The Reason Some Captain D's Restaurants Are So Small

Captain D's made the top five in our ranking of national seafood chains, with the restaurant offering standout features like drive-thru service and an extensive menu. The company is certainly expanding, but it's doing it in small steps. You might think that, in a growth-obsessed economy, restaurant chains would be quick to jump on success and focus on getting as many customers into seats as possible. But, this seafood stop is taking a slightly more measured approach than moving into huge spaces.

Speaking to Fast Casual, chief development officer Brad Reed said the chain's restaurant footprints were "well-suited to the increasingly competitive real estate market," focusing on "an effective mix of small, medium, and no dining room options to provide [their] franchisees with flexibility and substantial cost savings." 

As the base rent for commercial real estate is typically priced by multiplying square footage by rental rate, opening several large franchise locations at once is a costly exercise. This is why, if Captain D's has opened or is opening a new location in your area, you may find that it's on the small side. According to Reed, this focus on opening numerous smaller franchises instead of only a few large ones "has positioned Captain D's for accelerated development."

While the maximum seating plan for a Captain D's franchise caters to 95 seats, Brad Reed has mentioned that the chain's overall growth strategy includes focusing on small and "no dining room options." Yes, you read that right — some locations have no dining room at all. Small and medium franchises boast 22 and 44 seats, a far cry from the full-size option. These lower-cost prototypes all feature drive-thrus, generating sales without the need for excess square footage. The D's Express drive- and walk-thru-only model was introduced in 2020 and takes up only 960 square feet. This is a massive decrease from even the smallest 22-seat model, which covers 1,598 square feet.

In a press release announcing the Express prototype, vice president of real estate Phil Russo noted that even "Pre-COVID-19, 70% of our sales were generated by off-premises dining." With such a strong takeout market and a 32% reduction in start-up costs for Express models, it stands to reason that the company would hone in on this avenue to facilitate growth.

This change in focus from dine-in to takeout is not unique to Captain D's. From pizza stops to coffee chains, the industry is increasingly drawn to the cost- and time-saving potential of takeout (although hitting the drive-thru doesn't always save you money). From the murky origins of the restaurant drive-thru to its post-COVID renaissance, it's clear that this business model is here to stay.