🍟 2/3/2022 – The Future of Restaurants
Lunchbox: The Future of Restaurants
The restaurant industry is changing. According to CBRE, 111 million people in the US used an online ordering app for food in 2020 – a 17% increase from 2019. On top of that, online ordering app revenue is expected to increase 62% by 2025.
With that big a chunk of the market – ghost, virtual, and cloud kitchens are taking off. The article provides a great background on what the difference is between each, and what you need to consider before getting in the restaurant game.
Colossus: Breaking Down the Food Ecosystem
Second week in a row I’m plugging a Colossus podcast, but they really are the go-to source for business and industry deep dives.
This is a super interesting conversation that discusses how legacy food businesses are creating their 2nd acts as digital businesses, and also explores what makes Dominos Pizza such an interesting business (hint: their technology).
One Franchise Breakdown:
- Founded in 1977, franchising since 2015
- Based in Illinois; 6 units open as of 2021
- A flexible fast casual pizza franchise with a community focus
Fees + Investment
- Royalty: 5% of gross sales
- Brand Fund: 1% of gross sales
- Franchise Fee: $25,000
- Initial investment: $323,000 – $520,500
- The below information contains the performance from 2 company owned outlets and 4 franchised outlets in 2020
The Wolf’s Take
I had to dig deep to find this week to find a brand that I felt compelled to share with you all. At first glance this may not seem that impressive.
But, consider this: each location that was open for a full year is doing at least $1.1M in revenue, which is on pace with Dominos. Additionally, while there may not be much proof of concept at just 5 locations, each unit is located in extremely light markets, with the highest 3-mile population radius being just 42k.
Higher density often means more competition, but the fact that Antioch is driving this much revenue in such sparse locations makes me interested to know how it would perform in major suburbs where population radius’ of 150k is the norm!
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