Fast-Food Upstarts Pursue Success with Quality, Not Quantity

After several years of working to spotlight value to pennywise consumers, fast-food giants like Burger King, McDonald’s, and Subway are trying to be all things to all people by expanding beyond their traditional product offerings and remodeling restaurants. Rather than expanding the number of locations, the big players in the industry are trying to improve performance at existing locations. Wendy’s and McDonald’s have led the way, by adding options such as salads, along with sleek, modern restaurant interiors to battle the long-held public perception that fast food is unhealthy and unclean.

Early in 2011, Subway rolled out a plan to develop a Subway Cafe concept for certain “higher-end” office locations. The company envisions a Starbucks-meets-Subway concept that serve its usual sandwiches in addition to espresso drinks and gourmet desserts. Burger King has also been revamping some locations, and the chain now offers smoothies and an Asian chicken salad alongside its iconic Whopper hamburger. McDonald’s still sells its much revered French fries, Big Macs, and Quarter Pounders, in addition to the various salads, granola, coffee drinks, and smoothies it has added to its menu in recent years.

Interestingly, while many of today’s fastest-growing smaller restaurant chains are also paying close attention to design and branding, their menus tend to be more limited. The fast food industry is volume-driven, so transaction speed is paramount. A more limited menu translates to lower overhead costs and fresher food because restaurants can keep fewer ingredients on hand. Product assembly is also easier and quality control is inherently better because there are fewer things than can go wrong. A simple menu can also reduce the amount of marketing and advertising a chain needs to do to in order to make customers aware of what they offer. There are several relatively small restaurant chains that are growing rapidly by keeping it simple, focusing on quality, and building a strong brand through creative marketing.

• Five Guys Enterprises operates the Five Guys Burgers and Fries quick-service restaurant franchise, which offers a simple menu of burgers, fries, and hot dogs. Founded in Arlington, Virginia in 1986, Five Guys has grown to more than 750 locations in 40 states and Canada since expanding its franchise rights nationwide in 2003.
• Potbelly Sandwich Works owns and franchises more than 200 quick-service sandwich shops in about a dozen states. The chain's menu is focused primarily on sandwiches, desserts, and milkshakes. Potbelly operates mostly in the Midwest, with a small number of units located in Texas and along the Eastern Seaboard.
• Chipotle Mexican Grill owns and operates more than 1,050 quick-casual eateries popular for their burritos. Its stores are often located in and around urban retail areas. Though the chain finds it difficult to compete with the value pricing of Taco Bell and Taco Cabana, Chipotle concentrates on food quality and freshness.
• Known for its made-to-order charbroiled hamburgers, Back Yard Burgers operates about 135 quick service restaurants in Tennessee, Mississippi, and more than 15 other states in the Southeast and Midwest.
• The Which Wich sandwich chain operates more than 80 franchised locations in about 15 states. Although the company offers about 50 different toasted sandwiches at most locations, its menu does not stray far away from its bread and butter with drinks, chips, cookies, and milkshakes.
• Qdoba Mexican Grill offers made-to-order Mexican food. The company has about 500 locations in 40 states. The eateries offer a selection of signature burritos, along with tacos, salads, nachos, and breakfast items.
• Found mostly in Texas and Oklahoma, Freebirds World Burrito operates more than 20 taqueira-style eateries that specialize in custom-made burritos. The fast-casual chain's burritos are prepared along a steam-table assembly line. It also serves tacos, nachos, and salads.

Michael McLellan is an editor at Hoover's.