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Finding Falafel Success On Main Street

Main Street Merchant Index

The rumors of Main Street’s demise may be greatly exaggerated. The hot-off-the-presses Q3 PYMNTS Store Front Business Index™ indicates that store front businesses are proving doomsdayers wrong, growing by nearly 2 percent in Q2 2016 and outpacing GDP. You can find more key takeaways from the research, along with insights from Matt D’Alessio, the first franchisee of the restaurant chain Amsterdam Falafelshop, inside the latest index.

Behind most every Main Street success story is opportunity-seeking passion and a willingness to risk it all to make the business succeed.

For Matt D’Alessio, that passion began with his first bite of a falafel sandwich at the Amsterdam Falafelshop in Washington, D.C., as an 18-year-old George Washington University student.

Years later, when he found an opportunity to open the restaurant’s first franchise, D’Alessio was ecstatic about bringing the taste he loved during his college days to Boston. He opened his first location in Somerville’s Davis Square in 2012.

“I romanticized the concept of having my hands in all parts of the business, from HR to accounting to advertising, so that was part of the drive,” said D’Alessio, who continues to think of himself as an “engineer guy.”

Much like Washington, D.C., the constant ebb and flow of college students in Boston gives restaurants and businesses more scope for initial success and, if they do succeed in the longer term, expansion. However, on the other hand, the industry comes with its own set of challenges.

“It’s so risky these days; you can’t just do anything and expect it to be successful,” D’Alessio said. “So, the proven concept with the franchise system was appealing.” But he didn’t want to sign on with just any franchisor, he said.

“I wouldn’t be here if it were Subway or Dunkin’ Donuts or a more established brand,” D’Alessio said. The chain of now seven restaurants traces its flavor profile to the bustling falafel shops in Amsterdam, the Netherlands. “Amsterdam Falafelshop was unique and still continues to be unique.”

 

Falafel 2.0

While the taste of crunchy, fried chickpea balls stuffed in a pocket of pita bread and served with a glaze of tahini was nothing new to Boston gastronomes (or hungry college students, for that matter), D’Alessio thought Amsterdam Falafelshop had something more to offer.

The restaurant brought falafel to Boston in a whole new style. Customers place their orders, wait for their fix of freshly fried falafel served with pocketed pita bread on the side and head to a self-service bar, where they can choose from toppings, including pickled cucumbers and beets, finely chopped red cabbage, dill, hummus, baba ganoush and chickpea salad.

The restaurant’s opening was a success, D’Alessio said. Today, the first franchise location serves about 1,500 handmade falafels on a busy day, he said.

Buoyed by the success of his first location, in March 2015, D’Alessio opened another franchise in the heart of the Boston University campus in partnership with Laurence Wintersteen, a veteran restaurateur from Boston.

Although the restaurant also caters, in-store traffic is its bread and butter — or pita and hummus, as the case may be.

While business has benefitted from a steady stream of students, that also proves to be a challenge during summer and winter breaks, he said. Some businesses near campuses experience a slowdown when class is not in session, but that’s not the case with Amsterdam Falafelshop’s Davis Square location.

“What happens in the Boston area and other neighborhoods is that local residents sort of take back their city,” D’Alessio said. “They are so used to their neighborhood being overrun by college students that, when no one’s around, they say, ‘OK, now we can go explore our town again.’”

 

Four Seasons For Falafel

For Amsterdam Falafelshop and many restaurants in the Boston area, the health of business isn’t just dependent on the seasonality of foot traffic from college students, it also depends on weather conditions — a factor that is particularly more visible in the Davis Square location, popular for its food and bar scene.

“People are very weather-averse,” D’Alessio said. “When it’s snowing or raining, they stay home, but otherwise, it’s amazing how steady [traffic] is. I can predict the weekly sales based on the weather forecast.”

The inherent unpredictability of weather led the restaurant to experiment and later partner with four delivery service providers: Caviar, Diningin, DoorDash and GrubHub. While the two locations have seen some success with offering delivery for catering orders from student groups at nearby universities, such as Harvard, MIT and Tufts, the delivery options haven’t had much of an impact on the restaurants’ day-to-day business, D’Alessio said.

One challenge the franchise owner faces constantly is finding — and keeping — reliable employees, he said.

“Staffing has been the biggest challenge, and managing staff is the biggest learning curve,” D’Alessio said. “There are a lot of issues surrounding hiring and firing, company policy, payroll costs and scheduling that you really can’t teach somebody.”

D’Alessio said it took him nearly a year after the opening of his first restaurant to really get in the swing of staffing his business.

Over time, D’Alessio said, he has seen staffers — many of them college students themselves at the time — parlay their work at the restaurants as a stepping stone to other careers.

“It’s an easy first step for anyone who doesn’t have other skills or experience to jump into a job and be trained and be able to make money,” he said. “But then, the idea is they move onto other interests, so turnover and retaining good people is always a problem.”

 

Main Street’s Social Sweet Spot

While word of mouth goes a long way toward hiring employees, social media has played a crucial role in spreading the word about Amsterdam Falafelshop’s locations to gain customers.

Instead of relying on discounting and couponing to drive business, D’Alessio has, so far, depended on favorable Yelp reviews to bring new patrons to his restaurants (they are both currently rated four-and-a-half stars).

“If you’re in Somerville, Cambridge or Boston and you go into Yelp and type in ‘falafel’ or ‘Middle Eastern,’ we usually pop up first, so that’s pretty powerful,” he said.

The restaurant has also relied on social media platforms, such as Instagram and Facebook, to connect with customers. D’Alessio said promoted posts may help improve sales, but more importantly, they help raise brand awareness.

“Even if people don’t interact, like it or comment on it, they are reminded, ‘Oh yeah, Amsterdam Falafelshop — we haven’t been there in a while; we should go back,’” he said.

In the business of selling falafel, D’Alessio said, success doesn’t just mean hitting a sales target; it also entails giving back to the community that offers the business the ongoing opportunity to grow in the first place. And by running restaurants that provide much-needed jobs to locals, the entrepreneur believes he’s doing just that.

To download the 2016 Q3 PYMNTS Store Front Business Index™, click the button below.

store_front_index_download_here

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