5 McAlister’s Deli

Opening nearly 40 restaurants in a roller-coaster economy is no easy feat. But fast growth has been par for the course for McAlister’s Deli since Phil Friedman and Michael Stack bought the Ridgeland, Mississippi–based company in 1999. “I always want to do more,” says Friedman, McAlister’s president, chairman, and CEO.

In preparation for hitting the 300-store mark, McAlister’s hired Ken Green, a Friendly’s Restaurant alum, to serve as senior vice president of operations. McAlister’s will continue to recruit experienced staff who’ve been through growth spurts at other concepts, Friedman says. Marketing and human resources professionals are targets.

Product development will continue into 2009, with new offerings such as paninis and the Café menu, which lets customers choose any two items from the list that includes the soup of the day, a café sandwich, and side salads. McAlister’s suggested price point for the combo is $5.99—“The first time we’ve merchandised a price point,” Friedman says—but franchisees can opt for a higher cost depending on their location.

The chain has worked on concept enhancement with the addition of plates and silverware, which creates a more attractive presentation for salads.

McAlister's also improved kitchen efficiency, resulting in the need for less space. Instead of the traditional 3,600 to 4,000 square feet, the preferred location dropped to 2,800 to 3,000 square feet, which helps offset increased construction costs.

One secret to success in this economy, Friedman says, is to keep customer price points reasonable and avoid recouping vendor price increases all at once.

6 Pei Wei Asian Diner

Silverware, heavy-gauge napkins, and china distinguish Pei Wei from many competitors. Yet the concept, owned by Scottsdale, Arizona–based P.F. Chang’s, seeks to stand out even more.

The chain in 2007 and 2008 engaged in intense market research. “We want to do a better job of selecting our markets,” says COO K.C. Moylan, who took the job in 2007.

Menu offerings have been reduced to focus on core items with a high volume. “It makes it easy for us to execute, and it’s what the customer really likes,” Moylan says. “We also want to do great features.”

To that end, Pei Wei tested between 10 and 20 new selections within the last 10 months. Dishes were tested in three to four markets for up to 35 days. Two might debut in 2009.

Because Pei Wei is 100 percent owned by a well-capitalized company, franchisee financing has not been a hindrance to growth, Moylan says.

The strategy is to hit a market hard with three or four stores and expand with up to eight. The chain plans to open 10 stores in 2009, down from the 35 it opened in 2007. “We’re cautiously optimistic,” Moylan says of the economy.

7 Taco Cabana

It is easy to tell that Taco Cabana was born in San Antonio, Texas. In 2008, 142 of the chain’s 147 restaurants operated in Texas, primarily in Houston, where more than 40 Taco Cabana restaurants were temporarily closed after Hurricane Ike swept through the area.

Despite its heavy presence, Texas is far from saturated, says Alan Vituli, chairman and CEO of Taco Cabana’s owner, Carrols Restaurant Group in Syracuse, New York, which also owns Pollo Tropical and operates several Burger Kings.

The economy, however, is having its affect on development. Vituli in a press release announced plans to limit discretionary capital spending in 2009, anticipating total capital expenditures across the company at $20 million to $30 million with new unit growth reduced from 2008.

Any additions will undoubtedly follow the existing model, which is 3,200 square feet and freestanding with an outdoor patio.