Dan Rowe sees a lot of opportunity in the market for new restaurant concepts ready to sign leases, with deals available on rent and Covid-19 vaccine distribution underway.
Rowe is the founder and CEO of Fransmart, a franchise development company based in the D.C. area. He’s worked with brands like Five Guys Burgers & Fries, Qdoba Mexican Grill, and The Halal Guys. Rowe is also a board member of the National Restaurant Association.
Here in New York City, he’s been working with restaurateur Stratis Morfogen on franchising Brooklyn Dumpling Shop, a concept where customers can order dumplings on their smartphones and pick them up at the store without human interaction.
Rowe and I recently spoke about his outlook for restaurants in 2021 and beyond.
This interview has been edited and condensed.
What concepts do you think will take off this year?
You’re going to see a lot more new emerging young brands becoming national players because nowadays just through a savvy social media concept, [you can become] famous all around the world. I think you’re going to keep seeing this atrophy with old, tired brands. You’re going to see this new crop of brands that are going to open up that are going to be hip and relevant.
Tell me about the new concept you’re working on in New York, the Brooklyn Dumpling Shop.
It’s basically this killer dumpling concept. You order them on your phone, they’re going to be cooked, and then you come in and grab it. They’re going to be in an automat.
They’ll do $1.5 million to $2 million out of 500 square feet.
It’s going to make customers feel smart and safe about using them. [The founder is] even allocating space in his automats for Uber Eats, Grubhub and those guys. He’s engineering his concept from the beginning to be friendly for these third-party delivery guys.
You’ll see these brand new, young companies starting to pop up.
How do you expect the restaurant landscape will change in New York City post-Covid-19?
I think it’s a tough, tough lesson that landlords are learning the hard way. Remember at the beginning of Covid when tenants needed relief and landlords were unwilling to offer relief?
Every day we’re getting calls from another landlord that sort of gets it, “we need another tenant.” A restaurant, they’re not doing the same volume on Fifth Avenue as they were doing a year ago, so they can’t pay the same rent as they were a year ago.
If I’m looking backwards from the last year, it’s sad. There’s no way to spin it, Covid was terrible.
If I’m looking forward, there’s never been a better opportunity because you’re finally going to get these landlords humble.
I think 2021 is going to be a gold rush. You have all the same customers in the same markets with one-third of the competitors gone. They could make some really good deals.
Right now, with a vaccine, everyone’s starting to feel like next summer, things are going to be good. Right now’s the time to plant the seed. If you decided today to build a restaurant, it’s not going to open for four to six months. You’re starting to see people make those deals.
What kinds of spaces do you typically look for for these franchises from a real estate perspective?
[In New York City], 500 to 1,000 square feet is the new sweet spot because you’re going to do a third dine-in, a third carryout and a third delivery.
The old saying is, “Don’t build church for Easter Sunday,” and that’s kind of never more true than right now.
Article from New York Business Journal