The Rise of Franchising in the Fast Casual Restaurant Industry
Explore the opportunities and challenges for chains like Taim in the fast casual sector. Learn about the potential in Mediterranean cuisine and the lessons from successful and struggling franchises.
Photo by Jesman fabio on Unsplash
Photo by Jesman fabio on Unsplash
Understanding the Dominant Business Strategies in the Fast Casual Sector
In the Quick Service Restaurant (QSR) industry, franchising has been the go-to strategy for many brands to expand rapidly. However, when it comes to the fast casual sector, company-operated models tend to dominate. Chipotle and Cava have emerged as shining examples of success in the fast casual realm, showcasing the effectiveness of company-operated models. While franchising offers scalability and broader reach, companies like Cava have proven that a hands-on approach can also lead to significant growth and brand success.
The Franchising Potential in Mediterranean Cuisine
With the growing demand for Mediterranean cuisine, there lies a significant opportunity for chains like Taim to explore franchising as a means of expansion. The rise in consumer interest, as evidenced by a 10.2% year-over-year increase in demand according to Technomic data, highlights the untapped potential in this space. Gregg Majewski, the CEO of Craveworthy, emphasized the vast opportunity for concepts like Taim to thrive in the franchising landscape. Taim's diverse menu offerings, including vegetarian, vegan, gluten-free, and halal dishes, set the stage for attracting a wide range of franchisees and customers alike.
Photo by Jesman fabio on Unsplash
Challenges and Success Stories in Franchising
While Taim aims to venture into franchising, it's essential to acknowledge the challenges and success stories within the segment. Taziki's Mediterranean Kitchen, a key player in Mediterranean fast casual, has been offering franchising opportunities since 2013. The fluctuation in Taziki's franchisee numbers over the years showcases the dynamic nature of the franchising business. On the other hand, Craveworthy's multi-brand platform presents a unique advantage in not only attracting potential franchisees but also in supporting them to thrive in their ventures.
Lessons from the Mexican Fast Casual Segment
The Mexican fast casual segment has seen brands like Chipotle setting the benchmark for success. While franchising has been a strategic choice for brands competing with industry giants like Chipotle, it's not a guaranteed formula for success. Qdoba and Cilantro Taco Grill's ambitious growth plans demonstrate the competition within the segment. However, as seen with Roti's bankruptcy filing after facing challenges post-rent deferral agreements, being in a popular segment doesn't shield brands from potential pitfalls.
Navigating Growth Opportunities and Competition
As Taim prepares to embark on its franchising journey, the brand must navigate through early growth markets dominated by established players like Cava. The competition within the Mediterranean fast casual segment is fierce, with Cava's stronghold in key regions posing a challenge for newcomers like Taim. Despite the hurdles, Taim's unique menu innovation and brand potential could pave the way for a successful franchising program, provided that the brand strategically positions itself in the market.