February 21st QSR Roundup: Shake Shack's Ambitious Expansion, Smart Cooking Innovation, and Wingstop's Record Growth

QSR news for Feb 21st, 2025. We reviewed 21 QSR publications, 6 subreddits, and over 97 articles to bring you the latest. Estimated reading time saved (at 200wpm): 305 minutes. It'll take you only 9 minutes to catch up.

Shake Shack's Ambitious Expansion and Innovation Plans

Shake Shack is setting its sights on a massive expansion, aiming to quadruple its U.S. locations to 1,500 stores, currently operating around 330 restaurants.

• The fourth quarter saw a 4.3% same-store sales increase, extending a 16-quarter positive streak.
• CEO Rob Lynch acknowledged initial concerns over premium pricing but emphasized the sustained demand for high-quality food.
• To support this growth, Shake Shack plans to open a Kitchen Innovation Lab in Atlanta, serving as a testing ground for new kitchen designs and processes to streamline operational testing and accelerate expansion.
• They've improved operational efficiency with a newly tested scorecard for performance evaluation and an AI-driven labor model.
• Marketing efforts like Chicken Sundays have boosted guest frequency, and the successful Truffle Burger became a historical hit among limited-time offers.
• Shake Shack is committed to reducing build costs and times while expanding globally into Canada, Israel, and Malaysia.

Sources: QSR Magazine, Restaurant Business, Foodservice Equipment & Supplies, Fast Casual

RATIONAL Showcases Innovation at NAFEM 2025

RATIONAL, a leader in smart cooking systems, is set to impress at NAFEM 2025 in Atlanta from February 26-28.

• Showcasing the innovative iHexagon Cooking System, which integrates steam, hot air, and microwave technology for faster and more consistent cooking results.
• Efficiency Focus: Designed to shorten cooking times while slashing food costs in busy kitchen environments.
• Hygiene Innovation: The iCareSystem AutoDose automates cleaning with precise chemical dosing, cutting labor and plastic waste.
• Sponsoring the U.S. Culinary Open, where 12 chefs compete for over $14,000 in awards, highlighting culinary talent and diversity.
• Visit RATIONAL at booth #6318 to explore the future of professional cooking.

Sources: QSR Magazine, FSR Magazine, Foodservice Equipment & Supplies

Hooters Faces Bankruptcy Amid Declining Sales

Hooters of America is reportedly preparing for bankruptcy due to ongoing financial struggles.

• Operating 293 units, the chain has seen revenue declines of nearly 15% between 2018 and 2023.
• Vendor payments are delayed, taking about 4 times longer than average, with over 20% of bills overdue by more than 90 days.
• Approximately 40 underperforming locations have closed due to financial pressure.
• Holding about $300 million in asset-backed bonds, Hooters faces debt issues and has lost locations, dropping from over 430 restaurants in 2019 to below 300.
• Efforts to diversify, such as launching frozen snacks and the quick-service spinoff Hoots Wings, have struggled, with only three Hoots Wings locations remaining.

This situation reflects widespread challenges within the casual dining segment, pushing Hooters towards potential bankruptcy akin to other legacy chains like Red Lobster and TGI Fridays.

Sources: Restaurant Business, FSR Magazine

Wingstop's Record Growth and Technological Innovations

Wingstop celebrates its 21st consecutive year of positive same-store sales, with U.S. comps soaring 19.9%, fueled by transaction growth.

• Achieved a record 349 new restaurant openings and 15.8% unit growth year-over-year, reaching $4.8 billion in systemwide sales.
• Adjusted EBITDA rose 44.8% to $212 million, with digital sales reaching 70.3%.
• Innovations include a proprietary AI-enabled kitchen platform to improve order speed and team productivity.
• The MyWingstop platform now has 50 million users, showing 30% growth, leading to higher guest frequency and improved ROI.
• CEO Michael Skipworth emphasizes the focus on quality and value, positioning Wingstop to capture market share.

Despite strong previous performances, Wingstop expects solid growth in 2025, with brand awareness still growing and opportunities for further success.

Sources: QSR Magazine, Nation's Restaurant News

Texas Roadhouse Achieves Record Revenue Amid Sales Dip

Texas Roadhouse reported record-breaking revenue of nearly $5.4 billion in 2024, surpassing last year's $4.78 billion, with average unit volumes topping $8 million for the first time.

