After years of being pressured to diversify leadership, restaurant companies are now facing the threat of anti-DEI forces who call such efforts discriminatory.
Cracker Barrel this week faced charges of violating federal and state civil rights laws from America First Legal (AFL), a law firm co-founded by White House Deputy Chief of Staff Stephen Miller. AFL has asked the U.S. Equal Employment Opportunity Commission (EEOC) and the Tennessee attorney general to investigate the company’s diversity, equity and inclusion (DEI) policies, saying they make “unlawful commitments to provide unique employment benefits to certain races and sexes.”
Cracker Barrel is one of the few large restaurant chains led by a woman: Julie Felss Masino.
In fact, the industry is at a crossroads as it faces anti-DEI pressures at a time when some within it work to elevate more female leaders.
But it’s not like they didn’t see it coming, some said.
Over the past year, companies outside the industry have faced similar complaints from conservative activists like Robby Starbuck, who has taken to social media to crusade against “woke” DEI programs at public companies, including John Deere, Walmart and Toyota. President Trump has openly called for the elimination of DEI efforts, both within the federal government and in the private sector.
Even before the Cracker Barrel news, the threat of such allegations had “thrown a blanket” over public discourse in the restaurant world that might appear to be DEI related, said Denny Post, the former CEO of Red Robin and a former chair of the Women’s Foodservice Forum.
And that chilling effect is exactly what such efforts are designed to do, she noted.
“DEI is about opportunity, not discrimination,” she said.
But organizations must walk a fine line.
“They’ve made a big commitment to various BRG (business resource) groups, and they don’t want a backlash internally. They want to remain supportive of leadership development, of inclusion, of opportunity,” she said. “But they have to be very cautious, particularly if they’re publicly traded companies, about being public with it.”
Some companies may even have felt pressured to say they are getting rid of DEI policies, she added, noting that didn't work out so well for the retailer Target, which earlier this year reportedly saw a decline in in-store visits after rolling back DEI initiatives there.
“But that doesn’t mean organizations aren’t remaining focused on developing all of their talent and trying to make sure that people feel valued and cared for,” Post said. “So, it’s almost like, because they have to be less public about it, in private, behind closed doors, they are wrapping their arms around individuals and saying, ‘This still matters to us.’”
Female-led restaurant chains
This year brought news of what seemed like more women in the CEO seat at chain restaurants.
Debbie Stroud at Whataburger, Julie Fussner at Culver’s and Betsy Schmandt at A&W Restaurants moved into the helm of their respective companies this year. They followed last year’s appointments of Heather Neary at Taco John’s, Liz Williams at El Pollo Loco and Christine Barone at Dutch Bros.
It felt like an upswing.
But analysis of the leadership among the Technomic Top 500 Restaurant Chains in 2024 revealed that women remain woefully underrepresented at the top of the largest restaurant chains.
Of those 500 companies, there are 35 female CEOs, or 7%.
That’s less than the roughly 10% of Fortune 500 companies that were led by women last year.
Still, Post said the 7% number among the Top 500 is “encouraging.”
It by no means represents the high percentage of women serving on restaurant front lines, she noted, or even the customer base, where women tend to make the decisions about where to eat.
“But that is a positive outcome of the past 20 years of advocacy and leadership,” she said. “And they’re all young leaders.”
Outside the restaurant industry, women appear to be making more progress as they move into leadership ranks.
By comparison, 52 of the Fortune 500 companies last year had women at the top, or more than 10%, according to an analysis by the Women Business Collaborative.
In a tenth-anniversary report published last year, the global management consulting firm McKinsey & Company found that women have made important gains at every level of the corporate pipeline, including senior leadership. But the report also said that progress remains surprisingly fragile, especially for women of color who continue to be underrepresented at every level.
According to McKinsey’s 2024 report, women make up 29% of C-suite positions. That’s up from 17% in 2015.
But progress has been slower at entry and manager levels. Since 2015, female representation at the manager level has grown only 2 percentage points, for example.
And women are less likely to be hired into entry-level roles than men, which leaves them underrepresented from the start, according to the report. As a result, women are then less likely to be promoted into management—which McKinsey calls the “broken rung” in the corporate ladder. It’s even worse for women of color.
At the time, companies were doing more to reduce bias in hiring practices and performance reviews, the report found, as well as providing benefits that support women as caregivers, like increasing work flexibility.
But at the same time, the report said companies have scaled back programs designed to advance women.
