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Taco Bell’s Strategy to Win in Urban Markets Involves Delivery, Kiosks and Alcohol

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“Throughout its company history, Taco Bell has dominated with a development strategy that focused on sprawling suburban locations equipped with drive thrus wrapped around the side. That is beginning to change.

The gigantic American Mexican quick service chain has been testing a handful of small-format restaurant concepts, branded as Taco Bell Cantina and Urban In-Line restaurants, in various urban centers for the past three years. The Urban In-Line format is essentially a regular Taco Bell, modernized and shrunk to fit on a street corner. The Cantina format is similar but also features twists on the traditional menu, including alcoholic drinks and shared platters of food.

Both concepts are tailored for densely populated locations where the rent is overwhelming, the foot traffic is high, and there’s no space to fit a traditional Taco Bell unit.”

See more here.


US Demand for Ethnic Flavors

The US foodservice market is very attractive to international operators looking to expand globally. According to the National Restaurant Association, restaurant industry sales last year surpassed $680 billion, with the limited-service sector accounting for a third of the total. Due to the rise of importance of the millennial generation, ethnic flavors have become more in demand than they ever have before, which is causing international brands to be able to boom and grow their brands across the US.

As the popularity of the global fast casual concepts grows, chains from Brazil, Asia, Europe and South Africa are jumping into the US foodservice space to compete and expand their concepts. For example, London-based Pret A Manger is thriving by marketing their healthy and fresh products in urban areas with a high pedestrian traffic count. Lauren Hallow, associate editor of news and concept analysis for research firm Technomic states that Pret “really lets people know they use natural, preservative-free ingredients, so the fresh factor is still there. They do have a higher price point, and I think that’s why they’re sticking to these urban areas with affluent consumers.”

Le Pain Quotidian is another chain, from Belgium, that has grown exponentially in the US last year. Aside from the fresh, healthy menu items, what has made LPQ attractive in large urban areas which can at times feel lonely, is their store layout which always includes a large communal table. CEO Vincent Herbert was excited by the challenge of breaking into the US market and was confident they would succeed given their strong core values of enjoying the hospitality aspect and not just the service aspect. LPQ faced higher rent terms than accustomed to in Europe, so Herbert explains that the chain had to ensure that each location would yield high profits quickly, and that their success really came from the brand’s ability to not look like a chain.

Giraffas, a Brazilian steak and burger brand also chose to take on a challenge and enter the US market, but before doing so realized they needed a fast casual makeover to succeed. João Barbosa, CEO of Giraffes, says that the key to keeping the food costs low lays in the cut of the beef known in Brazil as a ‘piranha,’ which is relatively inexpensive in the US and has become popular in their first locations in Florida. The brand is looking to target more urban areas this year such as New York and Boston which will serve as a gateway to these expand westward and eventually franchise.

To read more about international concepts that aim to expand their brands in the US market due to an increased demand for global flavors, click here


Papa John’s Entrepreneurial Advice on Growing A Business

John Schnatter impressively built the global pizza franchise that is now Papa Johns. Schnatter has shared some of his most valuable lessons learned through his experiences to last month in Washington D.C. during National Small Business Week. One of the major lessons he learned from his father before he even started building his pizza empire was that hiring the best people did not necessarily mean hiring the most experienced; he stated, ” You look for people who are positive and who have integrity…That’s how he taught me to train for aptitude, hire for attitude.”

Schnatter believes in the importance of being surrounded by people with great can-do attitudes and spirits that are full of passion. The key is not to be too controlling of employees but to give them a direction to head in and provide them with the appropriate resources and lead by example. It is important to motivate and reward them when they are doing things right so that they can begin to motivate themselves.

Of course Schnatter states that one of the most important elements to growing a business is to have an effective business model. However, he also shares some advice on how important it is to make a few mistakes along the way and not get down on yourself because of them; mistakes need to be made in order to learn from them, analyze and innovate.

