In late November, Bertucci’s, the 23-unit Italian casual-dining chain, unveiled a new concept.
Bertucci’s Pronto is a sort of Bertucci’s in miniature. It will feature counter service and will focus on takeout and delivery.
The first location is set to open in March in the middle of Boston, an area that Massachusetts-based Bertucci’s exited years ago. But rather than Bertucci’s usual audience of sit-down diners, Pronto will target office workers in search of a quick lunch with a limited menu of pizza, salad and sandwiches.
“For us, it’s a brand extension. It is taking into account changing consumer needs,” said Robert Earl, owner of Bertucci’s parent company Earl Enterprises. “It will be identical to the casual-dining experience of those same items but done in this more rapid environment.”
Bertucci’s is the latest in a long line of full-service chains that have tried to reimagine themselves as fast casuals. Last year, P.F. Chang’s, Perkins, True Food Kitchen and Wings and Rings opened or announced limited-service spinoffs. Other brands, such as Buffalo Wild Wings, Outback Steakhouse and Hooters, have been operating similar offshoots for years. And that’s not counting the many other full-service brands that launched a fast-casual venture only to retire it.
A rendering of Perkins' Griddle & Go concept, unveiled last year. | Image courtesy of Perkins
The chains’ reasons for branching out of their full-service comfort zones tend to boil down to a few common themes. The fast-casual format allows for quicker service at a time when consumers are looking for convenience. The smaller stores open up new real-estate opportunities, often in urban areas. And they give brands a new option to offer franchisees.
The trend is being driven by one unavoidable fact: Fast-casual restaurant growth has taken off while full service has stagnated. In 2023, sales at fast-casual chains increased 11.2% compared to just 4.7% for casual-dining chains and 5.9% for family-dining chains, according to Technomic’s Top 500 Chain Restaurant Report.
“Full-service restaurants are essentially a slow- to no-growth part of the industry, and for the last two years, real growth in FSR has been negative,” said David Henkes, senior principal at Technomic. “Fast casual has been and continues to be where the growth is happening.”
That has prompted many full-service operations to try to adapt their brands and menus for a fast-casual format over the years. But few have gotten very far.
Noble Chicken is a spinoff of Wings and Rings. | Image courtesy of Wings and Rings
In 2011, Red Robin Gourmet Burgers debuted a fast casual called Red Robin Burger Works. It was created to get the suburban burger stalwart into urban markets where it could compete with fast-casual upstarts like Smashburger and Five Guys.
“All those guys were coming up really fast, and it was viewed as a threat,” said Denny Post, who joined the casual-dining chain as president while Burger Works was under development.
The concept also allowed the brand to enter dense, urban markets like Chicago, where it could never put a 5,000-square-foot full-service restaurant. And it was envisioned as a place where Red Robin could experiment with new menu items and techniques. An early iteration featured an open-flame grill, Post said, which introduced a new cooking process for the chain’s signature burgers.
But Burger Works ran into several problems. Customers who walked in expecting a sit-down meal were confused and disappointed. Franchisees were wary of the new menu and specs, and Burger Works eventually returned to serving something closer to Red Robin’s regular menu. Even then, the chain never was able to get a franchisee to open one. “They were really leery of it,” Post said.
The biggest issue was unit economics. In order to afford expensive rents in the city, Red Robin figured Burger Works needed to generate average unit volumes of $1.5 million to $1.8 million, which was about half of what a full-service Red Robin did at the time. That ended up being a tall task.
“You had to take this much smaller location with much more limited seating and a much more limited menu and it needed to do roughly half,” Post said. And all of it had to be done essentially during lunch. “Fast casual is not, for the most part, a two-daypart business,” she said.
Red Robin closed Burger Works in 2017. | Photo courtesy of Red Robin
It wasn’t for lack of trying. Burger Works even tried to push into breakfast by selling coffee and lattes in the morning. But it didn’t work. In 2016, shortly after Post was promoted to CEO, Red Robin pulled the plug on the brand’s remaining 12 locations.
“It was killing us,” Post said. “We were losing money hand over fist.”
Meanwhile, other full-service chains were bringing similar concepts into the world. A year later, Hooters launched Hoots, which offered both counter and table service; Buffalo Wild Wings was formulating the takeout-centric B-Dubs Express; and Denny’s had grown The Den to 17 locations, mostly on college campuses.
More attempts would follow in the years after the pandemic, which added further momentum to takeout-focused concepts. Many would ultimately go the way of Burger Works.
Most recently, Outback Steakhouse was shrinking its Aussie Grill offshoot. The brand debuted in the U.S. in 2019 and grew to seven locations. But as of January, that number had shrunk to three. Parent company Bloomin’ Brands declined to comment for this story.
