Why are some chains easily outperforming their biggest competitors?

This week’s episode of the Restaurant Business podcast A Deeper Dive features Joe Pawlak, the managing principal with RB sister company Technomic, to talk about this topic.

Several restaurant chains are easily outperforming top competitors right now. Chili’s is beating Applebee’s. Dutch Bros is outperforming Starbucks and Texas Roadhouse is outdistancing Outback Steakhouse.

Pawlak uses data from Technomic to help explain a lot of this. Customers clearly prefer some chains over others right now, and amid intense competition they are voting with their feet.

We discussed what some of these chains are bringing to the table and how much luck plays a role. The discussion offers lessons for some brands as they look to win in a competitive restaurant market.

The best time to invest in a restaurant chain may be when the industry is struggling.

This week’s episode of the Restaurant Business podcast A Deeper Dive features Andrew Smith, the cofounder of the private-equity firm Savory Fund.

We have long wanted Smith on the podcast, largely because of Savory’s unique history. Smith has a restaurant operations background as a franchisee of brands like Little Caesars.

These days, Savory invests in emerging chains. The ifirm has invested in brands like Swig, Mo’ Bettahs, Houston TX Hot Chicken, Pincho, Via 313 and others.

Smith discussed his firm’s investment strategies, what they look for and how to tell whether a brand will be a winner or not. He also discussed the right time to exit an investment and why it’s not about time. He also notes that tough times for the restaurant business can be good times to make an investment and explains why that is on the podcast.

Check it out.

What is the right franchising strategy for your restaurant brand?

It’s not as simple a question as you may think. And I brought in Sean Thompson, VP of IT with Freddy’s Frozen Custard and Steakburgers, to discuss franchising strategies and what may or may not work for restaurant brands.

The number of strategies for franchising a restaurant brand, or any industry for that matter, is as varied as the companies themselves. There are companies that love big operators and those that prefer smaller franchisees and everything in between.

There are also misnomers about franchisees. They are not always local. And they’re not always small.

In any event, we sort it all out on this episode as we talk about what works and what doesn’t and what is the key ingredient in any franchise company. Please check it out.

Should restaurants worry about weight-loss drugs?

This week’s episode of the Restaurant Business podcast A Deeper Dive features Leo Feler, chief economist with the data firm Numerator, to talk about the potential impact of GLP-1 drugs on consumers’ food-spending habits.

Drugs such as Ozempic and Wegovy are increasingly popular. The medications are historically used for Type 2 diabetes but were found to cause weight loss. They’ve been used increasingly for weight loss. With nearly half of Americans overweight or obese, they’re expected to only grow in popularity.

Numerator recently coauthored a study analyzing the impact of these medications on sales at grocers and fast-food restaurants. They show a real impact that could influence sales in these industries.

Feler talks about the study and the impact of GLP-1 medications and what restaurants should do to prepare.

Why did restaurants close so many locations last year?

This week’s episode of the Restaurant Business podcast A Deeper Dive features Jim Balis, the operations partner with the private equity and debt financing firm CapitalSpring.

We had Balis on the podcast to talk about the closures. A lot of companies closed locations in 2024. Many of them ended up in bankruptcy, such as Red Lobster and TGI Fridays. Others have struggled for years. But many of them include brands like Wendy’s and Denny’s that closed locations for strategic reasons.

Closures generate headlines in publications like Restaurant Business. But there are reasons they opt to close locations. We had Balis on the podcast to talk about these reasons. We talk about the reasons companies make these decisions and what issues operators should take into consideration before they opt to close a location.

We’re talking closures on A Deeper Dive so please check it out.

Traffic and value dominated restaurant news in 2024.

Unsurprisingly, then, this episode of the Restaurant Business podcast of A Deeper Dive, which features some of the best content from a year’s worth of podcast episodes, focuses mostly on discussions about that very topic.

The first clip features Technomic’s Robert Byrne, talking about consumer frustration over restaurant prices. You can find the full episode here.

The second clip comes from our discussion with Placer.ai’s R.J. Hottovy, in which we also discuss value and why restaurants need to get customers excited about coming in. You can find that episode here.

The third clip is a more broad look at the state of the industry, featuring the National Restaurant Association’s Hudson Riehle, who discusses a wide variety of topics, including some of the issues currently driving the industry. You can find that episode here.

This will be the last episode of the podcast for the year, as we take a break for Christmas and New Year’s Day. But we will return with a vengeance in 2025. Thank you for listening, and you can check out all of our episodes on Apple Podcasts or Spotify.

How can you tell if an emerging brand will be a long-term success?

It’s not an easy question to answer. A lot of private-equity firms, restaurant executives, real estate companies, consultants, vendors and others all spend hundreds of millions of dollars to try and answer that question.

This week’s episode of the Restaurant Business podcast A Deeper Dive does its best to answer that question and features David Henkes, senior principal with RB sister company Technomic.

Thousands of entrepreneurs start new restaurants every year. Many of them yearn to grow those restaurants into major chains. The vast majority of them fail.

This year has demonstrated just how hard it is to tell whether a brand will ultimately fulfill whatever promise it once had. Companies such as MOD Pizza, Uncle Julio’s, Rubio’s, Tijuana Flats and many others, all of which had major backing at one point, either filed for bankruptcy or came close to it after their once-promising futures did not come to fruition.

And we recently told you the story of Baja Fresh, which 20 years ago was considered a pioneer of fast-casual Mexican only to quickly lose its place to the younger Chipotle Mexican Grill, which has gone on to become the biggest such concept in the world.

The result is a fascinating discussion on emerging chains and what it takes to make them work, and why it’s so difficult to tell winners from losers, at least early on. So check it out.

Restaurants have been loading their menus with new items lately.

This week’s episode of the Restaurant Business podcast A Deeper Dive is all about menu development, and specifically why so many restaurant chains are turning to limited-time offers to get customers in the door. RB Senior Menu Editor Pat Cobe joins me to talk about that this week.

Here’s a statistic: There were nearly 26,000 limited-time offers in the restaurant industry last year, according to Technomic. That was up 46% from 2022 and 53% from 2019. And, apparently, that hasn’t slowed down this year.

In short, restaurants have broken out of their pandemic-fueled restrictions on new menu development in a really big way.

The reason is simple: Necessity. Restaurants have struggled to generate traffic the past couple of years and were leery of going too deep into a value war.

But there is little evidence that all this development is pulling in more customers. And there are real risks when it doesn’t do that.

We’re talking about new menu items on A Deeper Dive so please check it out.