The Cheesecake Factory is branching into a new restaurant segment, as the brand is slated to open its first fast-casual concept later this year.
The fast casual will debut in Los Angeles, Cheesecake Factory CEO David Overton revealed during an earnings call on Wednesday. Overton did not share the name or menu direction of the concept, but did say that it was developed internally and a site had been chosen. The 2018 opening date is contingent on the completion of lease negotiations, he said.
Although Cheesecake Factory had previously invested in Flower Child, Fox Restaurant Concepts’ fast casual, this is the first the chain is developing from the ground up. Other plans the chain has in the works for this year: Boosting focus on off-premise growth, with a nationwide online ordering platform to be rolled out by the end of March.
“To-go orders accounted for 12% of sales in Q4, and we project them to reach 13% to 14% in 2018,” said David Gordon, Cheesecake Factory president, during the call. In 2017, the chain teamed up with third-party delivery partners to expedite off-premise growth, and 90% of its locations now offer delivery. Although Gordon wouldn’t say how much delivery contributed to the bump in off-premise sales, he did report that it was “the biggest piece of that growth.”
Comps at Cheesecake Factory declined 0.9% year over year in the fourth quarter of 2017, and total revenues fell to $571.89 million from $603.1 million during the year-ago quarter, a drop CFO Matt Clark attributes partly to food and labor inflation.
The launch of new company-owned stores was on track during the quarter, and Overton was particularly bullish about the new Toronto Cheesecake Factory—the first company-owned international location. More than 400 customers waited in line for hours to get a table on opening day, and demand continues to be strong, he said. In addition, solid traffic at the chain’s first licensed location in China could spell more openings in that country, he said.
On the domestic front, the company expects to open up to six company-owned units in the coming year, including one Grand Lux Cafe.