February 26, 2014

DC real estate #2

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I put up a post discussing some of the decisions we’re facing for DC the other day. It was awesome. Why?

#1, I’ve never talked here about real estate because I was afraid I’d piss off landlords (who are sensitive about a lot of stuff I’ve learned). So it was really liberating to speak honestly about one of the very few parts of Clover that hasn’t been transparent.

#2, The response was just amazing. Between this blog, emails to us directly, and other blogs that picked up the story (Eater, PoPville) we’ve had literally over 200 comments. And many of them are multi-paragraph, super thoughtful and unnecessarily kind. DC, we can’t wait to get to know you better.

So a bunch of people asked for more detail about what we’re doing. So here’s a quick summary.

WHAT WE DO: We do so so much, but the heart of everything is making our food. We’re committed to making the best tasting whatever we make. So that means we do somethings and not others, we’re constantly trying to improve, we use a ton of organic ingredients (often tastes better), we buy a ton locally (often tastes better), we make everything from scratch (excl ketchup, mayo, and bread). We’re focused on plant-based foods, on a mission to make them exciting to the meatiest of palettes. So think of this as a new chance for fast food.

OUR FAVORITE REAL ESTATE: We do some massive volumes at our locations in Boston. 800-1,000 customers/ day at some of our trucks (DWY, PRK, MIT), more than 1,000 customers per day at some of our restaurants (HSQ, KND). 80% of our customers travel less than 5 minutes to eat with us. So to hit those numbers we’re loving very dense areas. We love to have huge impact, so we love the volumes. Daytime population greater than 10,000 within 5 min or high foot traffic. (developed site)

Lowest volumes we can operate profitably would be around 200 customers/ day. We do a few of these in the Boston area (BLV, HUB, BUR) (developing site)

Lunch accounts for between 40and 80% of our sales, like most fast casual. We have really nice dinners in some locations (HSQ), but most of our high volume experience is lunch. We love breakfast, at HSQ today we served about 200 people at breakfast, but they are low tickets and don’t generate a lot of sales/ profit.

RENTS: We can afford big rents, if the traffic is right. I haven’t heard of any rents in DC that scare me off yet (now LLs, please don’t take this the wrong way, we’re not out to make stupid decisions). Our experience is that it’s better to pay more for the right location and do really well vs. skimp on rent and location and work hard to make it survive.

We also do well just off the main drag, we’ve been known to operate in alley ways. So this helps us on some of our rents.

DC STRATEGY: Obviously there is a lot of detail and nuance to our thinking about how to enter our first every market that is not Boston. But the simple version is: (a) open a restaurant in a less developed area where we can afford to experiment, get to know a community, etc., (b) open a restaurant in a busy area where we can hit huge numbers. We’d love both to start off strong. We’re used to hitting profitability in our first month or two of operation. This isn’t a “let’s invest now hoping we’ll have a business in 5 years” sort of thing.

I’m so pumped about the response I’m going to start posting regularly about sites we’re checking out. I’m going to be down on Monday. Anything you’d have me look at?

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