Atlas Restaurant Group was projected to generate $85 million of business coming in 2020. But COVID ruined those plans.
But Alex Smith, CEO of Atlas, thinks the environment is right for growth. It recently acquired the Admiral's Cup in Baltimore, unveiled a $1 million teppanyaki room inside its Japanese restaurant, and opened another new concept called Monarque. Later this year, Atlas plans to open two more restaurants in Baltimore and is continuing its plans to expand to DC.
Smith thinks this recession offers restaurateurs an opportunity to secure management deals in spaces that might otherwise be unattainable, as landlords need rental income to pay their banknotes.
"There are a lot of developers out there with big projects still moving forward, and they're going to have empty space all over their development," Smith says. "Now, landlords who have capital behind them are looking to build out spaces for restaurateurs to provide traffic into their developments."
Currently, Smith is talking to a few developers.
"We're talking to people that have big-time developments that normally would be leasing space, but are now are looking to build out these spaces for a competent operator to come in and run a good concept to drive traffic to their development," Smith says.
Finding capital for restaurants is extremely difficult right now, according to Smith. So, developers' willingness to work with restaurateurs can be a huge win.
"Nobody is going to sign a lease deal for the next year," Smith says. "The space is going to sit empty. So developers' philosophy is 'OK, we'll build it out, get somebody in here and at least we have the space [occupied].'"
As a group with some scale and 1,000 employees, Atlas makes an attractive partner for these developers, according to Smith.
"We're an operator that will have 22 units by March," Smith. "So they look at us, and they're like, 'Hey, you guys have the infrastructure and the people to go and do a few of these deals."
Then it is up to Smith to choose the deals that work.
The performance of Atlas' restaurants throughout the pandemic has been directly dependent on the local jurisdictions that it operates on, according to Smith.
"In Florida and Houston, we're doing 100% percent of what we did last year in sales at this point in time," Smith says. "Whereas in Maryland, we're in phase one, and we have to close by 10:00 PM. We're only allowed 25% occupancy and we're doing about 70% or 75% of what we did last year."
Atlas has taken safety precautions to limit the spread of COVID by spraying down surfaces. "In certain types of stores, we have plexiglass up," Smith says.
In-restaurant dining is especially crucial to Atlas because it doesn't have significant take-out business at any of its properties. "It [business] is from people that are coming in and sitting inside or outside and dining with us," Smith says.
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