Should You Open a Fast Casual?
Even as momentum has slowed in the fast-casual sector, full-service operators and chefs continue to enter the quick-service fray en masse. Some want a crack at becoming the next Shake Shack or Sweetgreen, attracting investors and big potential profits. Others see it as insurance against the next great restaurant culling as the landscape grows more crowded.
But the fast-casual model isn’t a panacea. It’s facing increased competition from higher-quality convenience-store food offerings and service-oriented supermarkets, as well as decelerating unit development. Some operators even see renewed promise in the casual-dining sector, which has been overlooked in certain markets amid the quick-serve frenzy.
All the while, heightened consumer expectations surrounding convenience, quality, and service continue to affect the broader industry. Savvy operators with crossover experience between the casual and fast-casual worlds are applying innovative learnings in unexpected ways, raising the bar on everything from efficiency to hospitality.
Should you follow suit and add a fast-casual to your portfolio? These lessons learned from operators with feet planted in both quick and full service might help you answer the question.
Offsetting labor increases
It’s no secret that labor increases are presenting a daunting challenge to full-service operators—particularly for brands predicated on fine dining–quality fare at everyday prices. Counter-service technologies like self-ordering kiosks help brands save on front-of-house labor costs so they can focus on customer service at other touch points, as well as offset rising labor costs with increased revenues.
For the Denver-based team behind full-service brands Park Burger and Homegrown Tap & Dough, adding fast-casual chicken joint Birdcall to the portfolio enabled them to capitalize on the efficiency side of the value proposition.
“Our full-service brands are about high-quality foods at very low price points—the kinds of places people can dine at two or three times a week,” says Park Burger president Peter Newlin. “Birdcall originated as a one-off chicken sandwich shop, but then we realized, wow, there’s real value here. We really became intrigued by the idea of technology in the fast-casual market and how we can use software to keep driving our prices lower and lower.”
The team built a proprietary customer-facing POS system, resulting in a nearly staffless front of house. Customers place their orders at bright-yellow touchscreens, then track a mounted flatscreen with rolling names and orders that counts down the seconds until their chicken sandwiches are ready to be retrieved from honeycomb-like bins—typically within three to five minutes. Frequent diners are assigned profiles to simplify repeat ordering, and a forthcoming app will link with the kiosk
“It’s been so great to save order-taking for a simple platform and focus on those service aspects that are more important,” Newlin says, pointing to hospitality-oriented quick serves like Chick-fil-A, which he looked to while building Birdcall. “We want to touch every table—whether that’s grabbing you an extra napkin, refilling your lemonade, or taking your coat if it’s cold.”
Undoubtedly another big draw of this model, though, is the quickened path to stability and ease of training staff compared with full service, which has enabled the company to scale quickly and franchise. Birdcall opened three locations in the past year alone—most recently inside a Whole Foods Market at Denver’s Union Station.
But Newlin’s quick to add that the company isn’t abandoning full service. “It’s not that we want to stop doing full service, but the price point is going to have to go up there,” he says. “We’re still a restaurant with big dreams that wants to make an impact. From an execution point of view, it’s much more challenging to do that with Homegrown or Park Burger, which have a ton of moving parts. They could never be franchised, and never grow faster than one store a year. Birdcall was designed to use technology and automation in as many areas as possible to improve the performance of the team and, more importantly, to set them up for success.”
Lessons from fast casual
Brothers John and Joe Lanni, cofounders and owners with Alex Blust of Cincinnati-based Thunderdome Restaurant Group, started in limited service in 2005 with globally inspired burrito and bowls concept Currito. The popular brand now boasts 20 locations across the Northeast, Florida, and Illinois, with plans for nine more franchises in Chicago alone.
But as the Lannis were mulling a second fast-casual concept in 2011, they saw a void for casual dining in the urban market and decided to shift gears, opening full-service Mexican street fare spot Bakersfield, which has eight locations.
“There’s an urban renaissance across the country in mid-tier cities, and we saw a gap in the market to do something in Cincinnati’s inner city,” John Lanni says. “Everybody and their mother is doing fast-casual concepts these days, but we’ve actually found that the casual-dining space, at least in the last couple of years, has been less competitive in urban areas than fast casual.”
Having built their business on limited service, the Lannis were inspired by certain aspects of the model, such as keeping the menu simple and the prices low, which they did at Bakersfield and their three-unit, Southern-inspired beer hall, The Eagle.
“The Eagle is a great example of how fast casual has influenced us,” Joe Lanni says. “We decided that rather than try to tackle all kinds of Southern food, we’d focus primarily on one item—our bone-in fried chicken—and do that really, really well. We built some things around it to complement it that fit with the brand. The fast-casual mentality is about keeping it tight, executing, and being the best at what you do.”
Yet even as Thunderdome edges further into casual dining, the Lannis still see the draw of the quick-serve model.
“There are still so many articles being written about the changing needs of the consumer—how everybody is looking to get in and out and nobody has any patience,” John Lanni says. “Plus, due to the complexities of operating full-service restaurants, some operators figured out that while fast casual is very competitive, they can create a model that’s much simpler to operate.”
“But,” he adds with a laugh, “it’s still a restaurant.”
Listening to the neighborhood
Owner Aldo Zaninotto and chef Cameron Grant, the duo behind the critically acclaimed, full-service Piedmontese restaurant Osteria Langhe in Chicago, thought starting a counter-service Italian concept would be far easier than opening their ambitious first restaurant, which they did in 2014 with just $140,000 and almost no name recognition in the area.
