Aging Population Eating Out More at Casual Restaurants

The long-term trend for casual and fast food restaurants looks inviting for franchise buyers and owners. According to one analyst interviewed by BusinessWeek, the restaurant business is in for growth.

"The restaurant industry's long-term fundamentals look pretty attractive. People sense that there are growth prospects in it and are willing to pay for them [their public stocks]. In the U.S., you have an aging population that is wealthier, that is looking to eat out. You have a lot of dual-income households where there's not enough time to cook, so people are dining out more and more. As a percentage of overall meals, dining out has been increasing for several decades, and it looks to continue that way."

Extrapolating from that statement, luxury and casual dining looks like it will strengthen as the demographics change to an aging, wealthier population. Of course, he is an analyst looking for a good buy in stocks so he limits his buy list to such public companies as Applebee's and Rare Hospitality. But there are other great casual restaurant chains that could be attractive to a franchise buyer.

Ron Paul, president of research firm Technomic said something quite similar at SG Cowen & Co.’s Consumer Conferencein New York City yesterday.

 "There is no lack of expanding chain-restaurant concepts on the horizon and no reason to think that their unit counts won’t continue to expand"

Finally, an interesting prediction is made in regards to the fast food giants returning from private to public held stocks.

"What you may see going forward is the Burger Kings and the Dunkin' Donuts, after being held by the private-equity firms, may look to go public."