What’s Been Going Wrong?

There have been challenges for the fast-food industry in recent years that have been pressuring profit margins. The industry as a whole has proven robust enough to withstand these challenges, though some players have done better than others.

Over the last decade there has been increased focus on the quality of food served in fast food restaurants. Typically, highly processed and industrial in preparation, much of the food is high in fat and has been shown to increase body mass index (BMI) and cause weight gain. Popular books such as 'Fast Food Nation' and documentaries like 'Super Size Me' have increased public awareness of the negative health consequences of fast food. Fast food companies have responded by adopting healthier choices and have had some measure of success, but the shadow of bad press still hangs over the industry.

Rising commodity prices have also significantly crunched many fast-food franchises. With food and beverage inputs making up approximately 33% of costs, higher prices for livestock, corn, wheat and more have seriously shrunk margins over the past decade. In such a fiercely competitive space it is impossible to force a price increase on customers, so profit margins are often south of 10%. The recent economic recession did lower commodity prices, but the recession brought on its own complications, and now prices for commodity inputs are on the rise again.

Fast food had been thought to be largely recession-proof, and indeed the industry did not suffer nearly as much as other discretionary spending sectors. In fact, there was some increase in consumer visits as people choose cheaper fast-food options over fast-casual or traditional restaurant choices. But overall, the recession hurt spending and consumers overall purchased less with each trip. Fast food franchises fared reasonably well but still felt some pain.

Market saturation is also a relevant issue in the fast-food industry today, at least in the U.S. There is a McDonald franchise in almost every town, and it usually sits in a row with several competitors. With so many competitors which offer similar products, there are fewer customers per location. Increasingly fast-food restaurants are also losing market share to fast-casual, a relative newcomer in the restaurant space.

The Supreme Burger concept will focus on the term “better burger.”

In simple terms, it means fresh ingredients and made-to-order. This also means guests can expect a better experience than is typically provided by your local “fast food” burger restaurants. This is why the better-burger industry is taking off and providing franchise owners a unique business opportunity.

Where do we go from here?


Busy citizens still need quick meal options, and fast-food restaurants are fighting these challenges with gusto. Now offering healthy choices to battle the stigma of unhealthy food, some quick-service restaurants now focus on fresh or organic products. From franchises focused solely on salads or healthy wraps to the lower calorie options offered at traditional burger franchises such as Wendy’s or McDonald’s, consumers are able to make better choices...if they want!

Fast food franchises are also focusing on expanding into new product lines, such as the coffee initiative in the McCafé. Intended to offer competition to Starbucks, Mcdonald's is luring customers back into their stores, hoping they will purchase food as well. Many franchises have been exploring other mealtimes such as breakfast and the mid-afternoon snack for growth opportunities and to increase real estate utilization.

The industry is most effectively battling saturation within the United States by creating a much more diverse range of offerings. Sure, there is a Mcdonald's in every town, but there are very few crepe franchises...yet! From new cultural cuisines to fresh takes on a traditional story, there are many more types of quick-service restaurants than ever before.

Lawrence Shamsid-Deen knows a thing or two about large families. He comes from a family of four and has six children of his own. When Lawrence entered a store on "Sweet" Auburn Avenue in Atlanta, Georgia to ask if the business was for sale, it was his first introduction to the thousands of loyal customers who would become an extension of his own family.

That store became Supreme Burger, Lawrence’s first restaurant business in Atlanta in 1978. To meet the demand for fish in the area, he changed the menu and the name to Supreme Fish Delight. Since 1980, the company has grown from humble beginnings on Auburn Avenue to a franchised operation with more than 10 restaurants throughout metropolitan Atlanta. Today, Supreme Fish Delight is more than just a restaurant with great food and service. Supreme Fish Delight is about family - customers, franchisees, and the community. Now with the second generation operating the business, Supreme Burger will become an extension of the Supreme Brand.

With a team of experienced restaurateurs and professionals in legal, accounting, business development, real estate, marketing, advertising and franchising; Supreme Burger and Supreme Fish Delight will serve as two premier concepts that will grow Supreme Foods Franchising to a premier Franchise operator and QSR owner around the world!

The Industry

The fast-food industry, also known as Quick Service Restaurants (QSR), has been serving up tasty morsels for as long as people have lived in cities. The modern system of fast-food franchising is believed to have started in the mid-1930’s when Howard Johnson franchised his second location to a friend as a means to expand operations during the Great Depression. Revenue has grown from $6 billion in 1970 to $160 billion last year, an 8.6% annualized rate.

Fast food franchises focus on high volume, low cost, and high-speed products. Frequently food is preheated or precooked and served to-go, though many locations also offer seating for on-site consumption. For stands, kiosks, or sit-down locations, food is standardized and shipped from central locations. Consumers enjoy being able to get a familiar meal in each location, and menus and marketing are the same in every location.

