The Wall Street Journal (subscription required) had an interesting piece on August 2 about an innovative business and development strategy at Applebee's. The casual restaurant chain now targets smaller rural towns where its restaurant is frequently the only one available to the residents and where its casual restaurant environment passes for upscale eating. Leaving the struggle over strip and shopping mall development space, Applebee's has outpaced its nearest competitor in the casual dining segment by having more than 1,600 restaurants (over Chili's 877 restaurants) operating in the U.S., with 138 units operating in counties with 50,000 households or less. Turning the demographic/traffic study model on its head, the strategy appears to be paying off, with the population of these rural towns flooding the restaurants. The strategy also provides potential for massive growth with more than 2,000 of the country's 3,100 counties having less than 50,000 households.
Posted by franchiselawblog at August 4, 2004 05:15 PM