Here are the top dining brands that should be on your radar going into the new year.
Despite more Americans cooking at home or looking for cheaper fast casual options, several full-service dining brands have been able to rise above their peers and succeed. Lower and higher price points restaurants have seen steady growth partially due to creative, refocused marketing efforts, increased revenue in the better breakfast category and economic influx by wealthy Americans. However, Jonathan Maze, senior financial editor at Nation’s Restaurant News, says that casual dining in general will continue its steep decline amid a saturated market.
“The mid-range — what we call casual dining — has been bad for years and years. That’s only getting worse. Based on various metrics, casual dining chains have been losing traffic almost every quarter since 2006,” said Maze. “Applebee’s and Chili’s both reported big traffic declines in their most recent quarter. Even Buffalo Wild Wings has reported three straight quarters with declining same-store sales, when even one bad quarter is a very rare event for them.”
Casual dining brands like Old Country Buffet, Logan’s Roadhouse and Quaker Steak & Lube have all declared bankruptcy while nationwide seafood joint Joe’s Crab Shack is closing locations and looking for solutions to reinvigorate the concept to draw customers back in.
Maze says that the rise of food delivery holds promise for boosting sales, but 2017 will be another equally tough year for the full-service restaurant category. Here are 25 restaurant franchises that are going against the grain and finding wins in this extremely competitive sector.
Arooga's Grille House & Sports Bar
Unit Count: 14
Investment Range: $1,313,400 - $3,996,900
This small East Coast chain with a casual bar and American-style menu was founded in 2008 in Pennsylvania and currently has 14 locations, but is rapidly expanding with more than 100 deals in the works across the Northeast region of the country. Arooga’s started franchising in 2014 and is best known for winning the "America's Next Top Restaurant Franchise" competition in 2010 co-sponsored by Sysco Foods and The Franchise Edge.
Denny's
Investment Range: $915,569 - $2,421,185
Unit Count: 1,728
The nationwide breakfast diner has 1,728 locations around the world and is having an impressive year in part due to its refocused, creative marketing efforts targeting the Millennial generation. Denny’s saw the highest same-stores sales and traffic growth in more than a decade with combined sales of $2.8 billion and has been focusing on increasing its international presence; the brand is opening its first restaurant in the Philippines this year.
Double Dave’s Pizza Works
Investment Range: $289,000 - $341,500
Unit Count: 50
With 50 locations, this family-friendly pizza chain, founded in 1984, has a small hometown feel and offers hand-tossed pizza for dine-in or carry-out. In addition to pizza, the restaurant offers Stromboli and sandwiches along with desserts like apple and cherry strudel. Double Dave’s Pizza Works started franchising in 1995 and has a large presence throughout Texas and one location in Oklahoma.
Gyu-Kaku Japanese BBQ Restaurants
Investment Range: $789,793 - $2,110,501
Unit Count: 688
Customers grill up veggies and meats at their table (traditionally known as yakiniku) at this traditional Japanese-style BBQ chain that emulates the popular Korean BBQ trend. Gyu-Kaku Japanese BBQ Restaurants originated in Japan and opened its first U.S. location in Los Angeles in 2001 and now has 688 locations worldwide. It capitalized on an open market for table BBQ and has successfully franchised the concept to expand in major cities throughout the U.S., including Chicago, New York City, Miami, Dallas and Las Vegas.
Huddle House
Investment Range: $444,192 to $1,550,670
Unit Count: 372
Last year, Huddle House saw a sales increase of 5.3 percent and opened 22 restaurants adding to its 372 locations. The family-style diner is open 24/7, offering all-day breakfast in a casual setting. The brand has set a hefty goal of doubling restaurants’ average unit volumes in the next few years and is looking to partner with driven franchisees.
Famous Toastery
Investment Range: $414,500 to $768,000
Unit Count: 12
Founded in 2005, Famous Toastery, the family-style breakfast chain, realized Americans’ love for a premium dine-in breakfast that is made with high quality ingredients and offers top-notch service. Now, this commitment to quality has paid off and led to continuous growth and sales revenue for the brand. “We’ve been very fortunate to be in the right place at the right time in the better-breakfast segment, which is simply untapped. There’s so much room for growth,” says CEO & Founder of Famous Toastery, Robert Maynard. And the brand is growing. With 12 current locations, existing franchisees are in the process of opening their second or third locations and the chain is targeting new regions in the U.S, especially the state of New Jersey. In 2017, Famous Toastery is set to open at least 12 new restaurants.
The Brass Tap
Investment Range: $664,050 – $1,223,000
Unit Count: 35
With the craft beer bar category rapidly expanding, The Brass Tap, founded in 2008 and with 35 current locations, features 60 craft beers on tap and more than 200 varieties of imports, local craft beer, wine and cigars. The concept mixes a hip, upscale menu with a casual sports bar atmosphere, creating the perfect local hangout. The brand has 50 locations in development and has ambitious plans to quadruple in size in the Southeast region of the country and beyond.
