DALLAS — This article was originally published by our content partners at the Dallas Business Journal. You can read the original article here.
Newk's Eatery, a Mississippi-based fast-casual restaurant franchise, is rapidly expanding throughout North Texas, with a keen eye on the region's rapidly growing northern suburbs.
The brand plans to add six to 10 locations in the next five years in cities such as Prosper, McKinney, Allen, Richardson and The Colony. Currently, there are locations in Frisco and Plano at 6750 Gaylord Parkway and 5960 West Parker Road, respectively.
"To me, those are no-brainer places you'd want to be," CEO Frank Paci said. "Dallas keeps growing to the north."
About 30% of Newk's 100 locations are company-owned but the North Texas expansion will likely focus on partnerships with franchisees. The total investment to open a Newk's franchise ranges from $1 million to $1.4 million, Paci said.
Each store typically employs about 45 workers. Paci is currently in discussions with a potential franchisee, and if all goes as planned, a new location could open in North Texas by next winter. The specific city for the store, however, is not yet known.
In terms of the ideal franchisee, Paci said he is looking for someone with experience in the food industry, whether that's in casual dining, fast casual or quick service restaurants such as a Burger King or McDonald's.
"Ultimately, if we get multiple franchisees, I could see us building three a year," Paci said. "A lot of it's going to depend on the availability of real estate."
Newk's expansion strategy hinges on identifying locations with a "sufficient daytime population." About 60% of Newk's customers visit the store before 4 p.m., Paci said. Ideal sites are those near retail and housing.
Average sales across most locations is about $2.4 million. Although the current stores in Collin County perform slightly lower than the company’s national average, Paci expects the new locations to perform on par.
Paci said the reason why the store on Gaylord Parkway is performing under expectations is because it "doesn't have residential and retail backup." He believes situating the restaurant near busier intersections on Preston Road would help with visibility and performance.
Newk's business model focuses on three main areas: dine-in, catering and delivery. While the majority of its revenue comes from dine-in customers, about 24% comes from catering and delivery services — a segment that Paci credits with helping the company survive the COVID-19 pandemic.
"If you look at us historically, prior to Covid hitting, we had very low digital sales," Paci said. "Then all of a sudden, the digital sales jump through the roof. Between that and delivery, we were able to rebound quicker than some of the restaurants [in urban areas]."
Newk's opened in Plano in 2014 and expanded to Frisco in 2017. Each store generally operates under a 10-year lease, Paci said.
Currently, there are about 12 stores in Texas, including in cities such as Tyler, Texarkana, Fort Worth, Austin, Waco, Houston and College Station. Looking ahead, Newk's could open an additional 50 to 60 stores across the Lone Star State.
Additional growth states include Georgia, Florida, Oklahoma and the Carolinas.
In 2023, FSC Franchise Co. LLC, the Tampa-based parent company of Beef O’Brady’s and The Brass Tap, acquired Newk's for an undisclosed price. The company was founded in 2004 in Oxford by Don and Chris Newcomb, the same father and son duo who founded McAlister's Deli in 1989.
"As I look at those locations where [McAlister's] has been successful, it gives me confidence to know that we can be successful in that market as well," said Paci, who was CEO of McAlister’s from 2010 to 2014.
