For the fast-casual segment overall, 2024 was undeniably a pretty good year, given the circumstances.
Except, perhaps, for chains that sell noodles. And for a certain better-burger chain whose short life as a public company ended in bankruptcy. As well as a bakery-café chain that was gearing up for an initial public offering that never happened.
Mostly, however, the leading fast-casual players thrived this year, while restaurant chains in the quick-service and casual-dining segments struggled and were forced into aggressive value promotions to compete for inflation-weary customers.
Wingstop, for example, had an extraordinary year with eye-popping same-store sales results, almost entirely driven by transactions.
The Dallas-based chain expects same-store sales to be up 20% for the full year, and growing unit economics spurred expansion as franchisees cheered their strong returns. Between 320 and 330 new restaurants are expected to open globally in 2024, quite a bit higher than the earlier projections of between 285 to 300. The chain ended the third quarter with 2,458 units, of which only 56 are company owned.
For Wingstop, the strong 2024 was due in part to the brand’s addition of boneless chicken options on the menu, including a line of chicken sandwiches and many sauces, which has brought in new guests. The chain in 2024 also rolled out a new tech stack that has enabled more personalized marketing. And hardly a major sports event went by without a Wingstop ad of some sort, hitting a market already primed for wing eating.
The Mediterranean concept Cava, meanwhile, is not far behind, with same-store sales for the year expected to be between 12% and 13%. In the third quarter, same-store sales increased 18.1%, including a 12.9% increase in traffic, and that was lapping a stellar 2023, the chain’s first year as a public company. Over two years, third-quarter sales increased more than 32%.
Cava has been stealing market share from both quick service and casual dining with a healthful offering that seems to have hit the right value perception for all kinds of diners. And Cava is in a bit of a league of its own, with no big competitors among Mediterranean chains.
Beef was a sales booster at Cava, but also for competitors Sweetgreen and Chipotle.
Cava Steak Bowl captions. | Photo courtesy of Cava.
Sweetgreen rolled out a new caramelized garlic steak as a protein in May, for example, which has helped the brand shake off its “salad-concept” reputation. It also helped Sweetgreen drive traffic at dinner and attract more men. And now the chain is testing fries, albeit an air-fried version.
The Los Angeles-based chain climbed steadily toward profitability in 2024, and still has further to go. But the chain’s automated Infinite Kitchens are showing real promise and about half of the 40 new restaurants scheduled to open next year will include the automated makeline, which can churn out bowls faster and more accurately.
Sweetgreen's automated makeline format, dubbed the Infinite Kitchen, is a potential game changer. | Photo courtesy of Sweetgreen.
Chipotle, meanwhile, also had a strong year, sales wise. But the fast-casual leader hit two big bumps in the road this year.
First, TikTokers took to the platform to attack the fast-casual burrito chain for allegedly skimping on portion sizes. Even the famed reviewer Keith Lee shamed Chipotle for serving a minimal amount of chicken in his bowl, though the chain has long been known for its generous servings.
Chipotle blamed certain outlier restaurants for the inconsistencies and later said the problem was solved. But then came another blow: CEO Brian Niccol made the surprise announcement that he was leaving Chipotle to lead Starbucks in September, a move that was perhaps a leap from frying pan to fire.
Stepping in to replace him was COO Scott Boatwright, first as interim chief and then later as Chipotle’s permanent CEO. The selection of Boatwright was cheered by analysts who praised his operational expertise, saying that’s what the more than 3,600-unit chain needs as it pushes to reach 7,000 units in North America.
Shake Shack also welcomed a new CEO. Former Papa John’s CEO Rob Lynch took the helm at the burger chain in May following the retirement of Randy Garutti. Lynch wants to make the 550-unit Shake Shack faster and more accessible, while maintaining its premium positioning.
Among non-public fast-casual chains, Raising Cane’s also had a killer year, with same-store sales up 17.5% in the first half, and similar results expected for the second half of the year, mostly driven by traffic.
The chicken-finger specialist spread its expansion wings this year with about 100 new units open, for an expected total of 875, mostly company owned. Another 100 are expected to open in 2025.
The chain, with a very simple menu of chicken fingers, fries, Texas toast and slaw, saw average unit volume climb to $6.4 million in 2024, which is among the highest for a limited-service chain.
For several fast-casual brands, it was a year of menu transformation.
Panera Bread, for example, streamlined its menu and has been adding new and enhanced dishes throughout the year, with a focus on sandwiches, soups and mac and cheese.
But it was a tough year for Panera, which for years had been making tweaks in preparation for a planned IPO that didn’t happen. The chain faced several lawsuits related to its Charged Lemonades, which were blamed for at least two deaths. The caffeinated drinks were removed from the menu.
Panera also had a major ransomware attack that closed down digital ordering channels for a few days. The chain also laid off workers as it shuttered several dough-making facilities around the country, as well as at the corporate office in a streamlining move.
Noodles & Company's new Chipotle Chicken Cavatappi. | Photo courtesy of Noodles.
Noodles & Company also attempted transformation in 2024, with a menu overhaul aided by The Culinary Edge. CEO Drew Madsen, who was previously president of Panera, was made permanent CEO of Noodles in March and pledged to update or replace two-thirds of the menu.
In 2024, that effort brought dishes like Lemon Garlic Shrimp Scampi, Chipotle Chicken Cavatappi and Crispy Bacon Alfredo, for example. But by the end of the year, the turnaround did not appear to be gaining traction. In early December, the company’s stock price was down about 80% for the year.
In addition, Madsen warned earlier in the year that up to 20 underperforming restaurants could be closed before leases were up. In addition, about 15 positions were eliminated in the central support office. For the year, the 471-unit chain expected same-store sales to decline between 3% and 1.5%.
MOD Pizza also surprised the industry this year when rumors of bankruptcy emerged in July. But then, the then-512-unit chain was acquired by Los Angeles-based Elite Restaurant Group, a collector of financially troubled brands.
Underperforming units were shuttered, a new management team was brought in, and the mostly company-owned chain launched a refranchising effort.
But perhaps no fast-casual chain had as bad a year as BurgerFi.
Parent company BurgerFi International also attempted a turnaround, but instead defaulted on loans and ended up in bankruptcy by September. It was also delisted from the Nasdaq.
BurgerFi and its sister-brand Anthony’s Coal-Fired Pizza were acquired out of bankruptcy in a credit bid by lender TREW Capital, who almost immediately sold both brands to separate buyers.
The 93-unit BurgerFi, which is mostly franchised, in mid December was sold to the owner of Savvy Sliders, Happy's Pizza and Fat Boy's Pizza, which could give it a fresh start.
Oh wait, perhaps one fast-casual chain had an even tougher year than BurgerFi.
The rotisserie chicken chain Boston Market, whose decline was well documented in 2023, continued its free fall into 2024, with its numbers dwindling to about 16 by December, lingering court battles, creditors scrabbling for assets and attempts by the owner to file bankruptcy.
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