Jack In The Box's choice of the fast casual format as part of its growth strategy is just one sign of the growth that has marked the fast casual segment of the fast food industry, where the concept has produced a host of all new restaurant chains as well as offshoots of existing fast food chains trying to capitalize on the trend. McDonald's is the majority owner of the Chipotle fast casual chain, for example, and the Baja Fresh Mexican Grill fast casual chain is now owned by Wendy's. Dozens if not scores of new names are operating in the fast casual arena, among them Off The Grill, La Salsa, Corner Bakery, Panera Bread, Noodles & Company, Pei Wei Asian Diner, P.F. Chang's and Schlotzky's Deli.

Precise figures on the size and growth of the fast casual segment, also known as quick casual and quick gourmet are hard to come by. It's not just that not everyone agrees on what to call them. Measuring the fast casual market can be difficult, too, because at least some of the fast casual market is mixed in with sales at plain old fast food restaurants, which are adding new menu items that resemble those of fast casual restaurants. The new items on fast food menus represent what Bob Sandelman, president of the Villa Park, CA-based market research firm Sandelman & Associates Inc. refers to as the "premiumizing" of fast-food.

The fast casual chains "are appealing to consumers who grew up on fast food fare, but are now ready for a better product and are willing to pay a bit more for it," says Sandelman, whose firm recently completed a study of the fast casual phenomenon. A recent report from Port Washington, NY-based NPD Group notes that "After watching the Fast Casual segment continue to grow, traditional fast food restaurants are taking notice and making changes." Michele Schmal, VP of product management for NPD, says the fast food industry "has begun defending its own business by pushing out more premium products, like salads and premium sandwiches, that directly compete with the fast casual offerings." NPD says fast casual restaurants account for only about 2% of all restaurant visits, but the fast casual restaurants have grown at double-digit rates in both units and sales.

According to EVP Dennis Lombardi of Chicago-based Technomic Inc., the fast casual market rang up just under $7 billion in sales in 2003, the last full year for which figures are available, or about 4.5% of the $153-billion ``limited-service'' segment of the restaurant industry.Schmal of NPD sees both a bright future and some dark clouds for the fast casual segment, which are perceived by consumers to offer a slightly higher quality of food, service and atmosphere. "A shake-out is starting to occur. There will be some winners and some losers," Schmal says, noting that a recent NPD survey indicates that the double-digit growth of fast casual segment has slowed to high single-digit growth. "While there is no evidence that shows double-digit growth is coming back, we see fast casual as a growth area over the next few years," Schmal says.

Regardless of whether the growth is single- or double-digit, fast casual has clearly grabbed the attention of existing chains as well as those that are being founded purely as fast casual concepts. Jack In The Box says it will expand both of its fast-casual concepts in 2005, citing "high single digit increases" in same store sales at its Qdoba restaurants and saying that Qdoba is "well on its way to becoming a national brand and a leader in the fastest-growing segment of the restaurant industry."

JBX Grill is still in the early stages of test at two locations in San Diego, but in 2005 the company plans to expand by converting approximately seven Jack in the Box restaurants in Boise, ID and Bakersfield and opening two new restaurants shortly thereafter. If all goes well, the chain expects to expand into Dallas by the end of the year. Based on what it has learned thus far, the company says, approximately 10% to 15% percent of the Jack in the Box chain could be converted to the JBX Grill concept over the next five years.