At the current pace, parity for all women—with their leadership rates reflecting their share of the U.S. population—would take almost 50 years.
That’s sobering, said Kelli Valade, CEO of Denny’s who previously served as CEO of Red Lobster.
“But it’s also progress,” she notes. “It used to be 100 years.”
Hyper awareness
Anecdotally, Valade said she also has noticed an upswing of women moving into leadership within the restaurant industry.
“I see it in events I attend and in networking,” she said. “I do see bright spots there.”
For years, Valade has taught a class on women’s leadership and she has long been a vocal advocate and resource for women in the industry.
She agreed that there is a “hyper awareness” about the conversation about women in leadership.
“Everyone is thinking about ‘how do I say this out loud,’” she said. “But we’re still having those conversations.”
And though that conversation may have taken a turn on a macro level, the playbook at Denny’s has not changed, she added.
“Our focus is exactly where it has been, because it is so much of our foundation,” she said. “We do invest heavily in thinking about the diversity of our leaders and how we can continue to enhance, promote diversity in thinking, skills and background.”
In her leadership class, Valade said she shares her own experiences grappling with many of the “work-life choices” women struggle with, like, “Can I do this and have a family?
“Well, I have a family, and it wasn’t easy,” said Valade. “There were times when I was thriving in one area and not in another.”
She encourages aspiring leaders to raise their hands to take opportunities that may be outside their comfort zones. Valade spent more than two decades at Brinker International, for example, climbing the ranks initially in HR before shifting to operations, later become president of Chili’s, and then leading data firm Black Box Intelligence.
“It helped me that I didn’t color inside the lines,” she said. But, perhaps fundamentally, “it’s important for all leaders—men, women—to know if there is anything keeping you from raising your hand.”
The shifting landscape
More restaurant chains among the Top 500 may be led by women, even though they don’t have the title CEO.
The list does not include companies led by women as founder or co-founder, who don’t serve as CEO, like Evonne Varady, co-founder of Clean Eatz, for example. (Former CEO Eric Wyatt left that chain in May, a spokesperson said, and there are no plans to replace him for now.)
The list also does not include female presidents of brands that are part of a larger group, like Sheilina Henry, president of Flemings Prime Steakhouse & Wine Bar, which is part of Bloomin’ Brands; or Laurie Casler, who was named president of Seasons 52 at Darden earlier this month.
And several women recently dropped from the CEO ranks among the Top 500, including Carrie Walsh, who was Subway’s interim CEO until Jonathan Fitzpatrick was named to the permanent role earlier this month.
Denise Nelsen also recently departed as CEO of Smashburger. (The company said Jim Sullivan, the chain’s former chief development officer, has since been named president of the brand.)
Betsy Hamm resigned as CEO of Duck Donuts in January amid corporate layoffs there. (She recently launched a podcast about women finding success in the workplace.)
Emerging leaders
The list also does not reflect women leading chains that have not yet achieved Top 500 status.
Maria Rivera, for example, last week was named CEO of Starbird, an 18-unit “super-premium fast-food” chain that has big plans for growth.
The former CEO of Smalls Sliders, Rivera brings extensive franchising experience as Starbird begins a big growth push. The first franchised unit is soon to open in Denver and the chain has 30 in development, along with plans for more corporate growth.
From the emerging chain world that Rivera operates in, the number of CEOs among restaurant chains appears to be dwindling, she said.
“We had an era where quite a few women were in CEO seats and, as the positions turned or got replaced, they were never backfilled with other women,” she said. “We definitely have a talent gap, or an upward mobility gap, or the ability to break through to get those calls.”
It's a topic people don’t like to talk about, she said, but that’s long been true.
“This has been a sensitive topic for a long time,” she said. “But you also can’t live in that space, mentally. I coach a lot of female leaders at many levels of organizations, and I say, look, you have to prepare, you have to network, and put your best food forward.”
In the end, Rivera said she’d love to see the conversation change.
There is a perceived reality that women often get evaluated for their performance versus potential, she said.
“I do think that everybody should be evaluated on both, regardless of gender,” she said. “You’re either going to do the job and push the brand forward, or you’re not.”
But, as a CEO moving into a new role at a growing company, Rivera also stressed the importance of not being afraid to talk about hard topics before taking that C-suite job, to ensure it’s a good match.
“I think women feel talking about those things is going to hinder them,” she said. “But I think what hinders them is not having the real conversations.”