Famous Dave's of America Inc. (DAVE), a well-known chain of barbecue restaurants, is on the verge of restructuring its store portfolio in Maryland. As part of the initiative, Famous Dave’s will close the Gaithersburg unit and open the Germantown unit next month. Another of its unit at Timonium, Md. remains under construction.
Per management, the lease agreement for the 10-year old Gaithersburg location will expire next month. Hence, management decided to relocate to Germantown to support better growth prospects for the company. The new Germantown unit will be spread across approximately 5,200 square feet and house around 171 customers. The Timonium unit can accommodate around 175 customers.
Famous Dave's ventured into the Maryland market 13 years ago. The emerging restaurant industry in Maryland might have caught the attention of Famous Dave’s, which stuck to its decision of further expanding in the state. As per the National Restaurant Association, the restaurant industry of Maryland has the potential to generate about $10.3 billion in restaurant sales in 2013.
We note that the company has outlets across several locations in the state including Annapolis, Alexandria, Columbia, Falls Church, Frederick, Laurel, Owings Mills and Waldorf. The opening of the Germantown unit in mid-September and the Timonium unit in November will take the tally of Famous Dave's units in Maryland to 10.
Minn-based Famous Dave's is focused on improving its business model through a series of initiatives including remodeling ventures and investments in corporate infrastructure system. In 2013, Famous Dave's expects to launch 11 restaurants among which 2 are company-owned. The launch of one unit, slated for a 2013 opening, has been deferred to early 2014.
At the end of the second quarter of 2013, the company operated 187 restaurants, including 53 company-owned and 134 franchise-operated restaurants across 34 states in the U.S., the Commonwealth of Puerto Rico and one province in Canada. Famous Dave's current holds a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other players in the restaurant industry, which are similarly placed, include The Wendy’s Co. (WEN), Domino’s Pizza Inc. (DPZ) and Burger King Worldwide Inc. (BKW), all carrying a Zacks Rank #2.
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