Improve your success entering new geographic markets

Growth through new stores

Get your real estate model and new store marketing plans right

New unit growth is one of the best ways to drive additional revenues and profits. It leverages what your organization already does, just in a different place. But it’s not without risk, as it’s unclear if the concept will work in new geographic markets. 

I recently spoke with a mid-sized company looking to restart new unit growth. The company is an established concept that has operated in the same geographic markets for a long time. The conversation was interesting because they want to move beyond legacy markets into “greenfields.”

These are essential moments for concepts—proving your concept can extend into new geographic markets will release a massive upside for revenue and income.


Improve upon the limitations of your real estate model

Your real estate model is only as good as the information upon which it’s based. 

These models utilize data based on your current footprint. Potential areas for development are identified based on markets and trade zones that look similar to your better stores. It starts with the presence of who is using your concept, how often they are coming, and how much they spend per visit. 

Four sources to feed consumer-level information include:

In-store surveying

  • Engage those visiting your store and ask for basic information such as zip+4 and how often they visit. Somebody can then enrich via other data sources. For this study to represent your customer base, it usually has to run for long periods and include some incentives. Even then, it’s likely to underrepresent certain segments.

Credit cards

  • Credit and debit cards represent more than 70% of purchases in restaurants.* Assuming you have some means to determine that this 70% is representative of the larger whole, this can be a means of understanding visitation at the store level.

Location-based data software as service solutions

  • Location data can provide the geographical context to make more informed decisions. For example, it can give information about property, mobility, demographics, and addresses. While location data is readily available, looking at the appropriate format and place is critical for making informed decisions. To help manage the differing focus and varying quality of data sets, companies will sometimes purchase multiple datasets to help mitigate any risks.

Behavioral market segmentation

  • Another way to understand the presence of consumers in given markets and trade zones is through geodemographic systems. These systems have identified segments based on socioeconomic and demographics. With a cross-tabulation against your current customer, you can identify new markets and trade zones to enter.

When thinking about greenfield expansion, there is an essential limitation of this approach to bear in mind. The model assumes segments in greenfield markets will behave like legacy markets. Which they likely will. After the same time in the market, years of promotion, and experience with your concept. 

But is it reasonable to assume they will right at launch? 

Ensure you have a model for how you will build usage and that your investment in marketing is adequate to support the model and achieve your goals.


Build a new unit opening specific marketing plan

Will your marketing spend on new-unit openings be as efficient as your current marketing line?

Your current marketing line enjoys efficiencies in the forms of length of time in the market, footprint density, and being part of regular traffic patterns. Will your new units enjoy those same benefits out of the gate? 

There will be other costs that your current units don’t have to bear, like “grand openings,” as well as all the little things a restaurant does to integrate and ingratiate itself into the community.

Yes, you can target geographically, focus your keywords, and use various traffic-driving offers. But to gain the reach and attention you may well want, you’ll want to consider solutions that will seem less efficient (but will be more effective). 

There will likely be resistance to spending as much as necessary as organizational incentives are rarely aligned. Failing to address this, you create risk around your ability to fund/drive growth and future valuation.

Start by identifying key marketing measures that lead to store and market-level success. This information will likely come from various sources such as trackers, third-party in-market collection, in-store collection, and in-house programs. They might include measures like:

Unaided awareness

  • If one of the main goals is to be thought of when someone is considering breakfast/lunch/dinner, then being part of that “consideration set” without any prompting becomes a critical goal.


  • Percentage of the market or trade area that have tried, as well as total penetration of your target.

Usage levels

  • Usage by frequency levels and consideration for your key buying situations.

Key brand attributes

  • Specific attributes from your brand promise and principles you know/believe are linked to market success.

Excess Share of Search (eSOS)

  • Excess Share of Search (eSOS)** predicts a change in market share up to six months in advance.


Next, collect and analyze this data for the markets/trade zones you wish to enter and a representative comparison market. Consider your recent history with opening new stores or less developed markets than your more mature legacy markets as your baseline. 

You will want to understand variances to provide focus on strategies, tactics, and investment levels you will need to achieve your goals. Remember, the volumes and key marketing measures your better stores enjoy today were not born overnight. Sequence and pace your efforts accordingly. 


Add new segments to increase potential footprint

Based on the appeal of your concept and limitations around cannibalization, there will be a limit to how many units your real estate model says you can profitably build.

However, you can increase the number of units you build by getting your existing customers to spend more or expanding your market penetration. For most restaurants, the evidence points to expanding your market penetration as the most sustainable path to increasing your revenues.***

Find segments that geographically live/work/play close enough and who under-index with use. Identify the larger segments and their barriers to use that can be readily addressed. (Re)work your concept if/as appropriate, and intentionally promote. Not only will you pick up the additional volume in stores with these segments, but if done right, you will open up new markets or trade zones that your real estate model previously said your model could not support.



This strategic brief covered improving your odds of success in new markets with a focus on real estate and marketing. While opening additional stores does leverage much of what the company already does, other areas must be planned to ensure success. Some of these include building a store-level management team and ensuring your supply chain can handle the additional volume.

Despite these additional challenges and the inherent risks, building new stores can be a great way to expand opportunities for all stakeholders and help keep your company thriving.