Multiconcept Restaurant Operators Rely on Flexibility, Economies of Scale

Published on Tuesday, August 09, 2011

Written by The Editors

Multiconcept operators get the best of both worlds. These companies are able to take advantage of the economies of scale and efficiencies characteristic of chain restaurants while also enjoying the local patronage and menu flexibility of independent operators, according to The Top 200 Leading Multiconcept Operators Restaurant Report, published by Technomic, a Chicago-based foodservice research firm.

Technomic defines a multiconcept operator as a company that owns and operates at least three unique restaurant concepts with annual sales of $10 million or more. Multiconcept operators range widely in terms of size and scope, going from from industry giants like Lettuce Entertain You, Levy Restaurants and Wolfgang Puck Companies, to smaller operations such as Kalamazoo's Millennium Restaurant Group (6 concepts), Cincinnati's Tavern Restaurant Group (5 concepts and 15 units), and Denver's Sage Restaurant Group (9 concepts).

While the companies may not command market share comparable to the country's largest chains, they do occupy an important niche for foodservice suppliers and distributors, with 116 of the top 200 Multiconcept Operators having annual sales of at least $30 million, according to Technomic. Overall, the top 200 companies represent 1,448 concepts, 2,367 units and more than $5 billion in annual sales.

"There are a number of trends contributing to multiconcept operators' current success," says Mary Chapman, director of Technomic. "These concepts are more easily able to offer seasonal menus and focus on local relationships that make the experience feel unique to diners. Many customers may not even be aware of the relationships between concepts and think of these restaurants in the same way they view other local independent restaurants in their area."

Chapman also points out that these companies can easily change the allocation of resources between brands in order to stay ahead of the curve when it comes to industry trends.