Middle Eastern Halal Food
The original Halal Guys in Manhattan is a thing of local legend: a food cart that became a word-of-mouth phenomenon with long—and occasionally violent—lines day and night. Now the purveyors of chicken and rice in Styrofoam containers are trying to turn the sidewalk stand into a national franchise concept. After signing with consulting firm Fransmart, Halal Guys now plans to grow into a chain of 100 brick-and-mortar stores in the U.S. and overseas in about five years.
Halal Guys isn’t the only one trying to create a market for Middle Eastern fast food in the U.S. Just Falafel, based in the United Arab Emirates, plans to open 160 outlets in North America and has already signed franchise agreements in New York City, New Jersey, Kentucky, San Francisco, and Toronto. Amsterdam’s Maoz Vegetarian already has a chain of falafel restaurants in the U.S.
While starting a “Chipotle of Middle Eastern food” may seem seductive, Darren Tristano, executive vice president at restaurant consultancy Technomic, sees certain challenges that did not confront the successful fast-casual Mexican restaurant. The average American, he argues, lacks basic familiarity with Middle Eastern cuisine. Only 0.5 percent of the U.S. population is of Arab ancestry, according to U.S. Census data (PDF).
“Mexican food has been around forever” in the U.S., Tristano says. “Some other categories—like Vietnamese, Indian, and Middle Eastern—still have growth potential, but 150 restaurants might be a tough sell.”
The dynamics of operating a food cart for the Halal Guys—where success is driven by limited supply and high demand—are very different from a restaurant chain with much higher costs. Planning to grow so quickly in five years is especially risky. Tristano sees Fransmart’s experience expanding Qdoba Mexican Grill (JACK) and Five Guys Burgers & Fries as invaluable to the Halal Guys’ prospects.
Catching on as a mainstream fast-food chain often means changing things. “You need to get it right with the flavor profile and adjusting it,” Tristano says. Look no further than the changes wrought to Chinese food as it became a universal takeout staple in the U.S. The practice was once lampooned on The Simpsons when the fictional Fleet-A-Pita franchise dubbed falafel “crunch patties” and tahini “flavor sauce” for their less-than-cosmopolitan customers.
The best thing for these budding U.S. restaurants at this point, Tristano says, is the lack of rivals in the Middle Eastern fast-food business right now. The food might not be widely known, but at least there’s little competition.
Originally published on http://www.businessweek.com