Will Fast Casual’s Rise Ever Stop Growing? How To Spot The Next Big Thing in Fast Casual Franchising

What exactly is fast casual and why do Americans and people from around the world have an insatiable appetite for fast casual franchises?

A recent article on Washington Post by Roberto Ferdman tackles “The Chipotle effect: Why America is obsessed with fast casual food.” In it, Ferdman addresses the growth fast casual food has experienced since 1999, defining what exactly fast casual means, and how better food equals better business. He also shows that fast casual growth has no signs of letting up.

According to data from Euromonitor, fast casual food “has grown 550 percent since 1999, more than ten times the growth seen in the fast food industry over the same period.” Their studies have also found that “Americans spent more than $21 billion at fast casual restaurants” in 2014 alone. Fast casual franchises have only benefited from this growth and will continue to reap the rewards.

The term fast casual is hard to define though and definitions range depending on your source. Here are a couple of requirements that most industry experts agree on:

  • “an essential component of the fast casual category is its price point, which ranges from $9 to $14 dollars per receipt”
  • “ideally, earn less than 50 percent of their business from full service sit down meals”

Technomic has ten different markers that a restaurant or franchise must have to fall within the fast casual moniker:

  1. quality of the food
  2. use of better ingredients
  3. foods that is wholesome
  4. perception of freshness
  5. first-rate décor
  6. fair pricing
  7. fast service
  8. friendly employees
  9. flexible offerings
  10. view of how the food is prepared

Fast casual franchises practically have the same mission in mind. Chipotle and Panera seem to have nailed that mission right on the head. Ferdman writes, “The Mexican chain has come to embody not only the present but also the future of fast casual sector. Chipotle both has satisfied all of the conventional qualities of the category—food quality, freshness, efficiency, transparency, etc—and has managed to etch out a new standard that is increasingly central to the category: sustainability. Other fast casual chains, including Panera, seem to be following suit. Panera has taken steps to be more environmentally friendly, including a redesign of all of its packaging last year to promote recycling.”

The rise of fast casual franchises and its continued growth stems from innovative food minds filling a value need for consumers. There isn’t a complicated formula as to why fast casual franchises have been successful. Take any food franchise segment and you’ll see that there is a fast casual franchise that has or is ready to fill that void:

Five Guys, for burgers, filled the void between McDonald’s and full service restaurants who serve burgers. Chipotle, for Mexican, has flourished as an option between Taco Bell and chains like On The Border and Chili’s. Panera, for sandwiches, has exceled as a different choice between Subway and establishments like Applebee’s.

How do you find the next breakout star in the world of fast casual franchises? Look for the gaps between fast food and full service. The sustainable seafood experts at Slapfish are a fast casual franchise option between the Long John Silvers and Red Lobsters of the world. The Chickery is offering better chicken at a great value, filling the void between options like KFC and full service restaurants like Cracker Barrel.