Wonder, Dave’s Hot Chicken Real Estate VPs reveal growth strategies
Dave's Hot Chicken and Wonder reveal their unique real estate strategies for scaling growth in the QSR sector.
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Dave's Hot Chicken and Wonder are focusing on innovative real estate strategies to fuel their growth. Wonder plans to open about 100 locations in Texas, anticipating national expansion to thousands, while Dave's Hot Chicken operates over 430 locations worldwide, exploring unique market formats for expansion.
Why It Matters
The differing strategies may indicate a shift in site selection dynamics for franchisees, affecting their territory planning and growth potential. This highlights the need for multi-unit operators to adapt to changing consumer behaviors and real estate trends.
Wonder and Dave's Hot Chicken are pursuing distinct real estate strategies as they expand their presence in the restaurant industry. In a podcast from ICSC Las Vegas, Dannon Shiff, VP of Real Estate for Dave's Hot Chicken, and Abe Nasrallah, SVP of Real Estate at Wonder, discussed how evolving consumer habits and increased off-premise dining are influencing their site selection processes.
Wonder, which launched in 2021, has rapidly expanded from a food truck model to over 120 locations. The brand operates a multi-concept facility that balances delivery and dine-in experiences, with approximately half of its revenue sourced from each channel. Nasrallah highlighted that the company is focusing on locations that can facilitate quick pickup and in-person dining, with urban sites chosen for visibility and foot traffic, while suburban areas are selected for their proximity to grocery-anchored centers. Wonder is set to target Texas as its next significant growth area, with plans to open about 100 locations in cities like Dallas-Fort Worth, Houston, Austin, and San Antonio. The company envisions potential nationwide expansion to 4,000 to 5,000 locations in the long term.
Dave's Hot Chicken, which began as a pop-up in 2017, has achieved substantial growth, now operating over 430 locations globally. The brand has sold franchise rights across all 50 states and is exploring international opportunities. Shiff pointed out that the chain is testing various nontraditional formats, including openings in airports and food courts, such as a new location in a New York City food court. The shift towards delivery and off-premise dining has reshaped their site-selection criteria, emphasizing the importance of customer data over traditional trade area assessments. Approximately one-third of the brand's revenue is generated through third-party delivery services, though the majority of customers still prefer dining in.
The contrasting strategies of Wonder and Dave's Hot Chicken highlight the diverse approaches to real estate in the franchise industry. Continued observation of how each brand navigates their growth plans and adapts to consumer preferences will be important in assessing overall system health. Whether these strategies can sustain their momentum through the competitive landscape will depend on the effectiveness of their site selection and adaptation to new market dynamics.
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