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Fast-Food Expansion Slowdown Less Slow in Dallas-Fort Worth
Friday, August 21, 2009 3:54 AM


(Source: The Dallas Morning News)trackingBy Karen Robinson-Jacobs, The Dallas Morning News

Aug. 21--Even with consumers hurrying into fast-food restaurants to stretch their dining dollars, openings of the eateries have slowed across the country.

With construction financing scarce and the economic outlook uncertain, busy cash registers have not always meant busy builders, restaurateurs and real estate experts say.

The slowdown has been less pronounced in Big D, where nearly 60 percent of restaurants are classified as "limited service" or fast food.

Although the number of Dallas-Fort Worth restaurants fell 1.1 percent between March 2008 and March 2009, the fast-food count grew 0.8 percent, according to the Spring ReCount report from the NPD Group, a research firm in Port Washington, N.Y.

Nationally, the total restaurant count fell 0.7 percent and fast food was virtually flat.

"The implication is that Dallas, with a growing population, is still seen as a growth opportunity," said Greg Starzynski, ReCount's director. "As far as unit growth, ... [D-FW is] faring better than the rest of the U.S."

Even so, growth in Dallas has slowed from 2007 and 2008, when the number of fast-food restaurants rose 2 percent each year, according to ReCount.

"It's dramatically slower than anything I recall for at least a couple of decades," said Alan Hixon, president since March of Plano-based Mooyah Burgers & Fries. "There is some growth taking place within the segment, but overall there is a substantial slowdown."

Dan Harris, vice president of the retail division of Henry S. Miller Brokerage, said starts have slowed in part because of the drum-tight credit market. About 86 percent of fast-food restaurants are owned by franchisees, according to FranData, an Arlington, Va., research firm. And most franchisees need financing to grow.

"Sales have been strong, yet expansion has slowed relative to two or three years ago," said Harris. "There were franchisees with a dozen locations. Suddenly they could not obtain funding to expand."

Growth also has slowed because developers have dropped or delayed plans to open shopping centers, which typically serve as host sites, said Brian Glaser, president of the D-FW commercial retail division of the Weitzman Group.

"New big-box development growth has halted," Glaser said.

Fast food "lives and breathes with Wal-Mart, Lowe's, Home Depot and Target," he said. "If there's no power centers being built, there's no place for fast food to go.

"Given the state of the economy, we're just not seeing the opportunities like we did."

To the extent that there is growth locally, much of it is in the "fast casual" subcategory.




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