Recently, I scrolled through the Kansas City subgroup on Reddit and saw an interesting post wondering what the relationship was between two fast food chains in our area: Whataburger and Andy’s Frozen Custard. While the original poster assumed that there was something suspicious going on, it did spark a conversation of people noting other retailers and restaurants that often are located near each other. It happens often, and for good reason: many retailers and restaurants use similar strategies during the site selection process.
Most people can think about an area in their town or city where there is a string of fast food restaurants all in a row, which seems odd. Shouldn’t there just be one burger place, instead of a Burger King, next to a McDonald’s, next to a Wendy’s? Well, those chains often select high visibility locations near major roads or highway exits, so with the same strategy, they end up in the same places. Similarly, in a grocery store parking lot, there is often a drugstore taking a pad site. When you target the same basic demographics, traffic patterns, or accessibility, similar retailers are naturally going to situate together.
To clear up the original suspicion, we did some research on the ownership groups of the locations in Kansas City. While the Whataburger locations are owned by KMO Burgers, LLC, the Andy’s Frozen Custard locations appear to be company locations not franchised, so that takes out any potential for the same ownership group choosing similar sites.
To see these locations on a map, we asked Sam at REBLIE to create a POI map for us of the Kansas City area showing the Whataburger and Andy’s locations. REBLIE is a commercial real estate mapping tool endorsed by the CCIM Institute, available at a great price, and, in full disclosure, uses AGS demographic data to power their software. They have an extensive logo database which can be populated on maps for brokers and retailers to easily identify businesses that surround any site.
As you can see, there are a number of locations where there are both an Andy’s and a Whataburger, with one on the north side of the city and the rest on the south side. While there are standalone locations in the center ring, 10 miles from the downtown core, they are all in locations that have been around for a long time, and the locations in the 20-mile ring are newer locations. In fact, most of the southern locations where the two restaurants overlap are in new build developments.
If there was any collusion at all, these new developments may have sought out these two chains to come to their locations. After all, both Whataburger and Andy’s have announced that they want to expand their presence in the region, and an advantageous broker would—and should—contact these restaurants to fill the vacancies.
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