• Same-store sales rose by 7.7%, marking 11 consecutive years of positive traffic gains.
• However, the first seven weeks of 2025 saw same-store sales increase by only 2.9%, lower than their usual over 7%.
• Executives attributed this to adverse winter weather and seasonal illnesses affecting performance.
• 30 new restaurants planned for the year, expanding to 814 locations.
• A price increase of 1.4% is set for the second quarter.
• Introduction of mocktails due to declining interest in alcoholic beverages, showing positive early trends.
• Upgrading guest management systems for better customer efficiency.

Sources: Restaurant Business, Nation's Restaurant News

Leadership Changes at Church’s Texas Chicken

Church’s Texas Chicken has appointed Roland Gonzalez as the new CEO, succeeding Joe Guith.

• Gonzalez has over a decade in the restaurant and franchising industry, previously serving as COO since 2023.
• Aims to reach $2 billion in systemwide sales, building on current sales of $1.5 billion across 1,500 locations.
• During his tenure as COO, Gonzalez modernized customer-facing technology, launching loyalty programs and drive-thru automation.
• Recent C-suite appointments include Navin Sharma as CMO and Alisa P. Cleek as chief legal officer.

Gonzalez is poised to lead Church's Texas Chicken towards significant growth, leveraging his extensive industry experience.

Sources: Restaurant Dive, Nation's Restaurant News, Foodservice Equipment & Supplies

Bloomin’ Brands Streamlines Operations with Significant Layoffs

Bloomin’ Brands, parent company of Outback Steakhouse and Carrabba's Italian Grill, is laying off about 100 employees, roughly 17% of its Tampa headquarters staff.

• Expected to save $22 million annually, offsetting a $7.5 million severance package for affected workers.
• Follows the re-franchising of its Brazilian operations.
• Executives cite the move as necessary amid industry challenges and declining same-store sales.
• Notable executive changes include Lissette Gonzalez becoming chief commercial officer and Kelia Bazile promoted to president of Carrabba’s.

This reflects broader industry trends, as other restaurant companies also face similar challenges and layoffs.

Sources: Restaurant Business, FSR Magazine, Restaurant Dive

Keke's Breakfast Cafe Doubles Locations and Sets Growth Records

Keke's Breakfast Cafe has more than doubled its locations to 69 since its acquisition by Denny's two and a half years ago, with 55 franchised locations.

• 8 new restaurants opened in Q4, matching previous years' total openings.
• Fiscal 2024 saw 12 new units, a record for Keke's, expanding into six states, with 61 in Florida.
• Open restaurants boast over $2 million in average unit volume (AUV).
• Over 140 development commitments planned in 10 states; remodels expected to yield a 6-8% sales lift.
• Same-store sales improved by 3% in Q4, boosted by an alcohol program adding 110 basis points to comps.

CEO Kelli Valade emphasizes the impact of remodeling, promotions, and off-premises sales on future growth.

Sources: FSR Magazine

Taco Bell Teams Up with Milk Bar for Birthday Cake Churros

Taco Bell collaborates with celebrated pastry chef Christina Tosi of Milk Bar for a limited-time dessert launch: Milk Bar Birthday Cake Churros.

• Churros filled with signature birthday cake frosting, topped with pink confetti sprinkles.
• Available nationwide, priced at $2.99 for two and $1.99 for one.
• Celebrates Taco Bell's 63rd birthday.
• Follows a previous successful collaboration on the Strawberry Bell Truffle.

This innovative treat aims to enhance customer experiences with nostalgic dessert flavors.

Sources: Restaurant Business, Nation's Restaurant News, Food Business News

Flower Child's Impressive Growth Under The Cheesecake Factory

Flower Child, part of The Cheesecake Factory brand portfolio, is experiencing significant growth.

• Same-store sales increased by 11% year over year in Q4, with average weekly sales reaching $83,000.
• Catering services and a revamped rewards program boosted performance.
• Introduction of kitchen display systems improved operations.
• The Cheesecake Factory plans to unveil 6-7 new locations this year, eyeing over 200 potential nationwide.
• Reported a 1.7% rise in same-store sales, with restaurant-level margins at 18.4%, the highest in over seven years.

