Lenny’s first drive-thru expects 30 pct. uptick annually

Move over roast beef, here comes the Philly cheesesteak.

As of Tuesday, Sept. 27, the former Arby’s at 4740 Showcase at Perkins and I-240 is officially Memphis’ first drive-thru Lenny’s. There model comes after the sub sandwich shops’ drive-thru locations in both Arkansas and Mississippi.

The idea came about when franchisee James Kelly, who currently has 10 locations in the Memphis area, noticed a loyal following paired with decreasing traffic at his Mall of Memphis store. He calls that the “people side” of the equation.

“We wanted to reinvest in this (Showcase) location for our customers’ sake, to make it more convenient and a better environment to give them the deli-fresh experience,” Kelly said.

Then there’s the “business side,” where it made sense to snatch up the second-generation drive-thru space while investing in the area.

“With the economic situation that there is now, a lot of commercial real estate is on sale,” Kelly said. “It’s basic common sense that rent that is spent you don’t get back, and it’d be better to take that money and invest in an asset, such as our own property, our own building, where we can control the environment around us.”

The drive-through strategy is based on research that Kelly’s been exploring with his personal business and other concepts as well. In fact, he hopes to see a 30 percent increase in weekly sales in year over year.

Barry D. Maynard with Trezevant Realty Corp. represented Atlanta-based Arby’s Corp. in the deal, which closed about a month ago.

The former Mall of Memphis location was doing about $700,000 in sales annually, Maynard said, which is extremely strong for a Lenny’s. The new location is poised to do that and more.

“The Nonconnah Corporate Center and Thousand Oaks office building, I assume most of those people are eating Lenny’s,” Maynard said. “They were doing $700,000 without a drive-through and they’re thinking they can obviously go over a $1 million with the drive-thru and some outside seating and what not.”

The No. 1 performing Lenny’s in the country is the Memphis International Airport, Maynard said, which brings in a couple million in revenue each year. But a typical Lenny’s doesn’t perform anywhere near that.

“My buddy Dan Walker owned all of the ones in Nashville,” he said. “A lot of Lenny’s do $350, $400, $450, $500. So $700 is a pretty strong number.”