Does fast casual exist? According to Ron Schaich, the executive chairman at Panera Bread, the biggest such fast-casual chain on the planet, it doesn’t.
Last month, Schaich told a gathering at the Multi-Unit Foodservice Operators conference that there is no such thing as fast casual, because diners never say, "Let’s go to a fast-casual restaurant." (Then again, nobody really says "I’m in the mood for a limited-service establishment." )
Still, for something that doesn’t exist, the fast-casual dining sector is doing quite well. In fact, as customers stayed away from casual dining chains and avoided fast-food restaurants over the past few years, they’ve flocked to these upscale, limited-service restaurants. According to Mintel Foodservice, the fast-casual category grew 30 percent from 2006 to 2010. The non-existent fast-casual sector is now a $30 billion business.
The fastest growing chains in the country right now belong in the fast-casual sector, including Schaich’s Panera Bread, which has grown eight-fold in the past decade. Five Guys Burgers & Fries has become a $500 million franchise system seemingly overnight. Table-service chains like Denny’s, Uno Chicago Grill and Ruby Tuesday continue to make forays into fast-casual. And most of the emerging chains, such as health-food concept Freshii, would meet the definition.
The sector has its share of concepts that have struggled, such as Fazoli’s, a company we highlight in this section that is $100 million smaller than it was a decade ago.
But that is not keeping entrepreneurs from entering the sector. Many believe there remains considerable growth potential despite its recent success - Ruby Tuesday CEO Sandy Beall noted there is plenty of "white space" remaining to be filled.
"The fast-casual segment has been growing, even through the tough macro environment," said Chuck Rink, president of California-based burrito chain Baja Fresh. "While there’s contraction in the industry, there is still growth in fast-casual."
