The Worst Practice of Fast Casual Restaurants

fast casual

The fast casual restaurant business has undoubtedly boomed in the last few years, changing the industry at an exponential rate. New concepts and established restaurants alike are switching gears to cater to the changing needs of consumers, but while fast casuals may be trending, one practice may set companies back who are looking to grow: ironically, they may become stunted if they are growing too fast.

Take a look at these quotes from well-known IPOs that The Motley Fool pulled for a side-by-side comparison.

"We utilize a sophisticated site selection process using proprietary methods to identify target markets and expansion opportunities within those markets. Based on this analysis, we believe there is substantial development opportunity in both new and existing markets. We expect to double our restaurant base in approximately four years." -- Zoe's Kitchen 

"Our selection process uses proprietary methods to identify target markets and expansion opportunities within such markets. Based on this analysis, we believe there is opportunity for substantial development in both new and existing markets, and we expect to double our restaurant base over the next four years." -- Habit Restaurants Inc.

"With only 63 Shacks around the world, as of December 31, 2014, we have identified many attractive new markets for the Shake Shack experience...We currently expect at least 10 new domestic company-operated Shacks to be opened throughout the year, [and] at least five international licensed Shacks to be opened under the Company's current license agreements in the U.K. and Middle East..." -- Shake Shack Inc.

All three of these companies have set their goals at a compound annual growth rate of 19 percent. Are these expectations unrealistic? Could this promise, not likely to be kept, affect investor decision? Read More

 

Posted on August 13, 2015 and filed under Fast Casual.