The restaurant industry is highly competitive, especially in the developed markets. In the U.S. and other international markets in Europe and Asia-Pacific, quick service restaurants and fast-casual restaurants have gained popularity in the last decade. Well-established brand chains compete against each other on the basis of products, quality, service, menu price, and location.

COVID-19 Scenario

The operational disruption in the food & beverages industry, due to the COVID-19 outbreak, has impacted the fast-casual restaurant market.

During the coronavirus pandemic, the consumer demand for outside food has been decreased, however, will rebound quickly.

Halt in the services offered by the restaurant industry due to active lockdown and social distancing has adversely affected the growth of this industry.

The burger/sandwich segment to maintain its lead status

Based on food type, the burger/sandwich segment accounted for nearly one-third of the global fast-casual restaurant market in 2019 and is expected to maintain its lead status in terms of revenue throughout the forecast period. This is due to convenience and ease of availability. However, the pizza/pasta segment is estimated to portray the highest CAGR of 13.6% from 2021 to 2027. The rise in influence of western food across the globe drives the growth of the segment. The market size of the Burger Restaurant industry in the US increased faster than the Consumer Goods and Services sector overall and account for roughly $115B.

The dine-in segment to maintain its leadership position

Based on mode of operation, the dine-in segment contributed to the highest market share with two-thirds of the global fast-casual restaurant market in 2019 and is estimated to maintain its leadership position during the forecast period. This is due to the availability of freshly prepared, and high-quality food. However, the takeaway segment is estimated to generate the fastest CAGR of 11.9% from 2021 to 2027. This is attributed to the adoption of online services for ordering food across the globe.

North America is anticipated to dominate the market by 2027

Based on region, North America accounted for the highest share based on revenue, accounting for nearly half of the global fast-casual restaurant market in 2019, and is projected to maintain its dominant position throughout the forecast period. This is due to the rapid transition toward healthy preferences in terms of food choices in this region. However, the Asian-Pacific is estimated to generate the fastest CAGR of 13.7% from 2021 to 2027. This is attributed to the increase in the middle class and working population in this region.

In the Fast-Food Hamburger Restaurant industry, Burger King has managed to maintain its brand appeal among customers, competing against big brands such as McDonald’s and Wendy’s. Burger King has been ranked third in this segment below the two burger chains after Wendy’s overtook its second spot in 2011. In the fast-food industry as a whole, Starbucks and Yum! Brands are the other two major rivals. These companies have well-capitalized and organized chains and franchises spread worldwide with a greater number of U.S. stores than Burger King. Burger King generated average daily sales of around $3,300 at a franchised restaurant in 2013, which is nearly the same as Starbucks’ average daily revenue of $3,200 per store but only half the revenues generated by a McDonald’s outlet (around $6,700 per outlet per day), indicating McDonald’s dominance in the industry. Moreover, McDonald’s customer base is much wider than that of Burger King with 28,000 franchised stores spread worldwide ranging from developed markets to developing nations in comparison to Burger King’s 13,000 franchised restaurants in selective developed markets.

Leading market players

• Chipotle Mexican Grill 
• Erbert&Gerbert's Sandwich Shop 
• Panda Restaurant Group 
• Zaxby's corporate 
• Five Guys Holdings, Inc. (Five guys burger and fries) 
• Roark Capital Group (Wingstop) 
• Tortilla Mexican Grill 
• Firehouse Subs 
• Famous Brands (Gourmet Burger Kitchen).

Same-store sales for fast-casual remains on par with the industry. Even though comps have tracked positive for most of the last 24 months, they are trending in the wrong direction (just like the overall restaurant field). During September of 2019, same-store sales for all chains reached an actual year-over-year contraction point. In the third quarter—for the first time in two years—growth turned negative with same-store sales falling 0.4%. The gradual slowdown we’ve seen this fiscal calendar slipped into actual comparable contraction.

This movement unfolded as checks rose, too. For fast-casual and the industry overall, per person and per ticket averages have steadily increased.

Compared to the rest of the industry, fast-casual experienced a huge jump in delivery sales, though. The monthly average from September 2017 through August 2018 compared to September 2018 through August 2019 changed from 10.3% to 28.46%. The industry as a whole grew to 7.4% in delivery sales. Fast-casual also witnessed a 7% hike in off-premises as a percentage of total sales since 2016 (this includes the use of third-party delivery providers).

By now, this is a pretty standard reality for quick-serves of all sizes, but those with a clear strategy in regard to how they translate the brand experience through to-go and delivery options will have an edge. That’s the undeniable effect of a consumer set fueled by convenience and frictionless ordering.

Market share, and how it’s changing

This is what 2018 looked like, according to TDn2K’s Market Share and Industry Growth Report. The numbers are pretty close to NPD’s.

