February 14th QSR Roundup: Wendy's Sales Growth Strategies with AI Innovations and Menu Expansions Drive Fast Food Success

QSR news for Feb 14th, 2025. We reviewed 21 QSR publications, 6 subreddits, and over 91 articles to bring you the latest. Estimated reading time saved (at 200wpm): 340 minutes. It'll take you only 10 minutes to catch up.

Wendy's Embraces AI and Menu Innovations for Sales Growth

Wendy's is leveraging technology and menu expansion to drive significant growth in the fast-food industry.

• 10% Year-Over-Year Sales Increase: In October 2024, Wendy's recorded a remarkable 10% increase in same-store sales compared to the previous year.
• SpongeBob Partnership Boosts Sales: Collaborating with SpongeBob resulted in a staggering 20% sales lift, marking the brand's best performance since 2021.

Investing in AI technology, Wendy's is enhancing customer experience through voice AI in nearly 100 drive-thru locations. The company is also focusing on breakfast, with a 6% rise in breakfast sales, surpassing industry growth. Plans include investing around $70 million in a build-to-suit program to fuel restaurant growth, aiming for 2-3% global growth in 2025.

Overall, Wendy's strategic initiatives in technology, menu innovation, and partnerships are propelling the brand forward amidst industry challenges.

Source: QSR Magazine

Valentine's Day: Rewards, Solo Dining, and Sweet Promotions

Lee's Famous Recipe Chicken and Freddy's Frozen Custard & Steakburgers are celebrating Valentine's Day with special promotions:

• Double Points at Lee's: From February 12-14, rewards members earn double points on purchases, with opportunities to give back through GiftAMeal, contributing over 195,000 meals to local food banks.
• National Steakburger Day: Freddy's offers rewards members in-app promotions leading up to February 24, with a highlight of a $1 Original Double offer.

Additionally, the trend of solo dining is on the rise this Valentine's Day. Restaurants are embracing solo diners by creating tailored experiences, recognizing that nearly half of New Yorkers dine alone, often for self-care or to try new spots.

Source: QSR Magazine, FSR Magazine

Innovative Menu Launches and Collaborations

The Big Hac Sandwich at Dog Haus

Dog Haus teams up with food personality Josh Elkin to launch the Big Hac sandwich:

• Two layers of six-ounce grilled Angus beef
• White American cheese
• Secret sauce
• Grilled cheese sandwich in between
• Available from Feb. 17 to Mar. 31

Elkin is known for his creative culinary reinterpretations, hinting at more innovative menu items in the future.

Source: QSR Magazine

Ted's Montana Grill Introduces New Smashburger

Ted's Montana Grill is rolling out a new smashburger featuring:

• 3 oz. beef or bison patty
• Diced red onions, Ted's Seasoning
• Three slices of American cheese
• Homemade ranch onion dip
• Accompanied by hand-breaded onion rings and French fries

This offering promises to enhance the dining experience with a classic American favorite.

Source: FSR Magazine

Casual Dining Outpaces Fast Food Amid Quality Focus

Chili's reports a 30% rise in comparable store sales, showcasing robust brand experience and menu differentiation. Meanwhile, McDonald's faces negative traffic counts despite discount strategies, indicating that today's diners prioritize quality over low prices.

• The overall restaurant industry sees customer visit declines, but the casual dining segment witnesses a 1.5% increase, attracting mid- to higher-income consumers from traditional QSRs.
• Aggressive price increases have narrowed the gap between QSR and higher-tier dining, prompting customers to consider trade-ups to fast casual options.

The industry's future performance may hinge on QSRs' ability to innovate beyond discounts to retain customers.

Source: QSR Magazine

Dutch Bros Expands Morning Offerings and Embraces Mobile Ordering

Dutch Bros is making strategic moves to capture the morning market:

• Testing a new limited food program in eight locations to boost morning traffic.
• Mobile ordering expansion led to a 6.9% rise in same-store sales and 8% of sales through mobile orders.
• Rewards members significantly contribute, with 5.4 million mobile orders accounting for 71% of all transactions.

CEO Christine Barone emphasizes goals for employee satisfaction, effective food offerings, and maintaining throughput. Dutch Bros plans to open 150 new shops in 2025, aiming for continued revenue growth.

