Many operators look at a shuttered restaurant and see a doomed site. But for The Greene Turtle Sports Bar & Grille, converting vacant former restaurants has resulted in locations with sales trending more than a million dollars over the system average.
“Restaurants close for many reasons other than a poor location,” says Tom Finn, vice president of franchise development for the 37-unit, eastern U.S. casual-dining chain, based in Hanover, Maryland. “Sometimes a high-performing unit in a low-performing chain closes when the entire chain goes out of business. Other times a brand that has been on a site for 20 or more years relocates or simply runs its course. And still other restaurants simply did not survive the economic downturn of 2008.”
Conversion-deal metrics vary greatly depending on the particular property, Finn notes. For instance, some buildings are available at the lower range of the chain’s average cost estimates, while others can cost the same as a ground-up build. But, says Finn, even the ones that cost as much as building from the ground up can be a good deal when they are located in areas where finding the right real estate to build on is difficult if not impossible.
The Greene Turtle purchases some of the former restaurant spaces and leases others, but leases are typically long-term.
“If we are certain about the volume opportunity, we think we have a better chance of success even if the initial costs are higher,” he says.
Another advantage of conversion is that many times the basic kitchen—or at least kitchen fixtures—are already in place, which eliminates the need for heavy mechanical and plumbing work. But, he cautions, this is not true all of the time.
“Opening in a former restaurant site is like buying an old house: you have to be very careful,” Finn advises. “However, for The Greene Turtle the marketplace is always the first priority and the building is [secondary].”
Acquiring a former restaurant space may also be advantageous because existing restaurant facilities have typically already cleared the path through local zoning and negotiated the municipality restaurant and liquor licenses. Some communities, Finn observes, may not want a restaurant or bar to open and so they create obstacles to delay building or opening.
Once-popular restaurant sites can also be a source of ready-made customers. That’s what sibling franchisees John and Jeff Froccaro found when they converted a former casual-dining restaurant site in Franklin Square on Long Island into a Greene Turtle last summer.
“The community was actually waiting for them to open,” Finn says. “People were excited about being able to come to a neighborhood restaurant again.” The franchisees are actively seeking other conversion opportunities for the additional nine Greene Turtle units they are planning to open on Long Island.
Finn points out that The Greene Turtle is able to take advantage of many conversion opportunities because of its flexible format and its appeal to a broad demographic base that ranges from young Millennials to Baby Boomers, and from families to couples to individual diners who just want to watch a game at the bar. Over the past five years, The Greene Turtle has converted eight restaurant locations and plans to continue looking for more.
