Fries King no Health Nut - London Free Press
Mon, August 17, 2009 - by Hank Daniszewski
Jay Gould never set out to become the french fry king or make fast food healthier -- it just happened that way.
As president of New York Fries, Gould led the drive to use healthier cooking oils in the fast-food industry. Earlier he co-founded Cultures, the first fast-food chain to feature healthier choices such as salads, fruit smoothies and frozen yogurt. But you won't catch the 55-year-old executive extolling the virtues of tofu or alfalfa sprouts. "My eating habits wouldn't make me a poster child for Health Canada. This was a strictly business decision. We were opening for a new category in the fast food business," said Gould, who lives in Toronto.
The Gould family name could once be found on billboards all over Southwestern Ontario. His grandfather was a co-founder of a business that became Gould Outdoor Advertising.
Gould was born in London, his mother's home town, but his family moved to Brantford soon after he was born. His older brother, Hal, took over the family business and moved it to London after their father died prematurely in 1975. About a year later, when Jay was only 21, the brothers opened the first Cultures in the downtown mall then known as the London Arcade.
Culture's feature product was frozen yogurt, then a trendy item Jay's mother had spotted on a trip to New York, But the restaurant expanded into other healthy items such as fruit smoothies and salads. Gould said the brothers figured they could ride the trend toward healthier lifestyles. "We noticed some people were exchanging the martini lunch for a game of squash. Even if what we sold only appealed to 5% of the market, we were the only guys selling it," he said.
But in an industry dominated by burgers and fries, it was a risky move. "Most people thought we were nuts -- banks, advertising agencies, they were not impressed," he said. Neither was the Arcade's landlord.
The first Cultures was shut out of the food court just off Dundas St. and consigned to an obscure corner on the second floor. Despite that disadvantage, Gould said sales were strong almost from the beginning. But figuring out a business model, especially one that priced in the volatile cost of fresh fruits and vegetables, was a challenge.
"We were losing a fortune because we didn't know what we were doing."
Cultures kept expanding with new outlets through southern Ontario, but Gould said it took five years to get the company in the black.
After 10 years, the chain had grown to 58 outlets and the Goulds sold out after getting a lucrative offer from grocery giant Steinberg's. The family's outdoor sign business had already been sold to Vancouver billionaire Jim Pattison.
By that time the brothers were already on to their next venture. A few years earlier, they'd come across a french fry stand at the South Street seaport in Manhattan that was drawing big crowds. The fresh-cut fries reminded them of the chip wagons they loved growing up in Brantford.
The Goulds bought the Canadian rights to New York Fries. The thick fries, with the peels still on, were a welcome change for a generation accustomed to McDonald's frozen shoestring fries.
Gould said the New York owners had a stake in real estate giant Trizec and their reputation helped them get New York Fries into Canadian malls, which were enjoying a growth spurt in the 1980s. "We went in with an operation that was doing a landslide business in New York."
The Canadian franchises soon overtook the business, and with the sale of Cultures in 1987, the Goulds bought out the American company. The Manhattan outlet later closed and New York Fries, despite the name, became a Canadian company. Gould said the sophistication of the New York tag was part of the appeal. "We take pains to point out that we are Canadian but we don't want to spoil the effect, either. Beaver Fries just doesn't sound as good."
Hal Gould worked in other fast-food businesses but came back to London in 1998 to become president of Ivest Properties.
In 2004 New York Fries became a pioneer in the fast-food industry by switching to non-hydrogenated and trans-fat free sunflower oil to cook fries. The sunflower oil cost about 25% more, but Gould said the change was about improving quality and taste. He said the health benefits of sunflower oil were a bonus "I'm not a scientist or a health food freak. We wanted to do the right thing but the right thing has commercial benefits." Most fast-food chains have since followed suit and switched to healthier oils.
New York Fries has grown to 182 outlets in Canada. There are also 15 outlets in Dubai, Bahrain, Korea and Hong Kong. Gould said those outlets were started by franchisees who were educated in Canada and confident they could sell New York Fries in the Middle East and Asia.
Four years ago, Gould launched the South St. Burger Co. chain that pairs New York Fries with locally-raised, hormone- and antibiotic-free beef. Most of the outlets are in the Greater Toronto Area, but the chain plans to expand into Southwestern Ontario.
He said New York Fries formula seems to be working because same-store sales have been steadily rising for several years. Gould said consumers are confused by conflicting claims about the safety and nutritional value of various foods. "What they want is real food, When they do eat fries, they want the good stuff," said Gould.