To read more on John Schnatter’s advice on growing a business, staying competitive and establishing a culture of entrepreneurship, click here


Halal Guys to become Middle Eastern Chipotle

The street vendor Halal Guys, whose original location can be found on 53rd and 6th Avenue in Midtown, will soon be turning its cart into a restaurant chain. Halal Guys just signed a deal with the franchise consulting firm Fransmart. The firm hopes to have outposts in Canada, Los Angeles, along the East Coast and in the Middle East within a year’s time. In the next five years it also hopes to include more US locations as well as some in Europe. Fransmart is the firm responsible for the franchising of Five Guys Burgers and Fries and Qdoba. The chief executive officer of Fransmart, Dan Rowe, has stated that he believes this deal could turn Halal Guys into “the Chipotle of Middle Eastern food.”

Two other locations within New York City were already in the works before this deal was finalized; one in the Lower East Side and one near Columbia University. These locations will operate independently of Fransmart. The other five carts around the city will also continue to stay open for business.

To read more about the franchising of Halal Guys click here

Corporate Food Trucks?

The food truck scene originally was attractive to customers because they were able to taste new specialty food items at a reasonable price. Of course there are many different kinds of food trucks, not all selling artisanal homegrown products, but overall they were presenting the customer with unique food options.

This movement is not only a cheaper alternative to selling products, but it also gives the cooks a means of creating a fan base and establishing themselves in the competitive dining scene. Soon enough, however, large fast food chains and franchises began to launch their own food trucks. In the past couple months there has been a resurgence of larger corporations setting up their own trucks that clearly will not be selling handmade special products. This will certainly have implications for the smaller food trucks who will be competing with the giant corporate ones.

To read more about how this could impact the food truck movement, click here


The “Brooklyn” Water Difference

Thanks to a high-tech water filtration system that produces “Brooklyn” water, or water that has been filtered down to its purest state with the addition of signature New York elements, Brooklyn Water Bagel Co. is marketing a superior product across their food and beverage line. CEO Steve Fassberg defends the quality of his bagels, “We truly believe that guests will learn the real difference our water makes when they enjoy one of our freshly baked bagels. Our bagels have a thin, crusty exterior that’s golden brown and moist, just like they would find in Brooklyn.” The H20 isn’t Brooklyn Water Bagel Co.’s only strength. Customers can witness the baking process of dough to bagel, leaving them with a memorable experience. The magic lies in the water.

Fine Dining Chefs Joining the Fast Casual Market

Over the past decade, some of the most experienced chefs, who under typical circumstances would only work in fine dining establishments, have expanded their interests to the fast casual sector. Take Chef Bradford Kent, for example. The CIA grad opened Olio Pizzeria & Cafe in Los Angeles, a wood-fired pizza enterprise; however, the thought of serving high-quality pizza to the fortunate few who could afford it did not appeal to him. This triggered Kent to help launch Blaze Pizza, a fast-casual franchise that serves customizable pizzas in two minutes for less than $8. Blaze Pizza is an example of just one of several chef-driven fast-casual concepts to influence the restaurant industry.

Kent claims, “Every chef wants to make a difference and wants people to eat well. There’s nothing cooler for a chef than seeing tens of thousands of people eating their food and blogging about it. It’s way more exciting than making 30 plates per night. This is more important, and most chefs want to be a part of something like that.”

Darren Tristano of Technomic, the leading food-industry research and consulting firm, offers his theory behind the trend, “The reason chefs are going into fast casual is very simple. Opening full-service restaurants is too risky. Fast casual allows chefs the latitude to create better-quality food in an environment convenient to customers and less risky and costly than an upscale restaurant.”

As for franchising, “But while more chefs are making the leap into fast casual, only a few are dipping their toes into franchising. “I think the reason many of them don’t franchise is because they have the finances to grow their businesses independently,” according to Tristano. “They want to keep control over the quality and service. Those are very important to chefs.”

To learn more, visit the original Entrepreneur article.

b.good is Breaking Franchise Traditions in Boston

Jon Olinto, co-founder of Boston’s b.good, wants to break the traditional route of franchising — cutting costs by buying in bulk from suppliers, and instead is turning to local producers.  His restaurants feature seasonal menus, farm-to-table produce, and made-from-scratch condiments and salad dressings.

He tells Bloomberg News, “It’s a challenge to expand a boutique concept into a franchise,”  “It’s cheaper to buy 30 pounds of local, natural beef chuck roll than it is to buy frozen processed” hamburger patties, despite the increased labor cost. “It’s a piece of our business model that seems hard to believe, but it’s true.”

Read the full article here.