Rewards temper risks for restaurants opening in New York

Construction and differentiation

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At the opening of the Moe's unit in New York City, located at 367 1st Ave., Buchholz said one of the biggest challenges was securing real estate. The company relies on brokers to help find specific locations, noted Damico.

“Construction is also a little more difficult,” Buchholz said, adding that ventilation and garbage disposal were different in urban areas versus suburban ones. “You’re more limited by a building’s infrastructure.”

Ventilation is difficult because sometimes restaurants have to vent five stories up and take neighboring tenants into consideration, he said. And garbage is challenging because all ingredients and garbage go in and out the front door, as there is not always a dumpster out back.

To market the location, Buchholz and Damico blanketed the area with direct mailers and fliers and put a big banner out front. Marketing and advertising mostly happened on a local scale, relying somewhat on word of mouth, he said.

The people in New York, he said, are who make or break a restaurant. “I think in New York City, people are demanding customers,” Buchholz said. “But they also appreciate consistency. They’re loyal.”

Denver-based Chipotle Mexican Grill, a competitor to Moe’s, has exploded in New York City in recent years. Chipotle opened its first New York City location in 2003, and now has more than 40 locations there.

New York has been a big market for the brand, said the company’s communication director Chris Arnold in an email. Part of what has helped Chipotle succeed in New York is its competitive differentiators, namely using sustainable sourcing and preparing foods fresh in restaurants, he said.

“In the fast-food, fast-casual space, these things really aren’t done, but people appreciate them, particularly in a city like New York that has so many sophisticated restaurant-goers,” Arnold said.

Chipotle has had a lot of success in New York City and plans to expand more in the coming years, Arnold said. “We always look to build more restaurants where there is demand for what we are doing,” he said.

Homschek added that he also believed Pie Face’s unique segment would be its strength. “We’re not worried about saturation of restaurants because we’re different enough,” he said. “None of them do quite what we do.

“We’re here for the long haul,” he added. “We think [our brand] has national appeal.”

Contact Erin Dostal at erin.dostal@penton.com.
Follow her on Twitter: @ErinDostal