Operators in the breakfast-and-lunch segment are finding that the “early to bed, early to rise” business model can make for happy employees and healthy returns—no matter the economy.
With hours that contribute to workers’ quality of life, limited menu items with attractive margins and comparatively low startup costs, breakfast-and-lunch eateries are catching the eye of both seasoned industry veterans and newcomers.
The segment’s menus usually feature pancakes, omelets and skillets for breakfast and often salads, sandwiches and burgers for lunch.
J. Christopher’s Restaurants LLC of Atlanta recently opened its 22nd store, and eight more are scheduled to open within the next year, say officials, who point to the many benefits of focusing on the early morning and lunch daypart:
Attractive prices: “There’s a pricing benefit,” says Dick Holbrook, president of J. Christopher’s. “Having an average check in the $10 to $11 range is more affordable for dining out. Our guests see that as a real plus. For us, it’s not about appetizers or alcohol or even desserts. It’s an entrée and a beverage. The concept is very straightforward.”
Loyal customer base: Sam Haddock, chief operating officer for J. Christopher’s, says research has shown that “breakfast is the most loyal daypart for customers.”
“If they find a breakfast place they like,” he adds, “they are very loyal and don’t jump ship very easily.”
Quality control: Haddock says, “You have one shift a day. You don’t have transitions to an evening shift. That does lead to better consistency and continuity in the restaurant.”
BONUS POINT “The breakfast-lunch concept is designed to keep the initial expense down, so it’s a good financial model. They are very easy to replicate. And what they excel at is the relative ease of operations.”—Chris Tripoli, owner A’La Carte Consulting, Houston
Quality of life: “There are a lot of excellent managers out there who are frankly burned out on the late hours of casual dining and dealing with the alcohol and other things we don’t have to deal with,” Haddock says. “That goes to not only our franchisees but to our management team of the restaurant and the staff in each of the restaurants.”
Lower initial investment: A J. Christopher’s unit is typically 3,500 to 3,800 square feet with 100 to 120 seats inside. Most restaurants also have a patio that offers 15 to 40 additional seats. The initial investment for an in-line or end-cap location is about $500,000.
“For what it might cost you to build a freestanding casual-dining concept, you could build a few J. Christopher’s,” Holbrook says.
Profitable margins: Holbrook says, “Returns are good, whether you look at cash-on-cash or internal rate of return. Food costs are significantly lower than [those of] dinnerhouses.”— [email protected]