IHOP
Investment Range: $639,000 - $2,834,000
Unit Count: 1,650
The breakfast staple owned by DineEquity Inc. has seen consecutive positive sales growth in 2016 with an impressive 6.9 percent revenue increase in 2015. IHOP has 1,650 locations, including more than 70 international locations as of 2014. Last year, the company revised its iconic logo and this year, has been focused on greater international expansion with a focus of adding 17 locations to the Middle East.
Twin Peaks Restaurant
Investment Range: $1,309,800 – $2,365,900
Unit Count: 78
This casual-dining chain was founded in 2005 near Dallas with a focus on creating the ultimate sports bar and restaurant with an all-female wait staff serving American fare and beer in a cozy lodge atmosphere. In 2014, the racy brand was named one of the fastest growing restaurants in the U.S. by Bloomberg and now has 78 restaurants in 25 states, with expansion into the Washington and California markets this year. According to Nation's Restaurant News, system sales have increased to $269.1 million in the last two years. Notably, former Hooters executives, who created La Cima Restaurants LLC, also recently acquired a large stake in Twin Peaks and COO of the restaurant group Joe Hummel is set to become the CEO of the chain.
California Pizza Kitchen
Investment Range: Starts at $2,000,000
Unit Count: 283
This upscale and well-recognized pizza chain with 283 global locations was bought by Golden Gate Capital in 2011. This transition kick-started the brand refresh featuring menu updates with the addition of more premium, health-conscious ingredients, expansive restaurant remodeling plans and a continued focus on its successful frozen pizza line. And this investment has already started to pay off. California Pizza Kitchen has seen positive same store growth in recent years and just opened its first restaurant in Australia this year following recent openings in Japan, South Korea, Hong Kong, Dubai and Mexico.
Perkins Restaurant & Bakery
Investment Range: $1,700,000 - $3,000,000
Unit Count: 402
Perkins was founded in 1951, started franchising in 1965 and has more than 400 locations in the U.S. and Canada with plans to expand further into the Canadian market. The longstanding brand serves up classic home-style cooking and traditional American baked goods and has seen consistent growth in the last three years.
Texas Roadhouse
Investment Range: $1,600,000 - $3,000,000
Unit Count: 450
In the fourth-quarter of 2015, the chain posted a remarkable 12 percent boost in revenue to $454.4 million. So far this year, sales growth has increased an average of 3.9 percent at domestic franchise locations. Texas Roadhouse has seen 26 consecutive quarters of positive traffic growth with plans to add up to eight new restaurants in the first two quarters of 2017 adding to more than 450 locations worldwide.
Golden Corral
Investment Range: $1,968,244 - $5,969,693
Unit Count: 484
This American chain indulges customers by offering an expansive buffet with home-style options, Asian and Mexican cuisine and extravagant dessert options like a chocolate fountain or hand-spun cotton candy. Golden Corral has seen dependable restaurant growth in recent years with 484 current locations in 41 states. The brand is now looking to take over 30 to 40 locations that are vacant due to the recent bankruptcy of Buffets LLC, which operated Old Country Buffet and HomeTown Buffet. The brand is the country’s largest buffet chain with $1.7 billion in total sales, according to Nation’s Restaurant News, and Entrepreneur ranked the brand the #1 franchisor in the U.S. among family steakhouses this year.
TGI Fridays
Investment Range: $2,071,500 - $4,855,000
Unit Count: 916
This American staple has refocused its dining concept with a brand overhaul complete with an increasingly modern restaurant redesign, brunch and grab-and-go options, longer restaurant hours and a new space called “Fridays Offsite” to appeal to a more casual crowd. These new changes have been implemented in an effort to drive growth and sales revenue for this longstanding brand competing in a crowded market. With these drastic changes and a shift towards modernity, TGI Friday is a standout restaurant company to keep on the radar in 2017.
Melting Pot
Investment Range: $996,027 - $1,535,897
Unit Count: 125
The Florida-based fondue restaurant founded in 1979 has more than 125 locations domestically and internationally, with a recent expansion into the Middle East and Indonesia last year and 10 more international locations currently in development. The Melting Pot has seen slow-but-steady growth throughout the years and has room to grow with little competition in this unique and open dining category.
Beef ‘O’ Brady’s
Investment Range: $250,000 - $500,000
Unit Count: 209
Chris Elliot, CEO of Beef ‘O’Brady’s, joined the brand in 2010 and turned it around by conducting a thorough analysis of what could be improved system-wide. Elliot added menu variety, a fast-casual version of the brand called Beef’s Express and other additions. The brand slowly started seeing growth and now in 2016, the Tampa-based sports pub has more than 200 locations and several more in development.
Outback Steakhouse
Investment Range: 1,400,000 - $1,700,000
Unit Count: 978
This Australian inspired casual steakhouse reinvigorated its concept a few years back by doing an analysis of the target consumer, and an analysis on menu items, spending on promotional efforts and how they were perceived in the category. By making the correct changes and listening to guests, Outback Steakhouse has seen positive growth sales and is planning to add 50 locations annually in the U.S. and 20 to 30 restaurants internationally, with a focus on Japan and South Korea.