CEO David Overton highlights strong customer satisfaction and diverse menu offerings as key factors in their success.

Sources: Restaurant Business, FSR Magazine

Restaurants to Tackle Wage Debate in 2025

The Independent Restaurant Coalition (IRC) plans to address the complex issue of restaurant wages this year, aiming to balance fair pay with business sustainability.

• Seeks input from over 100,000 members to shape policy approaches.
• Recognizes different states face varying challenges in wage structures.
• Introduced a diverse board, including chefs and restaurant owners, to tackle wage issues.
• Plans to work with the industry over the next year to propose actionable solutions before introducing them to Congress.

This initiative underscores the industry's commitment to finding equitable solutions for workers and operators alike.

Source: Restaurant Business

Strategies to Reduce Labor Costs in Quick-Service Restaurants

Labor and food expenses account for up to 66% of sales in quick-service restaurants (QSRs), with 98% of operators citing labor costs as a significant issue. To combat financial challenges, QSRs can adopt the following strategies:

• Conduct a Labor Cost Analysis: Identify high expenditures using metrics like scheduling and productivity.
• Cross-Train Employees: Enhance skills and flexibility, reducing overtime and reliance on additional staff.
• Increase Employee Retention: Offer competitive salaries and growth opportunities; retaining staff cuts costs.
• Use Labor Management Software: Streamline scheduling, time tracking, and payroll.
• Minimize Overtime Hours: Establish strict approval policies to avoid increased labor costs.
• Foster a Cost-Conscious Culture: Educate employees on resource management and reward cost-saving suggestions.

By implementing these measures, QSRs can effectively manage labor costs, enhance employee satisfaction, and improve profit margins.

Source: QSR Magazine

Maximizing Profits by Leveraging Peak Hours

Focusing on busy hours can significantly boost restaurant revenues. Strategies include:

• Smarter Upselling: Train staff to suggest pairings, making upselling personalized rather than pressure-selling.
• Streamlining Table Turns: Encourage proactive pre-busing and use technology like handheld payment devices for efficiency.
• Increasing Capacity: Add outdoor seating or repurpose areas to accommodate more guests without significant marketing costs.
• Leveraging Peak Promotions: Offer enticing limited-time deals to boost per-customer spending during busy times.

Optimizing peak hours with small adjustments can lead to substantial revenue growth and enhanced dining experiences.

Source: Total Food Service

Dutch Bros Tests Food Menu Expansion

Drive-thru coffee chain Dutch Bros is trialing a limited food menu at eight locations, initially launched at six.

• All branches offer muffin tops and granola bars; test locations feature enhanced bakery items and hot food.
• CEO Christine Barone stated the test aims to offer food varieties without impacting service times.
• Food currently represents less than 2% of sales, but there's growth potential in morning transactions.
• Plans to expand the food program throughout 2025, with broader implementation targeted for 2026 and beyond.

This move contrasts with Starbucks, which is trimming its food and drink options to streamline operations.

Source: Food Business News

KFC Relocates US Headquarters to Texas

KFC is moving its US corporate offices from Louisville, Kentucky, to Plano, Texas, to enhance growth and collaboration.

• Around 100 positions are affected, with support for relocating employees.
• Yum! Brands CEO David Gibbs highlighted the move as a strategy to strengthen company culture and competitive advantage.
• A $1 million endowment will be given to the University of Louisville's College of Business.
• Some offices will remain in Louisville.

This relocation aims to better position KFC for future success and operational efficiency.

Sources: Food Business News, Restaurant Business

Winter Brings Flavorful Menu Innovations

Chain restaurants are heating up their menus with innovative winter items and flavor mashups.

• Burgerville unveils six new items, including spicy sliders and a breakfast biscuit.
• Jersey Mike's adds a hot honey condiment.
• Potbelly introduces Chili Mac, combining beef chili and mac and cheese.
• Hungry Howie's offers a Chili Cheese Crust Pizza.
• Krispy Kreme collaborates with Hulu for movie-themed doughnuts.
• Handel's Ice Cream launches a new flavor featuring peanut butter and caramel.
• Tijuana Flats and White Castle introduce new tacos and shrimp options.

These creative offerings aim to attract customers with bold tastes and innovative combinations this winter.

Sources: Restaurant Business, Food Business News

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