Source: QSR Magazine, Restaurant Dive

Preparing for ICE Inspections: A Crucial Guide for Restaurants

With the restaurant industry employing a significant number of foreign-born workers, it's vital to be prepared for potential ICE workplace inspections to avoid legal and reputational harm.

Key Steps:

• Compliance: Regularly conduct I-9 audits and retain forms for at least three years after hiring.
• Staff Training: Designate a manager as the point of contact with ICE, ensuring all employees understand their rights.
• Warrant Understanding: Differentiate between administrative and judicial warrants to know your rights.
• Emergency Preparedness: Develop a response plan, including training drills and legal counsel contacts.
• Documentation: During inspections, verify warrant legitimacy and document ICE actions thoroughly.

Post-inspection, consult legal counsel immediately to assess risks. Transparent communication with staff is essential for clarifying rights and improving protocols.

Source: QSR Magazine

Employee Ownership and Empowerment in Dining

Your 3rd Spot in Atlanta is revolutionizing hospitality by offering employees actual ownership in the brand:

• Promotes strong work ethic and employee growth, creating a culture of autonomy.
• Features over 80 games, upscale shared plates, and craft beverages, serving as a social hub for adults.
• Recognized by Newsweek as a top workplace, emphasizing commitment to employee satisfaction.

Founder Josh Rossmeisl's principle of continuous improvement is set to drive national expansion, with new locations planned while prioritizing team empowerment and guest experience.

Source: FSR Magazine

Industry Responses to Economic and Legislative Challenges

Congressional Budget Proposals Impacting SNAP and WIC

• Congressional Republicans are advancing budget plans proposing significant cuts to SNAP, aiming to save $230 billion.
• Potential changes could eliminate SNAP benefit increases and adjust work requirements, affecting millions of recipients.
• Advocates warn that cuts will exacerbate food insecurity, especially among families with young children.
• WIC may be indirectly impacted, with nearly 360,000 children potentially losing access to essential nutrition support.

Source: Civil Eats, Salon

New Leadership in Food and Agriculture

• The Senate confirmed Robert F. Kennedy, Jr. as head of HHS and Brooke Rollins as head of USDA.
• Kennedy's appointment faced scrutiny, but both secretaries are expected to address critical issues like food safety and regulations.

Source: Civil Eats, Food Business News

Mergers, Acquisitions, and Franchise Expansions in the Food Industry

• Döner Haus plans U.S. expansion through franchising, with over 1,000 franchise inquiries and agreements for 20 locations in California.
• Lola Beans introduces a drive-thru coffee franchise model combining premium coffee and infused drinks.
• Penn Station East Coast Subs appoints Don Champion as SVP of Sales and Development, aiming to double the brand's footprint.
• Chicken Salad Chick opens its 14th Louisiana store, expanding its southern footprint with over 270 locations in 20 states.
• Rock N' Roll Sushi opens a new location in Florida, marking its 14th restaurant in the state and 73rd overall.

Source: Fast Casual

Marketing Techniques and Influencer Partnerships

Companies are adapting their marketing strategies, leveraging influencer partnerships for eCommerce growth.

Effective Steps:

• Research Your Audience: Understand your target demographic.
• Utilize Social Media: Discover relevant influencers on platforms like Instagram and TikTok.
• Leverage Marketplaces: Use sites like Collabstr to connect with influencers.
• Employ Automation Tools: Utilize tools like BuzzSumo to automate searches.
• Monitor Competitors: Analyze competitor mentions to find potential influencers.

Understanding the types of influencers (nano, micro, macro, mega) and setting clear goals ensures successful partnerships that enhance brand marketing strategies.

Source: BlueCart

Valentine's Day Dining Trends and Promotions

• Restaurants see significant increases in sales on Valentine's Day, with steak sales surging 135%, seafood doubling, and dessert sales climbing 80%.
• Wine sales rose 63%, becoming the drink of choice for romantic dinners.
• Prepaid bookings spiked by 67%, reflecting a trend toward premium dining experiences.
• 65% of consumers plan to celebrate Valentine's Day, favoring dining in at casual restaurants.
• The rise of solo dining allows individuals to enjoy personal celebrations.

