7-6 Multiconcept Restaurants are a Growing Trend

A multiconcept restaurant incorporates two or more restaurants, typically chains, under one roof. Sharing facilities reduces costs of both real estate and labor. The multiconcept restaurants typically offer a limited menu compared to full-sized, stand-alone restaurants. For example, KMAC operates a combination Kentucky Fried Chicken (KFC)/Taco Bell restaurant. The food preparation areas are separate, but orders are taken at shared point-of-sale (POS) stations. If Taco Bell and KFC share facilities, they reduce fixed costs by 30 percent; however, sales in joint facilities are 20 percent lower than sales in two separate facilities. What do these numbers imply for the decision of when to open a shared facility versus two separate facilities?