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Five Guys restaurants keep things simple. The franchise chain serves hamburgers made from fresh—never frozen—meat and hand cut french fries. It sets itself apart from larger burger chain competitors with its hand-crafted approach to food and by what common aspects it leaves out.
There are no burgers stacked in warming trays because all food is made to order. And, the stores have historically lacked another fast food mainstay. “We always said that we’d never be a drive-through business because of the way that we cook to order,” says Sal Nappo, Southeast regional real estate director for Five Guys. That philosophy was challenged when the COVID-19 pandemic struck, though. In response, the company began to think outside the box and incorporated pick-up windows into some its designs.
Five Guys is now testing some locations where customers can order meals online and then drive to a window to pick up their orders. Meals are still made to order, but customers have the option to retrieve them without leaving the comfort of the vehicle. The Five Guys mobile app makes this process easier, as it tracks the location of customers, informing restaurant associates of the time they are expected to arrive.
Five Guys’ pandemic response illustrates how critical it is for a large restaurant chain to quickly adjust to new market conditions. Nappo, who has been attracted to the commercial real estate business since childhood, enjoys the fast pace of the industry. Building relationships with developers, real estate brokers, designers, contractors, and franchisees is the key aspect of his role, he says. Solid partnerships with the right people are essential to responding to challenges, finding the best sites for expansion, and supporting franchisees.
Nappo’s father was a real estate investor and his mother was a broker, so he was exposed to the business at an early age. He noticed that many of the successful adults he encountered were involved in real estate, and that nudged him down his career path. While enrolled at the University of Georgia, Nappo tested his aptitude for the business by working part time as a realtor, selling a couple of homes per year.
A two-year stint as a real estate representative with restaurant chain Waffle House, including responsibilities for site selection, land acquisition, and development, prepared him well for his current post. He joined a hot company in Five Guys, which had an impressive expansion spree from 2009 to 2011, adding 2-300 new sites a year. Growth continued after that two-year burst, albeit at a slightly slower pace.
Then the coronavirus struck last year, forcing a major reevaluation of strategy. “COVID-19 flipped the entire real estate world on its head,” Nappo says. Restaurant chains, along with many other businesses, focused on making adjustments to the new paradigm of social distancing and reduced in-store capacity. Adaptation was crucial for survival.
Five Guys had already tweaked its brick-and-mortar designs to accommodate online ordering and the increasing popularity of meal delivery services such as DoorDash and UberEats. Many sites had also created dedicated parking spaces for pick-up and delivery. Inside, counter space was set aside for these services.
So, when the pandemic hit, Five Guys was ready for expanded take-out and delivery. It soon became clear, though, that some customers also wanted the option to receive their orders without entering the building. So, Nappo and the real estate team along with construction, design, and operations all collaborated together to develop a plan to install pick-up windows wherever the configuration of a Five Guys site allowed it and the market supported it.
Some sites are located within a large strip mall structure with no side wall for a drive-up window. Some of those locations found an alternative: a curbside tent and table to distribute pick-up orders. While Five Guys hasn’t committed to pick-up windows as a new design requirement, the features may have lasting appeal, particularly if the pandemic continues beyond 2021. “On every new construction deal, I am certainly evaluating the pick-up window option,” Nappo says.
Site selection depends on many other factors, with high-volume traffic and visibility high on the list. For best results on site selection, it’s better to plan far ahead. “You have to create opportunities, not react to current activities,” Nappo says.
Trusted real estate brokers who know the ins and outs of local markets are indispensable to finding the best locations, Nappo says. “You can’t do everything yourself,” he says.
Loyalty to business partners including brokers is a must. “You’ve got to protect your guys,” he says. If a developer or landlord offers savings on a deal by cutting the broker out, Nappo won’t accept it. He says, “That’s not how we do business. Five Guys is a family-owned business and we take care of our people, partners, and customers as if they were family.”
Few sites are perfect, and all have their quirks. For instance, he’s run into locations that have great potential in terms of traffic and customer base, but with large trees obscuring the building. That prompts negotiation with the developer on a solution that might include trimming the trees, or increased parapet size, or larger signage.
Attending to these types of details are how Nappo earns his keep, and his positive approach to problem-solving may be the key to his success. It’s just like a mentor once told him: “There are no problems in commercial real estate—only opportunities.”
