HEADQUARTERS: Chicago
SEGMENT: fast casual
NO. OF UNITS: 3
LEADERSHIP: co-founders Shoaib Aziz, finance manager; Imran Kasbati, operations manager; Munaf Kasbati, marketing director; and Henry Nuguid, executive chef
YEAR FOUNDED: 2009
METHOD OF GROWTH: franchising
NOTABLE COMPETITORS: Roti Mediterranean Grill, Falafill

The founders of the Chicago-based I Dream of Falafel are hoping to awaken growth opportunities in the competitive fast-casual sector with the expansion of their three-unit Mediterranean-themed concept.


Co-founder Shoaib Aziz said the concept, which features a “Chipotle-inspired” service style and ingredient focus, plans to explore franchising in the next year or two.


I Dream of Falafel opened its first unit in Chicago’s Loop in 2009 and added two more locations in May 2010 and this past May.


Over that time the concept has evolved. 


“From the day we started till now, everything has changed,” Aziz said. “Things have gotten better and better. The foundation to our food is the same, and it’s the same menu. Our first store used to be in a 1,500-square-foot space, but we bought the Quiznos next door and made it into 2,500 square feet. We changed the color scheme and everything [about the design].”


Mediterranean staples like falafel and chicken shawarma are the best sellers, Aziz said, but the chain also sells a lot of vegan platters to health-
conscious professionals at lunch.


“Mediterranean has become so mainstream that everybody’s getting into it,” Aziz said. “Since we opened we have had about 11 Mediterranean restaurants open near us in the Loop.”


That competition isn’t necessarily a bad thing, he added, because as the category grows, I Dream of Falafel can expand with similar chains and gain more scale to leverage later, when the game becomes more of a contest to steal market share.


“The way we’re going to grow is if people know what Mediterranean food is,” Aziz said. “[If] you go to a small town and people don’t know what falafel is, how are we going to grow?”


Darren Tristano, executive vice president of Chicago-based research firm Technomic Inc., agreed that there are opportunities for a Mediterranean-food chain, but said it would be premature to forecast the category growing to the size of fast-casual Mexican.


“It’s got options because the category is very underpenetrated, but there’s still a good-sized independent market in areas where that food is prominent,” Tristano said. “Vegetarian is growing, but consumers haven’t developed the huge appetite or [craving] yet for falafel and some other Mediterranean foods. ... There’s no reason to think you can’t see growth in the segment, but I don’t know if we’ll see a concept doing $2 billion a year in the next 15 years.”


With competition intensifying all the time, I Dream of Falafel strives to differentiate itself with its food quality to bring in repeat customers, Aziz said.


“Our food is freshly made, and our beef is grass fed and our chicken is cage free,” he said. “It’s costing us more money. We could put out a cheaper product, but we won’t. We have kept that standard, and we’re working on a new bread that should give us an upper hand.”


Buying in bulk for three stores has mitigated somewhat the higher food costs that come with sourcing premium proteins and baking bread on-site, Aziz said.


“From when we opened our first place to now, it’s a 7-percent difference in our costs,” he said. “But regardless of costs, we want to keep our standards high. Our main goal here is to keep our repeat customers.”


I Dream of Falafel’s marketing activities stick mostly to text and social-media offers, as well as a loyalty club for its weekday lunch customers.


The brand is concentrating franchising efforts on Illinois first and foremost. Ideal candidates to start would be single-unit operators with restaurant experience rather than large, diversified area developers.


“If we’re franchising, we want our franchisees to be successful, and the way to do that right now is to keep it local,” he said. “We want to keep it limited. It’s a learning process.”


Projections for the Illinois market are about 15 units, and down the line I Dream of Falafel will look to franchise in Midwestern college towns and cities like Madison, Wis., and Milwaukee, and on to bigger states like California, Florida and Texas.


While Aziz and his co-founders forecast a conservative pace of franchise growth, they remain bullish on I Dream of Falafel’s potential to capitalize on a burgeoning market.


“Chipotle got huge only about five years ago, and I think next it will happen with Mediterranean food, and then Indian food,” Aziz said. 


Contact Mark Brandau at mark.brandau@penton.com.