Buffalo Wings & Rings
Investment Range: In-Line: $1,244,000 - $1,855,000; Free Standing $2,010,000 – $3,085,000
Unit Count: 65
This classic sports restaurant serves up traditional American fare, including wings and handcrafted burgers and has seen consistent growth this year with 65 locations open including 12 international units. The brand saw system-wide sales of $82.5 million last year and is on track to exceed record-breaking growth for the ninth consecutive year. In the second-quarter of this year, BWR signed five additional franchise agreements that will lead to 10 new openings and saw average unit sales increase by 2.9 percent while direct rival, Buffalo Wild Wings posted negative sales growth this year.
Bar Louie
Investment Range: $410,000 - $3,000,000
Unit Count: 122
The neighborhood bar and eatery that was founded in Chicago in 1991 now has more than 120 locations nationwide and has seen an increase in sales thanks to its new Chief Marketing Officer Stephanie Hoppe, who has refocused the brand’s marketing efforts and created successful new menu additions. In early November, Bar Louie announced recent openings in California, New Jersey, Ohio and Maryland and franchise developments in Kentucky and South Carolina. Next year, the brand is set to open 20 new locations and is currently looking for experienced entrepreneurs and restaurateurs to join
Cici’s Pizza
Investment Range: $446,000 - $715,000
Unit Count: 462
This pizza buffet chain recently underwent a brand refresh after it focused on its commitment to quality by implementing higher quality ingredients, rolled out a revamped marketing campaign and new contemporary restaurant designs for locations nationwide. These steps have allowed Cici’s Pizza to gain sales momentum and in turn has attracted new growth opportunities with deals to open 70 new restaurants in Dallas, Colorado, Kansas City and Orlando throughout 2017 adding to the 462 current locations.
Eggs Up Grill
Investment Range: $453,414 - $892,897
Unit Count: 8
This small breakfast-focused chain with a Southern-inspired menu was founded in 1986 in South Carolina. The restaurant has seen increased growth in recent years with the addition of four units in the last year, including its first location in the state of North Carolina. Eggs Up Grill currently has eight locations and another six in development and with the better-breakfast segment seeing high consumer demand while other full service sectors are declining, this chain is positioned for another year of continued expansion and sales growth.
Russo’s Coal-Fired Italian Kitchen/Russo’s New York Pizzeria
Investment Range: $260,000 - $950,000
Unit Count: 44
For more than 25 years, this upscale Italian restaurant and casual pizzeria with 44 locations has been serving up traditional Italian entrees with a commitment to using the highest quality ingredients and freshest flavors. “We make everything from scratch - salad dressing, the dough, pizza sauce and even the chicken stock. You don’t find too many places in today’s market where they make their own Italian sausage, fresh mozzarella made in-house and use extra-virgin olive oil to cook everything,” said Founder & CEO of Russo’s Coal-Fired Italian Kitchen and Russo’s New York Pizzeria, Anthony Russo. The brand has been heavily focusing on international expansion with an upcoming opening in Dubai and Saudi Arabia and plans to develop 10 more locations throughout Saudi Arabia. In 2017, the Italian chain is targeting Shanghai and more cities throughout the Middle East for development.
Ruby Tuesday
Investment Range: $1,559,650 - $3,877,400
Unit Count: 540
Founded in 1972, this restaurant giant with 540 global locations has overhauled its operations and growth strategy heading into the new year. The company is now heavily focusing on finding driven and experienced franchisees to partner with and is offering substantial franchise incentives, including $5,000 off the franchise fee and a waived royalty fee for the first 12 months the restaurant is open. Ruby Tuesday has also created a Fresh Start initiative that will streamline operations, reduce costs and create new menu options that more closely align with current customer preferences in the casual dining category. With a revitalized strategic plan in place, this longstanding American chain is a top pick to monitor in 2017.
Black Bear Diner
Investment Range: $527,800 - $1,472,200
Unit Count: 85
Starting in 1995, this Redding, Calif.-based family dining concept with 85 current locations recently received a large investment from PWP Growth Equity to help expand the brand nationwide. Currently, Black Bear Diner has 75 locations in eight states, offers huge portions and is known for its memorable bear-themed restaurant décor. Last year, the company generated $180 million in system net sales and this year has already opened more than 15 new locations. Black Bear Diner has created solid growth momentum and has plans to operate 100-plus restaurants by 2018.
O’ Charley’s
Investment Range: $2,105,500 - $3,340,000
Unit Count: 212
Founded in Nashville, Tennessee in 1971, this dine-in chain with steady growth boasts Southern hospitality with fresh ingredients, generous portions and a commitment to giving back to local communities. Most O’ Charley’s locations are currently company-owned, but the brand is looking for franchisee partners in order to expand throughout the South, East and Midwest regions of the county.
