A homegrown fast-casual restaurant chain that bills itself as a healthy option for eating out is sprouting four locations in Colorado and Texas in 2015.
Denver-based Modmarket’s 13th through 16th stores will open this year. And the company’s co-founder, Anthony Pigliacampo, said he thinks that’s just the tip of the iceberg and that the U.S. market could support hundreds of his stores.
“The goal is to build as large and successful a company as we can,” he said. “People eating out more help our business plan – I want to be the kitchen replacement.”
Pigliacampo, a 35-year-old University of Colorado at Boulder engineering graduate, said he started the company in 2009 on a hunch that customers would eat the sort of made-to-order meals he would, himself, like to buy.
“I was really frustrated by the lack of healthy, affordable dining options,” he said. “I thought that I could engineer a better store for that.”
The company has grown at an average of two restaurants per year. Modmarket has even taken a bite into the big boys’ territory – its 16th Street Mall location is a former McDonald’s. Its new Colorado locations are planned for DIA, where it already operates one restaurant, and Colorado Springs.
“Healthy food is becoming more mainstream. Whole Foods is a household name now,” Pigliacampo said. “It drives the demand curve. More people want this food, and we’re the people who can deliver it to them.”
Modmarket’s menu includes salads, soups and sandwiches, as well as seasonal, gluten-free and vegetarian and vegan options, all hovering around $10.
Other companies have tried to cash in on the healthy eating trend – even Taco Bell has announced that it will be eliminating artificial colors and flavors from its food this year. But Pigliacampo said his brand has an advantage over its competitors because it began in the healthy food scene and isn’t playing catch-up.
While customers have traditionally been young, working women, Pigliacampo said, other demographics are showing interest in the brand, particularly retirees.
It costs between $500,000 and $1 million to open a Modmarket, depending on its location, Pigliacampo said. In the case of the four new restaurants, he said, that money is sourced from existing cash flow and private investors. Pigliacampo said Modmarkets typically become cash-positive within a month, not including construction costs.
The biggest challenge to the chain’s plans for growth is the hot real estate market. The company looks for retail locations that are about 3,000 square feet and in a central trade area.
“If you think of your routine, there are places you go on a regular basis,” Pigliacampo said. “We try to find sites in those highly-trafficked areas to place Modmarkets because we want to fit into your weekly life as tightly as possible.”
But the same properties that Pigliacampo looks for are in high demand.
“The only reason there aren’t 50 Modmarkets right now is because of a lack of real estate,” he said. “Everyone wants to be in a great trade area. In those areas, even bad restaurants can do well.”
The new Texas and Colorado stores aren’t Modmarket’s only expansion plans. Pigliacampo is also looking at untapped markets that include Phoenix, Minneapolis, Chicago and Austin.
“We’re looking at anywhere that we can expand quickly,” he said. “I don’t see a maximum. There can easily be hundreds and hundreds of Modmarkets.”