October 32nd: QSR Roundup: Fast-Food Innovations Drive Exciting Developments Amid Ongoing Challenges

Interviewy Team

Interviewy Team

— 9 min read
October 32nd: QSR Roundup: Fast-Food Innovations Drive Exciting Developments Amid Ongoing Challenges
QSR news for Oct 32nd, 2024. We reviewed 21 QSR publications, 6 subreddits, and over 60 articles to bring you the latest. Estimated reading time saved (at 200wpm): 194 minutes. It'll take you only 13 minutes to catch up.

FAT Brands' Strategic Growth and Challenges

FAT Brands has demonstrated remarkable resilience with a 31.1% revenue growth, totaling $143.4 million, even amidst a net loss of $44.8 million in Q3. While same-store sales have dipped by 2.7%, the company is actively pushing to develop 1,000 new stores. Notably, nine new Twin Peaks locations have opened this year, bringing the total to 115, and the company has successfully converted its first Smokey Bones to Twin Peaks. Plans to potentially take Twin Peaks and Smokey Bones public are underway, exploring options like direct listing or SPACs. FAT Brands aims to de-leverage and seek profitability through strategic debt refinancing starting in 2025.

Source: Nation's Restaurant News

Shake Shack's Festive Season Offerings

Shake Shack is embracing the holiday spirit by introducing new merchandise and themed shakes. Their holiday merchandise includes four unique ornaments, an ugly sweater, and a flavor-enhancing truffle duo. Additionally, new shake flavors like the Christmas Cookie Shake, Chocolate Yule Log Shake, and Apple Cider Donut Shake are available, each priced from $6.49. These offerings are available nationwide at Shacks and online at shackstore.shakeshack.com.

Source: Nation's Restaurant News; QSR Magazine

Wendy's Accelerates Restaurant Closures for Enhanced Performance

Wendy's has expedited its plan to close underperforming restaurants, reducing the timeline from 2025 to 2023. This year, 140 units are set to close, focusing on outdated locations and those with poor sales performance. The company is also aiming for new locations with over $2 million in average unit volume to boost profitability. CEO Kirk Tanner highlighted the strategy to replace older sites with better-performing ones to strengthen the chain. Despite these closures, Wendy's third-quarter results showed a 2.8% increase in same-store sales globally, indicating growth amid strategic changes. New promotions include collaborations with Coca-Cola Freestyle and seasonal items like the Salted Caramel Frosty and a premium mushroom burger, with revenue increasing to $566.7 million and net income at $50.2 million.

Source: Nation's Restaurant News

Church’s Texas Chicken Revives Its Original Recipe to Combat Competition

Church’s Texas Chicken is bringing back its original 1952 recipe as a strategic move against rising competition in the chicken sector. The reintroduced recipe features hand-battered, double-breaded chicken, emphasizing bold flavors and simplifying preparation for staff. Promotions include two-piece meals starting at $2.99 and Family Packs at $10.99. With domestic sales reaching $803 million in 2023 and over 1,500 locations globally, Church’s aims to celebrate its legacy while driving future growth.

Source: Nation's Restaurant News

McDonald’s Faces $5 Million E. Coli Lawsuit Amid Outbreak

McDonald's is embroiled in a class action lawsuit over an E. coli outbreak linked to its Quarter Pounders, with damages exceeding $5 million. The outbreak, affecting at least 75 cases across several states, resulted in one death and multiple hospitalizations, including a 15-year-old with acute kidney failure. The outbreak was traced to contaminated slivered onions from a supplier that has since been dropped. McDonald's is facing accusations of negligence and product liability, prompting swift legal action and recalls to mitigate the situation.

Source: Nation's Restaurant News; Restaurant Business

Chipotle Enhances Operational Efficiency with Back-of-House Upgrades

Chipotle is upgrading its back-of-house operations to boost efficiency. The company is testing a dual-sided plancha and dual-backed fryer, and introducing a produce slicer. Despite a dip in third-quarter results, Chipotle reported a 6% increase in same-store sales and overall sales growth of 13%, reaching $2.8 billion. The return of Smoked Brisket and the launch of Chipotle Honey Chicken have driven incremental transactions, with expectations to continue into the fourth quarter. The strategy focuses on improving throughput and operational excellence to enhance customer satisfaction and profitability.

Source: Nation's Restaurant News

GPS Hospitality's Leadership Drives Industry Transformation

Under CEO Tom Garrett, GPS Hospitality has revolutionized the fast-food landscape by focusing on culture and excellence. Over the past 12 years, GPS has built a strong leadership team and become an industry icon. Garrett’s inspirational vision, inspired by Michael Jordan’s winning shot, emphasizes performance over other factors. Founded in 2012 with the acquisition of 42 Burger King restaurants, GPS identified and addressed operational flaws, such as poor handling of customer complaints, to enhance service quality and drive growth.

