February 3rd QSR Roundup: Fast-Casual Dining Surges, Tariffs Impacting Restaurants, and Scaling with Soul

Interviewy Team

Feb 3, 2025 — 15 min read

QSR news for Feb 3rd, 2025. We reviewed 21 QSR publications, 6 subreddits, and over 69 articles to bring you the latest. Estimated reading time saved (at 200wpm): 265 minutes. It'll take you only 14 minutes to catch up.

The Rise and Evolution of Fast-Casual Dining

Fast-casual dining has transformed significantly since the early 2010s, with brands like Chipotle and Panera leading the way. The industry's entrepreneurial spirit was showcased through QSR Magazine's 40/40 List, highlighting 320 unique fast-casual concepts.

honeygrow's Journey: Founded by Justin Rosenberg after a personal health transformation, honeygrow focuses on plant-based, locally sourced meals.
Expansion: From its inception, honeygrow has expanded to over 50 locations across multiple states.
Menu Highlights: Stir-fry dishes are a hit, making up 70-75% of sales.
Overcoming Challenges: Faced with rapid expansion hurdles, honeygrow refocused post-pandemic, leading to 30 new openings in four years and more than doubling in size.
Suburban Success: Contrary to the urban-only myth, honeygrow thrives in suburban locations, emphasizing better economics.
Financial Health: Operating with essentially no debt and aiming for 30% annual unit growth, the brand emphasizes quality and operational excellence.
Consumer Value: Rosenberg believes that consumers are willing to pay for quality, setting honeygrow apart from mediocrity in the market.

Source: QSR Magazine

Tariffs Shaking Up the Restaurant Industry

The imposition of new tariffs by President Trump is set to impact restaurants across the country, affecting everything from ingredient sourcing to menu pricing.

Tariff Details:
- 25% tariffs on goods from Canada and Mexico.
- 10% tariffs on Chinese imports.
Affected Imports:
- Canada: Imports totaling $418.6 billion, including baked goods ($4.98B) and rapeseed oil ($4.80B).
- Mexico: Imports totaling $475.2 billion, including beer ($5.69B) and fresh fruits ($3.86B).
- China: Imports at $426.9 billion, including fish fillets ($985.3M) and preserved fruits ($445.9M).
Industry Response:
- The National Restaurant Association emphasizes monitoring food pricing and sourcing dynamics.
- Restaurant operators are considering menu adjustments to manage rising ingredient costs.
Economic Impact:
- Average household cost increase estimated at $830 this year.
- Potential to shrink the economy by 0.4%.
- Small restaurants may face significant challenges due to rising costs and limited pricing power.

Source: QSR Magazine, Restaurant Business, Food Business News

Dee Wells: Building an A&W Legacy

From carhop to franchise mogul, Deanne "Dee" Wells has built a remarkable legacy with A&W restaurants.

Early Beginnings: Started as a carhop at age 15 in a small Midwestern town.
Entrepreneurial Leap: Faced with competition, she added a drive-thru to her convenience store and partnered with A&W, expanding into smaller cities.
Community Integration:
- Overcame zoning hurdles and mixed community reactions.
- Became celebrated for revitalizing local economies.
- Engages communities with ice cream giveaways, scholarships, and local events.
Family Business: At 56, Dee plans to open 10 more locations, intending to pass the business on to her children.
Mentorship: Emphasizes preparing staff for future careers, receiving gratitude from those she's mentored.

Source: QSR Magazine

Sweet Valentine's Day Treats

🍩 Shipley Do-Nuts is spreading the love this Valentine's Day with heart-shaped donuts available from Feb. 10-16.

Flavors: Strawberry, cherry, and chocolate frosting.
Special Offers:
- Pre-order availability.
- Decorated Valentine’s Day box option.
- Introduction of YAYs, mini beignets available in various sizes.

Source: QSR Magazine

Just Salad Expands Leadership Team

Just Salad is bolstering its executive ranks to enhance guest experiences and propel growth.

Jennifer Lally promoted to Chief Marketing Officer:
- Excels in brand strategy.
- Led successful campaigns boosting same-store sales by double digits.
Mark Berinato appointed as Chief Experience Officer:
- Leverages over 20 years in customer engagement.
- Aims to ensure seamless, personalized guest experiences.
Stephen Blum joins as Chief Development Officer:
- Brings over two decades of real estate expertise.
- Targets expansion to nearly 100 locations this year.

Source: QSR Magazine

Chipotle and Starbucks Properties Sold

Hanley Investment Group announces the sale of high-performing Chipotle and Starbucks properties for $6.22 million in Rancho Cucamonga, California.

