Which new fast-casual chain will be the next Chipotle? This a question many investors and landlords wonder and ask. Competition is fierce for these chains across the country. The demand for a small footprint in a premium location is also high. A surge of new fast-casual restaurants has flooded the market in recent years, but not all of them have succeeded.
In the last 10 years many chefs started moving away from traditional sit-down restaurants to fast-casual restaurants where they can do a higher volume, and perhaps make bigger profits in smaller spaces. That’s the theory anyway.
Let’s start with the explosion of gourmet burger joints that started with Shake Shack in 2005 and now we have Smashburger, BurgerFi, Burger 21, BGR: The Burger Joint, Hopdoddy Burger Bar, and Elevation Burger to name a few. But it’s not just burgers, there are healthy eateries such as Sweetgreen, Chopt, and Sweet Leaf opening across the country catering to the change in consumer food demand. Not all of these fast-casual chains have managed to be successful though. Cosi declared Chapter 11 bankruptcy and shut down more than a third of its company-owned stores. Another popular chain, Noodles & Company plans to close 55 underperforming restaurants. Many of the upscale burger restaurants have also struggled of late. For example, Smash Burger closed stores in Chicago, Bethesda, and the Twin Cities just this year that were underperforming.