A fixture of New York street meat, Halal Guys has gone global

| 15/12/2016 | Reply
Started from a single street cart, the chain has expanded to more than 30 locations worldwide

Photo: Buck Ennis: The Halal Guys’ street operations started in 1990 from a hot-dog cart.

The Halal Guys spent 22 years building their business, hawking meat-and-rice platters from steaming food carts, and since 2014, from storefront restaurants. They also still operate at their first street-cart location, the corner of West 53rd Street and Sixth Avenue. And now, after expanding to the East Village and the Upper West Side, they’re taking their business global.

“I had the honor to travel all the way to Manila, Philippines, to attend our first franchise opening,” said Hesham Hegazy, the director of brand development who has worked for Halal Guys since 2011 and advised them unofficially since the business started. “I was almost breaking down in tears.”

Photo: Buck Ennis OFF STREET: The Halal Guys’ 307 E. 14th St. location opened in June 2014.

The Halal Guys—Muhammed Abouelenein, Ahmed Elsaka and Abdelbaset Elsayed—opened their first storefront restaurant in August 2014 at East 14th Street and Second Avenue, near New York University dorms and their potential supply of customers seeking late-night munchies; they opened their second that December on West 95th Street and Amsterdam Avenue, not far from Columbia University. That same year they began franchising the operation, which now has more than 30 restaurants worldwide. (The company, which declined to share revenue or profit information, retains the rights to open restaurants in New York City but franchises the operation elsewhere.) The goal is to open one to two restaurants a month, according to Dan Rowe, CEO of Fransmart, a franchise consultancy firm that is advising the budding chain on its expansion.

The Halal Guys’ success didn’t come easily. Abouelenein, Elsaka and Elsayed—all Egyptian immigrants—founded the company in 1990 after Abouelnein, who trained as a veterinarian, realized that he couldn’t practice while studying to get certification in the U.S.

So he and Elsaka and Elsayed acquired a hot-dog cart from a friend, then switched to selling halal platters two years later when they realized there was a market for them among New York cabdrivers, many of whom are Muslim. Word of mouth spread among cabbies, then bloggers, and in 2005, the Halal Guys were finalists for the Vendy Award, which honors street vendors nationwide.

Today, only about 5% of Halal Guys’ customers adhere to halal dietary restrictions, Rowe said. Since halal food must be free of what Islamic law considers impurities, such as pork and alcohol, and prepared with animals slaughtered according to religious law, halal food is sometimes perceived to be cleaner and more ethical—which has helped make it more appealing to young, middle-class consumers of all faiths, according to Susan Labadi of the American Halal Association.

That may explain why listings of halal food on U.S. menus have grown 7% year over year, according to the consultancy Technomic.

“It’s clear that Americans of all different backgrounds are willing to try new tastes and diets,” said Jordan Rost, vice president of consumer insight at the data and measurement company Nielsen.

Today NYU, tomorrow the world

To operate a Halal Guys restaurant, potential franchisees must have a minimum of $1 million in liquid capital and $2 million in total net worth, plus agree to develop between five and 10 stores. In exchange for a $40,000 per-restaurant licensing fee, a 6% royalty and a 2% advertising fee, the Halal Guys corporation provides franchisees with ingredients—including their famous white sauce—training in food preparation and national advertising. These are fairly standard terms, according to Warren Ellish, a professor at Cornell University’s Johnson Graduate School of Management.

For years, whenever Paul Tran came to New York from Southern California, the first place he’d visit was Halal Guys, for flavors “you can’t find anywhere else.” Last year, he and four partners opened SoCal’s first Halal Guys franchise. Tran, who works with Fransmart and Rowe, said he decided to open the restaurant in part because Halal Guys had such a big following in Manhattan that the brand is already known nationwide. In Costa Mesa, where Tran opened the first outpost, adventurous foodies are always looking for interesting cuisine, he said, and there’s not much competition from other Middle Eastern fast-casual restaurants.

Although Tran declined to disclose profits or revenue, he said “sales have remained the same” since his Costa Mesa location opened. According to Los Angeles County CW-news affiliate KTLA, 400 people waited in line on opening day in October. The lines are shorter now, Tran said, partly because of efficiency and the restaurant’s new delivery service—a natural extension considering that the company started with a street cart.

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Category: Asia, Branding & Marketing, Finance & Investment, Research, Restaurants, The Americas, Trends, USA

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