Property Highlights:
- Chipotle ranks in the top 25% for customer traffic in California.
- Starbucks secured a 10-year lease extension, reinforcing its commitment to a top 15% U.S. location.
Location Benefits:
- Adjacent to a major shopping center.
- City experienced a 53.5% population growth since 2010.
- Average household income of $113,000 within a five-mile radius.
Investor Interest: High demand due to esteemed corporate tenants with a 21-year operating history.

Source: QSR Magazine

Eduardo Diaz's Pizza Hut Decline: A Cautionary Tale

Once a top franchisee, Eduardo Diaz faces a dramatic downfall in his Pizza Hut enterprises.

Negotiation Struggles: Difficulty with brand compliance led to franchise disputes.
Financial Collapse: Business value decreased by 90% over three years.
Operational Decline: Poor performance metrics impacted customer satisfaction and sales.
Brand Strain: Failure to meet operational standards distanced him further from Pizza Hut.
Industry Insight: Highlights the importance of adaptability and brand alignment in franchise success.

Source: Restaurant Business

Scaling with Soul: Redefining Growth in Full-Service Restaurants

Five innovative restaurant groups are proving that growth doesn't have to compromise culture or community connection.

Leaders in Focus:
- Casa Nela Hospitality
- Hai Hospitality
- Big Red F Restaurant Group
- Lotus Concepts
- José Andrés Group
Growth Approach:
- Prioritize sustainable expansion.
- Maintain unique cultures and positive team dynamics.
- Focus on intention and community impact.
Key Strategies:
- Emphasize authentic dining experiences.
- Invest in passionate hiring and extensive training.
- Innovate menus and concepts tailored to local communities.

Source: FSR Magazine

Hai Hospitality's Culinary Journey

From a single sushi restaurant to a growing culinary empire, Hai Hospitality is making waves.

Founder: Tyson Cole opened Uchi in Austin, Texas, in 2003.
Growth:
- Now operates 12 locations across four unique concepts: Uchi, Uchiko, Uchibā, and Loro.
- Upcoming openings in Miami Beach and Charlotte, NC.
Leadership: CEO Tony Montero, with over 30 years in the industry, joined in 2017.
Employee Focus:
- Passionate hiring and extensive training programs.
- Empower staff to create authentic dining experiences.
Impressive Sales:
- Sales have tripled since 2019.
- Projected growth of 20-25% annually.
Community Connection:
- Each restaurant's design and menu are tailored to local tastes.
- Maintain high-quality service despite industry challenges.

Source: FSR Magazine

Lotus Concepts: Innovating Hospitality

Lotus Concepts is redefining guest experiences through genuine hospitality and community engagement.

Guest-Centric Approach:
- Crafting unforgettable experiences with personalized service.
- Emphasis on genuine hospitality across all venues.
Culinary Diversity:
- Restaurants like My Neighbor Felix and ViewHouse offer unique menus with over 100 local products.
Community Hubs:
- Partner with local vendors.
- Host events to foster connection and belonging.
Innovative Spaces:
- Wonderyard Garden + Table offers dynamic environments for various experiences.
Future Growth:
- Plans to expand while maintaining authenticity.
- Embrace innovative practices and technologies.
People-First Philosophy:
- Centered on connection and community.
- Aim for every guest to leave with joy and a desire to return.

Source: FSR Magazine

Creating a Homey Dining Experience with Casa Nela

Casa Nela focuses on hospitality and community, making diners feel right at home.

Founder: Carlos Suarez.
Concepts:
- Bobo: Feels like a French country home.
- Rosemary’s: Features a rooftop garden in NYC, offering seasonal Italian comfort food.
- Claudette: Captures the elegance of the French Riviera with Mediterranean dishes.
- Roey’s: Casual dining with pizzas and salads for a younger crowd.
Expansion Plans:
- Opening Rosemary’s in Miami.
Commitment:
- Focus on community, quality, and sustainable practices.
- Use fresh, seasonal ingredients in all their restaurants.

Source: FSR Magazine

José Andrés Group's Vision for Culinary Impact

Under new leadership, the José Andrés Group (JAG) is on a mission to change the world through food.

Rebranding: Formerly ThinkFoodGroup, now José Andrés Group.
Leadership: Sam Bakhshandehpour, CEO since May 2024.
Mission: Unite people with exceptional dining experiences while driving social change.
José Andrés:
- Operates 40 restaurants globally.
- Founded World Central Kitchen, serving over 3.8 million meals during disasters.
- Recipient of the Presidential Medal of Freedom.
Employee Focus:
- Emphasizes appreciation and career mobility.
- Cultivates a passion-first culture.
Culinary Innovation:
- Chefs travel globally to enhance dining experiences.
- Operate Michelin-starred establishments.
Future Endeavors:
- Opening The Bazaar House in D.C.
- Partnerships with major hotel brands.
Sustainability Efforts:
- Targeting food waste reduction.
- Collaborative projects to influence the industry.
Blending Purpose and Profit:
- Aim to create rich dining experiences while being responsible business stewards.

