Solutions by Industry

Restaurant Network Planning: A Case Study

Restaurant chains employed APT to optimize their growth.

  • Site growth, relocation, and other network changes are critical levers in QSR, Fast Casual, and Casual Dining.
  • Using APT’s technology, customized to each client’s network planning process, leading restaurants predict sales, profitability, and total return on investment, including network effects on nearby locations.
  • APT is used to assess hundreds of potential sites and relocations each year, enabling clients to focus on their best opportunities.
The Company

A number of leading restaurant and hospitality companies

The Challenge

Since the site network is the engine for future profit, every leading restaurant company deploys some sort of network planning solution. The challenge APT has seen among its clients is to align a rigorous analytical solution to each individual company’s often fast-paced and nuanced process. Too often, restaurant network planning solutions focus on the analytics at the expense of integrating into the overall planning process. Clients come to APT seeking to marry the “art” and the “science” of network planning into a solution that actually improves decisions.

The Solution

Clients use APT's Network Planner solution to inform a wide variety of network actions, including market-by-market concept “carrying capacity,” new market selection, new site openings, format selection, relocation, remodels, expansions, QSR-in-store decisions, and closures.

Each of these actions requires rigorous analytics. APT works with each of its clients to build the highly customized prediction and economic models required to fully assess return on investment. For example, for a particular new site with a given “first year sales” prediction, the ROI can be heavily impacted by franchising economics, impacts on neighboring sites, year-by-year growth rates, day-part mix, menu item mix (e.g., alcoholic beverage mix, value menu mix, etc.), local differences in margin rates, and more.

In each of these cases, the solution is tailored to the client’s needs.  For example:

  • With one franchise based company, models are tailored to identify best new physical locations for franchisee partners, rather than focusing on site economics.
  • For one heavily company-op restaurant, models focus on a deep understanding of network effects, especially cannibalization patterns in dense areas of the network.
  • For one highly-penetrated mall-based chain, models have been configured to focus on new out-of-mall format opportunities and in-mall relocations.
The Results

Through better site selection, avoidance of bad locations, and targeting broker/franchisee activities, APT’s network planning relationships have helped drive hundreds of millions of dollars of NPV improvement.