January 15th QSR Roundup: Strategic Acquisitions, New Policies, and Innovative Expansions

QSR news for Jan 14th, 2025. We reviewed 21 QSR publications, 6 subreddits, and over 107 articles to bring you the latest. Estimated reading time saved (at 200wpm): 300 minutes. It'll take you only 8 minutes to catch up.

Major Acquisitions and Sales in the Restaurant Industry

Pizza Factory Acquired by Wonder Franchises

The investment firm Tucker’s Farm Corporation has acquired the 110-unit Pizza Factory, forming Wonder Franchises to manage operations. CEO Mary Jane Riva will continue to lead the brand, which boasts $94 million in system sales and partnerships with 84 franchisees. To celebrate its 40th anniversary, Pizza Factory is offering franchise incentives, including 40% off fees and no royalties for four months.

Crumbl Explores Potential $2 Billion Sale

Crumbl Cookies is considering a potential sale that could value the company at around $2 billion, working with North Point investment bank. Despite expanding to nearly 1,100 locations since 2017, the chain has faced a 37% drop in average revenue per location and a 59% decrease in net profit. Challenges include layoffs and store closures, yet the brand continues to grow, opening a net of 184 new shops in the past year.

Twin Peaks Plans IPO and Aggressive Expansion

Twin Peaks, known for its lodge-like setting and all-female waitstaff, is set for an IPO on January 30 under the ticker TWNP. The chain is valued between $1.04 billion and $1.28 billion and plans to expand to 650 U.S. locations and 250 internationally. Despite a 3.7% decline in same-store sales recently, the company projects sales between $580 million and $590 million in 2023.

Sources: QSR Magazine, Restaurant Business, FSR Magazine

Starbucks Implements New Code of Conduct

Starbucks is enforcing a new policy requiring customers to make a purchase before sitting inside or using the restroom, effective January 27. This move reverses the 2018 open-door policy enacted after a controversial incident involving the arrest of two Black men. The new code prohibits discrimination, alcohol, smoking, and panhandling, aiming to improve the in-store experience and safety.

• Free Refills for All: Starting January 27, all customers can enjoy free coffee refills, not just rewards members.
• Employee Feedback: Staff have expressed a desire to return to a traditional café experience focused on community and customer connection.

Sources: QSR Magazine, Restaurant Business, Restaurant Dive, Food & Wine, Nation's Restaurant News

Shake Shack's Ambitious Expansion Plans

Shake Shack is set to quadruple its current count, aiming for 1,500 restaurants up from the existing 330. The company opened 76 locations in 2024, including 43 corporate units, and has seen the average unit volume (AUV) rise to $4 million with a 22.7% restaurant-level profit margin in Q4.

• Workforce Growth: Plans to hire 45 new managers to support new openings.
• Operational Enhancements: Focus on improving operations and service speed, crucial for suburban drive-thru markets.
• Tech Investments: Aiming to enhance guest connection and retention with personalized experiences.

Sources: QSR Magazine, Restaurant Business, Nation's Restaurant News

Panera Bread's Leadership Changes

Panera Bread has revamped its leadership team, appointing Scott Uehlein as VP of Culinary and Robin Seward as SVP of Brand and Integrated Marketing. Uehlein brings over 30 years of experience from roles at Papa Johns and Sonic, while Seward comes from Subway and Arby's. The chain aims to drive innovation in marketing strategies and menu offerings.

Sources: Restaurant Business, Restaurant Dive, Foodservice Equipment & Supplies, Food Business News

Chipotle Invests in Sustainability Initiatives

Chipotle Mexican Grill is tackling meat's climate impact through strategic investments in sustainability.

• Investment in CH4 Global: Developing cattle feed from red seaweed to reduce methane emissions by up to 90%.
• Partnership with Plantible: Producing Rubi Protein from duckweed as a sustainable plant-based substitute mimicking meat quality.

These initiatives aim to reduce emissions while expanding plant-based offerings, contributing to climate change mitigation.

Sources: Restaurant Dive, Nation's Restaurant News

Portillo's Enhances Drive-Thru Efficiency with AI

Portillo’s is testing computer vision AI technology to improve drive-thru efficiency, aiming to reduce average wait times from 15 seconds to an additional 45 seconds, striving for a total of 5 minutes. The company is also launching a new rewards program, Portillo’s Perks, by the end of Q1.

• Real-Time Data Monitoring: AI aids managers in monitoring customer wait times, enabling better labor management.

Sources: Restaurant Dive, Nation's Restaurant News

Restaurant Pricing Trends and Economic Impact

• Restaurant Menu Prices: Increased by 0.3% last month, with a 3.6% rise over the past year.
• Grocery Prices: Also saw a 0.3% increase in December and 1.8% year-over-year.
• Inflation Gap: The difference between restaurant and grocery price inflation narrowed to 180 basis points, the lowest since April 2023.
• Consumer Spending: Analysts express concern that the persistent price disparity could impact the restaurant industry's same-store sales in early 2025.

