Shake Shack 2016 Annual Report Download - page 14

Table of Contents
GROWTH STRATEGIES
We believe that we are well-positioned to achieve significant, sustainable financial growth. We plan to continue to expand our business, drive Shack sales and
enhance our competitive positioning by executing on the following strategies:
Opening New Domestic Company-Operated Shacks
This is where our greatest immediate opportunity for growth lies. We waited nearly five years to open our second Shack, and we are still in the very nascent stage
of our story, with only 44 domestic company-operated and five domestic licensed Shacks 12 in states and Washington, D.C. as of December 30, 2015 . We believe
there is tremendous whitespace opportunity to expand in both existing and new U.S. markets, and we have invested in the infrastructure that will enable us to
continue to grow rapidly and with discipline. In fiscal 2015 , we significantly expanded our domestic company-operated footprint by opening 13 new Shacks
representing a 41.9% increase in our domestic company-operated Shack count. We plan to open at least 14 new domestic company-operated Shacks each year for
the foreseeable future. We believe that over the long-term we have the potential to grow our current domestic company-operated Shack footprint to at least 450
Shacks by opening domestic company-operated Shacks in new and existing markets. The rate of future Shack growth in any particular period is inherently
uncertain and is subject to numerous factors that are outside of our control. As a result, we do not currently have an anticipated timeframe for such expansion. We
believe we have a versatile real estate model built for growth. We have adopted a disciplined expansion strategy designed to leverage the strength of our business
model and our significant brand awareness to successfully develop new Shacks in an array of markets that are primed for growth, including new and existing, as
well as small and large markets. As we grow, we will continue to live by one principle to ensure the success of both our new and existing restaurants: "The Bigger
We Get, The Smaller We Need To Act." This mantra is central to our Stand For Something Good vision and encompasses our commitment to continue to make
decisions that focus on the core of who we are, staying true to the principles of Enlightened Hospitality.
We will continue to expand in existing markets (New York, Boston, Philadelphia, Washington, D.C., Atlanta, Chicago, Las Vegas, Texas and South Florida) in
order to leverage operational effectiveness as we cluster in these high-density markets, but also will enter new markets, such as Arizona, California and Minnesota.
With only 84 Shacks around the world (as of December 30, 2015), we have identified many attractive and differentiated markets for the Shake Shack experience.
In major metropolitan areas, we seek locations where communities gather, often with characteristics such as high foot traffic, substantial commercial density,
reputable co-tenants and other traffic drivers such as proximity to parks, museums, schools, hospitals and tourist attractions. For every potential domestic
company-operated Shack we consider, we apply rigorous financial metrics to ensure we maintain our targeted profitability. Our flexible model allows us to design
our Shacks so that we can pursue a variety of property types. We have successfully launched Shacks with different layouts and sizes in varied locations throughout
urban high density areas, suburban in-line and pad sites, regional malls, outlet malls, lifestyle centers, ballparks, airports and train stations. With a disciplined
approach to new Shack development and a successful track record in site selection, we believe we are positioned well for future growth.
Capitalizing on Our Outsized Brand Awareness
One of the great advantages for Shake Shack has been our birthplace and headquarters in New York City. Rarely has a brand of our type been born in New York,
and this gives us a tremendous media and brand power. The Shake Shack experience has cultivated significant brand awareness relative to the small number of
Shacks we operate. We have worked tirelessly to establish a genuine connection with our guests and integrate into their communities through investment in
innovative marketing and programming. We utilize various social media outlets to actively engage with our growing online following. In June 2015, we ranked #9
on Restaurant Social Media Index's top 250 restaurant brands, which is measured on influence, sentiment and engagement. Furthermore, we believe that our press
and media impressions and industry recognition are a testament to the strength of our brand. We were named one of "The 25 Most Innovative Consumer and Retail
Brands" in 2014 by Entrepreneur.com , ranked #7 in The Daily Meal's "101 Best Restaurants in America" for 2015, and were the winner of the 2013 "Most Loved
Brand of the Year" from the RIZMY Awards, "Best Burger" at the 2014 South Beach Wine and Food Festival's Burger Bash and more. Additionally, we give back
to the communities in which we operate, and strengthen awareness for philanthropic causes such as Share Our Strength's No Kid Hungry campaign. Our
marketing efforts focus on interacting with our guests in an authentic, innovative manner which creates memorable, meaningful experiences. The experience that
we provide for our guests and local communities has generated a growing loyal following who
Shake Shack Inc. Form 10-K | 12