Watch out, Chick-Fil-A. Be on your guard, PDQ. Prepare yourself, Popeye’s. The category of quick and casual chicken restaurants has a new player: The Hatchery. It is backed by FSC Franchise Co., the Tampa-based entity that owns the Beef O ‘Brady’s and Brass Tap brands, which collectively have more than 20 locations in the Tampa Bay area.
The hatchery debuted on August 31 with a grand opening at its first location, 201 N. Dale Mabry Highway in South Tampa. While excited for the future, CEO Chris Elliott admits it’s tough to unveil a whole new restaurant concept, to say the least.
“With the choice, we wouldn’t have opened in a pandemic where you have plastic shields between cabins and people have to wear masks,” Elliott said. “But we are working on it.”
“A lot of consumers have changed their behavior by going for food after ordering online or by using third-party delivery. But I think that will change after the pandemic and be more balanced. Chris Elliott, CEO of FSC Franchise Co., owner of the Beef O ‘Brady’s and Brass Tap brands
Elliott, 66, has been with FSC Franchise Co. since 2010. Prior to that, he was President of Cinnabon and COO of Church’s Chicken, so he knows a thing or two about developing quick and easy-service restaurant chains. He says The Hatchery has been in the works for about three years and represents FSC’s attempt to capture a share of the lucrative chicken market.
“Chick-Fil-A makes more volume in six days selling chicken than McDonald’s does in seven days selling burgers,” he says. “So what does that tell you?” There is a huge opportunity in this segment.
The hatchery, however, faces significant headwinds in an economy still reeling from the COVID-19 crisis. Beef O’Brady’s revenue fell 7% in July, says Elliott, while the Brass Tap – in part because it’s a bar and subject to additional restrictions – continues to struggle, with sales declining 20% in July.
And unlike rivals Chick-Fil-A and PDQ, The Hatchery doesn’t come equipped with a drive-thru, though Elliott says future locations may have that feature. This means that the restaurant must do everything in its power to give customers the confidence to dine there and pick up take out orders.
While it’s still early days for The Hatchery, day one has started off well, with 60% of revenue coming from offsite orders, Elliott says, and 40% from in-store sales. “A lot of consumers have changed their behavior by going for food after ordering online or by using third-party delivery,” he says. “But I think that will change after the pandemic and be more balanced. ”
The Hatchery cost $ 650,000 to build, Elliott says, and he expects the restaurant to generate $ 1.5 million in gross revenue per year and employ 25 to 30 people. FSC is already looking to open a second Hatchery restaurant in Trinity or St. Petersburg.
The pro forma, says Elliott, calls for a two-to-one sales-to-investment ratio.
“We think that’s a very conservative number,” he adds. “We think we can do a lot, a lot better than that, but at 2,400 square feet, it’s a small footprint, with no drive-thru. You put a drive-thru on it and then you talk about over $ 2 million.
An intriguing footnote to The Hatchery’s development is how it got started – as an accidental Ghost Kitchen. Construction on the restaurant began in January but came to a halt in March due to the pandemic. To maintain the momentum and get a feel for how the new concept would be received, FSC made items developed specifically for The Hatchery menu in the company’s test kitchen at its headquarters in Tampa. Then, it partnered with third-party delivery services, such as Uber Eats, GrubHub, and BiteSquad, to make the food available to customers in South Tampa.
“There has been a lot of talk in the industry around virtual kitchens and ghost kitchens,” Elliott said. And we said, ‘Well, why don’t we try that until we can get back to building and see what we can learn. So we ran it like a ghost kitchen for eight weeks. It wasn’t what we originally planned, but it worked that way. “
It’s also a perfect example of not letting external circumstances beyond your control define and shape your reality – a point that did not escape Elliott.
“Maybe some people think we’re crazy to open in the middle of a pandemic, but the work had already started, and we think it’s a great idea,” he says. “We think it will be much better after the pandemic, but we are convinced that going ahead and opening was the right decision.”