Let’s first agree that most operators would consider it good news to find themselves in the company of the top-grossing restaurant chains in the U.S. When the lowest point in a ranking still represents $44 million in systemwide sales, even a triple-digit spot on the list is a win.
But there is something some members of this distinguished class take issue with—one word that has several operators in the Technomic Top 500 Chain Restaurant Report shifting uneasily in their seats. The word “chain.”
Last year saw many QSRs retreat from their overgrown menus, pruning the number of offerings and getting back to basics. But despite this push to make America’s chains great again, operators still are fighting to unshackle themselves from the notion of a one-size-fits-all model.
It may be because consumer backlash against big brands is intensifying, as Technomic SVP Patrick Noone told an audience of executives at our Restaurant Leadership Conference in April. About 40% of consumers say they would rather visit independent restaurants, according to Technomic’s research.
Beyond the go-to tactic of elevating menus and honing messages of differentiation, multiunit operators are flat-out rebuking the term “chain.” Legal Sea Foods owner Roger Berkowitz famously told customers in television ads, “You can call me stupid, an egomaniac or even an [expletive]. Just don’t call me a chain.” J. Alexander’s hammers home the term “unchained” in talking points to its shareholders, describing itself as a restaurant “that feels ‘unchained’ with architecture and design that varies from location to location.” And Canadian operator Earls Restaurants issued a press release in which President Mo Jessa declared, “We are unchaining the chain restaurant.” Its approach? “Expect to see the future of Earls less as a chain and more of a collective of individually compelling restaurants influenced, in part by our history and our experience, in part by inspired collaborations, but more by its location, market and purpose.”
It’s a trend that shows little sign of slowing, now that the numbers suggest it’s a strategy that’s working—or at least helping sales.
California Pizza Kitchen has been converting its stores over to its “Next Chapter” design and menu. In addition to boosting local ingredients on menus, CPK is tailoring each revamped store to its local market. As EVP and Chief Brand and Strategy Officer Natalia Franco told
SmartBlogs this spring, the transformation “is fueling growth in sales and guest counts, and our perception scores are up on experience, quality, taste and value.”
McDonald’s also is seeing success with its regionalized menu plays. The Gilroy Garlic Fries—made with garlic grown in Gilroy, Calif.—it tested at four San Francisco units sold out within days, prompting several news outlets to call the item one of the chain’s most successful tests ever.
While these artists formerly known as chains hone their regional game, at least one operator notably is embracing the idea of scaling up a regional mission on a national level. As Technomic President Darren Tristano says in our Top 500 coverage, a good part of Smashburger’s success can be attributed to it maintaining its regional bent—with local menu items and beers—even as it spreads out across the map. “Chain” or no “chain,” it’s about striking the right balance.