How Upscale Fast Casual Chains Are Challenging the Entire Limited Service Restaurant Industry

There’s a major shift happening in the booming fast casual segment of the restaurant industry. It used to follow fast food’s lead—nationally recognized brands like McDonald’s were the ones setting the pace for their competitors for years. But there’s a new kind of restaurant that’s gaining popularity among consumers and ultimately changing the way that fast casual concepts see success: upscale chains.

This new segment of fast casual restaurants is taking off across the country and challenging the norm in the entire limited service restaurant industry. Instead of relying on traditional fried food, brands are now finding ways to serve high quality, freshly made meals at a fast casual friendly price. Tender Greens, for example, is a brand that offers its customers a fine dining experience without breaking the bank. And the brand’s CEO, Erik Oberholtzer, says there are a few key reasons that make its business model not just run, but thrive.

“First, we have a very casual, counter-service formant, which democratizes the dining experience. By taking away the valet parking, the host and the waiter, we reduced the costs straight away by 30 percent. Then, we run our restaurants efficiently. We can provide food quickly at a price point that many people can afford on a daily basis,” he said in an interview with Nation’s Restaurant News.

That ability to offer consumers an alternative to traditional fast casual concepts at a price point that they can afford has created a lasting ripple effect in the industry. Other brands now have to rethink their strategies in order to keep up with these new concepts and continue to bring in new business. The reality is that fast casual restaurants like Tender Greens and the DC-based salad chain sweetgreen are capitalizing on the fact that consumers value healthy, farm-to-table meal options on the go.

Beyond their menus, upscale fast casual restaurants are also using technology to their advantage. By making mobile apps, digital menu boards and tech friendly environments a part of their model’s DNA from the very beginning, they’re successfully tapping into the next—and largest—generation of American consumers.

In an interview with TechCrunch last year, sweetgreen co-founder Jonathan Neman said, “Food is the last frontier of mobile. There’s been very little done to connect restaurants with their consumers and leverage tech to make that a better experience, and we want to lead that charge.”

Going forward, upscale fast casual chains will grow across the country. And as they open up their doors in new communities, the limited service segment of the restaurant industry will continue to evolve with them.

Co-founder Nathaniel Ru told Fortune, “We’re creating a brand that stands for something. We want to feed more people better food.”