McAlister’s Deli Positioned for Large Scale Growth in 2018

In 2017, McAlister’s Deli® owners opened new restaurants in markets across the U.S., bringing the franchise system’s total unit count to over 400 across 28 states. That kind of growth would be impressive in any climate, but it’s especially outstanding in a year in which the quick-service restaurant industry has been challenged to adapt to the demands of a quickly changing marketplace.

According to Paul Macaluso, McAlister’s president, the brand has been able to flourish where others have struggled by embracing the consumer trends that much of the rest of the segment has been resisting.

“Consumers, millennials, in particular, have different expectations for dining out than they used to,” Macaluso said. “Going out to a restaurant used to be considered a kind of luxury, something that was exciting. Now it’s fairly commonplace, even sometimes considered an inconvenience. Not only do people want their food quickly, they want it on-demand. It’s not enough to serve good food quickly in your restaurant, you’ve got to take that experience outside of the restaurant. Online ordering, catering, delivery, all of that is essential, and that’s where we’ve really excelled in the past year.”

To stay ahead of consumer demands, McAlister’s has implemented a suite of off-premise ordering options, including third-party delivery services, online and mobile ordering, and a robust menu of catering services. Many McAlister’s restaurants have even in-restaurant pick-up stations, allowing seamless pick-ups for prepaid to-go orders.

McAlister’s incorporation of an array off-premise ordering options has not only allowed the brand to meet consumer expectations, it has also posed a number of operational benefits for restaurant owners and managers.

“Once we implemented and refined our off-premise ordering systems, we saw significant reductions in wait times and communications errors, and it relieved a lot of the burden on staff during our busiest hours,” said Macaluso.

At a time when many restaurant brands are slowing their growth to meet the challenges of a changing marketplace, McAlister’s off-premise ordering options have helped the brand to accommodate those changes while still growing rapidly. Also contributing to that durability is a streamlined operational model that increases the success of favorable margins.

“Our restaurants are built around operational simplicity,” Macaluso said. “Our owners aren’t maintaining fryers or dealing with a million different vendors. Our restaurants are cost-effective to build and maintain, and they are there is a level of ease in operations. A lot of other brands in our segment would be thrilled to see the kind of margins our owners routinely report.”

McAlister’s is now preparing to leverage their advantage in the fast casual restaurant segment for more growth in 2018, and their development team is actively courting new and existing franchisees for new restaurant openings in markets throughout the country. To that end, Macaluso says McAlister’s is aiming to keep new-restaurant startup costs affordable and emphasizing their competitive margins.

“Our startup costs are extremely competitive within our segment,” Macaluso said. Excluding real estate, the cost to open a McAlister’s Deli ranges from $762,000 to $1,023,000. Even on the high end, that is significantly lower than the average net sales for a McAlister’s restaurant in a year. Our franchisees can see a very strong return on their investment, often very quickly.”