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What’s driving—and deterring—growth?

These trends are impacting the bottom line for chain restaurants, both positive and negative.
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Top 500


One of the biggest themes to emerge from this year’s Top 500 ranking is the continued slowdown of chain growth. Aggregate sales from the Top 500 chains rose just 3.1% in 2017, down from 3.5% the previous year. Total sales growth for the entire restaurant industry rose 3.5%, though, showing that independent restaurants are outpacing the Top 500 chains. This paradigm shift between chain and independent restaurant growth began in 2014 and is expected to continue, says Joe Pawlak, managing principal with market research firm Technomic. Technomic expects chain growth to reach only about 3.5% over the next few years, says Kevin Schimpf, Technomic’s manager of industry research. Still, chains are seeing healthy pockets. Here's a look at some of the trends most influencing the largest chains as well as newcomers to the Top 500.

Off-premise

Nearly half of the top 100 chains have said they are testing or have committed to developing delivery service. At first, several chains jumped into delivery in order to compete, learning in real time. Now, many have moved beyond that phase and are taking a closer look at understanding the challenges and economics of the off-premise market. They are examining third-party versus self-delivery, full or limited menus, packaging and more.

National brand relevance

Casual-dining chains are struggling to stay relevant, especially with millennials and Gen Z customers who are not visiting these concepts. While Technomic’s Joe Pawlak predicts that there will be some reprieve for this fledgling segment, “They will need to reinvent themselves. They will need to look at technology,” he says. Delivery is where they can play strong, he adds, if done correctly via a combination of menu, packaging and value.

Beyond the dayparts

Four out of five consumers say they snack between meals once a day, and their definition of snacks expands beyond a granola bar or bag of chips. So operators are adjusting to capture between-meal dollars. Menu developers are thinking beyond breakfast, lunch and dinner, from shareable snacks offered at happy hour to protein-rich, on-the-go snack boxes and sides that sub in as snacks.

Restaurants get smarter

To gain more consumers who want to feel a personal connection to the restaurants they frequent, marketing continues to shift from broad, national campaigns to hyperpersonalized, targeted efforts. And social media is just the start to build that loyalty and drive repeat visits. Operators are collecting data on their customers through apps, geotracking and more to better understand their audience and what drives purchasing behavior.

Dollar infusions

Private-equity and investment firms poured a lot of money into chains in 2017. Torchy’s Tacos, among the top 10 in both sales and unit growth, sold a minority interest to General Atlantic last April.

Leadership turnover

Domino’s, Chipotle and others saw the resignation of longtime CEOs, while other big brand higher-ups moved to smaller chains, such as Paul Damico moving from Focus Brands to Naf Naf Grill.

Biggest Sales Growth

Chain NameTop 500 Rank2017 Sales ($000,000)% Growth2017 AUV
MOD Pizza137$270M80.2%1,325
Blaze Pizza136271.448.9%1,400
Shake Shack109358.833.6%4,598
First Watch12531331.8%1,425
Fuzzy's Taco Shop184188*31.7%1435*
Cooper's Hawk Winery & Restaurants149241.830.5%8,775
Raising Cane's Chicken Fingers50966.430.2%3,132
WaBa Grill207161.1*26.0%950*
Tropical Smoothie Cafe10139325.1%675
Torchy's Tacos18818523.3%3,600

Biggest Sales Decline

 Top 500 Rank2017 Sales ($000,000)% Growth2017 AUV
Old Country Buffet/HomeTown Buffet174$206.5M*-37.2%2810*
Joe's Crab Shack135275*-25.7%3150*
Quiznos200170.9*-22.4%395*
Tilted Kilt Pub & Eatery221143*-20.8%2180*
Romano's Macaroni Grill158222.5*-17.0%2060*
Ruby Tuesday58827.9*-15.2%1345*
Souplantation & Sweet Tomatoes153235.7*-12.8%2300*
UNO Pizzeria & Grill159222.5*-11.6%2080*
Pollo Tropical110358.5*-11.2%2140*
Johnny Carino's235130.8*-10.8%2180*

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