A tale of two chicken shops and their franchising strategies
Emma Lin July 5, 2023
Should you choose an urban or suburban market for a new restaurant concept? We asked ChatGPT, and the answer remains unclear.
Courtesy of Dave's Hot Chicken
Courtesy of Rooster & Rice
Today, we take you through the story of two chicken shops–Dave’s Hot Chicken and Rooster & Rice as we look into the considerations of expanding into an urban vs. suburban market.
You may have heard of Dave’s Hot Chicken, a rising chicken chain phenomenon backed by the likes of Drake. In just three years, the brand has expanded to over 100 stores throughout the country. In California alone, it has 56 stores located in various affluent suburban cities, and surprisingly, none in San Francisco City.
Comparably, the similarly successful fast-casual and comforting Rooster & Rice chain inspired by Asian chicken dishes has established its presence in 14 locations, now moving quickly into southern California and Texas. In contrast, Rooster & Rice has 5 locations in the city of San Francisco itself.
Dave’s Hot Chicken locations in the Bay Area
Rooster & Rice locations in the Bay Area
What makes both of these brands individually successful despite having radically different takes on the urban versus suburban debate?
Store Level Comparison
Let’s compare Rooster & Rice’s most popular location in San Francisco's Union Square with Dave’s Hot Chicken’s most popular Bay Area location in Santa Rosa.
First of all, the trade areas of an urban and suburban store are different. Dave’s Hot Chicken’s customers may come by car while Rooster & Rice’s customers often walk or take public transit to reach the store.
Dave’s Hot Chicken's Santa Rosa location and its 15 minute driving boundary
Rooster & Rice's most popular San Francisco location and its 15 minute cycling/public transit boundary
Here is a comparison of the trade areas of the two stores within their respective travel boundaries:
Dave’s popularity soared due to social media presence and celebrity backing. Thus, it comes as no surprise that they are located in an area where 32.3% of households have children (in comparison to 8.1% in the city) to easily reach families and the younger population, many of whom visit the shopping mall and junior college located just down the street.
Rooster & Rice brands its offerings as healthy and simple, a convenient choice for professionals working in the Financial District or after a gym session from any of the multiple fitness locations nearby. Its offerings also evoke a unique nostalgia by replicating asian food stall experiences and is conveniently located a few blocks from Chinatown, where the population is 41.9% asian in comparison to 5.6% in Santa Rosa.
Dave’s faces fewer competing quick serve restaurants within their trade area, and those that do exist lack comparative publicity and media presence. While Rooster & Rice faces significantly more competition in the city, its distinct offering makes it stand out in San Francisco’s food scene that values diverse cuisines and flavor profiles.
Dave’s Hot Chicken & surrounding businesses
Rooster & Rice & surrounding businesses
Because most of Dave’s customers have heard of the brand before visiting the store, the visibility of their location matters less, so it’s located in the interior of a shopping plaza. Rooster and Rice, on the other hand, is located on a busy street for pedestrians walking to nearby office buildings. Both, however, benefit from being located close to well-known national brands such as Starbucks, AT&T, Safeway, and Blue Bottle.
Beyond location, however, franchising strategy differs drastically between these two chains. Rooster & Rice supports both experienced and first time owners, boasting an “air-tight operational model that makes [it] easy and inexpensive to scale” (Bryan Lew, co-founder and CEO). In contrast, Dave’s Hot Chicken invests in an operation team that works only with franchisees who have had previous experience operating more than five fast casual restaurants.
Dave's Hot Chicken taps into underserved markets in the suburbs to generate a loyal customer base, while Rooster & Rice caters to the higher demand in urban settings for international flavors and quick, affordable meals.
There is no one size fits all when it comes to urban vs. suburban markets, and what matters is matching your target market with your offering and brand.
Having a deep understanding of the demographic, competition, trade area of a new site using location data brings the highest chance of success.