How Fast Food Chains Pick Their Next Location

August 28, 2014

Fast food was growing at a fevered pace prior to the recession arriving in 2008. Since the slow down, most chains have cut back on locations with low performance and take more care with site selection when they do choose to expand. A lot of money goes into construction when a new location is added, so chains have to minimize risks and maximize payback.

The biggest names in the business are turning to high tech trend tools to decide how well a specific location will perform in the future. Geographic information systems tell the site management teams all they need to know to make a decision. For example, fast food chains tend to look at the consumer demographics of the neighborhood and the car traffic levels to see how much attention the location might receive.

Some chains, such as Starbucks, own their own in-house software solutions for tracking these kinds of details. Other fast food giants turn to data brokers instead to save money. Either way, they compare retail clusters located nearby to find populations of hungry workers looking for a quick lunch. Public transportation stops also factor in to create a wider picture of the chance of success.