Real Estate and the Waffle House, a match made in Heaven.

The dude who founded Waffle House, was a guy who came away from WW2 and joined the kitchen crew at a Memphis based restaurant called Toddle House. He joined the chain, learned the accounting side from the restaurant manager, and went on to open the first Waffle House with a partner who just happened to be a real estate broker. 

The formula for the Waffle House was a success due to its simplicity. There were 16 items on the menu, the buildings were painted a specific identifiable yellow. The locations were picked near spots where lots of cars are still out on the road at 2am on Tuesday. The seediness it took on as a location renown for being open 24 hours is what made the Waffle House an American cultural icon. 

A 2015 Bon Appetite article on Waffle House quotes “because of the round the clock service, crazy stuff famously goes down at the waffle house. There’s the time Kid Rock got in a fistfight in suburban Atlanta. Another incident in which a drunk Georgia couple got horizontal in the parking lot, and when the cop told them to get dressed the woman tried to slip a cheeseburger onto her foot thinking it was her sandal, there are robberies car crashes into facades and more commonly, obnoxious, boozed up customers simply behaving badly late, late night. Let’s be honest, If the French laundry were open 24 hours a day sketchy things would happen there too.“ 

Being open 24 hours is the secret sauce in terms of the foot up Waffle House has against its competitors. 24-hour good, simple, basic foods that are both fast and affordable.

But it ain’t the beige food menu that has kept Waffle House alive and kicking, Waffle House has most assuredly made bank on it’s real estate. 

There’s a quote from a McDonald’s CFO where he says “We are not technically in the food business. We are in the real estate business.”

This is because of the sheer number of locations. A decent amount of restaurant owners retire on their real estate profits, not what they saved on selling food. The food profit margin is generally pretty minuscule. But if you look at the land value of Waffle House’s many locations, it’s probably pretty darn big! 

The company owns more than 80 percent of its 18,000 locations, which is quite a lot. The rest are franchise operations. 

Waffle House only allows franchise expansion plans stemming from super successful pre-existing locations. They’re real big on consistency, and people clearly appreciate being able to rely on getting what they’ve come to expect over the years, with neither improvement, nor decreased quality. 

There are lots of other ways the symbiotic relationship between the Waffle House and real estate has made all American business magic happen. 

Another example we can pinpoint here is southern locations and hometown football culture. 

Waffle House has seen a lot of success in stepping into the role of the local College (or sometimes high school ) pre- or post-game place to celebrate. Tailgating, being the local spot, showing major team support with décor and identifying with being locals only, has made Waffle House very popular in those areas. Georgia and Alabama are states where Waffle Houses near college football stadiums are fiercely local team tradition. 

Waffle House has 95 locations in proximity to SEC schools. SEC schools are part of the biggest college sports scene specific to south central and southeastern United States colleges. 

The nostalgic and hometown identity Waffle House has curated in this space is special to people and the profits these spots rake in on game days are notable to say the least. 

The recipe to the iconic Waffle House is a little reliable and affordable waffles and a lot of smart, strategic real estate choices. The one would have no success with out the other. The weird drunk stuff late at night, is simply the icing on the cake. All stacked together perfectly is a country hometown classic, that’s sturdy and traditional and sweet enough to keep us coming back, hoping to see kid Rock get in a fist fight at 3am. That would make all those late-night calories consumed, totally worth it.