FSR-QSR March Combo Issue 2024 by WTWH Media LLC

NO. 123

FULL-SERVICE RESTAURANTS : SETTING AMERICA’S TABLE | INDUSTRY-WIDE ISSUE

THE DELIVERY DILEMMA

SPB’S CULINARY MAESTRO

SHARED KITCHENS

GEN Z & ALCOHOL

GREG FLYNN’S JOURNEY TO

NEXTGEN CASUAL

IS HERE TO STAY DATA REVEALS THE EVOLVING CRAVINGS OF MODERN GUESTS

FRANCHISING GREATNESS INSIDE THE ASPIRATIONS OF THE WORLD’S LARGEST FRANCHISE GROUP

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EDITORS’ LET TER ®

EDITORIAL EDITORIAL DIRECTOR

Two Segments Collide

Danny Klein

In the post-pandemic era, quick-service and casual-dining restaurants are looking more like fierce competitors battling for guests’ attention.

dklein@wtwhmedia.com QSR EDITOR

Ben Coley

bcoley@wtwhmedia.com FSR EDITOR

Callie Evergreen

cevergreen@wtwhmedia.com A S S O C I AT E E D I TO R

Sam Danley

sdanley@wtwhmedia.com

BRANDED CONTENT STUDIO DIRECTOR OF THE BRANDED CONTENT STUDIO, F O O D A N D H O S P I TA L I T Y

Welcome to the fourth edition of our annual combined

QSR/FSR issue, a time where we dive in and show just how similar quick- and full-service restaurants are becoming in terms of menu, models, and convenience. With the pandemic seemingly in the rearview—at least according to the federal government’s standards— we’re monitoring the latest evolution of fast food and casual dining.

QSR MAGAZINE

CEVERGREEN@WTWHMEDIA.COM FSRmag

LOOK FOR

QSR

FSR

Since we’re reporting on both service formats, check out our gauge to see where a story falls on the QSR/FSR scale.

B R A N D E D CO N T E N T A S S I S TA N T E D I TO R

Ya’el McLoud

Callie: One of the largest shifts

ymcloud@wtwhmedia.com

the restaurant industry has seen recently is the redefining of what “value” means to guests. It boils down to quality, portion sizing, and an elevated experience when dining at a full-service establishment. A relaxed atmosphere and comfortable seating are some of the most important considerations Ben: Taking one month out of the for consumers deciding where to year for a combined QSR/FSR issue dine, according to a recent study by makes sense for a lot of reasons. King-Casey (page 68). The report It’s a reflection of what the industry revealed evolving preferences of dinlooks like in today’s time. Fast food, ers, especially in the case of NextGen fast casual, and casual dining used Casual concepts—the rising segment to live in three silos, and customers would use each one for specific reaknown for mixing the full-service sons. Fast food, obviously, was the sector’s focus on hospitality with value play. You want something quick the technological advantages and and convenient without much thinkconvenience of quick-service and ing. Fast casual had longer wait times, fast-casual concepts. but that was in exchange for elevated One revealing outcome from the food and atmosphere. Casual dining survey: Though quick-serves foster was where you spent more for the the most frequent visits, full-service experience and additional service. restaurants earned the highest levels Thanks to COVID and inflation, of customer satisfaction, surpassing things aren’t as separated as they fast casuals, as well. The net satisfacused to be. One could easily find an tion score of quick service was 56 peroccasion where it’s cheaper to dine cent, fast casual 60 percent, and fullat a full-service establishment than service 71 percent. NextGen Casual a fast casual. In another scenario, a experts provide their insight on what guest may find that a fast-food conthe data means for restaurants movcept rolled out a burger that’s superior in taste and quality to a fellow ing forward, including leaders from fast casual. Want convenience? You Firebirds Wood Fired Grill; Ginger could likely get that at a fast casual, Brands Hospitality Group; Another considering how many are shifting Broken Egg Café; Black Bear Diner; toward drive-thru pickup lanes. Tupelo Honey Hospitality; Snooze, No one may understand this an AM Eatery; JINYA Holdings; The more than Flynn Group, the world’s Greene Turtle; Heritage Restaurant largest franchisee. The company is Brands; and more (page 80). the biggest operator of Applebee’s Though competition remains as but also has a sizable hand in Taco fierce as ever in this business, you Bell, Panera, Arby’s, Wendy’s, and don’t have to look far to find restauPizza Hut. Having that crosssegment view makes CEO Greg Flynn rant execs willing to share their best practices and tips for the sake of a better operator, but his opinion is the same as most in the industry—the creating a better industry for all.

