unit EBITDA*
- $1,573,714 average unit net sales*
- 33 to 1 return on first year sales to investment*
Even the bottom 30 percent of our franchisees perform well against other restaurant franchise owners – East Coast Wings + Grill operators experience the level of success achieved by other brands’ mid-line franchisees.
Our Methodical Approach to Market Expansion
We do not rely solely on the potential that exists in alternative markets. We are passionate about unit level economics (ULE) – so much that it dictates our growth. We purposely do not grow hastily in order to assure our ULE stays in check.
Just because a brand’s first location in an uncharted market starts out strong, does not mean they will have continued success. We opened a franchise location in Philadelphia in 2016, which did very well right from the start. We were inundated with calls about opening more stores in the city. It was an amazing opportunity to grow – one that many other brands would have jumped on. But, we were patient.
It was important for us to have a couple years in the new market to see how our brand performed. The Philadelphia location’s profitability increased because we were patient and focused on its unit level economics. The franchisees have experienced double-digit sales growth month after month since February 2017.
During this time, we gathered so much psychographic data about consumers in Philadelphia – which we use as part of our site selection process – that we are now expanding in Philadelphia. We are well-informed about the market to be confident other locations can do very well.
Love for Franchisees Affects our Growth
We don’t have hundreds of locations because we’re careful about choosing the right markets where our franchisees can succeed. We take the time to make sure each restaurant is profitable. That’s more important to us than opening new units in every primary market.
East Coast Wings + Grill works tirelessly to ensure the financial success of each franchisee, and our top-notch, in-demand product helps propel us toward that goal.
