Fast-Casual Restaurants Find Investors Among Downtown Customers
FINANCIAL DISTRICT — When fast-casual Greek restaurant GRK opened its first location in 2012, the founders hoped that office workers and tourists would come to the Fulton Street shop for fresh, fast Greek entrees and yogurts. What they didn't expect was customers turning into investors.
"We’ve had a lot of people come in who are great business people and great customers and they say, 'You know what, this is great. I want to do this. Can I franchise or be a part of this?'" said Christopher Potter, director of strategic development for GRK.
Opening a fancy fast-food restaurant in the Financial District can have unexpected benefits, which is why if you’re looking for the next Chipotle, you should head Downtown.
The Financial District has a well-established reputation as home to some of the city’s highest earners, and it is now becoming the petri dish for fast-casual restaurants looking to become nationally established chains and franchises.
Fast-casual restaurants are currently enjoying a boom in the food service industry. Considered more upscale than fast-food restaurants such as McDonald’s and Wendy’s, these establishments sell meals at an $8 to $12 price point.
Downtown Manhattan has comparatively affordable rents, a high density of tourists and a moneyed clientele, all of which make the area a lower risk than high-rent Midtown, restaurant owners said.
"It’s a good place to start a new franchise and grow," said Stephanie Jennings, VP of Economic Development and Research at Downtown Alliance. "The density and the [leasing] price points allow brands that haven’t made their way into New York City kind of test the market in Lower Manhattan. It’s priced competitively. It has such high foot traffic. And it has the worker population."
Since 2010, numerous chains have opened in the area, including Potbelly Sandwich Shop, Clarke's Standard, Chickpea, Red Mango, Crisp, Chop't, Dig Inn, Yushi, Terri, GRK, Hot Clay Oven, Pret a Manger, Roti and, of course, Chipotle.
When GRK was looking to open its first location, the founders sought out a high foot-traffic area. There are 310,000 office workers in the Lower Manhattan with an average salary of $136,000, according to data from Downtown Alliance — proof that the area is packed with prime customers.
“When you open up a new location, as a new brand, in New York City, you only want to open in places where there are tall buildings all around,” said GRK's Potter.
“Those people down in the Financial District, they’re there doing business. You have Wall Street, hedge fund managers, clerks and secretaries,” Potter said. “It’s a wide variety of people and it does expose them to your food. A lot of times, those are the people you want as customers.”
Having found success on Fulton Street, GRK is now looking to open locations in Chelsea and Midtown.
Potter said customers on Fulton Street have even approached GRK about business partnerships.
"We do get that a lot. We’re corporate, we’re not franchising and we don’t want to franchise. But we do have people who say 'This would be great in California or Florida, can I meet or talk with you guys?' because those are our customers," he said.
The cultural influencers who work in the Financial District can also help to advance a brand's cache.
Vegetarian fast-casual restaurant Terri opened its second location in the Financial District in May 2013, having first opened in Chelsea almost four years ago. As one of the only restaurants Downtown that is certified Kosher, it has been embraced by vegans, vegetarians and meat-eaters alike.
Through a personal connection, the restaurant was able to establish stalls in four Morgan Stanley cafeterias in the city. In many of the Terri locations, staffers have been approached by potential investors.
"If you have a good concept, there’s people out there who have money. We get offered that all the time," said Terri co-founder Craig Cochran. "We’ve been approached by a lot of big names or a lot of people with a lot of money. "
GRK and Terri both have plans for further expansion but would not disclose specific details about where outside of New York City they would like to go next. Until then, expect to see more fast-casual coming to the neighborhood.