There are a number of factors contributing to this fast casual phenomenon in the restaurant industry:
Uncertain economy: New technology and innovation causing job losses, rise in hourly wages contributing to shrinking labor force, rapid increase in healthcare costs putting financial pressure on middle class.
Sit down stagnation: Economic pressures causing slowdown for sit-down concepts, consumers “trading down” to fast casual concepts.
The “Amazon” effect: Faster is better, consumers demanding high-quality food options in quick service/fast-casual settings, seeking sit-down quality offerings in convenient locations offered consistent with speed of today’s digital world.
Value is king: Financial concerns along with lagging consumer confidence (though rising in recent months), has those formerly traditional sit-down restaurant purists looking for alternatives to the $50-plus checks, and trading down to more convenient, less expensive options.
Flood of talent: Given the speed of changes to this new economy, mid to senior level managers are now looking at franchising as an opportunity to take control of his/her destiny.
Rise of entrepreneur: Uber, Airbnb, and Shark Tank have contributed to a new brand of entrepreneur, ready and eager to be pioneers for new fast casual brands and concepts.
Private Equity: No longer are investors waiting for new restaurant brands for “proof of concept” and portfolio of 30 to 50 corporate locations open, operating and showing consistent returns … new concepts are popping up at an amazing rate, and seeming to find open-arms (and checkbooks) from private equity.
Selling a dream: New franchisors finding and partnering with franchise sales firms ready to sell the dream to this new crop of disillusioned corporate Americans ready to take the leap on business ownership.
This restaurant “explosion” offers opportunities for wannabe franchise owners … and also a growing choice of fast casual dining options not seen before. Now beyond the pizza, fried chicken and burgers into concepts featuring Mediterranean cuisine, Indian, farm-to-table, fish-to-table, Vegetarian, and many more popping up every day.
The Food Network, The Cooking Channel, Yelp, and a multitude of internet food and restaurant review sites have fueled this growing generation of “foodies” who want and expect great tasting food, but also insist on full disclosure on the origin of the ingredients, the traditions tied to these new and innovative dishes and menu offerings, and they relish the stories behind these new restaurant concepts.
Coupled with this explosion of concepts is the trend of big data and technological advances that offer unprecedented opportunities for restaurant operators to meet and exceed the status quo on the following tried and true:
Tried and true
- Provide customers with great tasting food at a fair price
- Provide superior customer service in a timely manner, and do it with a smile
- Provide all customers with a unique & memorable restaurant experience every visit
- Clean means green. A clean restaurant shows you care for your customers, and for many a deal breaker
- Social media. Word of mouth on steroids. It is a game changer for operators executing these principles in a smart, effective manner
- Friend or Foe. Franchise brands that lose site of the “basics” listed above, are ripe for today’s consumer with the latest digital phones that can capture and distribute images inside restaurants within seconds which can have immediate and sometimes long lasting impacts both positively or negatively
- Twitter, Facebook and Instagram have replaced TV, radio, and print advertising for the new mobile generation of consumers
- Location, location, location. The right location can (and usually does) mean the difference between success and failure
- New Data mining companies can slice & dice consumer data, customer buying habits, and identify and quantify specific trade areas using GPS technology
- New vendors are thriving, offering small & large retail/ restaurant chains, the ability to analyze customer data that serve as foundation to better understanding their customer and profile that can and should have a measured impact on site selection and market planning
As a wrap up, this explosion of new franchise restaurant concepts is exciting not only for consumers (now with healthier, tasty food options beyond burgers, pizza and fried chicken), and investors (rise of equity capital groups willing to take risk for high rewards), but also the former corporate middle management employees turned entrepreneurs ready to take the leap into franchise ownership.