Source: Modern Restaurant Management

Future of Digital Payments and Small Business Outlook

Digital Payments Transforming the Industry

• Mobile payments continue to grow, with SoftPOS technology turning smartphones into payment terminals.
• Sustainability becomes a key concern; consumers seek eco-friendly options in online shopping.
• The rise of Central Bank Digital Currencies (CBDCs) is anticipated, with significant developments expected by 2025.

Source: Modern Restaurant Management

2025 Small Business Outlook

• Economic growth is expected, but inflation fears loom.
• Potential immigration policies could disrupt small businesses, leading to labor shortages.
• Industries like restaurants and hospitality may face challenges despite projected growth.

Source: Modern Restaurant Management

Upcycling, Precycling, and Sustainable Food Practices

• Upcycling transforms discarded food into valuable ingredients, like cheese whey used for protein enrichment.
• Precycling aims to reduce waste before production, with examples like Milkadamia's oat milk sheets reducing packaging waste by 94%.
• Companies like IFF and Arla Foods invest in zero-waste initiatives and innovative uses of byproducts.
• These trends reflect increasing consumer interest in sustainability, with 37% prioritizing sustainably-sourced products.

Source: Food Business News

Restaurant Industry Leaders and Insights

Mohaimina Haque: Leadership at Tony Roma's

• Mohaimina Haque, CEO of Tony Roma's, focuses on expansion and franchisee mentorship.
• Balances her role with operating her own law firm.
• Emphasizes the importance of predictive technology and the rise of ghost kitchens.

Source: Networld Media Group

Krystal's Rebranding Efforts

• Krystal undergoes major rebranding to attract new generations while honoring its 92-year legacy.
• Introduces new menu items like Smash'd & Stack'd burgers and churro fries.
• Plans to launch a new loyalty program to increase engagement.

Source: QSRweb

Reddit Discussions: Insights from Restaurant Owners

Lowering Food Costs

• Restaurant owners discuss strategies like negotiating with suppliers and inventory management.
• Suggestions include menu analysis to drop low-selling items and adjust prices for better margins.

Source: /r/restaurantowners

Email Marketing Strategies

• Owners share the effectiveness of email marketing, with some generating significant revenue.
• Emphasize capturing customer emails and exploring outreach methods like SMS marketing.

Source: /r/restaurantowners

Dealing with Low Review Ratings

• Strategies include using QR codes for feedback and actively soliciting reviews from satisfied customers.
• Maintaining a high rating is seen as crucial, with Google reviews having significant impact.

Source: /r/restaurantowners

Toast POS Pros and Cons

• Mixed reviews highlight Toast's reliability and support but also its high costs.
• Smaller restaurants express concerns over expenses, suggesting alternatives like Square.

Source: /r/restaurantowners

Fast Food Updates and New Menu Items

• Hungry Howie's introduces the Hangry Howie Pizza, but faces criticism over price and presentation.

Source: /r/fastfood

• Cracker Barrel launches Oreo Stuffed Cheesecake Pancakes, garnering excitement and concerns over sweetness.

Source: /r/fastfood

Industry Challenges and Changes

• Denny's considers closing up to 90 additional stores in 2025, aiming to enhance cash flow and invest in remodeling.

Source: FSR Magazine

• Cargill announces the closure of its cocoa and chocolate plant in Pennsylvania, affecting 102 employees.

Source: Food Business News

Consumer Trends and Behaviors

• Rising egg prices cause a 15.2% spike in food costs, the largest since 2015.

Source: Food Industry Executive

• A shift in bread preferences as consumers move away from traditional white and wheat loaves, impacting companies like Flowers Foods.

Source: Food Business News

Promotion and Deals

• Amazon's Presidents Day sale offers up to 62% off on popular kitchen brands like All-Clad and Le Creuset.

Source: Food & Wine

Culinary Insights and Recipes

• Making the perfect boiled egg using "periodic cooking," a technique involving alternating between boiling and lukewarm water over 32 minutes.

Source: Food & Wine

• Gravy as a culinary love language, featuring a hearty mushroom-free recipe perfect for Valentine's Day.

Source: Salon

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