Employees at the new Checkers in Maywood prepare for the first official day open. Below, left, Raziya Lee Perry waits as her father, Ramon Lee, orders their food. Photos by Michael Romain for the Village Free Press.
Tuesday, September 30, 2014 || By Michael Romain
We took a very wild, wild guess at the new location’s fiscal impact
MAYWOOD — Ramon Lee had ventured into the Checkers restaurant at 1718 S. First Avenue at around 9:00 this morning on his way from work. His daughter, Raziya Lee Perry, was in his arms as he placed an order. Although there were purchases made by various Village officials — such as Maywood Mayor Edwenna Perkins, Police Chief Valdimir Talley and various trustees — who had arrived earlier for the restaurant’s official ribbon-cutting ceremony, Lee may have been the location’s first casual customer.
“I just so happened to be driving by,” said Lee, who lives on the West Side of Chicago. “I like Checkers, but I didn’t know there was one here.”
Lee may be just the patron the fast-food chain’s corporate planners and the property’s developers had in mind when they thought of this location, a former KFC restaurant that is right by the Eisenhower’s entrance and exit ramps.
Christopher Ilekis, a principal at Vequity, the real estate investment and development company that bought the property before leasing it to Checkers, said that his company had been eyeing the site for a while.
“It was in bankruptcy, so there were a lot of challenges [to acquiring it],” he said. “But over time, we ended up buying multiple KFC locations out of a portfolio sale.”
Maywood’s Acting Village Manager, David Myer, expressed satisfaction with the acquisition, the result of many months of zoning deliberations and meetings, but hopes that this is only the beginning of more development for the Village.
“This property had been vacant for many years,” he said. “This will draw a lot of patrons to this place. The existing building was in disrepair, with weeds around it. It wasn’t good to look at, but now look what we have. It’s a good kickoff to more economic development. We’ll keep working with people to get things done.”
As Mayor Perkins, State Rep. Chris Welch and other Village officials were cutting the ribbon on the Maywood Checkers, workers at the chain’s Broadview location, at the corner of 17th Avenue and Roosevelt Road, were preparing for their own ribbon-cutting ceremony.
The two locations are both opening during what may be considered the popular fast-food chain’s second act in the midwest, which comes several years after the company closed seemingly just as many stores as it’s now opening.
Scott New, Checkers’s brand growth manager, said that the chain’s reemergence in the area represents a shift in corporate strategy, with most of the new stores in the western suburbs being corporately-owned and operated, instead of franchised.
According to National Restaurant News (NRN), Checkers Drive-In Restaurant, also called Rally’s depending on the region, was founded in 1986 and became known for its signature double drive-thru design. However, that design has since been heavily imitated by competitors, which, in addition to the costs of construction, may have led to lower profit margins.
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A June 2013 report by the Chicago Sun-Times noted that the restaurant chain had been “limited in its expansion efforts because of the double drive-thru design.”
Jennifer Durham, the company’s vice president of franchise development, told the Sun-Times last year that Checkers loosened its design standards for franchisees.
“We’ve really evolved the restaurant formats and the design to incorporate whatever it is that’s needed in that particular trade area,” she told the Sun-Times, which reported that that may mean “allowing single-lane drive thrus, strip mall end caps and building conversions to better accommodate pedestrian and mass transit traffic.”
New said that within the next 2-3 weeks, Checkers will open two more stores in the Chicago area, with another 3-5 stores in development for 2015. And the building isn’t the only difference between these stores and the older versions. The menu also changed — slightly.
“As all companies change, we understand that we need to stay alive and vibrant and really push forward our new look and menu,” New said. “Now, compared to maybe 6 or 7 years ago, we still have our staples like our Champ sandwich, our shakes and our famous seasoned fries, but also added things like chicken wings and mozarella sticks and shrimp.”
New said he wasn’t sure how many Maywood residents the First Avenue location employed, but said that total employment at the location would range from 60 to 80 workers.
“We would like our employees to be local,” he said. “Not only does that give them the opportunity to be here and work, but it gives them a sense of pride in their community.”
As for the store’s fiscal impact, New said he couldn’t predict sales volume or the amount of property tax revenue the store would generate. However, according to financial data published by the National Restaurant News, the Tampa, Florida-based fast food chain had system-wide sales of $469.7 million at 498 stores (or units) across the country in fiscal year 2013. The estimated volume of sales per store that year was $952,000.
According to tax-rates.org, Maywood’s “sales tax is 9.00%, consisting of 6.25% Illinois state sales tax and 2.75% Maywood local sales taxes. The local sales tax consists of a 0.75% county sales tax, a 1.00% city sales tax and a 1.00% special district sales tax (used to fund transportation districts, local attractions, etc.).”
According to Cook County’s Property Tax Portal, the property tax bill amounts for 1718 S. 1st Avenue ranged from about $23,000 in 2009 to about $28,000 in 2012. In 2013, the tax bill was $24,488.98.
Taking 2.75 percent of the estimated sales volume per store for 2013 ($952,000) — which would yield about $26,000 in local sales tax revenue — and adding that to $25,000 (last year’s property tax bill rounded up), would render an extremely rough guestimate of the new fast food restaurant’s fiscal impact on the Village. The total amounts to about $51,000. A very rough (and imprecise) sketch, indeed, but some kind of indication nonetheless, of the new development’s potential economic footprint. VFP