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Log In / Register | May 27, 2018

Squeezing More Profit per Square Foot from Restaurant and Retail Locations

Key to a restaurant's profits is its revenue per square foot, with the goal being to increase revenue while keeping square footage at an efficient, rather than unnecessarily bloated — and expensive — level. Off-premise sales through online and mobile ordering are instrumental in generating more revenue without increased size.

Peter D'Amelio, COO of Matchbox Restaurant Group and former president of The Cheesecake Factory, has managed from both the revenue and square footage approach. 

According to D’Amelio, the key is to grow the bottom line [net income] faster than the top line [revenue], which can be accomplished by increasing revenue without increasing square footage. . . . today’s technology and changing demographics enable leading restaurant brands to deploy new strategies that no longer focus on the “numerator” in this equation, but the denominator, shaving off square feet. —Noah Glass, FastCasual

Chipotle Mexican Grill takes the lead.

A recent Restaurant Finance Monitor report ranked Chipotle the most profitable among publicly traded companies at $840.69 per square foot. Other fast casuals pale in comparison. Panera brings in $548 per square foot, and Zoe’s Kitchen draws $534.54 per square foot (as of its IPO). Quick-service falls even farther behind. Wendy’s tops the list at $504.67 per square foot, and Burger King brings in $392.27 per square foot.

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