Restaurant Franchisor Zoup! Eatery Redefines its Site Selection Process by Leveraging AI with Locate
“Locate helped us redefine what to look for in locations. They have cell phone data that shows where cell phone traffic goes at lunch, on the weekends, and at dinner time. It’s been surprising. Some locations where you think you won’t have weekend business, for example, you really will.” — Richard Zimmer, Director of Franchise Development and Real Estate, Zoup! Eatery.
Who is Zoup! Eatery?
Zoup! is a franchise of locally-owned and operated fast casual eateries with about 70 locations across the U.S. and Ontario, Canada. As a leader of the soup and broth restaurant category, Zoup! offers an innovative menu of soup, salad, sandwiches, mac & cheese, and bowls. The restaurant has been serving soup that soothes the soul since 1998.
Richard Zimmer, Director of Franchise Development Real Estate at Zoup! Eatery, has been with Zoup! for 16 years and in franchising since 1984. From identifying the best site location and building a restaurant, to training a team and opening its doors, Richard loves putting people in business and welcoming them into the Zoup! family.
Finding a Formula in the Game of Sites
The first step for any franchisee after signing an agreement with a franchisor is to identify a site that will create the most revenue, which requires knowing where your best customers are during business hours, and of course, rent.
“Landlords are not giving stuff away. They are changing how they negotiate. The right location is where everyone wants to be, so it’s more expensive. We have to find a little lower rent behind or around that area, and the biggest challenge is what kind of revenue are we going to get to pay those rents.”
For a restaurant like Zoup! lunch has always been its prime business hours, while dinner comes secondary. They have always focused their site selection process on office working people, as well as who lives and shops nearby during their prime business hours. Zoup! needed to understand its store performance on a deeper level, something only data analysis could provide.
“Everybody in the game of finding sites, whether it’s franchisees or for company locations, you’re always looking for a formula. Like, how can we rule out the bad sites? Over the years, we’ve worked with different companies, and we’ve hired statistical analysis consultants to help look at things. We’re always looking for a process that might work.”
With the goal of analyzing correlations between its customer behavior and its sites to rule out bad locations and zero in on good ones, faster and more accurately, Zoup! introduced AI as a site selection tool for the first time with Locate.
“We were new to artificial intelligence. Everything else was more linear, so it was kind of hard to wrap our heads around that in the beginning. But, Locate was great about explaining it, how it might work, and how we could work together. They taught us how it thinks.”
Discovering the Best Combinations to Create the Most Revenue for Zoup! Sites
AI uncovered new correlations for Zoup!’s site selection process that had previously gone unnoticed.
“The technology showed us that some of our old methods are good about validating sites, but not about initial site work. We found correlations that we had not seen before.”
Because AI makes it possible to quickly filter through the hundreds of thousands of demographic, psychographic, competitive, financial, traffic, and other variables that can impact store performance, Zoup! could validate and invalidate assumptions about its customer base.
Zoup! discovered specific customer insights, like people who drink craft beer are great customers and that on the weekend, more women visit Zoup! than men.
“It’s amazing how few choices you have when you’re looking at sites in a certain market. Now, when a good site becomes available, we can jump faster because we have already done the analysis for a certain area.”
Zoup! is looking forward to opening more stores across the country in 2022. The franchisor is proud to have owners looking to open their second and third stores.
“People spend their life savings to do this. They need to be with a company they believe in. We have done this over and over again, and it feels good helping them achieve their dream.”
Locate is a tech-enabled retail brokerage that analyzes over 180 million anonymous mobile devices to help retailers understand their customers and their behavior. To learn more about our data-driven site selection process, get in touch with us here.