Fast-casual form or substance?

After being kicked in the mints by fast-casual upstarts, a number of full-service restaurants are about to learn why.

To counter the challenge, they’ve trumpeted plans in recent weeks to whittle their concepts into fast-casual versions. So Famous Dave’s now has BBQ Shack. Red Robin has Burger Works. IHOP has IHOP Express. P.F. has two down-market versions, Pei Wei Asian Diner and the just-announced Asian Market—the list goes on and on.

The variations may hale from all sectors, from fine dining (Rick Bayless, with Xoco) to family restaurants (Denny’s, with Denny’s Cafe). But all share the strategy that less is better. Burger Works has a smaller menu. IHOP Express has less service. Virtually all have a smaller footprint.

There’s no doubt that scaled-back service is a big draw for the fast-casual sector, since it spares customers from having to tip. But that 15 or 20-percent saving would mean nothing if the buyer wasn’t getting food of unexpectedly high quality. And that’s where some of the trading-down chains may be deluding themselves.

They’re still working the old fast-casual formula: Food like you’d get in a casual restaurant, sold at a price closer to what you’d pay in a fast-food joint, served at a speed somewhere between grab-and-go and sit-and-order.

They should’ve learned in their market research that much of today’s fast-casual fare surpasses what customers expect from casual chains. Yet the companies hatching fast-casual formats haven’t said anything about the food being better than what the mother brand sells. They wouldn’t dare.

The closest they’ve come is touting the greater convenience and portability of what’s available from the spin-offs. If those benefits were key attractions, traditional quick-service concepts wouldn’t be losing fans to fast-casual.

Instead of standing pat, many of those conventional fast-food sellers are upgrading their menus and designs to compete with the likes of Panera Bread and Chipotle. Like the down-traders, they’re turning fast-casual themselves, but by aiming higher.

So Tim Hortons is testing a variation called Café & Bake Shop. Subway franchisees have more than 20 Subway Cafes open, and Burger King is growing its collection of Whopper Bars. Pizza Inn has lined up $4 million in to build Pie Five Pizza Co., a fast-casual riff that’s generating sales at an annual rate of $920,000, with operating margins of more than 20%.

One of the strange things about this economic downturn has been the boost it’s given to quality. Customers want value, but often that means higher caliber food for an attractive price.

So which fast-casual interloper is better addressing that need, the casual chain that enters the market without a significant food upgrade, or the fast-food specialist that trades up? I know how I'd bet.