Amy Wenk, Staff Writer
Almost two dozen fast food franchise headquarters, from Arby’s to Zaxby’s, call Atlanta home. Here’s why. Business climate, demographics make city a favorite of food brands.
Atlanta could easily be called the nation’s fast food capital.
More food franchises are headquartered in Atlanta than any other city undefined 23 to be exact undefined according to a survey of more than 1,800 brands by franchise research firm FRANdata.
That includes fast food favorites The Krystal Co., Arby’s Restaurant Group Inc., Zaxby’s and Moe’s Southwest Grill.
Georgia also ranks No. 4 in the country with 36 food franchise headquarters, according to FRANdata. That’s not bad, considering its population is dwarfed by the three states that have more: California, Florida and Texas.
So how did Atlanta become such a mecca for food brands?
“I think Georgia has been a very business-friendly state that has attracted a lot of growth over the last 20 years,” said Blake Bailey, chief financial officer for Zaxby’s Franchising Inc. “It’s so complex. It is hard to put a finger on why.”
Food executives named a variety of reasons from the world’s busiest airport, the warm climate, diverse demographics, an influx of talent and a critical mass of top food companies.
“These brands tend to stem off other brands,” said Darrell Johnson, president and CEO of FRANdata.
But for some local restaurant chains, such as Chick-fil-A Inc. and Zaxby’s, Georgia just happened to be where its founders were from.
Truett Cathy was raised in Eatonton, Ga., and went to school at what’s now Grady High School in Midtown. In 1946, he opened his first restaurant, Dwarf Grill, in Hapeville, Ga. He continued to innovate, often testing his food creations at the nearby Ford factory, and ultimately invented the chicken sandwich. The first Chick-fil-A opened in 1967 in a suburban Atlanta mall.
“Atlanta was [Cathy’s] home,” said Chick-fil-A spokesman Mark Baldwin. “He never knew he was going to have 1,800 restaurants.”
Right time, right place was also the story for the founders of Zaxby’s, Zach McLeroy and Tony Townley. The childhood friends, who grew up in the rural town of Watkinsville, Ga., founded the chicken chain in 1990 in Statesboro, Ga.
“I didn’t know anything but Georgia,” Townley said. “It made the most sense for Zach and I. It was our backyard.”
It’s a recipe that’s worked in a big way. Last year, Zaxby’s, now headquartered in Athens, hit $1 billion in sales. The chain opened its 600th location on Jan. 27 in Washington, N.C. Now, it plans to expand to states including Oklahoma, Utah, Colorado, Texas and Indiana.
Georgia’s accessibility to transportation, especially the world’s busiest airport, Hartsfield-Jackson Atlanta International Airport, has become a key reason why other food chains have headquartered here.
“We are the crossroads of transportation for the Southeast,” said Karen Bremer, executive director of the Georgia Restaurant Association.
Take for example, The Krystal Co. When Atlanta-based private equity firm Argonne Capital Group LLC acquired the mini-burger chain in 2012, it decided to relocate its headquarters from Chattanooga, Tenn., to Dunwoody.
“Our hometown of Chattanooga served us well for 80 years; however, with a goal of building 150 new restaurants within the next few years, transportation became a key issue for us,” said Doug Pendergast, president and CEO of Krystal. “Direct flights provide direct access to all of our present and future markets. Our office is located close to a MARTA stop, which can take any of us to Hartsfield for a flight.”
Krystal has more restaurants in Atlanta than any other city, Pendergast added.
“Atlanta is a great place to grow for the future,” he said. “We appreciate the many amenities that our new location affords us and look forward to a very bright future.”
Many companies see Atlanta as a perfect testing ground for new food concepts due to its diverse demographics and commuter culture. Plus, due to the sprawl of the metro area, there are more real estate opportunities here than in cities such as New York City.
“Everyone is programmed to drive here, drive there,” said Ray Biondi, chief operating officer with Atlanta-based Tin Drum Asiacafe and a former executive with Arby’s. Plus, he said, intown markets such as Buckhead are viewed as some of the trendiest in the country.
“This is a dynamic restaurant town, and I think Buckhead is one of the principal generators of that,” Biondi said. “The competition here can be very fierce. You’ve got to be the real deal.”
Pierre Panos, founder of Alpharetta-based “fast fine” chain Fresh to Order, can agree.
When he immigrated to the United States from South Africa in 1993, Panos chose Atlanta after reading a Fortune Magazine article that called it a good place to do business since the Olympic Games were headed to the city.
“For me, it was fortuitous,” Panos said.
He launched Fresh to Order in 2006 with a location in Midtown. The chain hopes to grow to about 15 locations by the end of the year.
“If you can make it in Atlanta, you can make it anywhere,” Panos said. “It’s a microcosm really of the country. It is a good place to test.”
Some of Atlanta’s newer food chains are the brainchild of executives from established restaurant groups.
“I think success keeps breeding success,” said Matt Andrew, a co-founder of Moe’s Southwest Grill, which launched in 2001 with a store “right smack in the middle of Buckhead.”
After Atlanta-based Roark Capital Group acquired Moe’s in 2007, Andrews went on a pizza tour with the mission of creating the “Moe’s of pizza.”
He did just that, opening the first Uncle Maddio’s Pizza Joint in early 2009.
“We knew we were going to grow it into a big brand,” Andrews said. The chain, which has 18 locations today, plans to grow to more than 50 by the end of the year. Plus, Uncle Maddio’s has signed franchise agreements to develop 165 more locations. “We are building a pipeline of stores that will open every year.”
Tory Bartlett, who recently became COO of Atlanta-based Tin Lizzy’s Cantina, is another local food alum. Bartlett spent 20 years with Hooters of America LLC, the Atlanta-based operator and franchiser of more than 430 Hooters locations in 28 countries. In his tenure, he worked his way from dishwasher to director of operations, opening more than 120 Hooters locations.
Now, Bartlett hopes to grow Tin Lizzy’s into a regional brand. The chain of taquerias, which has just six locations today, hopes to more than double in size over the next two years. It could open its first restaurant outside of Atlanta in 2015.
“I think the market represents a great opportunity to test and build your brand,” Bartlett said.
Panos, of Fresh to Order, can agree.
“Atlanta’s been great to us,” he said. “This will always be our base. It’s just got so much going for it.”
Atlanta has the most food franchise headquarters of any U.S. CITY
11 Irvine, Calif.
Georgia ranks 4th for the number of food franchise headquarters in the U.S.
Amy Wenk covers hospitality, retail and restaurants.