Two years ago, George Naddaff was driving through Watertown, Mass., when he spotted a line of customers snaking out the door of a local restaurant. As an entrepreneur and former Boston Chicken franchiser, he pulled over to investigate.
Inside the restaurant, Lo Fat Know Fat, he found a crowd of patrons ordering chicken-meatball wraps, “air-fried” french fries, fruit-filled smoothies and other healthful fare. He was impressed not only by the number of customers and the taste of what he sampled, but also by a store within the restaurant selling vitamins and other supplements.
Over the course of a week, he cased the operation, returning at night and on the weekend to gauge customer traffic. For 10 years Mr. Naddaff, 74 years old, had been searching for something that could match his early success with Boston Chicken — while avoiding the problems encountered by those who owned it later.
Much of the success of taking a small, local operation and expanding it into a national brand depends on making the right choice to begin with, and then, setting up an expansion plan that suits that choice. For Mr. Naddaff, Lo Fat Know Fat had promise.
Growing Appetite
The timing for such a restaurant chain was “on the money,” Mr. Naddaff says. A rising health-consciousness, in the face of increasing national obesity rates, worked in its favor. Mr. Naddaf also saw affirmation of the concept in moves by fast-food chains to healthier menu options. And, for rapid expansion, you could move quickly because you didn’t have to waste time convincing customers of the value of the product.
To check his instincts, he enlisted the help of Perry Lowe, a professor of marketing at Bentley College, a Waltham, Mass., business school, who ran an analysis of the business for four months with his students. They found that the average customer was between 18 and 34 years old, that many customers were traveling five miles to eat at the restaurant, and that many ate there four times a week.
“I was just being careful to make sure it wasn’t an illusion,” Mr. Naddaff says.
Mr. Naddaff approached the restaurant owners with a deal: He would pay the $150,000 salary of a longtime restaurant executive who would help them strengthen their operation. There was a handshake agreement that Mr. Naddaff would acquire the concept, and create a franchising company at a later date.
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