Fast food for the MySpace crowd
Brain behind Boston Chicken tackles a fresh challenge
George Naddaff realized he might have a problem when a Bedford police officer spurned his offer of a free snack.
Naddaff is the franchising guru who helped cultivate chains like Boston Chicken, Sylvan Learning Centers, and
"It was raining, and there was a cop out front directing traffic," recalls Naddaff. "I invited him in, and asked what he wanted to eat."
The officer made a sour face and said he'd pass. "He'd made a decision based on the name that he wasn't going to come into the store," Naddaff says. "How could no fat taste good?"
At age 78, Naddaff is wrestling with one of the toughest challenges of the fast food industry: how to turn healthy eating into a big business. "You can't build a business on the 20 percent of the population that are marathon runners, that eat organic, that work out at Curves," he acknowledges.
He needs to reach a more mainstream diner, in the same way that
"People talk about losing weight and eating well, but they still love their burgers and fries," says Jim Coen, executive director of the New England Franchise Association. In the 1990s,
Naddaff was born to Lebanese immigrant parents in the South End. As a child, he shined shoes in the Combat Zone and later sold newspapers and baby furniture. He served in the Army, but never made it to college. He started in the fast food business by opening Kentucky Fried Chicken outlets around Boston and later helped launch franchising companies in child care, tutoring, and business brokerage. He spotted Boston Chicken when it was a single store in Newton, expanded it to 50 units before selling it in 1992, and watched its record-setting stock market debut the following year.
(Coffee by George, his next concept, was not so hot, consuming $5 million before he closed the drive-through java dispensaries.)
Naddaff stumbled across the germ of the KnowFat concept in Watertown in 2002, where three entrepreneurs were running the Lo Fat Know Fat Gourmet Cafe; it operated next to a storefront where they sold nutritional supplements. What attracted him were the long lines - especially since parking was inconvenient and there were no "anchor tenant" stores nearby to attract customers. Though Naddaff himself isn't a granola-lover, he recalled that during Boston Chicken's early days, he'd often get notes from customers grateful to have a healthier alternative to McDonald's.
Of the original cafe, Naddaff says, "You had to work on the look, the atmosphere, the food costs, and the service times. We had to take and fine-tune what they had created."
He offered the founders a 20 percent equity stake in the new venture, and began building a team to franchise it. He streamlined the name to "KnowFat Lifestyle Grille," to hint at the importance of knowing what one is eating, and hired a former Ritz-Carlton Hotel chef to come up with new menu items.
But then came the encounter with the Bedford police officer. Naddaff hired a branding consultancy to research his chosen name and come up with alternatives. "They said KnowFat was more of a negative than a positive to people," Naddaff says, and presented several fresh options. One was UFood Grill. "It's like MySpace, the iPod, and YouTube," Naddaff says, percolating with enthusiasm. "Young people are looking for this place. This is their
Among the items on the UFood menu are UBowls (with teriyaki chicken, broccoli, carrots, and Thai chili sauce, for example), cobb and Caesar salads, bison burgers, and mysteriously crispy, low-fat french fries, a holdover from the original Lo Fat Know Fat menu. (They're sprayed with soybean oil and baked at high heat.)
Eric Spitz, the chain's cofounder and executive vice president of business development, said although the calories for some items may not be that different from other leading fast food restaurants, UFood offers items burger chains do not.
"If you want to come into our restaurant and eat super healthy, there is no better place to eat super healthy," he said.
But the business has developed more slowly than Naddaff had planned; an early goal was to have 100 restaurants open by the end of 2006. Today, there are eight - six in Massachusetts and one each in California and Florida. "We ran into the money issue - not having enough funds," says Naddaff, adding that every change he made to the concept "took longer than we expected."
A location in Shrewsbury, which got off to a quick start during the Atkins Diet carb-reduction craze, later slowed down. Naddaff decided to sell it to one of the original Lo Fat Know Fat founders, Tim Kurtz, who reopened it as Wah-Bo last November. Another KnowFat restaurant in Stoughton was opened in 2006 by a franchisee who had lost 100 pounds, in part by eating at the original Watertown location; it has since closed.
"I think this one is not an easy sell for George," says Coen, who also operates a Chestnut Hill consulting firm, Franchise Perfection. "The name change is indicative of the fact that they've struggled, and are trying another launch."
Naddaff did succeed in taking the company public through a reverse-merger in January. That helped raise $13 million, Naddaff says, bringing the company's total funding to $25 million. He signed on pugilistic preacher George Foreman as the spokesman for UFood, offering him stock in the company rather than his usual cash fee. (When the Boston area KnowFat restaurants are re-branded as UFood Grills this month, Foreman will pay a visit to publicize that.)
He claims the UFood at Logan International Airport is doing more business than the neighboring McDonald's and Cosi counters, and he says he has sold 100 franchise licenses to eight entrepreneurs around the country, in places like Chicago and Salt Lake City.
"I'm gonna have 800 stores in six years," Naddaff says now. Especially attractive to him are locations like airports, where healthy food is a rare option, hospitals, and college campuses.
But UFood will face competition from established fast food chains, which have been expanding the calorie-conscious choices on their menus, and other start-ups. A six-outlet chain in New York, Energy Kitchen, has begun selling franchises. The founder, Anthony Leone, expects five locations to open in Boston, most likely beginning in 2009. A small Portland, Maine, chain, O'Naturals, backed by Stonyfield Farms founder Gary Hirshberg, has one location in Massachusetts, and last year opened a franchised outpost in Florida. (O'Naturals restaurants in Somerville and Portsmouth, N.H., didn't survive.)
Naddaff is undaunted, and happy with his headstart. "I can't say that I've never failed, but I'm always willing to try something unique and different that has the potential to be a national brand," Naddaff says. Even at 78, he offers no inkling that this may be his last attempt to do that. "As long as I can be creating, and be part of something that's exciting," he says, "that's what I enjoy the most - the idea of being in the game."
Scott Kirsner can be reached at kirsner@pobox.com.
