The Rebirth of the French Fry - Foodservice News
Though some of his ideas may go against the grain, Jay Gould is no stranger to the QSR (quick service restaurant) world. Born in London, Ontario, Gould began his fast food franchising career in 1977 at young age of 21, when he and his brother Hal launched the Cultures chain in London, Ontario. Cultures was the first popular franchise to capitalize on the burgeoning health and fitness trend, and set the pace with a selection of salads, soups, frozen yogurt and fruits - lunch items that were by no means ingrained into the eating patterns of Canadians. Confounding the experts, the Gould brothers successfully grew the Cultures brand to 58 stores, eventually selling the company in 1987.
Gould's talent for recognizing a successful concept was proven again, discovering New York Fries in 1983 while visiting Manhattan's South Street Seaport, following a tip from his brother. Gould was so impressed with the product that he bought the Canadian rights, and began an aggressive expansion plan to bring New York Fries to Canada in 1984. Within a couple of years, New York Fries grew to 25 stores in Canada while the original New York City location closed. Gould purchased the American company in 1987, acquired ownership of all future royalty streams and with it, the ability to expand the concept worldwide with corporate and franchise locations. Today New York Fries has 195 locations across Canada, with international locations in U.A.E., Bahrain, South Korea and Hong Kong.
Gould's vision and entrepreneurial spirit have enabled him to see things other people could not. The business philosophy of New York Fries has always been a focused operation - do one thing well - and Gould has resisted the temptation of diversifying the menu offering to be all things to all people. From the onset, Gould was determined for New York Fries to have a sustainable point of difference on which to build a solid brand and to sell fries. This point of difference was freshness and quality. He recognized that compromise was not an option, and that serving fresh, quality food came with a price. Gould's choice to become a "category killer" meant that the strategy of using the freshest, highest quality products was mandatory. The best potatoes and oil. Customized equipment. A head office team of committed professionals, and a network of dedicated franchisees and frontline staff to grow the brand.
"When I first started working with Jay in 1987, I wasn't sure if New York Fries was a really great idea or a really bad idea", offers Warren Price, Executive Vice President, "Twenty one years later, with 2008 being our highest grossing revenue year yet, tells me that it was a damn good idea." Today, New York Fries ranks as one of the most successful Canadian fast food stories with Jay acknowledged as an industry trailblazer. Honoured with numerous awards celebrating his entrepreneurial accomplishments and corporate success, this past December Gould accepted a Pinnacle Award winner for the Franchise Excellence by his peers from Foodservice and Hospitality magazine, an award he cherishes closely.
The franchisees' trust in the company, and in Gould's entrepreneurial vision, allowed the company to expand across the country. Gould often credits the franchisees in enabling him to grow the company from a fresh-cut fry from a 3rd floor kiosk in New York City's South Street Seaport and developing it into an international franchise and Canadian success story. "I have made mistakes in my career" begins Gould, "but the smartest things I have done is to keep the business focused on our core competence, hire the best people, and surround myself with a strong network of franchisees that believed in this business and dedicated themselves to seeing it succeed".
Celebrating their 25th anniversary this year, New York Fries has stayed true to its consistency of product and quality, and has set a new benchmark for French fries in the fast food industry. "I am convinced that the key to this brand's success has been our unwavering compromise of premium ingredients, and the insight that we know who we are as a brand, which keeps us all focused on cooking the best product we can", says Gould. "To us, it is always about the fries...how do we ensure that our fries are the best they can be? - that's the challenge our office contemplates every day".
And in a business with a focus on fried potatoes, that is a challenge that comes to bear often. In 2004, when the media first began to report on the dangers of trans fats, Gould led the chain to immediately research and source an oil that would be trans fat free yet still produce an excellent product. Combining his business instinct, and his ability to steer the company by his strong moral values of "being the right choice" for customers, Gould convinced franchisees to spend an additional 30% on cooking oil and the chain moved to a non hydrogenated, high oleic sunflower oil. As a result of this initiative, Gould was invited to speak in Ottawa at the House of Commons about the health effects of consuming trans fatty acids.
There are times when Gould's entrepreneurial acumen seems to defy trend and even logic. In 2004, when many fast food companies were growing by broadening their meal offerings or introducing selections at lower price points to compete for "share of stomach", Gould convinced New York Fries franchisees to downsize their customers by renaming the existing cups set which encouraged customers to "order down". In concert with this change, franchisees were asked to decrease their price as well. Gould's theory was "leave customers wanting just a bit more, instead of feeling stuffed from overindulging, and they will come back to the counter more frequently to satiate their appetite for a treat". And it worked. Customer counts increased across the chain by 6%, and same store sales began to jump.
Without these initiatives, New York Fries could easily have become the poster child for everything wrong in the North American diet. Instead the company has successfully carved out a leadership position in a challenging market. With a commitment to freshness and quality proven, New York Fries became the destination for the premium French fry seeker. This strategy had served New York Fries well in the mall and cinema environments, however, with no new Canadian shopping mall real estate in development (the most recent shopping mall built in Canada was Vaughan Mills in 2004), the company needed to rethink how to grow the mature New York Fries brand in new, untraditional ways. After an unsuccessful attempt at stand alone street front New York Fries locations, Gould determined that fries alone are not a strong enough calling card for vehicular traffic to pull over and park.
In 2004, the idea to pair New York Fries with a "best in class" hamburger was born. Assessment of the current market led New York Fries to the conclusion that while the hamburger market was saturated, no one had produced a quality, fresh burger accompanied by the most premium French fries available. "There is a certainly a market for premium quality fast food" observes Gould. "When you decide to indulge, do it with the best quality and best tasting products." This comment defines the inspiration for the restaurant. This revelation became the South St. Burger Co. opportunity.
Inspired by the simplicity of their New York Fries operations, South St. Burger Co. was built on the premise that less is more; rather than trying to offer everything to everyone, do very few things, but do them exceptionally well. The first South St. Burger Co. opened in North York, Ontario in August 2005. The strategy to marry a fresh patty made with 100% pure, hormone and antibiotic free beef with New York Fries' famous fresh cut fries was a hit and a loyal customer following began promoting the restaurant through word of mouth advertising and food blogs. "The success of South St. Burger Co. allows the New York Fries brand to grow in new real estate including big box centres and neighbourhood street corners" says Gould, "and it gets our fries into the hands of many men who are rarely shopping in malls, turning them into ambassadors for both brands". Four years later there are seven corporately owned South St. Burger Co. restaurants in the Greater Toronto area, with three more stores currently being built, and a strategy to begin franchising the brand later this year.
Overcoming many external threats, including diet fads, obesity scares, and a lack of new mall real estate being developed, the company, which many people scoffed at 25 years ago, is still standing stronger than ever. Under Gould's leadership, the company has remained relevant to the changing needs of consumers, while remaining true to its brand identity. Plans to grow the New York Fries brand oversees are in full tilt, with expansion targets in the Middle East and Hong Kong markets. With chain wide sales at an all time high in 2008, the success of New York Fries and South St. Burger Co. validates Gould's focused business strategy and keen entrepreneurial instincts. "The past 25 years have been a thrilling ride" says Gould "and I am certainly not ready to get off just yet".