Push Is on for Growth through Franchising

While introducing the new store design, McAlister's Deli is also embarking on an aggressive growth strategy to increase its national footprint, primarily through franchising. Of its current 307 stores, only 34 are company-owned, and no company stores have been opened for several years. "We did acquire one store from a franchisee last year," Paci says. "But most of our growth will be through franchising. We have no hard-and-fast number saying we're going to have X number of corporate stores."

The chain is targeting underdeveloped existing markets in addition to seeking growth in new territories across the country, particularly the Midwest, and hopes to attract new franchisees who have casual-dining experience. "To accelerate growth, we are focusing on expansion in small to midsize markets initially," says Peter Wright, vice president of franchise development. "We're looking for multiunit operators with strong community ties and casual-dining experience. This is a brand for operators who understand the importance of strong operations and a commitment to true hospitality in the guest experience."

"It's a great opportunity for people who have experience in the customer service area and, in particular, for franchisees who have a casual-dining background to get into the faster-growing fast-casual space," Paci adds. "Operationally it's significantly simpler. No late hours, no alcohol, no fryers. When you look at the return on investment and the operating environment, it can be very attractive."

Facts of Note

• Year founded: 1989
• Headquarters: Ridgeland, Miss.
• Ownership: Roark Capital Group, Atlanta (since 2005)
• Estimated annual sales: $399 million
• Service model: Fast casual, with table service for refills, requests and desserts
• Services: Dine in (65 percent to 70 percent of sales), takeout and catering
• No. of units: 307 in 22 states; 34 company-owned, 273 franchised
• Real estate: Freestanding, endcap and in-line units
• Key expansion markets: Existing markets, primarily Southeast and Southwest; also Midwest
• Menu signatures: Sandwiches, Spuds, Salads, Famous Sweet Tea
• Average store hours: Sunday to Thursday 10:30 a.m. to 10 p.m.; Friday and Saturday 10:30 a.m. to 10:30 p.m.
• Average check: $9.60
• Average unit size: 3,800 square feet
• Average kitchen space: One-third of total
• Average unit cost: $536,000 to $871,000, endcap or in-line; $879,500 to $1.38 million, new freestanding
• Equipment investment per unit: $120,000 to $200,000 (FF&E, including office equipment, sound systems, smallwares, menu boards and décor)

Key Players

• President & CEO: Frank Paci
• Chief Financial Officer: Carl Jakaitis
• Vice President of Operations: Charles Corley
• Vice President of Marketing: Donna Josephson
• Vice President Operations Services: Larry Keltner
• Vice President of Real Estate and Construction: Steve Phillips
• Vice President of Business and Concept Development: Tony Valles
• Vice President of Information Technology: Randy White
• Vice President of Franchise Development: Peter Wright
• Food Distributor: MBM Corp.
• Equipment Distributor/Dealer: Hotel & Restaurant Supply
• Interior Design: FRCH Design Worldwide
• Manager of Development: Angie McGuffee
• Architect/Director of Design: Lynn Pool