Habit Restaurants LLC is making its push outside of its tri-state comfort zone with franchise agreements that will take the chain into Seattle and Las Vegas.
The Irvine-based company, which landed on Chicago industry researcher Technomic Inc.’s recently released Fast 50 Growth Chains list, has signed deals with franchisees to open a handful of Habit Burger Grills in the new territories starting next year.
The deals are the first multiunit franchise agreements for the chain. Its first franchised unit opened on the campus of the University of Southern California in January.
Habit has 94 restaurants in California, Arizona and Utah. The chain ranked No. 16 on Technomic’s Fast 50 list with 2013 systemwide sales up 34.5% from the prior year to $113.2 million.
The deal it struck in Las Vegas is with 12 Ventures LLC and calls for 15 Habits in the area. The Seattle agreement is with PBUH Holdings LLC and calls for 25 Habits in the area.
It’s too soon to say where the first of the Seattle and Vegas restaurants will open, according to Vice President of Franchise Development John Phillips, who said the two cities fit into a larger geographic strategy.
“We wanted to supplement our development in Utah, Arizona and California,” Phillips said. “We thought that would be good for our first franchises out of the gate who could still benefit from the supply chain and brand awareness and support being right here. That’s why we want to fill up the West before we head back East.”
The chain is set to enter the East Coast market in the summer with a company-owned Habit in Fair Lawn, N.J. That’s one of 26 total new locations planned for this year.
That area is Five Guys territory, another fast-casual, better-burger concept that’s been compared to Irvine-based In-N-Out Burgers Inc. chain. Habit acknowledges Five Guys’ position in the region, but still thinks it can nab market share.
“Anywhere we go we’re going to face some pretty stiff competition, and Five Guys and some of the others are good brands,” Phillips said. “We really feel that we have some differentiation on that. First off, our ambiance is typically much nicer, and we have a nicer buildout than our competitors at the mid-tier, better-burger concepts. We also have a much wider variety of food items being offered on the menu.”
Phillips was brought on a little over a year ago to establish the company’s franchising program and comes with industry experience, having most recently worked as West Division director of franchise operations at Miami-based Burger King Corp. He’s also had stints at El Pollo Loco Inc. of Costa Mesa and Mission Viejo-based Sizzler USA.
He said Habit is in discussions with prospective franchisees in the East Coast market, and is set to open a company-owned restaurant in Northern Virginia in 2015 that will likely be followed by franchised locations in the surrounding area.
East Coast growth will be measured, in any case.
“We’re really just putting our stamp out with company operations, and we want to get those up and running so we have a company base to get our supply chain going and marketing and branding to build awareness,” Phillips said.
