Can the words "healthy" and "fast food" really coexist happily together? Many have tried to pair the two and failed, but a couple of former McDonald's executives believe they may know the secret to making "healthy fast food" actually work.
Mike Roberts and Mike Donahue both used to work in the trenches at the biggest fast food franchise in the world and now -- with financial backing from an entrepreneur named Steve Sidwell -- they are looking to launch a healthy, environmentally-friendly option in the fast casual dining market, according to Ad Age. The concept, which is tentatively being referred to as Stephanie's after Sidwell's daughter, is expected to open it's first location next year with the ambitious goal of reaching 250 sites in the next five years.
With healthier fare and vegetarian options at prices between $8 and $12 per meal, Stephanie's looks to be a little bit more than your typical fast food joint or rest stop fare. Ad Age reports that diners will be able to order apple-cinnamon steel cut oatmeal and pita pockets for breakfast. "We think the biggest unmet customer need is great-tasting, delicious, affordable food that is also good for you," Donahue told Ad Age. There is even talk about delivery services and frozen food products to be sold in places like Whole Foods.
While the concept may seem mouthwatering to diners, it may not be as appetizing to investors. A number of healthy alternatives to fast food have been tried and abandoned in the past. Boston Market (formerly Boston Chicken) was launched in the mid-80s as a healthier alternative to burgers and fries. It was such a phenomena that, even though it had filed for Chapter 11 bankruptcy protection two years earlier, McDonald's bought the chain in 2000. But McDonald's never managed to expand or even manage the chain and in 2007, it was acquired by Sun Capital, a private equity group that has a history of buying flailing retail concepts. McDonald's had more success with Chipotle, the Mexican chain that claims to serve "food with integrity," in which it had a controlling interest for eight years until 2006.
As McDonald's previous efforts show, it's not easy for a place that specializes in burgers and nuggets to do a great job with fresh vegetables and natural ingredients. However, both Roberts and Donahue were around when the groundbreaking, Oscar-nominated documentary "Super Size Me" hit the big screen and saw firsthand the backlash it engendered. And it's pretty clear that Stephanie's will be targeting an entirely different type of customer: One that is health conscious and likely to shop at Whole Foods rather than grab dinner at McDonald's.
A good thing too, I've long contended that those who visit quick serve restaurants do so because they like that food. Cheap and convenient are part of the equation but if I'm going to Burger King, I'm ordering a Double Whopper with cheese. Every time. How else do you explain KFC's Double Down?
Most people aren't going to McDonald's or Wendy's looking for a low-calorie option. What Stephanie's will do is serve a smaller niche that is interested in healthy fare on the go. Yet, are there enough people interested and willing to pay a premium for that fare? History says no.
Take the first steps to building your portfolio.View Course »