Old-Fashioned Eatery Seeks New Growth | National diner chain, with franchise in Worcester, eyes Connecticut locations
After 22 years of slow growth, a chain of 1950s-style themed restaurants has developed an appetite for expansion. The Maynard-based 5 & Diner is seeking a franchisee to open a store in the Hartford, Conn., area this year and establish a foothold in the market.
The fast-casual chain, which started in 1989 as a one-concept eatery in Arizona, has 12 locations in five states, including one on Lincoln Street in Worcester.
The 5 & Diner chain features jukeboxes with music from the bygone era, soda fountains, hula hoop contests and hostesses in poodle skirts who serve hamburgers, sandwiches, fries, flavored sodas and shakes.
“The authenticity and unique nature of the business means that competition in Hartford is nearly nonexistent, allowing for plenty of room to grow,” said CEO Bob Watson.
Typical development costs range from $450,000 to $750,000 and the average unit sales volume is more than $1.1 million.
Each 5 & Diner location runs about 2,800 to 3,000 square feet, employs between 25 and 30 people and takes about seven months to open, according to Tim Sheehan, vice president and CFO.
The company plans to open at least five units in Connecticut over the next few years, Watson said.
“We look for potential owners who have a passion for the ’50s and ’60s, old car culture, owning their own diner or all of the above and then some,” he added.
Before 5 & Diner, Watson led the hospitality management firm LPM Holding Co. in Natick. In 2006, he opened the Worcester franchise with his wife Laurie. In 2008, the original franchisor decided to sell 5 & Diner and Watson bought it.
“When we bought it three years ago, we decided to park the business during the worst years of the economic recession and rather than begin expanding right away, sat down and redesigned everything from the business model to the website to the menu,” Watson said.
“We’re looking to add six to eight franchises over the next two years, or one about every five months. In Hartford, specifically, we’re looking at having two to three deals signed by June 2012, with openings in the following six to nine months.”
To help propel franchise growth, he launched a new prototype designed to lower development costs, introduced a non-freestanding option to attract more investors and updated the company’s marketing strategy.
As part of revamping the retro restaurant, Watson hired Texas-based retail research consulting firm Buxton to help 5 & Diner identify strong markets for potential franchisees. The firm said the U.S. could accommodate 495 units.
“Hartford and New Haven were identified early on as great territories for expansion,” Watson said.
Although seven of the 12 units are in the Phoenix area, Watson is focused on expanding the chain on the East Coast, particularly Connecticut, Pennsylvania, New Jersey and New York.
Bergman is a freelance writer based in North Carolina.
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