Following Osteria Langhe’s surprising success (and amid growing momentum behind state and federal minimum-wage increases), Zaninotto and Grant opened Animale in 2016. Their aim was to revolutionize the fast-casual Italian model with a counter-service spot featuring kitchen staff doubling as waitstaff and an edgy pan-Italian menu comprising house-made pasta by weight, panini sandwiches, and a selection of offal and off cuts like rabbit livers, blood sausage in puff pastry, and bacon-wrapped sweetbreads. But the setup and menu proved challenging.
“It was a tough sell—people didn’t know what to do when they walked in,” Grant says. “And starting out with all the offal and off cuts, a small percentage of people loved them, but the neighborhood overall wasn’t really going for it.”
With food costs running around 35 percent and a menu filled with labor-intensive, scratch-made pastas and burgers made from Piemontese beef, Animale was almost indistinguishable from Osteria Langhe food-wise, despite its much lower price points (sandwiches cost $7). Zaninotto and Grant anticipated plenty of foot traffic, as Animale was close to a subway stop in a bustling residential neighborhood. But they found that a lot of people headed straight home after work instead.
So, after a few months of listening to guests and feeling out what the neighborhood wanted, Animale changed back to full service, rebranding itself as an Italian diner to reflect its open kitchen and flat top–heavy cooking style.
Like the original concept, servers are equipped with tablets for ease of ordering and tableside bill payment. The menu is more accessible, having traded off cuts for comfy classics like fish and chips, steak, and monthly rotating burger specials created by chefs from neighboring restaurants. Animale also features several weekly specials, like pizza night on Wednesdays, chicken parmesan on Mondays, and build-your-own Bloody Marys on weekends. Newly mounted TVs enable diners to catch sports games on weeknights or weekend afternoons. The brand also added delivery through third-party Caviar, which has greatly increased business. To offset its biggest challenge—labor—Animale recently started closing on Tuesdays, which had historically been its slowest day.
“We’ve settled into embracing the neighborhood, and we’re really hitting our stride,” Grant says. “But it hasn’t been easy. It’s all about taking some risks and giving it a shot, and—most importantly—listening to your clientele.”
Lessons on both sides
In Washington, D.C., chef Victor Albisu pivoted his meat-centric fine-dining restaurant Del Campo to be more casual at the behest of changing customer demands, too. Being located within walking distance of the Capital One Arena, home to the city’s NHL and NBA teams, he found that his South American hotspot’s white tablecloths and high-end prices turned off certain jersey-clad consumers en route to a home game.
Albisu replaced the tablecloths with wooden tables and he simplified the menu, making it more approachable via lower-priced shareable plates. This fall, he debuted a taco counter at Del Campo as a mini outpost of his fast-casual taqueria chain, Taco Bamba. On weekdays from 11 a.m. to 3 p.m., guests can feast on $3 al pastor or spicy ’shroom tacos beneath Del Campo’s sparkling chandeliers, or they take them to go.
“Del Campo has historically been seen as a more celebratory destination restaurant, but it’s becoming more of a weekly, even daily, restaurant for a lot of people now,” he says. “I had to evolve with the times. The margins are different compared to the white-tablecloth heyday, when you could build your whole life off of a single restaurant.”
At the same time, chef-driven approaches to quick service, like Albisu’s Taco Bamba, continue to shape consumer expectations surrounding quality, creativity, and service within the category. Each of Taco Bamba’s three locations offers a menu of house-specialty “taco nuestros,” which makes each outpost feel like a one-off and keeps chefs on their toes creatively. For the mini-chain that draws long lines at all hours of the day, offering generous portions and quality ingredients at such affordable prices from the beginning led to high volumes.
“I don’t see a $3 or $4 taco any different than I see a $20 appetizer or $40 entrée,” Albisu says. “We do it a little differently—giving first and hopefully getting back over time through repeat business and strong loyalty. I think a lot of people came to do fast casual thinking, ‘I’m going to just do burgers or pizza, and it’s going to be a hit.’ I came from Michelin-starred kitchens and high-end restaurants, and for me it was applying that idea to simple street food that I love.”
Indeed, the experience that comes with running both full- and limited-service concepts can give operators fresh approaches to improving efficiency, quality, or service across the categories. The Lannis continue to take Currito more upscale from both a brand experience and menu standpoint, reflecting the growing trend of fine casual, as seen at spots like Shake Shack and Rick Bayless’s high-end sandwich brand Xoco.
“One example of how full service has impacted our fast-casual business is we have a culinary development team now that’s focused on homing in on Currito’s recipes—innovating, adjusting, and tinkering them,” Joe Lanni says.
For Newlin’s team, seeing the time savings gleaned through online ordering at Birdcall inspired them to implement it across all the full-service brands in their portfolio—arming all Park & Co., Homegrown, and Park Burger servers with tablets.
“What sense is there in writing down orders? Restaurants are already so hard. Why are we making them even harder?” he says. “Our POS system isn’t custom, but we need to start using available solutions. I can’t tell you how much more efficient we are by coordinating between stations.”
And it’s all thanks to lessons learned from opening a fast-casual brand.
“We brought full-service concepts, like a dedication to hospitality, to fast casual, and now fast casuals are teaching us lessons back,” Newlin says. “That’s the thing I’d urge all restaurant players to do, whether fast casual or full service: Take the time to practice with solutions while educating yourselves. The lessons we learn need to stick with us everywhere.”