February 1st QSR Roundup: Pizza Hut Franchisee Bankruptcy, Chili's Outstanding Quarter, and Cracker Barrel's Rejuvenation Strategy

Interviewy Team

Interviewy Team

— 7 min read
February 1st QSR Roundup: Pizza Hut Franchisee Bankruptcy, Chili's Outstanding Quarter, and Cracker Barrel's Rejuvenation Strategy
QSR news for Feb 1st, 2025. We reviewed 21 QSR publications, 6 subreddits, and over 72 articles to bring you the latest. Estimated reading time saved (at 200wpm): 220 minutes. It'll take you only 9 minutes to catch up.

Pizza Hut Franchisee Bankruptcy

Six buyers are set to purchase 77 Pizza Hut restaurants for $11.78 million after EYM Group's bankruptcy filing. Key bidders include:

  • Pizza Hut: Bidding $720,000 for 18 stores across several states.
  • PZH Foods: Investing $5.7 million for 21 locations.
  • Other bidders like NRP, LLC and Valor Pizza will acquire locations in Georgia, South Carolina, Illinois, and Wisconsin.

The bankruptcy stems from alleged mismanagement by EYM, which operated 140 locations and struggled with performance issues. A court hearing to finalize these sales is scheduled for February 12.

Roll-Em-Up Taquitos' Legal Troubles

Roll-Em-Up Taquitos faces a lawsuit from Ferrari Financial Services over unpaid payments for a $415,000 Ferrari F8 Tributo. CEO Ryan Usrey owes $315,069.98 at the time of the lawsuit. Additionally, Usrey is involved in a separate breach of contract lawsuit involving a franchising agreement in New Mexico, concerning a $205,000 unit resale and $595,000 in liabilities. The fast-casual brand has reduced its units from 16 to 13 amid these legal issues.

Dine Brands Lays Off Workforce

Dine Brands, parent company of Applebee’s and IHOP, announced a 9% workforce reduction as part of a strategic realignment. The layoffs impacted various departments at their Pasadena headquarters, affecting corporate employees out of a total of 596. The decision comes as Applebee’s faces six quarters of same-store sales decreases amidst growing competition and a more price-conscious consumer.

Sources: QSR Magazine, Restaurant Business

Record-Breaking Successes: Chili's and Cracker Barrel Shine

Chili's casual dining chain boasted impressive performance metrics in its latest quarter:

  • 31% same-store sales increase, a record-breaking achievement reflecting strong financial vitality.
  • Competing with top performers, this sets a high benchmark for other restaurant chains.
  • Highlights resilience amidst changing consumer habits in the casual dining sector.

Cracker Barrel's Rejuvenation Strategy

  • Sarah Moore, the new CMO, aims to transition the 55-year-old brand towards a modern future with a $700 million rejuvenation plan under CEO Julie Felss Masino.
  • The three-year initiative includes updating the menu, operations, and pricing to attract younger customers while retaining loyalty from existing ones.
  • Recent menu innovations, like the Hash Brown Casserole Shepherd’s Pie, have introduced higher price points and seen positive reception.
  • Emphasis on value remains strong with early dining deals for $7.99 and all-day breakfast options.
  • Launched Cracker Barrel Rewards program with over 6 million members, driving increased visits and higher spending.
  • Enhancing social media presence to engage younger customers and encourage shopping customers to dine in.
  • Positive early indicators with same-store sales up 2.9% in the latest quarter mark the beginning of potential brand recovery.

Sources: Restaurant Business

Franchise Investment: Coffee vs. Pizza Opportunities

Coffee and Pizza Franchises Offer Distinct Investment Paths

  • 44 new coffee brands expanded in the U.S. within a year.
  • Pizza Franchises:
    • Franchise fees for chains like Domino’s range from $5,000 to $25,000.
    • Total investments can exceed $1 million.
    • Focus on supply chain and delivery.
  • Coffee Franchises:
    • Brands like Dunkin’ require $437,500 to $1,787,700 to start.
    • Centered on customer service and speed.
  • Profitability for both ranges between 12% to 18%.
  • Pizza chains can tap into new customer segments; coffee franchises boost tea sales across the day.
  • Both markets present solid opportunities for savvy entrepreneurs, contingent on managing specific challenges and operational strengths.

