David Page, the restaurateur and current chairman of Fulham Shore – owner of the Franco Manca and The Real Greek chains – says it is becoming cheaper to open new restaurants due to landlord incentives.
An unprecedented amount of capital has been invested in the UK restaurant sector over recent years, with demand for sites leading to increased property costs.
But following the recent challenges facing the market, and operators slowing their expansion, there has been a rebalancing in the market, according to Mr Page, whose group operates more than 60 sites. He says landlords are now making it more attractive to tenants in a bid to fill vacant premises.
“The capital needed to open a new restaurant is declining due to landlord incentives. Incentives alone, however, are never the right reason to open in a particular location and, if anything, this could continue poor expansion decisions being made in the sector,” he said.
“We still intend to open a limited number of new restaurants this year and to fund these openings largely from our internally generated cash. Any increase in our openings target would be for stand-out and highly profitable locations which would immediately offer above average returns.”
Mr Page said that negotiating low rents supports his company’s ability to offer low menu prices.
“Franco Manca especially concentrates on finding compact sites that may not be in the most prime locations,” he explained. “These off pitch locations are often at lower rents, but there is balance as it may take time for customers to find us and for the individual site to build up trade. We fit the premises out for what they are: hardwearing pizzerias built for very high volumes. Our two design imperatives are Enzo Apicella’s original artwork and our industrial and spectacular pizza ovens.”