The new general manager of the restaurant chain Gregory''s, Cristian Mesaros, says that players on the fast-food market have to go hunting for commercial spaces, as though they were real estate agents.
He says the outlet network he runs is in unrelenting competition for spaces, but there are still some limits set by shareholders.
"We have certain limits related to rent, area, and contract duration. Rent plays an important role in the category of costs, and then comes the location itself," Mesaros explained.
The costs entailed by the opening of a new outlet range between 80,000 and 130,000 euros, depending on the size and the condition of the rented space. The company has 10 outlets in Bucharest and this year intends to open another three in the same city, as well as granting franchises for the markets outside the capital city.
"We are hunting for several spaces simultaneously. We know our policies very well, but we also depend on the availability of spaces in the areas where we want to open outlets," said Mesaros. As a rule, the company considers around 10 areas, on the basis of which it makes its selection. "There are certain areas we monitor closely, but there are others which the market brings to our attention," he argues.
Mesaros also said the company would open a new logistic centre in Bucharest this year.
"With regard to nationwide expansion, the issues pertaining to logistics must be considered very carefully," he considers.
The identification of suitable franchise partners is one of the biggest challenges in the opening of a location outside Bucharest. "One cannot afford to make mistakes, because locations cannot be opened only to be closed without harming the company''s image," says Mesaros. By the end of 2007, the company will open two Gregory''s & Coffeeright locations under a franchise system outside the capital city.
Until the franchises are granted, the company is focusing on the Bucharest market, which the general manager still considers to be large, with the tight competition seen recently acting to boost the market.
"We are all competing over food, but the battle is being fought inside restaurants. On the fast-food market, concepts might differ, and there are not many overlapping product offerings," Mesaros considers.
Location thus becomes the most important advantage and this is one reason why Gregory''s marketing budgets go to promotion within outlets themselves, rather than towards purchasing advertising in other media.
"Location, products and the people selling them form the basis of our concept. The rest are tactical strategies that help us develop the concept," he explained.
Mesaros does not rule out the company embracing a more aggressive, direct promotion policy this year, but activities and marketing budgets will further be based upon the product offering.
"Without products, you only have some walls that you''re paying rent for," says the general manager of Gregory''s.
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