Can Quick-Service Brands Make the Shift into Fast Casual?

In this episode of On Foodable Weekly, brought to you by the Foodable Network, show host Paul Barron and QSR Magazine editor, Sam Oches, chime in on the attempts of quick-service chain restaurants to enter the Fast Casual sphere. What are these big guys doing right and what are they doing wrong? Is it even possible for QSRs to make the jump or will they plummet into profitless pits?

“It’s an interesting move. I think in the last couple of years, a lot of QSR concepts have been exploring that idea of upgrading to Fast Casual. And you know, it’s worked to some degree for some,” Oches said. “But on the other hand, I think there’s a lot of evidence for why some of these bigger legacy QSR brands should probably just stick with QSR.”

The approaches QSRs have been taking vary. Wendy’s has been steadily adding Fast Casual components to its menu without full-out embracing the movement, while KFC jumped headfirst into fast-casual with its KFC Eleven concept, yet it ultimately failed. Why are these brands doing what they do?

Barron and Oches first discuss Del Taco and Rubio’s, two brands whose menus are primarily fresh mex. In a decade, Rubio’s has gone from going toe-to-toe with Taco Bell to successfully elevating itself to Fast Casual, yet Del Taco, which is attempting to do the same thing, may struggle. This could be due in part to the fact Del Taco has already been established for 50 years, whereas Rubio’s has a younger history, Oches said. As a legacy consumer chain with a loyal customer base who has an expectation with their visit, it would be challenging to make that leap and requires a huge investment in the supply chain and equipment of the franchise.

The next two brands Barron and Oches explore are Sonic and McDonald’s. Both brands have been around for nearly as long as the other and have the same brand trademarks, yet, Barron reveals according to the Restaurant Social Media Index, Sonic has increased its score from 73.5 to 88.8 in consumer sentiment, whereas McDonald’s has fallen from an 80.82 to 67 in the last four quarters.

Why?

“Sonic is very much a middle-class brand…that really resonates in the Midwest and in the South, and it’s something that is kind of a down-home brand, and I don’t think they try to pretend they’re much more than that,” Oches said. “Whereas McDonald’s wants to assert itself as the leader in limited-service restaurants. And if that means upgrading the menu, if that means upgrading its restaurants, it’s going to try to do that. I don’t think Sonic is much going to try to play that ballgame.”

Yet, Oches doesn’t count McDonald’s out of the running.

“I would never bet against McDonald’s. When you look back at the last 20 to 30 years, you actually see McDonald’s go through this a couple of times,” he said.

He believes the company should aim for the millennial demographic, which is now at the cusp of starting families, in an authentic way. By winning back this generation and having them bring their children to get Happy Meals, McDonald’s will win the next generation as well. Watch the full episode to get more insight on QSRs making the shift to Fast Casual.