Upscale Restaurant Chain Expanding in Texas

DALLAS-Grill Concepts Inc., with Texas set squarely in its sights, has inked a long-term lease for another location in North Dallas and its fourth in the state. This time, the 23-year-old chain from Beverly Hills, CA has plans to open a Daily Grill, sister to the Grill on the Alley that opened last July in the Galleria.

The restaurateur is getting in on the ground floor of the $500-million, mixed-use Park Lane development at the corner of North Central Expressway and Park Lane Boulevard. If the construction schedule stays on track, doors will swing open on the 6,500-sf Daily Grill and its neighbors in late 2008.

It takes "the right real estate" to get the chain to the bargaining table, Wayne Lipschitz, Grill Concepts' CFO, tells GlobeSt.com. The Park Lane site shores up the Texas plan through 2008 "unless some incredible location comes up," he says.

The dual-branded, 25-restaurant chain made its first move onto Texas soil in 2002, putting a Daily Grill into the Westin Hotel at 5060 W. Alabama St. in the Houston Galleria. It also has the room-service contract for the 510-key hotel, helping to fuel 28% growth in same-store sales. "It shows the strength of our brand," Lipschitz says.

Lipschitz explains the two concepts' flexibility is key to understanding the Texas strategy. "We'd like to open another Grill on the Alley if we can find the right real estate," he says. "We've proven ourselves in hotels, mixed use and shopping centers like the Galleria so it's mostly about the demographics to support the concepts." The state's first Daily Grill will open this summer in the 700,000-sf Domain at 11400 Burnet Rd. in northwest Austin.

Lipschitz says the chain's owners had been opening one restaurant per year, but recently beefed up the credit facility to $12 million from $8 million to underwrite the push into select US metro markets. "Our biggest weakness is we never had the capital to grow the brand until recently," he says. The plan calls for four to six restaurants to open annually for two, maybe three, years and then scale back on ribbon-cuttings.

Lipschitz admits scouts are looking at San Antonio and possibly another location in Houston. Meanwhile, Daily Grills are set to open this year in Memphis and Seattle.

Regardless of the venue, Lipschitz points out that each location is distinct due to its drawing power albeit a combo like Galleria shoppers and travelers as in Houston to the differing customer bases projected for Austin and Dallas. Lipschitz says the "sweet spot" is 6,500 sf to 7,500 sf in varied designs. Park Lane's Daily Grill is budgeted at $2.5 million while Austin's is carrying a $3-million construction tab. Steve Jones & Co. of Los Angeles is the chain's architect.