The fastest-growing segment of the restaurant industry is fast-casual, with the concept being successfully applied to various food categories, though the hottest cuisine is Southwestern-Mexican with brands Chipotle and Moe”™s Southwestern Grill leading the charge.
“The whole business is about taste and price,” said Howard Davidowitz, chairman of New York City-based national retail consulting and investment banking firm Davidowitz & Associates Inc. “They force more sales per-square-foot and it”™s a very productive operation, which really is the secret to driving sales and bottom line growth.”
Fast casual restaurants do not offer full table service, but instead promise higher quality food and environment than fast food restaurants without sacrificing convenience or price. The typical cost per meal per person at a fast casual restaurant is $8 to $15.
Moe’s Southwest Grill is a fast-casual restaurant that has recently opened a location on Black Rock Turnpike in Fairfield, Conn. The same franchisees also have rights to open 12 more locations in the state over the next eight years. According to Paul Damico, brand president of Moe”™s, the lack of expectation of a 20 percent tip combined with quality is a huge draw.
“We”™re not fast food, we”™re not the Burger King, the McDonalds, the Taco Bell and we”™re not Friday”™s, Chili”™s or Maggiano’s,” said Damico, “Fast casual is the fastest growing segment in the franchise restaurant industry. Within that segment, Southwestern-Mexican is the fastest growing genre.”
On the other side of the border, the newly christened stainless steel assembly line at the first Chipotle Mexican Grill in Westchester, recently churned out its own freshly made fare to flocks of fast casual diners.
Opening April 30 in Rye Ridge Shopping Center, the approximately 2,500-square-foot site bustled in a manner that reinforced Damico”™s statements.
Chipotle nears its 1,000th store opening with markedly good numbers.
During a recent Chipotle earnings conference call, co-CEO Monty Moran reported that “during the first quarter, we opened five ”˜A Model”™ restaurants with average development costs well below $700,000 and much lower than our overall average development costs which were about $850,000 last year.”
First-quarter revenue was up 15.6 percent to $409.7 million, according to Jack Hartung, chief financial officer.
This year, Chipotle will purchase “over 72 million pounds of naturally raised meats,” said company Spokeswoman Katherine Newell Smith.
“Every decision in the company is formed by the underlying message that it”™s all about food with integrity,” she said. “Fresh is not enough. You have to be cognizant of how the food is grown, how the people that work in the fields are treated and how the animals are treated. It”™s just a whole continuum.”
Newell Smith will help the company open “50 this year up and down the East Coast.”
There are 24 locations in Manhattan.
“The Mexican area is doing particularly well,” Davidowitz said, of the quick-service craze. “It”™s a very hot area in the fast casual business.”
Moe”™s, the prime competitor of Chipotle, currently has 400-units across the country. The 13 franchises to be rolled in Connecticut will be owned by a three-man team at BCD of Connecticut L.L.C.
Moe”™s is purely a franchisee restaurant.
Chipotle ”“ partly owned by McDonald”™s until a 2006 complete divestiture ”“ is company owned.
Moe”™s is one of Focus Brands, an Atlanta-based brand development company that owns Cinnabon, Carvel and Schlotzsky”™s Deli, and purchased the Moe”™s brand two years ago from Raving Brands in Atlanta.
Where the two brands are similar is in the presence of a carefully planned formula. For Moe”™s, that includes a music playlist of only dead musicians and a “Welcome to Moe”™s” chorus when you walk through the door.
Bruce Steminsky, a BCD of Connecticut partner, said they had been shopping for franchise opportunities for a while before settling on Moe”™s.
“We chose Moe”™s partially because it”™s an underserved market, and partly because it”™s a fun, colorful exciting franchise,” said Steminsky.
Moe”™s already has Connecticut franchises in Hartford and New Haven.
“We”™re filling in the blanks, we”™re going from north of Hartford and Enfield down to Fairfield County,” said Steminsky.
Steminsky said the eight-year rollout plan will include locations in Connecticut in Stamford, Danbury, and Norwalk.
“It seems like consumers have stepped their purchasing back, but Moe”™s is doing great,” said Steminsky. “They”™re going to a fast-casual. Moe”™s is way up in this region with same store sales.”
Joining in as a growing fast-casual giant is West Redding-based Sandella’s Flatbread Café, known for its oven-grilled flatbreads. Sandella”™s is opening another of its fast casual operations in Stamford. With the opening of the new location, Sandella”™s will have more than 150 locations in the country and Middle East.
Other stores in fast-casual establishments ”“ the Westchester-Fairfield regional names include Panera Bread, The Atlantic Bread Company and Panda Express ”“ are repeating the formula, fortifying the notion that the space between fast food and full-blown service contains ample room for opportunity.
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Red Mango rides the wave
In the natural frozen yogurt sphere, Pinkberry may be more the household name, but Red Mango will soon elbow into Westchester County.
“The Westchester community is going to love the clean, modern aesthetics of the Red Mango store design and the healthy and delicious product line of yogurt, teas, smoothies and parfaits,” said Brandy Benson, a former Brooklyn assistant district attorney, in a statement.
Benson signed a development agreement and is now scouting sites to open four Red Mango retailers in Westchester County.
“The whole key is volume,” New York City retail analyst Howard Davidowitz said. “It”™s how you can position yourself to get footsteps and it”™s all about location, location, location.”
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Story by Ryan Doran and Kelly Liyakasa