Fast Casual Restaurant Industry: Costs, Trends, & Statistics
There’s never been a better time to join the fast casual industry. By 2027, the fast casual restaurant industry will be worth a whopping $209 billion — and growing. The restaurant industry outlook has never been brighter. In the world of restaurants, fast casual concepts provide the perfect vehicle for delivering trend-setting flavors with convenience, high quality food at affordable prices, and exciting franchising opportunities for dedicated entrepreneurs.
BOUNCING BACK FROM COVID
While the COVID-19 pandemic presented exceptional challenges for the restaurant industry, fast casual concepts fared slightly better than full service or fine dining establishments. Compound Annual Growth Rate (CAGR) is the touchstone for franchises to understand how their investments are growing. Despite adversity, the fast casual restaurant industry is on track to grow by more than 10% CAGR over the next five years.
Bridging the gap between full service and fast food, the fast casual restaurant industry is filled with an endless amount of flavorful potential. Diners can take their pick of virtually any type of cuisine under the sun, and the top fast casual restaurants appeal to the growing consumer demand for meals that are quick, inexpensive, and healthier than traditional fast food fare. Increasingly, consumers seek healthy meal options they can grab on their lunch break without breaking the bank. That’s why it is no surprise many new fast casual restaurants are among the fastest-growing food chains in the industry. In order to stay on top of their game, fast casuals will need to remain flexible and innovative as consumer habits evolve over time.
One of the key factors driving fast casual restaurant industry growth is the constant demand for innovation and menu customization. Consumers never grow weary of trying new flavor combinations and specialty items. Changing lifestyles and rising demands for on-the-go food ensure that fast casuals will always have opportunities to grow and meet new trends and changing preferences.
Perhaps unsurprisingly, millennials are major spenders in the fast casual restaurant industry, dining out more than any other living generation. As they are poised to surpass baby boomers in spending power, it’s beneficial for restauranteurs to understand how and where they spend their money. When millennials go out to eat, they place a high premium on convenience. Fast casual restaurants that prioritize technological advances, like POS systems that integrate online ordering into the restaurant’s workflow, enable the speed and convenience that millennials crave.
Millennials, too, are interested in the broader dining experience. Making your food “Instagrammable” is not a new concept, but it may come as a surprise to see that video is quickly becoming the medium of choice over photography. Social media postings including Facebook and Instagram live feeds and stories and Tik Tok videos are proving consumers are interested in food content that moves and makes sound. For fast casual restaurants, this means creating food that intrigues other senses beyond taste.
Utilizing social media and other interactive digital platforms promotes customer engagement that translates into new conversions and loyalty retention. For some fast casual restaurants, this may mean enticing customers with proprietary apps, loyalty points, and limited-time offers to attract business.
With escalating food prices, the fast casual industry will look toward simplifying menus in the next few years. Chefs will take a creative approach toward minimizing waste while amplifying flavor from a carefully curated selection of ingredients. Streamlining the menu to focus on delicious food without overwhelming the customer with choices will help businesses effectively manage their costs.
Teriyaki Madness has long been ahead of the curve with its offering of Seattle-style Japanese rice and noodle bowls that are cooked to order to appease any palate.
LET’S GET DIGITAL
Third-party food delivery services became a lifeline for both restaurants and their patrons with the onset of the pandemic, and our reliance on this convenient option is here to stay. Even as restaurants reopen their doors for in-person dining around the world, 71% of consumers questioned in a recent survey said they would continue to order delivery as much as or more than they had during the pandemic.
Having a presence on multiple online ordering apps is a necessity, as well as direct ordering capabilities off the restaurant’s website. Restaurateurs must prioritize planning for a digital menu with food quality and delivery taken into consideration.
Teriyaki Madness, known by their fans as TMAD, foresaw this trend even ahead of the pandemic. TMAD guests are fiercely loyal, spending more time and money with us than any other fast casual location. TMAD loyalty guests spend 9.6% more than the average customer and for the past year, we saw massive growth within the loyalty program with a 56% increase in members in 2021. With our loyalty retention rate of 75%-85%, it’s clear our members are MAD for our offerings. With kickass technology at the forefront of our operations, TMAD is ahead of the game. Online & app ordering? Check. Integrated third-party delivery? Done. Curbside pickup? Already there. By continuously integrating the latest and greatest technological advances, we provide a seamless customer experience and keep our franchisees on the cutting edge of a bustling industry.
FAST CASUAL COSTS
Unlike many household name fast food franchises, for which purchasing a franchise can run upwards of a million dollars, many fast casual franchises present a more affordable and lucrative investment opportunity. Whether you’re looking for a more accessible cost of entry or the ability to scale more quickly, fast casual concepts like Teriyaki Madness are where it’s at.
According to Restaurant Business, TMAD is the No. 1 fastest growing big restaurant chain in the $488.8 billion restaurant industry, a leading contender in fast casual dining. With a unique Seattle-style Japanese bowl concept, TMAD locations are popping up across the country and leading the fast casual dining revolution.
A smaller footprint, with store size typically ranging from 1,200 to 1,600 square feet, provides the perfect setting for a predominantly dine-away model and requires less rent and lower startup costs than many other fast casual competitors.
Teriyaki Madness considers potential franchisees with at least $150,000 in liquid capital. Initial investment ranges between $327,200 and $678,260, so entrepreneurs can open their own fast casual restaurant for far below $1 million. This lower investment level also means that investors with access to more capital may be able to build additional locations on a shorter time frame. And with a smaller footprint, the real estate, buildout, and construction costs are much lower.
A NEW DAY FOR FAST CASUAL
Several established and up-and-coming concepts adhere to all the tenets of what makes a great fast casual restaurant experience, while providing a platform for chefs and restauranteurs to elevate popular standbys, explore new flavors, and put their own personal mark on the industry. Teriyaki Madness is trailblazing its way into the future.
TMAD is an award-winning brand serving up huge bowls of awesomeness by combining three of the fastest growing sectors in the industry as a fast casual Asian concept. We are, in fact, the fastest growing big restaurant chain in the country as named by Restaurant Business. TMAD offers franchisees easy onboarding, ongoing support, and a simplified menu that keeps diners coming back for more.
If you’d like to learn more about franchising opportunities with Teriyaki Madness, download our free Franchise Report.