Source: QSR Magazine

Executive Moves: Shifting Leadership in Top Brands

Shake Shack's Executive Restructuring

  • Jay Livingston, Chief Marketing Officer, to leave in March.
  • Steph So promoted to Chief Growth Officer from SVP of digital experience; will oversee digital marketing and culinary innovation.
  • Nancy Combs appointed SVP of Culinary Innovation, joining from Papa John’s.
  • Luke DeRouen named Chief Communications Officer, with experience at Zeno Group and Inspire Brands.

Smoothie King's New CMO

  • Claudia Schaefer joins as Chief Marketing Officer, bringing experience as former Chief Experience Officer at Caliber.

Ziggi’s Coffee Expands Leadership

  • Stacey Kane appointed as Chief Marketing Officer.
  • Tom Seeker joins as Chief Technology Officer to enhance marketing and technology efforts.

Source: Restaurant Business

Cracker Barrel's Modern Makeover

Cracker Barrel is investing in a $700 million rejuvenation to modernize the brand:

  • Updating the menu with innovations like the Hash Brown Casserole Shepherd’s Pie.
  • Focusing on operations and pricing to attract a younger demographic.
  • Maintaining strong emphasis on value with deals like $7.99 early dining.
  • Launching Cracker Barrel Rewards program, exceeding 6 million members.
  • Enhancing social media presence to engage younger customers.
  • Positive signs with same-store sales up 2.9%, indicating potential brand recovery.

Source: Restaurant Business

Starbucks Union Mediation and Expansion Plans

Union Mediation Agreement

  • Starbucks and Workers United agree to involve a mediator in contract negotiations for over 500 U.S. stores.
  • Progress made, but complex issues like wage increases remain.
  • Unionization efforts started in Buffalo in 2021, representing about 5% of corporate units.
  • Union delegate Michelle Eisen expresses optimism for contract improvements with professional mediation.

Starbucks' Bold Expansion

  • Plans to double its locations by adding over 11,000 new stores, surpassing its current 18,000.
  • This expansion would set a record in U.S. restaurant history.
  • Despite recent store closures and labor challenges, the company exhibits strong growth ambitions.

Sources: Restaurant Business, Nation's Restaurant News

McDonald's will settle a lawsuit regarding its HACER scholarship program, making significant changes:

  • Removing the requirement for recipients to have a Latino or Hispanic parent.
  • Applicants now need to demonstrate contributions to the Hispanic/Latino community.
  • The program has provided over $33 million in scholarships to more than 17,000 students.
  • The lawsuit was brought by the American Alliance for Equal Rights following a Supreme Court ruling against affirmative action.

Source: Restaurant Business

Restaurants Rally to Support Communities

Chefs Aid LA Fire Victims

  • Chefs Greg Dulan and Kim Prince provided meals to residents and firefighters affected by the Eaton Fire in LA's Altadena neighborhood.
  • Served traditional Southern comfort food, including plant-based jambalaya and fried chicken.
  • Highlighted the restaurant industry's role in community support during crises.
  • Despite personal losses, such as chef Daniel Shemtob’s home, the industry mobilized to aid recovery efforts.

Source: Eater

Technological Innovations: Microwaves and AI in Kitchens

Revolutionizing Microwave Use

  • Microwaves can be game-changers when used thoughtfully in commercial kitchens.
  • Midea's inverter microwaves offer continuous power for consistent cooking.
  • They efficiently reheat proteins and sides, essential for takeout and delivery quality.
  • Proper training on microwave usage can significantly cut waste and save energy.

AI in Restaurants: Help or Hype?

  • Discussions reveal mixed feelings about AI in the industry.
  • Some see potential in automating repetitive tasks like handling high call volumes.
  • Others express frustration with AI systems that lack human interaction.
  • Consensus that while AI can help with certain tasks, it cannot replace the essential human touch in hospitality.

