South Beach Diets and Fast Food Franchises

Franchised Business Models and American Diets could be at odds. Yes there is significant issues with this in franchising. First before I get into my discussion for fear of someone, screaming foul. I would like to point to Krispy Kreme’s recent crash as an example of the changes in consumer buying behavior. We also noticed the IFA-International Franchise Association and the comments made by the Restaurant Association calling this Atkins, South Beach Low Carb Diet a mere fad. I can understand why the IFA wishes to help their members by quoting articles such as this one:

http://www.suntimes.com/output/news/cst-nws-usda04.html

And the USDA is right to make a statement as the shift and focus on the Atkins Style and South Beach Diets are helping Americans lose weight and causing a severe shift in the eating habits. Last time the shift was the five food groups 30 years ago, which caused the obesity of today. Even today the GAO discusses the need for changes in school meals programs and nutritional reasoning and how this will effect pricing and competitiveness: “School Meal Programs: Competitive Foods Are Available in Many Schools; Actions Taken to Restrict Them Differ by State and Locality.” Obesity slows the human spirit and energy levels and adversely effects productivity in our country, making us lazy, stupid and fat. You can tell by looking at your employees in your franchised business on the frontline.

The USDA is attempting to assist industry with this very fast shift which came out of the blue. After all a big and immediate switch in dietary consumption from consumers will affect farmers, wheat growers, etc. in a very big way. Too fast of a pendulum swing as we are seeing now could adversely effect the agricultural industry. Which today is highly government subsidized, but soon may be a huge target of the WTO as other countries complain. We see conservative think tanks, like the Heritage Group, CATO Institute, Ayn Rand Foundation, discussing the issues of Free Trade and Corporate Welfare. Most of the subsidies go to the Corporate Farmers not the little guy who is used as a reason to write the checks. If people eat less wheat then wheat farmers take a huge hit. Cattle ranchers may see lower prices for grain and they will be glad to see they are selling more beef too.

Remember the old Wendy’s Commercials made famous by Dave Thomas? Well instead of “Where’s the Beef” it is going to be “Where’s the Bun?” And we already see how much the diet issues effect fast food when Subway had blockbuster sales increases after their campaign where the fat guy lost weight by eating there everyday. Personally, I once went to that Subway store that he made famous and there were some cute girls working there behind the counter too, so some of his motivation to go there was probably due to the cuties or babes behind the counter? Never the less, what ever his reasoning was it worked, he lost weight and a smart marketing exec at Subway saw this and scored one of the greatest marketing campaigns ever, ranks right up their with; “Two-All Beef Special patties, pickles, lettuce tomatoes…on a sesami seed bun” and the Taco Bell Dog and the “Have it Your Way” and the Low Down Menu and the like. Every ten years or so there is a call to action for healthy Americans and that means watching what you eat.

Is this a short term trend? Well, not really it is a cycle set forth by Health Care Professional and a mandate for America. We have heard Presidential talks on this. We have heard recently that Diabetes has surpassed AIDS for death counts. Over weight causes heart disease etc. Moderation of things like ice cream and donuts is going to be a tough one. Nearly all the Fast Food Restaurants have had articles, PR and advertising telling of their low carb deals. Atkins lives on in spirit. Low Carb foods are flying off the shelves at Wal-Mart, Albertson’s, Safeway, Win Dixie, Piggy Wiggly, Hughes, HEB, etc. See for yourself, some of these shelves have only a few items left on them each time you shop. Well if anyone says that trend is going away, I would respectfully disagree but be willing to listen to well articulated ideas that maybe contrary to this observational comment. As a matter of fast as I sit at Starbucks and chat, I hear people say they are on a new diet. Literally 1 in 3 people I talk to? So it is not a 20% trend it is a 30% plus trend. And we know from watching modern day trends such as the Homosexual movement and Credit Card Consumption trend, wireless trend, Debit Card preferred payment choice trends that once you beat that 8% barrier it cannot be called a fad. No folks this is not a short term anything.

People I have talked to are happy to look better, feel better, etc. Soon they will be at a weight to start working out again too. It was not all that long ago that Body Builder Arnold the governator headed up Bush Seniors get in shape program, and we see a return of a cycle and the trend is to eat different than the 30 year old food pyramid we were teaching the boomers and Ex’ers.

If you are looking to buy a franchise, which involves food, check out the lines at the outlets folks, because we are seeing things not look so good. If you are wondering which business will perform better, watch the public as they vote with their dollars. This will help you visualize what is happening and the full extent of this newest trend.

We have seen Duncan Donuts switch to upscale coffee shops in the urban and suburbs to compete against Starbucks, and those are well received. And to their credit I say excellent work, they saw that one coming. In franchising nothing is guaranteed either you roll with the punches and you adapt to the market or you become an old Fad, one which is not necessarily going to deliver you your American Dream. Show me a food franchise without a sign in the window saying low carb and I will show you a fast food franchise, which has no lines and less same store sales in this quarter. Low carb a trend? No, it is just getting started. Companies are working extra hard to meet the rising demand of the consumer. Any franchise system denying this trend will have stores sales plummet and franchisees upset. Those brands which are known for high carb type foods, will have to spend big or be very innovative in their marketing to re-train customers, not as easy said than done. Any business including C-Stores, 7-11 and Truck Stops must also listen to the customers. As the attitude, consumer buying behavior and consumer sentiment is changing in America along with their belt size. “Convenience Store News” had a two page story on this very thing this months issue confirming our observations, that industry is changing and expect new low carb impulse food items to be emerging everywhere, this is a good thing.

People soon will be buying smaller clothes and fitting into their old favorites. You can already see this at the donation stations and thrift stores from my discussions from those wonderful American Volunteers giving their 2000 plus hours, thank you for this.

Some consumers say they tried the low carb diets but they made them constipated, even so anyone who would say low carb diets are a fab is really the one full of crap. We appreciate the USDA trying to uplift the industry spirits by telling the Food Associations that it is a fad, but to claim they know the future on this without looking at the trend is an incorrect view of observation. Even the GAO has studied these things: “Nutrition Education: USDA Provides Services through Multiple Programs, but Stronger Linkages among Efforts Are Needed.”

My advice to the franchise buyer? Sure, if you are looking to get into business for yourself; stay away from franchise offerings, which have long branded histories of the types of food associated with high carbs of fattening products. Newer franchises with less brand recognition can shift faster and re-educate quicker. Do not invest in a franchise with food unless you see that the franchisor and marketing departments are focused on this low carb issue. And check out the stores themselves the outlets are people lining up? Sit near the register and listen to what people ask, order and say, you will immediately say, you’re right. If you run a small business of any type which sells food, buy those things that will be wanted by those who are on these new diets. That is what they want and it is good for America and our future health care costs, quality of life and life expectancies.

“Lance Winslow” – Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/

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