The breakfast/brunch restaurant segment continues to be hot. With work-from-home trends still dominating nationally, many consumers have more flexibility to prioritize leisurely dine-in breakfast experiences with family, friends or colleagues. These menus are generally more affordable than dinner menus and are therefore advantageous to those concerned about rising inflationary prices associated with dining out. Retail space owners love breakfast/brunch tenants because of the increase of customers during weekday morning/early afternoon hours when foot traffic is generally slower. These establishments work best in retail centers with a nice mix of daily errand tenants and non-competing, dinner-focused restaurants. Many of the brunch brands that are buzzing with growth are seeking end cap and standalone second-generation restaurant spaces in more high-end suburban retail centers near luxury multifamily developments, especially sites that can provide full liquor license capabilities. Be on the lookout for First Watch; Eggs Up Grill; The Toasted Yolk Café; Huckleberry’s; Another Broken Egg Café; Snooze, an A.M. Eatery; and Biscuit Belly to all be growing their presence nationally in the coming years.
First Watch expects to continue its trajectory of opening up at least 50 new units per year over the next five years, in both new and existing markets. Look for First Watch to concentrate on expanding into high-growth population suburban towns within the major metros of the South and the Midwest, with Georgia, the Carolinas, Illinois, Ohio, Indiana and Texas on its immediate radar. First Watch, anticipating an increase of customers after all of its restaurants begin offering alcoholic beverages by the end of this year, is now expanding its average square footage to the 5,000- to 6,000-s.f. range, which is an increase from its previous units that were in the 3,500-s.f. range. The new restaurant prototypes will also have separate entrances specifically for carry-out orders. The brand is now targeting more high-end real estate sites to capture the higher income bracket customers, focusing on end caps or second-generation standalone restaurants, such as former Chili’s, within lifestyle centers and neighborhood power centers. The brand will also consider inline units, provided an outdoor patio area is included. Co-tenants should include a nice mix of noncompeting dining tenants, such as Chick-fil-A or Salata, or popular errand stores, such as Lowe’s. First Watch is known for its chef-inspired, healthy breakfast/brunch meals and seasonal menu options.
Eggs Up Grill will be opening about 20 to 25 units this year, followed by 30 new units in 2024, and 50 new units per year for both 2025 and 2026. Units will be popping up in the new state of Texas for the brand, thanks to a 30-unit deal signed with franchisee, Alliance Food Group, which will be focused on opening sites in the Dallas/Fort Worth area. Tennessee and Alabama will also be ripe for growth, as both states were first penetrated by Eggs Up Grill in 2022. Also, anticipate further growth in the South/Southeast, primarily in Alabama, Virginia, Florida and Georgia. Look for Eggs Up Grill to focus on its fairly new prototype, developed three years ago, which is between 2,300 and 2,800 s.f., and features a pickup window for takeout orders. The brand ideally seeks end caps with a patio — but will still consider inline spaces — in secondary and tertiary family friendly suburban neighborhood grocery-anchored centers and strip malls. Co-tenants should be daily errand destinations, such as PetSmart, The UPS Store or Food Lion. The brand has been experimenting with drive-up windows for online orders, which debuted at a unit in Rome, Ga., in 2021, and may consider drive-up capabilities in end cap spaces when determining future sites. Eggs Up Grill is considered a neighborhood destination that serves affordably priced, classic breakfast/brunch fare served in a unique way.
The Toasted Yolk Café franchise expects to open up to 25 new units per year over the next two to three years. Growth will take place in the South and the Midwest, with new states such as Louisiana, Kentucky and Ohio anticipating new units by mid- to late 2023.
Florida, a state which saw its first unit this month in Sarasota, will be on The Toasted Yolk’s radar, especially the Palm Beach area. Other states the brand entered last year, namely Kentucky, Arkansas and Tennessee, will also continue to be eyed for new potential sites, in addition to Louisiana, which saw its first unit in late 2021. The Toasted Yolk’s home state of Texas will also continue to see massive growth, with the San Antonio and Dallas/Fort Worth suburbs being especially hot.
The Toasted Yolk seeks second-generation restaurant spaces in the 4,000- to 6,000-s.f. range. Inline, end cap or freestanding sites will be desired, ideally with a patio area. Regional shopping centers or grocery-anchored centers in affluent suburban markets with a population of 75,000 in a three-mile radius are preferred. The local average household income should be $100K+/year. Ideal co-tenants include upscale grocers, such as Whole Foods Market or Trader Joe’s, as well as popular big-box brands, such as Costco. Sites should also be close to schools, medical facilities or businesses. This summer The Toasted Yolk will debut its first ground-up new build prototype in Mont Belvieu, Texas, which will feature an open-air bar area in the center of the dining room, leading to the patio. The Toasted Yolk is known for its chef-driven breakfast and lunch menu, as well as its full bar offerings.
