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Red Robin Expands in Upstate NY

Zacks Equity Research

In a bid to grow further, several U.S.-based restaurateurs are focusing on unit expansion. Greenwood Village, Colo.-based casual dining restaurateur, Red Robin Gourmet Burgers Inc. (RRGB), which operates as many as 482 units in the U.S. and Canada, is also geared to expand its presence further in the lucrative domestic market.

Recently, Red Robin declared that it is set to open a restaurant in Rochester, NY in the next week. The company also announced that it will contribute all the sales from its signature Freckled Lemonade during the grand opening week, which will start from Jan 13 to Jan 19, to the non-profit entity — Alex's Lemonade Stand Foundation.

Positioned at Greece Ridge Center Drive, this will be the second Red Robin restaurant in Rochester. We believe that the spacious unit with its signature food offerings like Royal Red Robin Burger and Red Robin's Freckled Lemonade will add to the company’s sales.

Red Robin operates only 12 restaurants in New York, one of the underserved markets in comparison to California, where it boasts 69 units. In Dec 2013, Red Robin unveiled a restaurant in New Jersey, another underserved market, where it operates only 10 units.

Additionally, the company is keen on expanding its smaller prototype restaurants — Red Robin’s Burger Works. In early Dec 2013, Red Robin opened a new Burger Works in Fort Collins, CO. This is the sixth Burger Works prototype restaurant currently operating in some distinct areas of the U.S. and plans to open more such units this year. These expansions are in line with the company’s policy to accelerate growth in non-traditional locations and boost return on investment.

Red Robin holds a Zacks Rank #3 (Hold). Investors interested in the restaurant industry may consider stocks like Fiesta Restaurant Group, Inc. (FRGI), The Cheesecake Factory Inc. (CAKE) and Cracker Barrel Old Country Store, Inc. (CBRL). While Fiesta Restaurant sports a Zacks Rank #1 (Strong Buy), The Cheesecake Factory and Cracker Barrel have a Zacks Rank #2 (Buy).

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