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

Industry Embraces Mergers and Acquisitions

• Franchisors Engage in M&A Trends: Crumbl's potential sale follows successful acquisitions of Tropical Smoothie and Jersey Mike’s in 2024.
• Pizza Factory's Acquisition: Tucker’s Farm Corp. acquires Pizza Factory Inc., integrating it into the Wonder Franchises division with approximately $30 million capital.

Sources: Restaurant Business, QSR Magazine

El Pollo Loco Enters the Chicken Sandwich Wars

El Pollo Loco is testing a chicken sandwich for the first time in years, responding to customer demand after previously staying out of the Chicken Sandwich Wars.

• Menu Innovation: Part of a three-year turnaround plan under CEO Liz Williams.
• New Products for 2025: Including Mango Habanero chicken flavor and Fresca Wraps.
• Focus on Value: Aiming to create items priced between $7 to $9.

Sources: Restaurant Business

Technology and Innovation in the Industry

AI Enhancements and Payment Optimization

• Portillo’s AI Implementation: Testing computer vision AI to reduce drive-thru wait times.
• Payment Strategies: Restaurants are optimizing payment systems to enhance profitability, utilizing AI auditing tools to cut transaction fees and prevent fraud.

Investment in Honest Greens

• Ron Shaich's Act III Holdings invests in Honest Greens, a health-focused fast-casual brand in Spain and Portugal, aiming for European expansion.

Sources: Restaurant Dive, Modern Restaurant Management, Restaurant Business

Restaurant Trends: Ranch Dressing and Protein Bowls

• Rise of Ranch Dressing: Several chains are introducing or highlighting ranch dressing options.
  • Burger King: Tested an 8-ounce cup for burger dipping.
  • Jimmy John’s: Revamped its Kickin’ Ranch sauce.
  • Taco Bell and Sweetgreen: Introducing their own ranch varieties.
• Protein Bowls Popularity: Low-carb, high-protein bowls are trending as healthier menu options.

Sources: Restaurant Business

Industry Figures Reflect on Leadership and Resilience

Phil Scotti and P.J. Clarke’s

• Community Service: Phil Scotti emphasizes community engagement and support for organizations like Operation Mend.
• Leadership Style: Inspired by his Marine background, focusing on communication and teamwork.

Revamping Casual Dining

• Labor Shortages: Approximately 450,000 workers are missing in the restaurant sector.
• HERO Model Introduction: A new operational model aimed at improving service delivery and employee retention.

Sources: Total Food Service

Vegan Dairy and Recipes Trending

The global dairy alternatives market is booming, estimated at $30 billion and growing at 12% annually. Plant-based milks like coconut, almond, and soy lead the market, and vegan cheeses mimic both hard and soft varieties.

• Health Benefits: Vegan dairy provides nutrients without lactose or common allergens.
• Popular Recipes: Vegan pancakes, creamy pastas, and plant-based beverages are becoming menu favorites.

Sources: BlueCart

Starbucks Workers Raise Safety Concerns

Starbucks Workers United criticizes the company for requiring baristas to work despite wildfires affecting air quality in the LA area.

• Company Response: Starbucks maintains that partner safety is a priority and that stores remain open only when deemed safe by authorities.

Sources: Salon

Food Prices Rise Again

• Food Price Increase: December saw a 0.3% rise in food prices, with a total 2.5% increase over 2024.
• Egg Prices Surge: Up 3.2% for the month.
• Restaurant vs. Grocery Prices: The price gap is narrowing, with potential impacts on restaurant industry sales.

Sources: Food Industry Executive

Checkers and Rally's Expand to Las Vegas

• New Locations: Opening three new locations in Las Vegas, operated by LV Foodservice.
• Brand Nostalgia: Aiming to enhance the travel plaza experience, tapping into customers' nostalgic connections.

Sources: Fast Casual

KFC Leadership Change

Scott Mezvinsky has been promoted to KFC Division CEO, effective March 1. He brings over 20 years of experience with Yum Brands, previously leading Taco Bell North America.

• Global Growth: Aims to expand KFC's reach in over 150 countries with more than 30,000 restaurants.

Sources: Fast Casual

Fine Dining Restaurant Viability

Discussions on whether opening a fine dining restaurant is a wise investment, with opinions suggesting it may not be feasible due to high startup costs and changing consumer preferences.

• Challenges: High initial investment, incompatibility with delivery apps, financial risks.

Sources: Reddit /r/restaurant

AI and Robotics in Restaurants

Restaurant Food Delivery Robot

• Mixed Reactions: Some patrons enjoy the novelty, while others express concerns about reduced human interaction and service quality.
• Efficiency: Questions arise about robots' effectiveness compared to human servers.

Sources: Reddit /r/restaurant

Other Notable Industry Updates

Jarritos Launches Jarriboba

• New Boba Tea Line: Flavors include kiwi-watermelon, mango-passion fruit, and strawberry-guava.
• Availability: Sold in 16.4-oz cans, currently in Atlanta with plans for expansion.

Sources: Food Business News

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