• Casual dining: 20.17%
• Family dining: 4.49%
• Fast casual: 10.82%
• Fine dining: 0.93%
• Quick service: 60.77%
• Upscale casual: 2.83%

2019:

• Casual dining: 19.77%
• Family dining: 4.43%
• Fast casual: 11%
• Fine dining: 0.93%
• Quick service: 61.07%
• Upscale casual: 2.79%

The only two segments that experienced an increase in market share compared to the previous year were quick service and fast-casual.

• To acquire the rights and IP for franchise quick-service restaurant companies in the US with the intent to expand globally.
• To acquire real estate and lease to owner-operators for franchising quick-service restaurants in the US and abroad.
• To support, grow and expand the Supreme Fish Delight and Supreme Burger Brands globally.
• To purchase, renovate and expand the corporate headquarters (including a commercial catering kitchen) 
• To develop and improve the franchise systems for food service operations, training, and packaging of food items for wholesale, retail, and government distribution.
• To reinvest in HUBZone’s, empowerment zones, and other inner cities to leverage tax credits and create value in areas with food insecurity. 
• To provide jobs, create opportunities and wealth for low-income inner-city communities that support the decrease in the wealth gap in America.
• The parent corporation will own the real estate, equipment packages, and intellectual property.

Waleed Shamsid-Deen

President & CEO of Shamsid-Deen & Associates (SDA), a business management and consulting firm specializing in Government, Non-Profit, and Business Management Services, and President & CEO of Supreme Foods Worldwide, a family-owned franchise corporation with 11 locations in Metro-Atlanta, Georgia. Waleed has over two decades of business experience. His drive, political savvy, and keen insight for intelligent investments have allowed him to establish numerous successful businesses and community-oriented ventures nationwide.

In the past decade, Waleed has raised millions for startup ventures and non-profit organizations nationwide. He has been a consultant for Athletes, Entertainers, Entrepreneurs, and Producers, managing and protecting their personal business and philanthropic interest.

He was co-executive producer for the hit reality show Being Bobby Brown and Producer of a theatrical production entitled Drumline Live™ which brings to life the story and experience of the Historical Black College and University marching band. His dive into the entertainment industry has led him to form relationships with media moguls Spike Lee, Robert Townsend, Polow da Don, Keri Hilson, and Dallas Austin, among others. Globally, he conducts workshops and presentations on various business topics.

Waleed has recently authored a book, Excellence at a Minimum: The Plight of an Entrepreneur. An avid traveler, Waleed has led academic and business delegations throughout several countries in Africa and the Middle East.

Waleed has received the prestigious Businessman of the Year Award, the Service above Self Award, the Rising Star Award, the Champion Award, and the Young Adult of the Year Award. Waleed holds a Bachelor of Science degree in Business Economics from Florida A&M University and a Masters in Business Administration with a concentration in Finance from Walden University. A native of Brooklyn, NY, Waleed is married to Quiana and has five children: Lawrence, Safiyah, Siraj, Micah, Aya, and the late Nya.

Amin Aleem

Chief Financial Officer

Amin Aleem has been providing project management, accounting, and financial management services to small businesses, nonprofits, and the government since 2000.  Amin was honorably discharged from the United States Air Force in 2004 as a Captain where he managed multiple multi-million-dollar projects. Amin provided financial management and accounting services for the Defense Finance and Accounting Service before founding Cornerstone Bookkeeping and Accounting, LLC in 2009.

Cornerstone designs and manages financial budgets, develops vendor payment strategies, establishes internal financial controls and protocols, supports audit investigations, and provides accounting software training. Cornerstone currently manages over $1.5 million in annual revenues from multiple clients.  Cornerstone improves the financial health of small businesses and non-profit organizations and increases the financial consciousness of their Executive Directors through monthly reporting and analysis.

Amin holds a BS in Chemistry from Morehouse College, an MS in Organic Chemistry, and an MBA in Financial Management both from Wright State University. He is a member of Alpha Phi Alpha Fraternity and the National Association of Black Accountants.  Amin has been married for 13 years and has 3 daughters.

Adeidra Washington

Director of Operations - Supreme Food Worldwide, Inc. 

Adeidra D. Washington has over 10-years of small-business and nonprofit management experience. After obtaining her BA in Journalism from Hampton University in 2006, Ms. Washington attended Troy University where she received a Master's in Public Policy in 2011. Adeidra serves as Director of Operations for Supreme Foods Worldwide, the parent company of Supreme Fish Delight, Supreme Burger, Supreme Seniors, and Supreme Family Foundation. 

For more than a decade, Adeidra has managed franchisee relations for nine Supreme Fish Delight franchise locations through Metro-Atlanta and the newest quick-service restaurant concept Supreme Burger. Adeidra also oversees vendor relations, restaurant expansion, acquisitions, and government contracts for all profit and nonprofit Supreme brands. During the 2020 COVID pandemic, Adeidra and the Supreme Foods Worldwide executive team acquired nearly $1 million in funding through government contracts, grants, and community partnerships.