Article

Fresh To Order CEO: Fast casual concepts need to 'elevate up'

Panos believes many brands in the segment are not delivering on true, fresh, made-from-scratch products.

July 15, 2014 by Alicia Kelso — Editor, QSRWeb.com

Few people in the restaurant industry share Pierre Panos’ unique perspective. The South African native is the CEO of Fresh To Order, what he calls a “fast fine” dining concept. He is also a 50-unit Papa John’s franchisee and owns a fine dining concept in Atlanta, called Brookwood Grill.

He’s been in the U.S. industry for 20-plus years and can break down numbers, offer advice, discuss regulatory challenges and predict menu trends across all segments. FastCasual.com had the opportunity to talk to Panos about what it’s like to be both a franchisor and a franchisee in the post-Recession, value-driven economy.

FastCasual.com: How do you juggle the different businesses in different segments?

Pierre Panos: Even though they’re in different segments, there is an overriding theme – every one of them has quality positioning. You could lose focus very quickly if you run any more than two or three brands. I only want to be associated with the top quality brands.

FastCasual.com: In 20 years what has changed the most about the restaurant industry?

PP:When I came to the U.S., I had a strong restaurant and accounting background. I knew numbers very well. But coming here, the food quality and the average restaurant concept just wasn’t very exciting or intriguing. I felt that we had better restaurants back home in South Africa because it blends so many different cultures and taste profiles.

Since then, a lot of areas are becoming much more sophisticated with their flavor profiles, and not just in Los Angeles and New York, but also in places like Denver and Atlanta. They’re birthing these concepts that are intriguing and on trend.

FastCasual.com: You describe Fresh To Order as ‘fast fine.’ What does that mean?

PP:We do feel we pioneered a new segment and we’re seeing huge explosions in this area. Fast casual restaurants are slowly trying to elevate up to fast fine, just like QSRs are elevating up to fast casual. In 2006, we opened our first unit, but the idea was put together two years prior to that. The genesis was we wanted to create something from our fine dining background – take that quality food and get it to the masses, quickly, not expensively and in a nice surrounding. But we wanted to stay at that $10 to $11 price point.

Fresh To Order is the most intriguing to me because I think it has the potential to make a true impact on the restaurant industry.

FastCasual.com: What trends do you predict coming up?

PP:I see the next huge growth being fast fine - in pizza, Italian, Indian, Asian cuisines. Fast casual will continue to grow, no question, but a lot of fast casual brands are trying to elevate up.

And, consumers’ taste profiles are more sophisticated so you have to elevate. They want full-flavored food, they want to be seen and they want to feel that they’re eating healthy. You have to take the positioning of being better and better for you. That’s why the fast casual segment has been so successful; it took the positioning of ‘we want to be better and better for you.’

FastCasual.com: So even with that positioning, you believe there will be another iteration of the segment?

PP:Yes. I believe a lot of fast casual concepts are saying that’s what they offer, but they aren’t. I don’t think overall fast casual is delivering on true, fresh, made-from-scratch products. That’s why people got tired of going to casual dining restaurants – they were meant to be all these great things and brand promises weren’t being delivered by every concept. That is what enabled fast casual to come in and do what they do and now I think fast fine is doing the same thing. The Recession really caused people to be wary of where they spend their dollars so brands have to elevate.

FastCasual.com: What gives operators an edge in today’s competitive industry?

PP: Twenty years ago, the reporting engines and the way numbers were calculated weren’t great. Today, you can slice and dice those numbers, and truly get data that helps you manage data, manage food costs. If you don’t have that ability, that technology, compared to all the competition, your margin erosions will be so huge that a lot of places will just go out of business.

Margins have shrunk in our business compared to even just five years ago. But we now have the technology systems in place to tweak our programs and make better decisions. But, if you don’t have the food, service and facility, that technology is meaningless.

FastCasual.com: Do you have tips for someone with a startup?

PP: If someone wants to get in, I would suggest they be well capitalized; most people open and run out of money because they put every cent into it.

A lot of people look at the restaurant industry and think it’s easy, but most restaurants fail within the first three years. It’s not rocket science, but there are 1,000 details every day that you need to focus on to drive traffic, and that’s when it becomes difficult. Focus on the guest, the service and the food, always.

FastCasual.com: As a Papa John's franchisee, what is your opinion of the growing fast casual, top-your-own, pizza subsegment?

PP: It reminds me of the frozen yogurt explosion when it went crazy. Every month one was opening 500 yards from me. The burger segment did the exact same thing, but now it’s shaking out. I think the pizza stuff will be the same.

Too many are popping up right now and trying to be a ‘me too’ and I think there will be a huge shakeout, with one or two national players taking the lead and the weak ones going away. I never wanted to be a ‘me too.’ I wanted to be the first concept doing it, hold that position and grow responsibly.