As John Kunkel searched for the perfect spot to open a second bakery, he stumbled across an overgrown alley on Alton Road.
He saw potential in the site, once home to a Jamaican/Chinese restaurant. Instead of expanding his coffee/smoothie/sandwich operation, he decided to launch a Mexican concept that had been, as he puts it, floating around his desk.
The first Lime Fresh Mexican Grill, only 800 square feet inside, opened on Valentine's Day four years ago. Then came a store in North Miami Beach.
And recently the company's third outpost, a franchise at the newly opened Shops at Pembroke Gardens, started serving customers a few days after Christmas last year.
UNEXPECTED APPEAL
''We really had a great crossover appeal,'' Kunkel, the founder and CEO, said on a recent afternoon, sitting in the courtyard at the South Beach store. 'A little unexpected [in North Miami Beach] because we had a little too loud rock and roll music and this vibrant feel. We knew we had touched on something when we had someone in their 70s tapping their toes to Britney Spears, having a Corona in the middle of the day, going `This place is cool.' ''
FAST CASUAL GROWING
Business has been brisk at the newest store. Kunkel spent the first week after opening working the grill to help keep up with the demand. There are plans to expand in Coconut Creek.
Fast-casual restaurants, like Lime and Chipotle, are growing at a nice clip, while full-service Mexican restaurants are struggling, said Darren Tristano, with Technomic, a food industry research and consulting firm.
''Because most of the food is prepared to order using fresh ingredients, it's a perception it's healthier and also more flavorful,'' said Tristano, Technomic's executive vice president. ``You might see fresh cilantro, fresh-squeezed lime. It's being prepared in front of you and that's very appealing to consumers today who want fresher food . . . . They want to ideally be able to spend less and get more.''
The appeal of fresh ingredients is one thing Lime has counted on. A fresh salsa bar with bean and corn salsa, pico de gallo and an array of other sauces offers accompaniments to crispy tortilla chips, made on site every day. The restaurants also offer frozen sangria and beer, and healthier alternatives like multigrain, whole wheat and low-carb tortillas, along with the standard flour.
GOAL: TO RUN OUT
Starting with a small South Beach store meant the company had little storage, making daily deliveries crucial.
''We still have our model that the franchisees make orders every single day,'' he said. ``Their goal is to run out of food at the end of the day.''
And from the start, a line snaked out the door of the South Beach location, a trick Kunkel picked up working managing nightclubs.
''No matter what time of day it is, you always see a line out the door,'' said Kunkel, who has held just about every job in the restaurant business, from washing dishes to managing. 'That's the No. 1 thing we hear from people. `What's going on at that place? You guys always have a line.' We always snicker a little because we did that on purpose. Business attracts business.''
HESITANT TO FRANCHISE
Next came the franchise requests. Kunkel said he's been picky about considering people to pony up the $30,000 franchise fee, real-estate costs plus $500,000 to $750,000 in start-up costs to join the business.
He wanted to make sure there was a plan to keep stores consistent. Now, cameras monitor each store, from the line to the walk-in refrigerator, and send updates to his cellphone. He can check in on sales at the cash register in real time.
''I was very hesitant in franchising,'' he said. ``We've found a lot of people in franchising . . . want to write a check, but they have no desire to participate in the daily, get-your-hands-dirty part of the restaurant, and I found over the years there's really no escape from that.''
One group that passed muster: David Pettit and his wife and her brother, who opened the Pines store and have a contract for a spot at a Coconut Creek mall that is under construction.
''We saw a real excitement and enthusiasm at the South Beach store,'' said Pettit, CEO of Salsa Management. ``That's appealing to us.''
BETTER THAN EXPECTED
The Pines store has done 50 percent more business than he expected, with revenue of about $40,000 a week at the busiest. The store in the upscale, outdoor shopping complex brings a business crowd while dinner and weekends attract more families.
''A family of four can come in and eat under $30, depending on what they order,'' Pettit said.
That's especially attractive during an economic downturn, said Tristano, the restaurant consultant.
''Another advantage to many fast casual is they serve adult beverages, serve beer, sometimes margaritas. You have a pretty good experience,'' he said. ``In times where economy is an issue, they're very well-positioned.''
