If anyone doubts the restaurant industry is maturing, they clearly haven’t been paying attention this week. A head-turning number of celebrated operators are reaching beyond their current fields of success to try new businesses. The announced diversifications came so fast and furiously in recent days that it was hard to note them all. Here’s a cheat-sheet of who’s looking to try what—and why heads may have spun.
1. Danny Meyer is trying the bar business
Most of the restaurants within his Union Square Hospitality Group feature a bar, but Meyer’s new Porchlight is the first standalone watering hole he’s developed. When you’ve racked up a string of critical and financial successes like Union Square Café, Gramercy Tavern, Blue Smoke and Shake Shack, people tend to notice a new undertaking like that. Meyer has flirted with the bar business through Jazz Standard, the jazz club downstairs from his Blue Smoke barbecue joint, but this will be the first time in one of his places that drinks come first and food is the complement. The New York City bar will also feature a game room and a performance stage. The Zagat Guide managed to get a representative inside for a preview.
2. Dunkin’ Donuts’ home invasion
The doughnuts-and-coffee chain has inked a deal to sell ground coffee in individual-serving K-Cups via grocery stores nationwide, a marked departure from its earlier licensing arrangement, which limited sales to Dunkin’ units. That earlier setup of having franchisees sell the K-Cups alleviated any firefights over cannibalization of sales and encroachment on exclusive sales territories. Dunkin’ is surmounting the problem in its new deal by giving franchisees half the proceeds from the sale of Dunkin’ K-Cups via supermarkets. It’s been closemouthed about how the funds will be allocated.
3. Texas Roadhouse tries a grill-and-bar concept
It’s called Bubba’s 33, described by the cowboy-themed older chain as a “family sports bar” that specializes in burgers, pizza and beer. The “33” refers to the temperature at which beers are served, as well as the percentage of meat in the concept’s signature burger that’s ground bacon rather than beef. Founder and CEO Kent Taylor says a new expansion channel is needed to provide Roadhouse employees with a new advancement path. It also provides another concept for partner-operators to develop and manage.
4. The Cheesecake Factory wants a slice of something different
Management said two weeks ago that the team may buy or brainstorm another way of building the business, and executives let the mystery stand this week as to what or when it might diversify. Nor did officials answer the obvious question, What about the alternatives Cheesecake already has, Grand Lux Café and RockSugar Pan Asian Café, a diversification from a few years ago? Management said the company will continue to focus on bolstering the profitability of Grand Lux, but uttered not a word about its Asian concept.
5. IHOP and Applebee’s adopted sister is still a mystery
DineEquity, the franchisor of IHOP and Applebee’s, said four months ago that it intended to buy a third concept to franchise. But it was no more willing to provide details this week than it was in October. We told you already that there are no specifics to report, CEO Julia Stewart said to financial analysts who dialed into Wednesday’s quarterly financial update.
“Maybe I should figure out a way to say the exact same sentence every quarter,” Stewart said in response to a question about the size and age of whatever DineEquity is hoping to buy. “But really it is absolutely what we’ve said all along, that it would not compete with family dining or casual dining, so that basically leaves specialty or fast casual.”
She added that the concept would have to be suitable for current domestic and international franchisees, and wouldn’t overtax the company’s development, marketing and franchise-support capabilities.
“So maybe it's a needle in a haystack,” Stewart said. “Maybe not. But that’s clearly what we are looking for.”