In today's ever-evolving economic climate, characterized by escalating retail prices and a limited number of desirable properties, restaurants face a significant challenge in finding suitable locations that align with their criteria. Creating a specialized real estate strategy has become more essential than ever for brands.
Small Footprint Model
Papa Johns has effectively navigated the real estate market by embracing innovative design strategies and maximizing the flexibility of its floor plans. One of the key elements driving the brand’s success is the introduction of its new smaller footprint model, which has broadened the pool of potential locations. This strategic moves has allowed Papa Johns to tap into new markets and reach a larger customer base.
Additionally, Papa Johns takes a versatile approach to its floor plan, considering it as a kit of parts that can be efficiently adapted to spaces ranging from 900 to 1,500 square feet. By collaborating with operations, the brand has identified key pieces of equipment that maintain high volume while occupying less space compared to larger alternatives. This adaptability is crucial in a competitive real estate market, as it enables brands to effectively adapt without compromising operational efficiency.
Construction costs remain a challenge. With skilled labor costs continuing to rise, Papa Johns’ small footprint addresses this issue as it reduces build-out expenses, as well as rent and common area maintenance (CAM) costs. By minimizing the overall investment required for building a new store, this approach enhances financial viability and widens the range of real estate options for expansion.
Another key aspect of Papa Johns’ strategy is its ability to adapt to changing customer habits and preferences when selecting sites. The brand strategically chooses locations in close proximity to residential areas, aligning with its delivery-focused business model. This ensures convenient access for delivery drivers and maximizes operational efficiency. Additionally, the inclusion of drive-thru options in the brand’s new prototype further enhances convenience, allowing customers to pick up their orders or use the “drive-up, pickup” lane for orders for pre-placed orders, in addition to the interior pickup counter.
When making real estate decisions, brands must consider consumer behaviors and effectively communicate brand identity. In Papa Johns’ case, the new prototype emphasizes the freshness of the food and offers customers with a transparent view of the food-making process. The exterior design of the store also plays a vital role in conveying the brand’s essence, regardless of the location. Papa Johns incorporates lighter exteriors and utilizes brick elements to accentuate the naturalness of its ingredients and menu.
Restaurant development, design and expansion are undoubtedly interconnected, but by prioritizing innovative design strategies and flexible floor plans that cater to changing customer preferences, brands can overcome challenges, explore new markets and maintain a competitive edge.