First Bite

CAVA is continuing to ride high after its IPO debut in June. The fast-casual restaurant company released its Q4 and fiscal year earnings on Monday and the results bucked the industry trends that have so far emerged during earnings season.

After suffering from delivery stagnation in the post-pandemic era, Domino’s Pizza appears to have finally found its footing again after implementing its multi-pronged “Hungry for More” strategy. The Ann Arbor, Mich.-based pizza chain reported 2.8% U.S. same-store sales growth for the fourth quarter ended Dec. 31, 2023, largely attributable to growth of both its delivery and carryout sectors, though total revenue gains were only modest.

The delivery sales improvement was actually noted before Domino’s began feeling the full effects of the company’s historic partnership with Uber Eats, which was first announced last July.

After the Atlanta-based restaurant company formerly known as Focus Brands announced its rebranding to GoTo Foods on Tuesday during the company’s annual conference in Las Vegas, CEO Jim Holthouser offered some details on exactly what to expect in the days and years ahead.

Although daily operations won’t change much for franchisees and employees as the company moves to a more platform-based business model, more brand collaboration will be on the table.

The goal is to eventually break down most silos between the seven restaurant brands — including Jamba, Cinnabon, Auntie Anne’s and Moe’s Southwest Grill — and commonly share resources, personnel and technology. For example, the company is in the midst of moving all seven brands to a single POS platform, Qu, to promote synchronicity among the brands.

Chefs Jennifer Hwa Dobbertin, Reuben Asaram, and Lawrence Smith have all crafted impressive resumes in their respective hometowns of San Antonio, Philadelphia, and Pheonix. But, as is often the case in the restlessly creative world of culinary, they all want more.

For now, Dobbertin, a repeat 2023 and 2024 James Beard Award semi-finalist, is busy running Best Quality Daughter, which she first opened alongside two friends in 2018 and five years after opening her first brick and mortar concept, Hot Joy. Best Quality Daughter has since become a San Antonio staple featuring Asian-American cuisine with a South Texas influence.

Rueben Asaram, who was trained at the Culinary Institute of America and now owns and operates Reuby in Philadelphia, blends Mexican and Indian flavors. Asaram has a background in fine dining but left to travel as much of the world as he could. The experience inspired him to since create colorful popups throughout his city, which has become his signature.

Lawrence Smith is a bit newer to the scene, working his way from line cook to sous chef to executive pastry chef. In early 2022, he opened Chilte in Phoenix, which he describes as experimental, modernized Mexican cuisine.

This past Valentine’s Day there was a trend among limited-service restaurants. Several high-profile companies turned one or a few units into fine-dining experiences.

Shake Shack launched a pop-up at two Los Angeles restaurants to promote its new Korean-style menu on Valentine’s Day called the “Swicy Date Night Experience” — “swicy” being a combination of sweet and spicy, two common Korean flavors.

In New York City and Los Angeles, Panda Express unveiled its newest menu item, Firecracker Shrimp, via a five-course tasting menu at two select locations of the chain. The menu included an elevated take on Panda Express classics as well as other Chinese American dishes.

And Wingstop, in honor of being named one of the worst date spots, launched its own fine-dining Valentine’s Day experience that included a pairing menu with alcohol and the chain’s famous wings and chicken items.

What do all these activations mean?

Texas Roadhouse CEO Jerry Morgan ended the company’s Q4/full-year earnings call Thursday evening with an enthusiastic “Yeehaw.”

Given the company’s results, this didn’t seem out of place at all. For Q4, the Louisville, Ky.-based casual dining company’s comp sales were up 9.9% at company-owned restaurants and 8.9% at domestic franchise restaurants. Those comp sales were driven by 5.1% traffic growth and a 4.8% growth in average check. By month, comp sales were up 9.2% in October and November, and 11.1% in December.

Restaurant margin dollars increased by 21.4% to $176.7 million versus $145.6 million in the year prior, primarily driven by sales. Restaurant margins were up to 15.3%, or 75 basis points higher year-over-year. The company opened 12 company restaurants and seven franchised restaurants during the quarter.

In 2024, it’s becoming harder than ever to be a successful franchisee. On top of ongoing rising food costs and labor shortages, federal and local legislation is cracking down on businesses while expanding worker rights and protections.

This year, 25 states introduced or will introduce new minimum wages, with six states increasing their minimum wages to either match or surpass $15 (California, Connecticut, Maryland, New Jersey, New York, and Washington state). 

On top of ever-increasing minimum wages, the joint employer rule is top of mind for many business owners. The National Labor Relations Board introduced a broadened joint employer in October that would make franchisees and franchisors jointly liable for labor terms and conditions such as union contracts, pay, scheduling, and more, reviving an Obama-era rule that was limited in scope during the Trump Administration.

Shake Shack is testing combo meals for the first time at some of its drive-thrus, as well as 8-ounce mini-shakes and sundaes at select restaurant locations, CEO Randy Garutti said during a conference call announcing the chain’s fourth quarter and annual earnings.

Garutti said the limited-service industry has already established that customers like combo meals, such as sandwiches, fries, and a drink, at drive-thrus, and he wanted to try them at his chain while still maintaining the brand’s identity of offering a relatively upscale experience.

Desserts, such as the sundaes that Shake Shack offered before the pandemic and the mini-shakes that it started testing at the beginning of last year, are being tested at select locations to see if they can boost sales and increase afternoon traffic.

Rick Diamond spent most of his career working as an accountant but, like so many others, decided he wanted to be his own boss after Covid hit and started thinking about franchising. Coincidentally, Emily was visiting family in Utah, which gave her the opportunity to visit Crumbl's very first store – a log cabin-like location that opened in Logan, Utah, in 2017.

She loved everything about the concept – the smell, the look, the product. Stores are closed on Sundays, which aligned with their values. They checked out an open location closer to home, in Louisville, Kentucky, and realized it was exactly what they wanted to pursue.

They set up a call with corporate and were approved for a store and, just this week, opened their third Crumbl location in their home market. Their experience with the concept has been “really positive, which is why we went for a third.” Notably, their experience also coincides with the company’s meteoric growth trajectory. Crumbl more than doubled its unit count from 2021 to 2022 and now counts nearly 1,000 shops, while its sales jumped more than 2.5 times to $985 million during that same timeframe.

For a free burger promotion on Monday, February 12, burger chain Carl’s Jr. went big. Like Super Bowl ad big.

The chain ran an ad at the game that was a fighter jet scene reminiscent of the Top Gun films with pilots rushing to get their free burger.

Carl’s Jr. announced it would be giving away free Western Bacon Cheeseburgers to its loyalty program the day after the Super Bowl.

Customers with the Carl’s Jr. app who have joined the My Rewards program received the “Free Burger Day” offer and were able to order it through the app or show the app offer to team members at a restaurant. No purchase is necessary.

The company said the giveaway is part of an effort to distance Carl's Jr. and Hardee's, which had often been marketed together.