Restaurant Franchising: Economy slowing but providing opportunities

While the economy has slowed down restaurant franchising, it also has opened up opportunities

Tuesday, March 10, 2009
By Teresa F. Lindeman, Pittsburgh Post-Gazette

The franchisees building Sonic drive-in restaurants along the Pittsburgh region's southern edge liked one potential site but there was a drawback. The owners wanted only to sell, and with lenders tightening up on credit, the franchisees weren't ready to buy.

"We called back and said, 'We don't want to go out for [new] financing. Can you lease a few years?' " said Chris Whalen, a partner in White Oak-based NCH Hospitality.

The landowners -- recognizing the economic realities -- were willing to talk. "There has been a little bit of loosening," Mr. Whalen said. "You can feel it change."

It may take a willingness to adapt to keep movement going in what has been one of the region's -- and the nation's -- more active development markets for years: restaurant franchise growth.

As consumers eat at home more and lenders pull back on credit, a number of chains have indicated they won't be cooking up new stores as fast as fries in a hot cooker this year. Restaurant operators, such as the parent of Olive Garden, Red Lobster and The Capital Grille as well as those opening Chipotle and Wendy's, have said they would move at a slower pace.

Yet the slowdown also has opened up opportunities, according to some in the businesses who see less competition for prime locations and more willingness by land owners to work with potential tenants.

And for those who've always sold themselves as a value, this may be a good time to reinforce and improve that image.

NAI Pittsburgh has several opportunities for Restaurant Franchisees: Listing Information: NAI PITTSBURGH RETAIL

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