Staying Nimble: The Secret to Filling Your Development Pipeline 

Wouldn’t it be great if filling your development pipeline was as easy as filling your cup at a soda machine? Imagine being able to press a button and have a steady stream of “A” locations on tap, including coveted properties in premier communities, high-visibility drive-through sites, and icon locations, ready and waiting for your concept.          

Unfortunately, the development-on-demand machine has yet to be invented. But, having worked with hundreds of restaurant owners and franchisees over the past four decades, I’ve found that the most successful concepts have a robust development pipeline, even in the face of inflation, lack of real estate inventory, rising food and labor costs, and other market challenges. Their secret? Staying nimble—focused, decisive and efficient, yet light on their feet and flexible. When an “A” location comes on the market, they’re able to snap it up, because they already know their economic parameters, build-out costs and location requirements, and they have their team in place to quickly jump on the opportunity.                                                                                                                                                                  

Building a pipeline of growth opportunities doesn’t happen overnight. There are no sure bets and no shortcuts. Staying nimble requires vast reserves of commitment and courage, but in my experience, the return on investment is a steady pipeline of exciting locations that meet your strategic goals.                                                                                       

Here’s what it takes. First, make sure your team is assembled and ready for action. Your team should include brokers, deal makers, architects, engineers, contractors, project managers, attorneys and decision makers.  Maybe you’re a small operation and the CEO wears most or all of these hats, or you’re part of a larger operation with individual professionals, outside or in-house, covering each of these roles.                                                                                        

In either case, building a robust development pipeline requires close integration and communication between all skill sets. I recently completed a long, complicated lease and brought it all the way to the finish line, only to find out that the development team hadn’t yet reviewed the work letter, thus delaying the deal by several more weeks. I’ve also seen leases stagnate, waiting for the decision maker to resolve open business issues. The most successful real estate strategies include regular development meetings with all skill sets at the table. Based on my experience, I can guarantee that if all disciplines are not in the room, the open issues will leak through the cracks in your team.                                                                                                                                                                                                    

Once your team is in place, make sure the deals move forward on all fronts at the same time. Have your architects meet with the city while you’re finalizing the letter of intent. Have your contractor walk through the space and review the work letter while your attorney is working on the lease. And, build check points into the process to address critical points and make informed decisions as you go. The letter of intent and the lease should include whatever contingencies you might need so that you can tie up the space while continuing to explore the viability of the location. Consider contingencies for due diligence, title, permits, drive-throughs, patios, signage, and liquor licensing, but also be realistic—the developer isn’t going to let you tie up the site indefinitely. If it’s a new development, make sure that your timeline synchronizes with the developer’s schedule. This involves coordination with the developer’s team as well as your own. With all teams working in sync, you’ll have all the information you need when it finally comes time to fish or cut bait.                                                                                                                     

With your team in place and running, and a deal structure that allows you to move forward in all directions at once, you’ll be poised to make quick decisions as the information comes in. Can you get your permits and approvals? Is your budget realistic? Does the development timeline meet your needs? Can you live with the use restrictions? Will this location support your long-term goals?                                                                                                  

Quick decisions will keep the deal moving along, or take it off the line so that your team can focus on more workable locations. Step by step, day by day, deal by deal, lease by lease, your pipeline will fill with “A” locations, so roll up your sleeves, jump into the fray, and stay nimble.