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Franchise Prospector » Franchise Trends
Fast Food Franchises
A Super-sized Opportunity
By Bob Seay
Food franchise owners have always had a full plate of business advantages, like strong name recognition and brand loyalty among customers. But consumer tastes are changing, and successful franchises are adjusting to meet new market demands. Super-sized menus are giving way to healthier choices. Traditional favorites are having to make room at the table for some impressive upstarts. Like the consumers they hope to serve, prospective franchise owners now have more menu choices than ever before. Those that choose wisely can expect a healthy return on their investment.
Fast food shapes up.
Consumer health concerns have led to menu changes at many fast food franchises. Today, one in five Americans is overweight; in fact, Americans are twice as likely to be overweight as they were ten years ago, this according to The Archives of Internal Medicine. Concerns about weight have never been higher. At any given time, up to 40% of women and almost 25% of men are on some kind of weight loss program. Consumers are looking to restaurants for help with their dieting needs - and fast food franchises are stepping up to meet the demand. Hardee's is introducing bunless, low-carb hamburgers designed for customers on the Atkins diet. Sandwich makers Blimpie's and Subway are eliminating the bread with low-carb salad options. Not to be outdone, Taco Bell, McDonald's, and Wendy's are working on low-carb or low-fat meals of their own. Other restaurants are experimenting with meatless meals and other healthy, more nutritious combinations.
An Asian influence.
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Asian diets that emphasize vegetables, fish, and balanced portions of grains have long been considered among the healthiest diets in the world. Now more than ever, American consumers are looking east for nutritional advice. Asian restaurants, with tasty treats from China, Japan, Korea, Thailand, and Vietnam continue to be hot franchise opportunities. Mongolian barbecue-style franchises offer the nutrition customers want with the fun of a build-it-yourself meal that is cooked to order. Noodles are another hot Asian import, and franchises like Wild Noodles, Zyng Noodlery, and Nothing But Noodles are serving up meals with an international flair, combining Asian, Italian, and American tastes on the same menu.
Turn up the heat!
Mexican food continues to be a fiery favorite. But today's food consumers want even more spice and a variety of exotic tastes. Franchises are responding to changing American tastes, the growing Latino market, and a general curiosity among consumers to try hotter, spicier foods. Extra-hot menus now include cuisine from Thailand, Korea, Malaysia, India, and Jamaica as well.
Restaurateurs who want spicy food with a decidedly American feel still have plenty of choices. Bojangles serves up Cajun-style chicken that is guaranteed to please even the pickiest palate. Hot Wings have taken flight, and WingStop, Wings of Fire, and Wing Dome are only three of several popular fast food franchises dedicated to only one part of the chicken. Wing Zone offers 25 flavors of wings, ranging from Jamaican jerk to Tabasco-heavy Buffalo. Customers and franchise owners alike are flocking in.
Cater to the kids.
Mom or Dad may drive the car, but it's the kids that often decide where the family goes to eat. Children between the ages of 5 and 13 ran up a food tab of over $500 billion in 2002, making this demographic one of the largest in the restaurant industry. Smart franchises, like Ozon's, have menus that appeal to children and their parents. When the kids are happy, everybody's happy. Of course, Moms and Dads want good nutrition, and kids menus that include healthy food are preferred.
Stick to one product.
One approach that has not fared as well has been co-branding, the juxtaposition of restaurants like Pizza Hut and Taco Bell in one building. Michael Seid, managing director of a food industry consulting firm, said in an interview with Entrepreneur magazine that such combinations may have seemed like a good idea at the time, but didn't necessarily work out as the owners had hoped. Says Seid, "You were taking two different day parts, shoving them together and saying, 'This should extend my business,' but the location didn't fit and a lot of the benefits weren't realized." For franchise owners, the lesson is to focus on products that fit your market niche.
New products for new tastes.
New fast food franchise choices are attracting the attention of customers and franchise buyers alike. Frozen custard is a hot choice for dessert lovers, and frozen custard franchises are quickly catching up with ice cream or frozen yogurt establishments in the race for customer taste buds. There's plenty of room in the freezer. Americans consume on average 23.2 quarts of ice cream a year; frozen custard franchises are in a position to capture a significant portion of that market. Teriyaki chicken may never be as popular as chicken from KFC, but Teriyaki and other variations on the chicken theme are making a strong showing. Panera Bread franchises are also on the rise. The Panera Bread Co. announced plans to roll out 30 new bakery/cafes in one market (Houston) alone over the next six years. Similar plans are in place for other major cities.
The changing face of fast food.
Trend watchers recognize a good thing when they see it. Ten years ago, no one would have thought that a coffee franchise could become a major player in the franchise market. Today, there is a Starbuck's on every corner of most cities and other players like Port City Java and "It's a Grind" are there to catch the overflow. Smoothies, fruit-based ice cream or yogurt drinks served in places like Juice Zone, are also becoming popular, as are other novelty drink or food items. Americans want fancier fast food fare, and are lining up for grilled steaks from The Great Steak and Potato Co., or Honey Baked Hams.
No one can predict the future, but the trends would indicate that Americans want more from fast food restaurants than just fast food. The new American food consumer wants food that is fast, nutritious, healthy, and affordable, served with service and panache. Fast food franchises that can meet the needs of this market will continue to grow well into the future.
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