Denny’s, meanwhile, said it will no longer push development of The Den, which now stands at just five locations. And in 2023, IHOP abandoned its Flip’d concept, a grab-and-go version of the pancake chain that had four units.
“The Flip’d by IHOP concept was piloted to test and learn how to make the guest experience for off-premise dining more enjoyable,” an IHOP spokesperson said in a statement at the time. “Our learnings from this pilot will inform how we iterate going forward.”
Flip'd by IHOP grew to four locations before it was shut down. | Image courtesy of IHOP
Not every casual-dining spinoff effort has failed. Buffalo Wild Wings, for instance, followed up B-Dubs Express with BWW Go, a small-scale concept focused almost entirely on takeout. Go was expected to reach 150 locations in 2024, and franchisees had committed to opening 600 more of them.
And Texas Roadhouse has said it is encouraged by the performance of Jaggers, a quick-service concept focused on burgers, chicken sandwiches and milkshakes that launched in 2014 and has slowly grown to 11 locations.
But, by and large, full-service operators have yet to make any meaningful headway into the fast-casual sector.
“It’s never really worked out,” Henkes said. “And I think the reason for that is that it’s just really hard for a big chain to run two concepts, because it divides the attention of the executives.”
Indeed, creating a new brand is a lot of work, even when it has the scale and resources of a large corporation to give it a head start.
“I think when you have these founder-led concepts that are developed, that makes a lot of sense,” said Jason Rusk, who spent more than 26 years at Red Robin, where he helped develop Burger Works, and is now EVP of restaurant operations at Wonder. “But that’s generally not what you’re getting when big casual-dining chains are trying to build out a concept.”
In fact, the spinoffs can get bogged down by the identity of the parent brand, which may not slide easily into a new format.
“There’s a certain amount of hubris which says, ‘The world wants more of me,’” Post said. “But there’s a lot of lack of willingness to understand how the consumer really uses you.”
True Food Market is a fast casual retail-hybrid from True Food Kitchen. | Photo courtesy of True Food Kitchen
Customers typically visit casual-dining chains for a sit-down meal, often with family or friends. Food is cooked to order and brought to the table by a server. Fast casuals, on the other hand, are focused on speed and convenience. Many employ the down-the-line format popularized by Chipotle Mexican Grill. Ingredients are prepared in batches and customers’ meals are built in front of them. It’s perfect for a quick lunch.
Jumping from one to the other would require a full-service brand to make significant changes to its operating model and food. Such a transformation runs the risk of confusing customers. Remove any ties to the parent concept, on the other hand, and the spinoff loses the advantage of name recognition. “You start going in circles on this stuff,” Post said.
“I just don’t think the equity transfers from casual dining to fast casual.”
That may be why full-service chains have generally had more success buying existing fast-casual brands than developing them in-house.
Cracker Barrel, for instance, worked for years to develop a fast casual called Holler & Dash. Then, in 2019, it acquired Maple Street Biscuit Company and converted all of its Holler locations to that brand.
“That, to me, makes a lot more sense than an established brand trying to either spin off their own, creating confusion of how to use it, or literally creating your own, and just starting from ground zero on the branding side,” Rusk said.
P.F. Chang's To Go was the chain's second attempt at a spinoff. | Photo courtesy of P.F. Chang's
That has not stopped full-service brands from dabbling in fast casual. P.F. Chang’s in January unveiled plans for its third such entrant into the category. It’s testing Pagoda Asian Grill in four locations in New York, Texas and Florida and says the bowl and wrap concept has been generating strong results.
The 300-unit Asian chain has tried fast casuals twice before. Pei Wei, launched in 2000, was spun off as its own company in 2017 so the parent brand could focus more on its full-service bistros. And during the pandemic, P.F. Chang’s developed a takeout-focused offshoot called P.F. Chang’s To Go, designed for urban markets. But it has since backed off of plans to expand it.
As for its latest effort, P.F. Chang’s thinks there could be room for as many as 2,000 Pagodas in the U.S. one day.
“We believe that besides the bistros, which is the core of the business, there's a very large white space for an Asian fast-casual model in the U.S.,” CEO Eduardo Luz said during the ICR conference in January.
For some casual-dining natives, scale is not necessarily the goal when jumping into the fast-casual segment. Pronto, for instance, will allow Bertucci’s to re-enter Boston, a key market in its home state. The chain hopes to open two or three more Prontos in the city before it considers taking the brand elsewhere.
“Of course, then you're playing on a more even playing field, because you don't have the same notoriety,” Earl said. “I think there's great pizza and fast Italian around the whole of America. And there's some awesome operations. I think this one will be on par with those. … But initially I am focusing it on downtown Boston.”