Source: QSR

Chuck E. Cheese Launches STEAM-tastic Adventure Program in Partnership with STEM.org

Chuck E. Cheese is partnering with STEM.org to introduce the STEAM-tastic Adventure program, launching in March 2025. Designed for kids ages 3-5 and 6-8, the program blends fun with essential STEAM concepts, led by Chuck E. Cheese characters and a STEAM influencer. Available at over 450 locations nationwide, the initiative includes a free kickoff event on National STEM Day, November 8, offering activities like paper plane experiments. Chuck E. Cheese has also raised over $21 million for schools, continuing its commitment to community engagement and educational support.

Source: QSR Magazine

Autonomous Delivery Revolutionizes Restaurant Logistics

The advent of autonomous deliveries, particularly drones, presents significant opportunities for restaurants to innovate their logistics. Drones offer a faster and cheaper alternative to traditional car deliveries, especially as labor costs rise. The FAA's Beyond Visual Line of Sight (BVLOS) certification in 2023 has facilitated mainstream drone usage. With advanced Detect-and-Avoid systems, drones can operate safely and efficiently, managing up to 20 drones per operator compared to human drivers. This shift enhances profitability and customer satisfaction by allowing restaurants to serve a higher volume of orders more quickly.

Source: QSR Magazine

Slim Chickens Achieves 70% Growth with Tech Integration and Southern Hospitality

Slim Chickens has experienced rapid expansion, boasting a 70% growth in the past three years with nearly 300 open locations and 1,200 more in development. Franchisees benefit from an average annual unit volume (AUV) of $2.5 million, peaking at $3.8 million. The brand supports franchisees through Slim Chickens University and two weeks of in-person assistance for store openings. A 40% increase in same-store sales over the last 4-5 years is attributed to their commitment to fresh ingredients and a simplified chicken-centric menu. Embracing tech innovations like AI in drive-thrus and customer-facing kiosks, Slim Chickens balances Southern hospitality with modern advancements to maintain exceptional customer service and operational efficiency.

Source: QSR Magazine

Fast-Food Marketing Triumphs Amid Economic Pressures

Fast-food chains like Wendy's and McDonald's continue to achieve strong sales through innovative marketing strategies. Wendy’s Krabby Patty Kollab enjoyed strong sales, while McDonald’s Chicken Big Mac has gained significant traction, demonstrating that creative promotional efforts can successfully navigate challenging consumer environments. These successes highlight that effective marketing remains a crucial tool in the fast-food industry, helping brands to sustain growth despite economic fluctuations.

Source: Restaurant Business

PopUp Bagels, a New York-based bagel concept known for its 'grip-rip-and-dip' style, is launching its franchising efforts under new CEO Tory Barlett, following an $8 million funding round that included investors like Paul Rudd and Michael Strahan. The brand plans to expand around New York and Miami, focusing exclusively on bagels and an ever-changing selection of schmears. Each bagel is sold in batches, emphasizing a unique, party-like customer experience. With nearly 12,650 U.S. stores, 7-Eleven is also enhancing meal options, including fresh pizzas and the new Philly cheesesteak pizza.

Source: Restaurant Business

Paytronix Acquisition Enhances Access Group’s Market Reach

The Access Group has acquired Paytronix, a leading digital loyalty program provider, to enhance its U.S. market presence. Although the deal terms remain undisclosed, this acquisition marks a significant milestone for Access, expanding its restaurant technology offerings like waivers and online ordering. Paytronix, founded in 2001, serves over 1,800 brands in 50,000 locations and will retain its brand post-acquisition. This move is expected to drive accelerated growth and provide a broader service offering, as loyalty programs continue to gain popularity with over 60% of limited-service operators set to invest in 2023.

Source: Restaurant Business; QSR Web

BurgerFi’s Future in Doubt Amid Franchisee Concerns Post-Bankruptcy

BurgerFi, a better-burger chain, has been sold out of bankruptcy to TREW Capital for $44 million, alongside Anthony’s Coal Fired Pizza & Wings. This follows a Chapter 11 bankruptcy filing in September after a brief period as a public company. Franchisees are skeptical about the potential for recovery due to past management issues, raising concerns about the brand's long-term viability. 19 underperforming units have been closed, impacting 67 corporate-owned locations while franchised locations remain unaffected. New management aims to revitalize operations through improved vendor partnerships and a streamlined workforce.

Source: Restaurant Business

Rising Back Injuries Among Restaurant Workers Due to Increased Deliveries

The surge in delivery orders has led to a rise in back injuries among restaurant workers, linked to the physical demands of handling multiple orders. According to AmTrust Financial Services, back injuries account for a significant portion of high-compensation workers' comp claims. Key findings include:

  • Delivery workers now lift multiple orders, resulting in more musculoskeletal injuries.
  • Back injury claims range from $60,000 to $85,000, significantly higher than claims for common cuts or burns.
  • Common injuries also include fingers and hands, with payouts averaging $2,164 and $3,733, respectively.
  • From 2018 to 2023, AmTrust handled nearly 32,000 claims, highlighting back injuries as a growing concern.
  • Experts recommend implementing training on proper lifting techniques to mitigate injury risks.

