Web Exclusive | April 2013 | By Christine Blank
A Quick-Serve Rebound?
In a sign that the economic landscape might finally be rebounding for quick serves, early results from Technomic’s upcoming “Top 500 Restaurant Chain” report reveal that the fastest-growing limited-service restaurant chains in the U.S. realized average sales increases of 22.3 percent between 2011 and 2012.
Dickey’s Barbecue Pit was the fastest-growing quick-service chain, enjoying a sales increase of 46.5 percent to $249 million, along with unit growth of 40.4 percent. Firehouse Subs sales spiked 33.5 percent to $380 million, followed by Jersey Mike’s Subs (26.3 percent to $348 million), Raising Cane’s Chicken Fingers (26 percent to $260 million), and Jimmy John’s Gourmet Sandwich Shop (24.6 percent to $1.27 billion). Chipotle (a 20.2 percent sales increase to $2.716 billion) was not far behind.
“For most of these chains, it is not a change in what they are doing; it is what they have been doing successfully year after year,” says Mary Chapman, director of product innovation for Technomic. “Regional chains that are doing well are able to get high-quality financiers, and then are able to grow quickly.”
Steady, regional growth is one of the keys to Firehouse Subs’ success, says CEO Don Fox.
“We have been very disciplined in how we have grown over the past few years,” he says. “We became a strong regional brand in the Southeast and, as we created brand awareness, we reached out to adjacent areas.” Firehouse Subs plans to have 700 units open by the end of 2013, in 36 states and Puerto Rico.
Firehouse Subs’ management also continues to refine its criteria for new real estate sites for franchisees, Fox says.
“We get better and better at approving the best locations and turning down those we don’t think meet performance criteria,” he says. Still, he acknowledges that it is a difficult task; new commercial development has been stymied after the recession, and “the best sites typically stay occupied.”
Another factor contributing to Firehouse Subs’ sales growth last year was a partnership with Coca-Cola to promote the soft-drink maker’s Freestyle drink machine. “We were the first brand to advertise it, and it generated double-digit sales increases for us in the first quarter of last year,” Fox says.
Chapman says Firehouse Subs also succeeds on the customer experience and hospitality front. “They focus a lot on how to have a quick transaction that is also pleasant,” she says.
Dickey’s Barbecue Pit has excelled over the past year because of its “aggressive growth,” coupled with significant price promotions, new menu development, promotion of its catering business, and other marketing efforts, Chapman says. “They are on Facebook, Twitter, and everywhere else,” she says.
Dickey’s added 75 locations last year and plans to open 100 new units this year. Like Firehouse Subs, Dickey’s has carefully planned its growth since the company’s inception in 1941, and is now tapping into markets that are oversaturated with burgers, sandwiches, and pizza, says Roland Dickey Jr., president and CEO of Dickey’s.
“We’re energized as a brand, and I think customers and franchise owners feel the excitement about what we have to offer,” he says.
Extensive training and the customer experience Dickey’s provides have also contributed to the chain’s growth, Dickey says. “The key to our success has been creating an authentic customer experience,” he says. “From the wood-fire aroma of the smoker to the tunes playing in the background, it all sets the vibe for the total customer experience.”
Chipotle Mexican Grill’s executives believe that doing the same things well over the past few years helped with the fast-casual chain’s growth in 2012.
“The real hallmark of Chipotle—and the things that drive our business—are our food culture, which has us looking for the best ingredients from more sustainable sources, … and our people culture,” says Chris Arnold, communications director for Chipotle. “Right now, 98 percent of our restaurant mangers come from within the ranks of our crew.”
“[Chipotle is] about the consistency of their product and selling the story of their product: offering really good food that is affordable and plentiful,” Chapman adds.
Last year, Chipotle opened 183 units and finished the year with 1,410 restaurants. The company has 165–180 new stores planned for 2013.
Chapman attributes Raising Cane’s rapid growth to its streamlined menu and franchising practices. “Their success has been in their ability to recruit and retain franchise partners,” she says. “If you can grow quickly through franchising, it’s probably because you have the track record to be able to recruit high-quality franchisees.”
Food & Beverage
Thank you for signing up to receive QSR's flagship e-newsletter, A.M. Jolt. To help us better serve the information needs of our audience, please complete the information below.
In addition to A.M. Jolt, we also offer the following e-newsletters and communications. Please mark those you would like to receive.
- Business Services
- Cleaning & Sanitation
- Computer Systems/Software
- Dispensing Equipment
- Disposables, Packaging, Plastics
- Equipment Installation/Repair
- Financial Products/Services
- Food Products
- Franchise Opportunities
- Kitchen Equipment
- Safety Services/Products
- Security Systems