Huckleberry’s, an established brand in California, opened its first unit in Nevada last year, the first outside the Golden State, and is now on a roll with national franchise growth. Projections are for 15 to 20 new units in 2023 and 20 to 30 new units in 2024. In addition to continued growth throughout California, the metros of Texas and Tennessee will also be targeted this year. Beyond that, future expansion will be focused on the Midwest, followed by the Southeast. The franchise chain, acquired by Heritage Restaurant Brands in 2016, looks for space in the 3,000- to 5,000-s.f. range in regional shopping centers with a daytime population of 100,000 within a three-mile radius. Sites should be in a community with a $75K median income. Huckleberry’s has a lot of flexibility with regards to preferred space, and will consider freestanding buildings, inline units or end caps, ideally with a patio area. Co-tenants can include grocers, such as Trader Joe’s, popular department stores, such as Target, and nearby motels or hotels. Huckleberry’s has a unique experiential interior concept that mimics the look of a Mississippi River bayou, and its food is described as southern cooking with a California twist.
Another Broken Egg Cafe is looking to open about 15 to 20 new units per year over the next two to three years. Expansion will take place in Elkridge, Md., a new state for the brand, along with continued growth into the Southeast and Southwest, with Orlando, Fla., Houston and Austin being targeted for the immediate future. Expect other underpenetrated Southern states to also be getting new units, especially Virginia and Mississippi, and for additional Western markets to be on Another Broken Egg’s radar, notably in California and Arizona. The eatery, which continues to open its latest “New South” restaurant format that first rolled out last year and features a full bar/extended patio layout, looks for space in the 2,600- to 4,000-s.f. range. Preferred sites are in lifestyle centers, power centers and strip malls in higher end suburban and urban markets, with non-competing daily-visit co-tenants, including CycleBar or CVS Pharmacy. Another Broken Egg Café is known for its upscale yet Southern-oriented menu items, such as Crab Cake Benedict, as well as its extensive signature cocktails, such as its Brunch Blueberry Margarita.
Snooze, an A.M. Eatery will be opening about 10 restaurants this year, followed by 12 to 13 new restaurants per year over the next three years, at least, beginning in 2024. New units are expected this year in Plano and Lubbock, Texas, and rumored areas that Snooze is considering expanding into in the future include Savannah, Ga., Charleston, S.C., Boise, Idaho, Miami, St. Louis, Indianapolis, Washington, D.C., Columbus, Ohio, and possibly Northern California, such as Sacramento and San Jose. Snooze seeks space in the 4,000-s.f. range in both high-traffic urban mixed-use spaces and upscale suburban lifestyle centers alike. Locations should be close to multifamily developments and offices that attract high-earning millennial customers. Co-tenants can include other higher end, trendy dining and grocery establishments, such as Whole Foods Market, BJ’s Restaurant & Brewhouse and Handel’s Homemade Ice Cream. Snooze, an A.M. Eatery has a retro-50’s interior and exterior, and the restaurant specializes in healthy dishes, such as sunny-side cage free eggs, and unique cocktails.
The Biscuit Belly franchise is planning to open up to 10 new units per year over the next three to five years, with growth focused in the Southeast and the Midwest.
Immediate expansion will take place in states such as Alabama, North Carolina and Virginia, followed by continued growth into Georgia and Kentucky. From 2024 on, look for expansion to take place in Mississippi, Louisiana and Texas. Cincinnati and Indianapolis are also high on Biscuit Belly’s radar. Preferred spaces are end caps in the 2,700- to 3,000-s.f. range, in both urban and suburban markets, within strip centers, grocery-anchored power centers and lifestyle centers. Co-tenants should include high-traffic errand brands, such as Kroger, or noncompeting fast-casual restaurants, such as CAVA. Local areas should have a median household income between $70K and $150K/year. Ideal sites should be in close vicinity to dense apartment developments, and there should be a large population in the 25- to 45-year-old range. Biscuit Belly, which describes its menu as “Southern Fare with a Twist,” serves family friendly biscuit-heavy items such as biscuit sandwiches and biscuits and gravy, as well as brunch cocktails such as coffee with bourbon and Tequila Sunrise.
