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Retail
Dominick Reuter
- The Cheesecake Factory is more than a staple of US shopping malls – it's a sign of financial health.
- Malls without a Cheesecake Factory were much more likely to be behind on their loans, Moody's found.
- I stopped in to see how the symbiotic relationship looks for the restaurant chain and its host.
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The Cheesecake Factory first opened in Beverly Hills, California, in 1978 and has since grown to more than 200 restaurants across North America.
The chain is typically located in or near shopping malls — a commercial real estate segment that has seen a rough few years with changing shopping patterns.
As traditional so-called anchor tenants like Sears and Nordstroms have declined, mall owners have increasingly shifted their emphasis to experiential businesses like movie theaters, bowling alleys, and trampoline parks to increase foot traffic.
Within this new landscape for US shopping centers, recent analysis from Moody's CRE economist Matt Reidy found that some malls are doing far better than others.
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One curious indicator Reidy found — beyond the popular destination retailers like Apple and Lululemon — was that malls with a Cheesecake Factory were significantly less likely to be behind on their loans.
"Regardless of whether it is strong site selection by the company or, less likely, the restaurant having an impact on mall performance, the relationship is certainly there," Reidy wrote.
To see how that relationship plays out in real life, I headed off for lunch at my local Cheesecake Factory at the West Towne Mall in Madison, Wisconsin.
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The Cheesecake Factory operates 210 locations under its flagship brand, as well as 108 restaurants under subsidiary brands.
The company made total sales of $3.3 billion last year, with $2.5 billion of that coming from The Cheesecake Factory restaurants, per its most recent annual report. The Cheesecake Factory also owns a handful of other chains. All locations are leased, usually with initial terms of 10 to 20 years, with options for five-year renewals, per company filings.
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The restaurant enjoys a prime location at Madison's West Towne Mall.
The mall is on the more affluent side of town than the city's other indoor mall, East Towne Mall, and has fewer vacancies and more higher-end tenants. At West Towne, what used to be a Sears is now a Dave & Busters, and an Urban Air trampoline park inhabits the former Toys R Us.
Based on where the Cheesecake Factory is located and by nature of having entrances in and out of the mall, the location gets a considerable amount of foot traffic.
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Several retail brands have recently opened at the mall.
Upscale department store Von Maur opened last year down the hall, as well as an Aveda cosmetics store. JCPenney occupies the other large department store space in the mall.
Ann Taylor and Banana Republic are just around the corner.
Several apparel brands have held a consistent presence in the mall over the years, and smaller pop-up shops keep occupancy high with fewer vacant storefronts than across town at East Towne.
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It being spooky season, there is of course a Spirit Halloween.
The seasonal retailer has occupied this same space for several years now, even as it does pop-up shops in other vacant stores in the area. Where Spirit Halloween is sometimes seen as a harbinger of doom for struggling retailers, this location is, in fact, a good draw of seasonal business. (We came here last October to buy our toddler's tiger costume.)
After my mall tour, I stepped into The Cheesecake Factory to grab lunch.
A friendly host promptly seated me near a window.
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I passed the gleaming case of cheesecakes, which the company produces at one of two central baking facilities.
If The Cheesecake Factory doesn't make the cheesecakes, is it still a factory?
I perused the 260-item menu, with two full pages of cheesecake choices and wondered how I would ever make a selection.
My server was an expert at knowing exactly how long a person needs to digest the epic list of options and arrived as soon as I had reached a decision.
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Several retail brands have recently opened at the mall.
The Longhorn Steakhouse was where I tried the bone-in ribeye for a previous restaurant visit. The steak was terrific, as were the sides (and the knife). Of all the restaurants in the immediate vicinity, The Cheesecake Factory is probably the best pick for special occasion dinners or post-shopping spree treats.
I decided to try the Tropical Ginger Cooler non-alcoholic co*cktail.
If there were booze in this thing I would have been pretty toasted following lunch.
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For my meal, I went with a salad and flatbread lunch combo.
The Caesar salad was a bit heavily dressed for my taste — and surprisingly large for an ostensibly reduced-sized portion.
I ate it all.
The restaurant lives up to its promise of "generous portions."
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While waiting for my entree, I contemplated The Cheesecake Factory's unusual aesthetic.
No matter which of the 210 locations you visit, there's certainly no mistaking which restaurant you're in.
Before now, it had been about a decade since I last visited a Cheesecake Factory, but very little appears to have changed.
The menu may see periodic updates, but the ambiance is as familiar as ever.
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My Bee Sting flatbread pizza landed and was similarly massive.
The Bee Sting features Italian sausage, pepperoni, and bacon, over a vodka sauce base and drizzled with honey.
It also features Calabrian chiles, which I am an absolute sucker for.
If someone put Calabrian chiles on a shoe and told me to try it, I would seriously consider it. In writing this article, I learned that Calabrian chiles get their name (and their distinct flavor) from a particular region of Italy.
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The real kicker was whole cloves of roasted garlic – delicious.
Bee Sting? More like Bee's Knees.
Seriously though, I was quickly starting to see why people love this restaurant, and make it a destination for special meals — especially after a big-spending shopping trip with friends and family.
And yes, I finished the flatbread...
Chain restaurants sometimes get a bad rap, but The Cheesecake Factory chefs truly know what they're doing.
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As I reviewed the cheesecake options, I noticed a little footnote about recommended daily caloric intake.
With a single meal, I was rapidly approaching 2,000 calories. Nevertheless, I soldiered on.
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For desert, I chose the seasonal pumpkin pecan cheesecake, which Reidy at Moody's suggested might drive a slight uptick in traffic, à la pumpkin spice for Starbucks.
For those who struggle to choose between pumpkin pie and pecan pie, The Cheesecake Factory has you covered with a "Why Not Both?" option that layers the two together.
I took a few bites, boxed it up, paid the bill, and started thinking about when I might next have time to shop and dine at this icon of American cuisine.
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