Americans are choosing chain restaurants over independent mom-and-pops.
The number of independent restaurants in the United States decreased by 2 percent last year, while the number of chain restaurants increased by 1 percent, according to a 2016 study by the NPD Group, a global information agency.
The restaurant industry is huge; in Arizona alone, the National Restaurant Association predicts $11.5 billion in restaurant sales in 2016.
However, as the numbers show, it is not an even split between independent restaurants and chains.
Mom-and-pop restaurants are losing out to chains, but how can an independent restaurant stay viable in a big-box, mass-market world?
Chain restaurants often have more money backing their endeavors than a family-owned business may have.
One of the tools many chain restaurants use is geographical research to choose their next locations.
Representatives from Starbucks Coffee, Chick-fil-A and Wendy’s spoke at a 2014 conference hosted by mapping software company Esri, detailing its geographic information system technology used by more than 75 percent of Fortune 500 companies. This technology allows chain restaurants to compare data sets concerning auto traffic, consumer demographics, safety information and other factors that can help them choose locations more efficiently.
The technology is a luxury most mom-and-pop restaurants do not have.
“Independent restaurants are historically less stable [than chains], not having the same resources to get through more difficult times,” says Greg Starzynski, director of product management for the NPD Group.
In downtown Tucson, mom-and-pop restaurants are closing left and right. The high cost of rent is the reason some have shut their doors.
Dominic Moreno opened On a Roll on East Congress Street and South Scott Avenue with business partner Javier Trudeau in 2008.
Their rent under the building’s owner, John Wesley Miller Companies, was affordable because the duo opened On a Roll before the real downtown revitalization began, Moreno said.
“Another location we were looking at (near North Silverbell and West Grant roads) had fallen through,” Moreno said. “We got into downtown before everything else was down there.”
On a Roll closed its doors in July 2015 after John Wesley Miller Companies decided to put the building on the market. Moreno knew a new owner would mean higher rent, so with his lease running out, he decided to close the restaurant.
“It was all how timing worked out,” Moreno said about leaving. “Between Miller putting the building up for sale, our lease coming to an end, and family and business stress, (there were) a lot of factors.”
Empire Pizza at South Sixth Avenue and East Congress Street is one mom-and-pop hanging in there, Moreno said.
“Survival is what has to happen downtown now,” Moreno said. “I don’t think many (independent restaurants downtown) are thriving or expanding, but they’re great restaurants doing a great job.”
One of Moreno’s biggest struggles as a downtown Tucson business owner was construction-related.
“In our third year, they shut down Congress and built the streetcar,” Moreno said. “That easily took away 35 to 40 percent of our business.”
On a Roll was not the only business that suffered during the construction of the Sun Link streetcar. Moreno said he knew of at least five businesses that closed as a direct result of losing business due to streetcar construction, including Chileverde, which was at West Congress and North Stone Avenue, and Vaudeville Cabaret, which was at East Congress and North Scott Avenue.
“It took years to recover,” Moreno said of his restaurant’s difficulties during the streetcar’s construction, “but I loved being downtown.”
Although Moreno closed his independent restaurant, he is supportive of more chains restaurants coming to Tucson.
“It keeps the job market here in Tucson,” Moreno said. “As long as (chain restaurants) keep adding jobs, that’s a good thing.”
Losing his restaurant was not the hardest pill to swallow for Moreno.
“The hardest thing about closing my restaurant was having to tell my staff they had to find new jobs,” Moreno said. He let On a Roll employees know about the restaurant’s closure a month prior to give them time to find new jobs.
Moreno has not forgotten about On a Roll. He can’t because former customers continue to talk about it.
“Every time I see regulars, they tell me how badly they miss it,” Moreno said.
There is not a magic formula for mom-and-pop restaurants to stay in business.
Successful models with large followings, like Frankie’s South Philly Cheesesteaks at East Copper Street and North Campbell Avenue, have mastered something. But what that “something” is depends on a lot of factors.
Since Frankie’s opened in 2003, owner Frankie Santos said he has earned loyal customers by providing a consistent taste of Philadelphia in Tucson. Mementos from the City of Brotherly Love cover the walls of the fast-casual restaurant.
After retiring from the Delaware Pilot’s Association, Santos moved to Tucson from Philadelphia, where he was born and raised.
“When we came out here, we had a new concept,” Santos said. “We were going to bring in Philadelphia bread, which was unheard of in Arizona. We were also going to have our own butcher, so that we could butcher our own fresh prime rib.”
But it wasn’t easy.
“It was very expensive in the beginning,” Santos said. “I had two choices: one, we could do what everybody else does, which is just make a basic cheesesteak, have it at a decent price, and try to make a living. Or, we could bring in the Philadelphia bread and get our own butcher shop.”
Santos chose to stay true to his Philly roots.
“It’s much more expensive to make that (authentic) sandwich,” Santos said, “but because of the taste of the sandwich, it keeps bringing everybody in and bringing everybody back.”
As Santos sees it, his decades in Philadelphia make him pretty qualified to own a restaurant that serves Philly food.
“The fact that I’m born and raised Philadelphia,” Santos said, “I am able to make sure every sandwich that we make tastes like back home.”
While loyalty is what keeps many going back to Frankie’s for a freshly grilled cheesesteak, loyalty is also a factor in the success of chain restaurants.
“Every location for an establishment in a restaurant chain uses the same menu” with dishes that are “consistently prepared at each location,” says Wendy Rotelli, a food writer for restaurants.com.
This consistency increases a customers’ loyalty because they can get their favorite dish no matter where they are, Rotelli says.
Another factor that may keep mom-and-pop restaurants alive is having a specialty, Santos said.
“If it’s just a sandwich shop and there’s nothing much different about it, then a lot of times people will choose Jimmy John’s because they think of that first,” Santos said. “There’s so many (locations) and they have so much advertising.”
Frankie’s specialty is, of course, the cheesesteak — but he said it’s best topped with Cheese Whiz, which most South Philadelphians and Frankie’s customers prefer over fresh cheese.
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