Casual dining restaurants seek rural market spots

Branson now has two Ruby Tuesday restaurants and one Applebee’s. Nixa has an Applebee’s and Ruby Tuesday is under construction. And an Ozark location is on the calendar for Ruby Tuesday.

Area franchisees say the smaller markets – where it’s first come, first served – are necessary for continued growth.

“Going into the small markets, it’s

usually the first one in that wins. You can only divvy up the pie so much in small towns,” said Greg McGee, vice president of operations for Ozark Apples, the local Applebee’s franchisee. “It’s going to be interesting for us with Ruby Tuesday going into Nixa.”

Of Applebee’s 1,671 restaurants nationwide, 138 are in counties of 50,000 households or fewer, and Applebee’s plans for 25 percent of its new restaurants to open in smaller counties. Ruby Tuesday has 44 company-owned stores and 186 domestic franchise stores nationwide. It plans to open 55 to 65 new stores this year, but representatives would not disclose how many are in smaller markets. Ozark is one market itching for more dining choices.

“We’d like to see more sit-down restaurants, and I think that’s one area that a lot of the residents feel is a need,” said Collin Quigley, Ozark city administrator.

While area Ruby Tuesday franchisee John Bruton said he is still exploring the possibility of building in Ozark, Perrin Anderson, communications manager for Ruby Tuesday Inc., said an Ozark store is one of eight Missouri projects on the

company’s development schedule, set to open within the next two to three years.

People in rural markets appear to be eating up the small-town trend. According to Laurie Ellison, communication director for Overland Park, Kan.-based Applebee’s Inc., its rural stores generate only 10 percent less than the $2.3 million that typical Applebee’s tend to gross annually.

Applebee’s

Ozark Apples opened its first Springfield store in 1992 at 1855 E. Primrose. The company now has 10 restaurants within a territory that spans from Pittsburgh, Kan., to Rogers, Ark. A new store under construction at 4040 Highway 54 in Osage Beach is scheduled to open in late February.

Although Applebee’s launched its STAR program – an acronym for Small Town Applebee’s Restaurants – about four years ago, the smaller models don’t always end up in small towns.

“We build them in small towns, but it’s not a universal rule,” Ellison said, “For instance, you could have a STAR on the outskirts of a large city.”

STAR models are about 1,000 square feet smaller than the standard 5,000-square-foot restaurant. They seat 144 compared to the standard 165 to 200 and have about a dozen fewer items on the menu to keep the kitchen smaller.

Ozark Apples’ two STAR restaurants, in Pittsburgh, Kan. and Lebanon, have been open more than three years and McGee said they are meeting the company’s expectations.

Nixa, McGee said, is a hybrid of the smaller prototype, offering the full menu with fewer seats.

Applebee’s has population requirements for entering smaller markets, but McGee declined to disclose details.

Ruby Tuesday

For Bruton, a Ruby Tuesday franchisee since 2001, the Nixa store will be his 12th on the way to fulfilling a development agreement to build 25.

Anderson said that the most common Ruby Tuesday footprints are 4,600 square feet, 5,700 square feet or 7,000 square feet. The new Nixa store will be 4,600 square feet, about the same size as the store at 2725 N. Glenstone Ave.

Growth is based on several factors at Ruby Tuesday. “We don’t determine where we’re going to locate based on one town (being) twice as big as another town or three times as big,” Anderson said. Instead, the company studies an area’s population density, highway traffic, and retail and industrial growth.

Dollars

Less expensive real estate can make smaller towns more attractive, but Bruton said that he expects to invest at least $1 million in each Ruby Tuesday, regardless of whether it’s in Ozark or Springfield.

“That’s how much bricks and sticks cost,” he said.

Bruton’s newest location, at 715 N. McCroskey in Nixa, is set to open in early February. It has a $1.2 million estimated construction cost, according to Tom Wood, vice president of Bales Construction, general contractor for the project.

“You’re going into a smaller market and theoretically everything that you do should be less to some degree,” including less spent on property, construction, and fewer employees, McGee added.

Smaller Applebee’s stores employ 60 to 70 employees, while standard stores require 80 to 100. The average Ruby Tuesday store employs 55, Bruton said.

But there is a risk factor in smaller communities, said McGee of Applebee’s.

“You just don’t have the rooftops to supply you not only with the people to come in and enjoy our dining, but you’re also having a more difficult time staffing a restaurant,” McGee said.

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