Sources: Total Food Service, /r/restaurant

New Menu Offerings: Sweet Treats and Special Collaborations

IHOP's Pancake of the Month

  • Launches Chocolate Strawberry pancakes for February.
  • Features chocolate chip pancakes topped with cheesecake mousse and fresh strawberries.

Outback Steakhouse's February Specials

  • Super Bowl 59 Deal: Enjoy 59 wings for just $59 on February 9th.
  • Valentine’s Day Menu: Four-course dinner for $30 per person from February 10-16.
  • Social Media Contest: Share a dining photo for a chance to be featured and win a gift card.

Subway's Sweet Collaboration with Oreo

  • Introduces the Oreo Footlong Cookie, combining Subway's chocolate cookie dough with Oreo pieces and sweet vanilla cream.
  • Over 13 million Footlong Cookies sold since launch.

Sources: FSR Magazine, Food & Beverage

Restaurant Industry Challenges and Resilience in 2025

  • 71% of restaurant leaders plan to enhance customer loyalty programs amid economic pressures.
  • 85% aim to integrate AI and automation to improve efficiencies.
  • Consumers are cutting spending, with 63% reducing restaurant expenses.
  • Convenience stores are expanding food offerings, competing with restaurants; sales rose 8% year-over-year.
  • Pizza loyalty remains strong, with one in seven Americans not changing their pizza order in five years.

Sources: Restaurant Dive, Modern Restaurant Management

Impact of Immigration Policies on the Food Industry

Trump's Immigration Plans Raise Concerns

  • Mass deportations could remove a significant portion of the agricultural workforce, over 70% undocumented.
  • Experts warn of food price increases and supply disruptions.
  • Farmers may turn to more vulnerable H-2 visa workers, who have fewer rights.

Immigrant Vendors Face Raids in NYC

  • Street vendors, mostly immigrants, fear ICE raids as deportations increase.
  • Many have stopped working due to detention threats.
  • Calls for regulatory changes to protect vendors' rights.

Sources: Salon, Eater NY

Innovations in Food and Beverage

Flavor Modulation by FlavorSum

  • Launches FlavorSum Modulate line to:
    • Mask bitterness.
    • Enhance mouthfeel.
    • Reduce off-notes in food and beverages.
  • Suitable for bakery products, beverages, dairy, non-dairy, alcoholic, and cannabis-infused items.

Kerry's 2025 Flavor Trends

  • Global flavors influencing local markets.
  • Yuzu fruit, Sichuan spices, Indian masalas, and Korean barbecue gaining popularity.
  • Novel citrus twists like Japanese sudachi and finger lime emerging.

Sources: Food Business News

Operators Discuss Industry Practices on Reddit

Open Table and DoorDash: Worth the Cost?

  • Restaurant owners debate the effectiveness of third-party apps.
  • Concerns about higher costs and whether they attract loyal customers.
  • Some suggest increasing menu prices to offset service fees.

Payment Processing Fees

  • Many report fees exceeding 2.99%.
  • Consensus that rates can be negotiated.
  • Switching providers may yield significant savings.

Cleaning Greasy Kitchen Floors

  • Recommendations include:
    • Using Tide and bleach with an orbital scrubber.
    • Monthly steam cleaning.
    • Mr. Clean's greasy floor cleaner from Restaurant Depot.

Sources: /r/restaurantowners

Super Bowl and Valentine's Day: A Boon for Restaurants

Super Bowl Spending Surge

  • 77% of Americans plan to watch the game, spending projected at $17.3 billion.
  • Over 40% expected to order delivery.
  • 1.45 billion chicken wings projected to be consumed.
  • Restaurants offering promotions to attract customers.

Heart-Shaped Offerings for Valentine's Day

  • Pizza chains introducing heart-shaped pies.
  • Mountain Mike’s Pizza adds a heart-shaped cherry pie.
  • Popeyes launches tequila-flavored items for the Super Bowl.

Source: Nation's Restaurant News

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