It seems the way to a man’s heart really is through his stomach, if the list of the top 50 fastest growing franchises is any indication.
Healthy fast food franchise Sumo Salad had a dream debut with an average growth rate of 144 per cent over three years, topping the list released by business bible BRW.
The compilation contains no fewer than seven food franchise entries in the top 20, more than any other franchise sector.
Closely following Sumo Salad were the Crepe Café, Boost Juice, Gloria Jean’s, Oporto, Subway and Trios. All of top 20 food franchises, apart from Subway, are Australian-born.
According to the list, fast food franchises are still the most popular group in franchising. Expressions of interest continue to pour in and new fast food franchises are constantly entering the extremely competitive playing field.
Subway, in particular, is one fast food franchise that has experienced phenomenal growth. The fast food franchise now has an impressive 25,000 franchises in 83 countries. It a rare occurrence today to wander into a shopping centre in Australia without bumping into a Subway restaurant. According to Subway, the enquiries regarding opening a new franchise are still on the increase.
“We have more interest in the brand than we can find locations for,” says Tracey Steinwand, Subway regional director for Australia and New Zealand.
Yet fast food franchises have often been ostracised by the majority of the food industry. Fast food franchises have become scapegoats for a growing juvenile obesity epidemic in Australia. Whether this is an accurate attack or not is still being decided, but the fast food industry has not taken the beating lying down. Fast food franchises have banded together in an effort to improve the fast food image in the mind of the public.
Films such as the documentary Super Size Me and books like Dr Sandra Cabot’s The Liver Cleansing Diet have kick-started a health craze that shows no signs of slowing down. Articles about the latest celebrity diet are flooding the magazine industry. Many Australians are now more accountable for what they eat and the amount of exercise they take part in.
Oporto CEO Jeff Fisher remains optimistic the “grilled not fried” fast food franchise will remain one of Australia’s leading franchise networks, in spite of the fast food sector now taking up the healthy food challenge.
“There has certainly been an emergence in healthy fast food alternatives and there will always be new players coming into this space. Some might do well and others might struggle. If anything, it makes us work harder to ensure we keep up the quality of our service and food,” he says.
Entering the fast food franchise market in 1995, Oporto declared itself to have a healthier approach with the “fresh not frozen” chicken menu. According to Fisher, the reason for Oporto’s success comes down to one reason: tastebuds.
“Consumers still want to eat great tasting food,” Fisher explains.
So is the trend for fast food franchises to add healthy items to their menus?
As part of its image makeover, the McDonald’s franchise is currently giving its restaurants a modern, sophisticated look with American cedar exterior walls, giant plasma TV screens, comfy seating and soft music and lighting. The fast food giant is rolling out more McCafes across the nation after an extremely positive reaction from the public. McDonald’s also recently launched a Deli Choices range, providing healthier alternatives to the traditional menu. However, old favourites such as Big Macs and French Fries aren’t going anywhere, at least for the foreseeable future.
McDonald’s CEO Peter Bush believes the restaurant chain still has a lot of work to do to update its image in the eyes of consumers that want a wide range of eating options.
“Our mission is very clear. We want to become unequivocally Australia’s favourite brand. We’ve got a long, long way to go. We just need to keep doing the kinds of things that we’ve been doing in terms of offering food choices and becoming an increasingly big part of local communities through our support, whether that’s through Ronald McDonald House or sponsoring the local sporting teams and supporting the local schools. Our franchisees are, in particular, very good at that,” he says.
Fast food franchise Nando’s CEO Norman Picker states that McDonald’s is the benchmark by which the fast food sector is measured and others in the food industry will follow its lead, or more bluntly, “adapt or die”.
“Look at McDonald’s trying to reinvent itself,” he says. “It understands the marketplace is more discerning and is aware of the negative connotations that have been associated with the sector. We concentrate more on delivery, freshness and how it impacts the environment. The public want to feel like they are getting value for money as well as quality.
“Australia is such a competitive environment; it forces the industry to improve all the time.”
Oporto’s Fisher agrees Australians are now, more than ever, watching what they eat and the fast food franchises they frequent will have to change to suit changing consumer tastes. The fast food franchise recently added salads to its menu, in response not only to the competition, but also to what Australians are eating.
“There are two very distinct trains of thought – a growing awareness of what people consume and a desire for a balanced diet,” he says.
Fisher cites KFC and McDonald’s as the two major competitors in the fast food franchise market which are working together to undertake research and development into creating healthier menu items with reduced fat and salt content.
Subway’s Steinwand says customers want healthy food that tastes great and they want quick service, hence some replacing the term “fast food” and its negative connotations and dubbing it “quick service”.
“The low carb concept has passed its heyday. Today it’s about a medium carb diet rather than a no carb one,” she says.
As healthier fast food franchises continue to flood the marketplace, and Australians demand healthier menus from fast food franchises, existing outlets must adapt their menus for changing tastes, otherwise they may find themselves without a customer to feed.
5-Jul-2006