Source: FSR Magazine

Big Red F's Community-Driven Success

Dave Query and Big Red F are making an impact by intertwining culinary excellence with community involvement.

Expansive Reach: Operating 15 restaurants.
Community Commitment:
- Raised several million dollars for charitable causes.
- Emphasizes giving back beyond just serving food.
Diverse Concepts:
- The Post Chicken & Beer: Known for gluten-free fried chicken.
- Jax Fish House: Leaders in sustainable seafood, certified by Monterey Bay Aquarium.
- Centro: Offers vibrant Mexican dishes in downtown Boulder.
- West End Tavern: Classic tavern fare with Flatirons views.
- The Velvet Elk Lounge: Combines live music with exceptional cocktails.
- ButterPunk Cookies: Expanding to a brick-and-mortar shop in Denver.
Future Growth:
- Potential new Denver Airport location for Jax Fish House.
- Adapting to current trends while honoring traditional favorites.

Source: FSR Magazine

Dine Brands Layoffs Amid Declining Sales

Dine Brands, the parent company of Applebee's and IHOP, announces significant workforce reductions.

Layoffs:
- 9% of the corporate workforce laid off, approximately 50 employees.
Sales Decline:
- Applebee’s same-store sales down 4.1%.
- IHOP same-store sales down 1.7%.
- Fuzzy’s Taco Shop sales down 8.9%.
Reasons:
- Lower discretionary spending from consumers, especially low-income diners.
Strategies:
- Improving value messaging.
- Menu innovations.
- Exploring dual-branded units.
Support for Affected Employees:
- Offering severance packages and support services.

Source: Restaurant Dive

Emerging Pizza Chains on the Rise

While major pizza brands face challenges, emerging chains are capitalizing on market opportunities.

Industry Challenges:
- Papa John's and Pizza Hut experienced declining sales.
Marco's Pizza:
- Achieved 1,200 stores with 70 openings.
- Plans for growth in Mexico City.
- Introduced digital-centric designs and seasonal menu items.
Mr Gatti's:
- Signed 39 franchise agreements despite modest growth.
- Focused on opening in Walmart locations.
Donato’s Pizza:
- Aiming for 100 new Texas units.
- Adopted AI solutions for efficiency.
Competitive Edge:
- Marco’s aims to surpass Papa John’s to become the fourth largest pizza chain.

Source: Restaurant Dive

Pizza Hut Expands Operations Through Acquisitions

Pizza Hut strategically acquires stores to bolster its presence.

Acquisition Details:
- Purchased 18 stores from EYM Pizza at a bankruptcy auction.
- Total bid of $720,000 at $40,000 per store.
Market Impact:
- Pizza Hut's company-operated stores increase from 7 to 25 units.
- EYM's bankruptcy led to significant store closures.
Overall Presence:
- Approximately one-third of Pizza Hut's 19,927 global stores are in the U.S.

Source: Restaurant Dive

Le Creuset Brings Back Berry Hue

Le Creuset reintroduces the vibrant Berry color to its cookware lineup.

Color Revival: A bold pink-purple hue returning after disappearing in 2019.
Trend Contrast: Stands out against recent trends of muted, earthy tones.
Product Availability: Offered in key cookware styles.
Culinary Inspiration: Encourages a playful and creative spirit in the kitchen.

Source: Eater

The Future of Fast-Casual Restaurants

Fast-casual dining is adapting to evolving consumer needs and market conditions.

Growth Predictions:
- Expected rise from 1.3% in 2024 to 2.0% by 2026.
Market Leaders:
- Chains like Chipotle and Shake Shack continue to thrive.
Industry Challenges:
- Some smaller chains facing bankruptcy.
Shift in Sales:
- Takeout and delivery now dominate, leading to a focus on efficiency over dine-in experiences.
Menu Trends:
- Chicken dishes are dominant, with chains like Raising Cane's seeing a 27% sales increase.
Technological Advancements:
- Enhanced customer experience through better ordering systems.
- Loyalty programs and data mining for improved productivity.

Source: Foodservice Equipment & Supplies

Food Bank of Eastern Oklahoma Expands to Fight Food Insecurity

The Food Bank of Eastern Oklahoma enhances its capabilities with a major renovation.