Source: Restaurant Business

Starbucks Reimagines Store Experience to Boost Traffic and Efficiency

Under new CEO Brian Niccol, Starbucks is undertaking a transformation to revert to a classic coffee shop ambiance. Key initiatives include:

  • Return of ceramic mugs to enhance the in-store experience.
  • Store redesign focused on warmth and comfort to encourage longer visits.
  • Condiment coffee bars set to return by 2025, allowing customers to customize drinks.
  • Introduction of Clover Vertica brewers to speed up coffee service, aiming for drinks ready in four minutes.
  • Streamlined drink handoff processes and separation of mobile-order channels from in-store experiences to reduce wait times.
  • Investment in Siren System and labor enhancements to support increased traffic and efficiency.

Despite facing a 10% decline in transactions, Starbucks aims to revive customer traffic through these strategic changes, emphasizing staff adequacy and operational efficiency across all service points.

Source: Restaurant Business; Restaurant Dive

Franchise Insights: Sweet Treats and Digital Engagement

FAT Brands is enhancing digital engagement through the launch of the Great American Cookies and Marble Slab Creamery Rewards App, offering loyalty rewards, birthday surprises, and discounts to streamline customer experiences and increase foot traffic. This follows their co-branded online platform aimed at fostering loyal customer relationships.

Source: QSR Magazine

The 2024 menu trends reflect a shift towards high-end flavors, sustainability, and technological integration. Key trends include:

  • Global flavors and sustainability practices integrated across all restaurant tiers.
  • Street food evolution with food trucks transforming into upscale dining spots.
  • Gourmet toppings on classic dishes like French fries, including truffles and caviar.
  • Menu simplification, focusing on fewer, high-quality items.
  • Plant-based options expanding in quality and diversity, including breakfast items.
  • Continued popularity of spicy foods and specialty hot sauces.
  • Introduction of robotics in kitchens to address labor shortages.
  • Fusion cuisine developing specific culinary identities instead of chaotic mixes.
  • Rise of spirit-free drinks, offering quality non-alcoholic options in bars.
  • Radio Frequency Cooking technology offering gentle and rapid cooking without compromising quality.

These trends emphasize creativity and innovative dining experiences, aiming to meet evolving consumer needs and preferences.

Source: Foodservice Equipment & Supplies

Franchise Growth: Slim Chickens and Zaxby's Expansion

Slim Chickens has achieved significant growth with a 70% increase in the past three years and plans for 1,200 more locations. The brand focuses on fresh ingredients, simplified menus, and technology integration to maintain growth and operational efficiency. Zaxby's is also set to expand into Pennsylvania and New Jersey, with plans to open up to 10 locations in the next five years, driven by franchisee George Abdelmessieh's personal connection to the brand.

Source: QSR Magazine; Fast Casual

Community and Mental Health Initiatives in the Restaurant Industry

Giving Kitchen appoints Nancy Oswald as Chair of the Board to expand disaster relief efforts for food service workers. Additionally, mental health among farmers remains a critical issue, with initiatives like Agriwellness and legislative support through the 2018 Farm Bill aiming to reduce suicide rates and improve well-being in agricultural communities.

Source: FSR Magazine; Civil Eats

Tech Innovations: Autonomous Deliveries and Digital Loyalty Programs

The rise of autonomous deliveries, particularly through drones, is revolutionizing restaurant logistics by enhancing efficiency and reducing costs. Concurrently, digital loyalty programs like those from Paytronix are becoming essential, with over 60% of limited-service operators planning to invest in 2023, driven by the increasing demand for personalized customer engagement.

Source: QSR Magazine; QSR Web; Restaurant Business

Alternative proteins, particularly plant-based, algae, and insect proteins, are gaining traction due to health and sustainability benefits. Meanwhile, ocean farming must be approached cautiously to mitigate environmental risks and protect marine ecosystems. The industry is pushing towards sustainable and innovative food production solutions, reflecting consumer demands for healthier and eco-friendly options.

Source: Food Industry Executive; Civil Eats

Reddit Insights: Restaurant Operations and Staffing Challenges

Discussions on Reddit highlight the importance of effective digital menu solutions, the debate over the necessity of branded apps, and the critical role of beverage sales in restaurant profitability. Additionally, restaurant owners share strategies for staffing during slow seasons, emphasizing overstaffing initially and maintaining labor budgets. Collaboration among restaurant owners is both welcomed and met with skepticism, reflecting the diverse approaches to common industry challenges.

Source: /r/restaurantowners; /r/restaurateur; /r/Restaurant_Managers; /r/fastfood; /r/restaurant

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