Strong Growth Potential and Unique Business Model Sets McAlister’s Deli® Apart in the Fast Casual Segment of the Franchising Industry
From its focus on hospitality to its simple business model, the brand provides multi-unit franchisees with a series of strong competitive advantages.
Demand in the fast casual segment of the restaurant industry is on the rise. While restaurant sales as a whole are stagnant, fast casual chains are experiencing growth. In fact, the NPD Group is predicting that fast casual brands will be one of the few to see an increase in traffic in 2017. That means that in order to capitalize on that strong development potential, it’s more important for concepts to attract both consumers and prospective business owners than ever before. And when it comes to being positioned as the fast casual brand to beat, there’s one franchising opportunity that consistently stands out from the crowd: McAlister’s Deli®.
Founded in 1989 in Oxford, Mississippi, McAlister’s Deli® has a long history of raising the bar in the fast casual segment. The brand isn’t confined to one specific label—by serving top quality sandwiches, spuds, soups, salads, desserts and McAlister’s Famous Sweet Tea™, the brand is able to tap into a variety of categories that result in multiple revenue streams for its business owners. But its comprehensive menu isn’t the only thing that differentiates McAlister’s Deli® from the competition.
The brand is also known to loyal customers across the country for its commitment to hospitality. Exceptional customer service is at the core of every McAlister’s Deli® location—from providing a full-service dining experience to ensuring that meals are served with a smile, the brand goes above and beyond to create a family friendly environment and positive atmosphere. That focus on making every customer experience a great one has established a unique brand culture that can’t be found anywhere else.
“McAlister’s Deli® is far from a traditional deli or sub shop. In addition to the fact that our menu goes beyond sandwiches, every item that we served is home-made and delivered to our customers with a smile. That level of service is something that’s missing from other brands in the fast casual industry, and it’s continuing to help our franchisees bring in more customers,” said Jeff Sturgis, Vice President of Franchise Development of McAlister’s Deli®. “We’ve created a warm, comfortable and inviting environment that families want to experience on a regular basis. Our goal is to ensure that our customers—and franchisees—are always happy.”
With over 380 restaurants in 28 states, it’s clear that McAlister’s Deli® has a system of local owners who are thriving in their local communities. In order to achieve that high level of franchisee satisfaction, the brand supports its owners throughout the entire franchising process. McAlister’s corporate team is in it together with its franchisees—from hands-on, immersive franchisee training that includes on-the-job experience in an existing McAlister’s Deli® restaurant to periodic visits from the brand’s franchise business consultants, the brand is actively involved in setting its local owners up for success. And with a comprehensive, system-wide approach to advertising, marketing and promotions, McAlister’s Deli® is constantly looking for new and innovative ways to spread the word about the brand’s unique concept.
“If you’re interested in franchising, you should take a very serious look at McAlister’s Deli®. One, obviously, it’s financially successful. Two, I think it’s a brand that has growth opportunities from a geography standpoint. Three, I think within our segment we’re really having fast paced growth which is exciting,” said Kelly Saxton of the Saxton Group, which owns over 60 McAlister’s Deli® locations across four different states. “I think one important thing that sets McAlister’s Deli® apart today in how the system’s operated today is that senior management is listening to franchisees.”
By working with franchisees to improve its system, McAlister’s Deli® is positioned for long-term success. The brand isn’t afraid to make positive changes—locations with the right real estate capability are now introducing a pick-up window, for example, to reach customers who want to enjoy McAlister’s Deli® on the go. The brand is also focusing on developing in areas where it knows its local owners can thrive, like college campuses and end-cap store locations.
Beyond those enhancements, McAlister’s Deli® also offers prospective business owners a simple business model at its core. The brand already has an existing supply chain in place, giving franchisees the opportunity to take advantage of buying simple products for a decreased price. McAlister’s Deli® locations also don’t require equipment like grills or fryers, making the build out process more affordable and timely while local owners are getting their businesses of the ground.
Store build outs typically take between 75 and 90 days, giving franchisees the ability to hit the ground running as soon as their franchise agreement is signed. And local owners who follow McAlister’s proven system are bringing in customers at a more rapid pace—new restaurants are opening at the system average or better in terms of performance.
“Our system is designed to help our franchisees be profitable. Between our simple business model and established best practices, our local owners are automatically put in a position to make the most of the McAlister’s business ownership opportunity,” Sturgis said.
That business opportunity is expected to grow throughout 2017. With its sights set on development in key target markets like Tampa, Florida; Atlanta, Georgia; Montgomery, Alabama; Syracuse, New York and Milwaukee, Wisconsin, McAlister’s Deli® is planning to open more than 40 new restaurants this year, including seven that have already opened since the beginning of 2017.
To make those development goals a reality, McAlister’s Deli® is specifically looking to partner with experienced restaurateurs who are pursuing multi-unit ownership. Prospective franchisees need to have a net worth of $1.5 million, with $750,000 in liquid assets. And while total investment costs range depending on real estate, McAlister’s Deli® has a flat franchise fee of $35,000 per location.
“There’s no doubt that it’s an exciting time to be a part of the McAlister’s Deli® brand. For three years, we’ve had the honor of achieving certification as a World-Class Franchisor. We’re confident that we’re going to experience rapid growth in 2017, and we’re excited to partner with passionate and dedicated franchisees to make it happen,” said Sturgis. “McAlister’s Deli® offers a one of a kind business ownership opportunity, and we’re excited to see new owners make the system their own and thrive in the months and years to come.”