New Facility:
- Expanded to 157,500 square feet.
- Added a bulk food warehouse, kitchen, and partner agency shopping center.
Mission Goals:
- Five-year vision to reduce child food insecurity from 25% to below 20%.
Challenges Overcome:
- Completed expansion in phases over five years without interrupting food distribution.
Kitchen Upgrade:
- State-of-the-art kitchen with top-grade equipment.
Community Impact:
- Services over 600 pantries and programs.
- Relies on volunteer support for operations.
Innovative Solutions:
- Mobile Market Initiative to address food deserts.
Fundraising Efforts:
- Upcoming dinner party scheduled for May 17, 2025, to support distribution efforts.

Source: Foodservice Equipment & Supplies

Cedar Rapids' Kolache Bakery Boosts Production

Just in time for the Kolach Festival, Cedar Rapids opens a new community center with a full-service bakery.

Investment:
- Construction cost of $9 million, with $500,000 for the bakery.
Facility Features:
- 35,000-square-foot center includes church administration, classrooms, and an industrial bakery.
Production Milestones:
- In 2024, 54 volunteers produced 60,000 kolaches in three hours.
- Expected to double production to 120,000 kolaches in 2025.
Efficiency Improvements:
- Advanced design features streamline production.
- New air conditioning enhances volunteer comfort.
Community Support:
- Kolach sales fund local charities and community initiatives.

Source: Foodservice Equipment & Supplies

Unified Commerce: The Retail Revolution

Unified commerce is becoming essential for retailers seeking seamless customer experiences.

Integration Benefits:
- Centralizes various sales channels.
- Tracks inventory, sales, and customer interactions in real-time.
Efficiency and Scalability:
- Enhances systematic inventory management.
- Allows easy addition of new sales channels.
Industry Examples:
- Retailers like Zara and Walmart provide consistent pricing and stock levels across platforms.
Challenges:
- High initial investment.
- Need for robust cybersecurity measures.
Key Platforms:
- Shopify and BigCommerce are leading solutions for adopting unified commerce.

Source: BlueCart

Navigating Immigration Changes in the Restaurant Industry

New immigration laws present challenges that impact workforce stability in restaurants.

Key Changes:
- Stricter E-Verify requirements.
- Increased ICE audits.
- Restrictions on temporary work visas.
Potential Impact:
- Workforce shortages.
- Legal compliance complexities.
Strategies for Adaptation:
- Compliance: Use E-Verify and conduct regular I-9 audits.
- Recruitment: Tap into underutilized labor pools and partner with local programs.
- Technology: Invest in self-ordering kiosks and AI scheduling tools.
- Retention: Offer training and flexible schedules.
Looking Ahead:
- Proactive planning and embracing innovation are key.
- Industry associations and networking can provide support.

Source: Modern Restaurant Management

Brea Baker on Historical Land Theft and Reparations

Activist Brea Baker sheds light on the historical expulsion of Black farmers and the call for reparations.

Family Legacy: Six generations of Black land ownership dating back to the mid-1860s.
Historical Injustices:
- Significant land loss due to predatory taxes and corporate takeovers.
- Pigford case highlighted discrimination against Black farmers.
Rooted: Baker's book emphasizes the need for reparations and addressing racial injustice.
Modern Movements:
- Advocates for community interdependence, like community gardens.
- Connects historical trauma to current efforts for Black and Indigenous land ownership.
Stark Realities:
- Only 1% of rural U.S. land is owned by Black individuals today.
Call to Action:
- Encourages connection with elders and reclaiming historical narratives.
- Emphasizes solidarity in reparative justice efforts.

Source: Civil Eats

USDA Scrubs Climate Change Content

Significant shifts in USDA's approach to climate change are raising concerns.

Content Removal:
- Deleting web pages related to climate change.
- Halting billions in climate-related grants.
Internal Actions:
- Officials compiling a list of all climate change references for removal.
Historical Context:
- Under Trump, "climate change" was eliminated from USDA language.
Impact on Farmers:
- Facing increased climate-related disasters like hurricanes and droughts.
Global Implications:
- Solutions in agriculture are critical for slowing global warming.

Source: Civil Eats

EPA Employee Layoffs Amid Climate Policy Shifts

A leaked email reveals potential terminations at the EPA.

Layoffs:
- Over a thousand employees, primarily focused on climate change, face termination.
Reasoning:
- Applies to staff hired in the last year.
- EPA aims to enhance governmental effectiveness.
Agency Role:
- Vital in supplying data on greenhouse gas emissions and climate impacts on agriculture.
Uncertainty:
- Specific actions from administrator Lee Zeldin not confirmed.

Source: Civil Eats