FSR is a registered trademark of WTWH Media, LLC. FSR is copyright © 2024 WTWH Media, LLC. All rights reserved. The opinions of columnists are their own. Publication of their writing does not imply endorsement by WTWH Media, LLC. Subscriptions 919-945-0704. www.fsrmagazine.com/subscribe. FSR is provided without charge upon request to individuals residing in the U.S. meeting subscription criteria as set forth by the publisher. AAM member. All rights reserved. No part of this magazine may be reproduced in any fashion without the express written consent of WTWH Media, LLC. FSR (ISSN 2325-2154) is published monthly by WTWH Media, LLC, 1111 Superior Avenue Suite 2600, Cleveland, OH 44114. Periodicals postage paid at Cleveland, OH and at additional mailing offices. POSTMASTER: Send address changes to FSR, 101 Europa Drive, Suite 150, Chapel Hill, NC 27517-2380.

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B R A N D E D CO N T E N T A S S I S TA N T E D I TO R

Olivia Schuster

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DESIGN & PRODUCTION QSR SENIOR ART DIRECTOR

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Erica Naftolowitz

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SALES & BUSINESS DEVELOPMENT GROUP PUBLISHER

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restaurant business is as hard as it’s ever been to compete.

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CONTENTS

MARCH 2024 / QSR-FSR CROSSOVER CHEFS & INGREDIENTS

FE ATURES

ELIVERY DILEMMA D How is the relationship faring between operators and third parties in the post-COVID era? BY SAM DANLEY

GEN Z AND THE PUSH FOR ALCOHOLIC INNOVATION

Younger guests are urging companies to focus on diverse flavors. BY SAM DANLEY

CULINARY MAESTRO

DRIVES CROSS-CONCEPT COLLABORATION

This chef is bringing innovation to Logan’s Roadhouse and all of its sister brands. BY CALLIE EVERGREEN

DEPARTMENTS

W ILD THYME LOOKS TO GO BIG TIME Learn how this budding group balances full-service and fast-casual ocassions. BY SAM DANLEY

H AVING THE COURAGE TO HELP Corporate social responsibility is a crucial part of a brand’s culture. BY SATYNE DONER

109 A RE MULTI-CONCEPT

DEALS THE FUTURE OF FRANCHISING? Companies

with multiple brands to offer have a distinct advantage. BY SAM DANLEY

112 M ARKETING AT

THE HIGHEST LEVEL

A growing number of CMOs are reaching the role of chief executive.

BY SATYNE DONER

116 T HE NEXT EVOLUTION OF

BY BEN COLEY

Already the world’s largest franchisee entity, Flynn Group is looking for so much more.

68 Here Comes NextGen Casual BY DANNY KLEIN

A new breed of full-service restaurants are finding plenty of whitespace in the post-pandemic world of dining out.

120 START TO FINISH: SUSAN TAYLOR

FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

The Peak of Restaurant Franchising

SHARED KITCHEN SPACES

Using the term ‘ghost’ will likely be left behind. BY BEN COLEY

The CEO leads growth for the West Coast-based Juice It Up!

80 The Now of NextGen Restaurants BY CALLIE EVERGREEN

Backed by recent data and insight from restaurant leaders, the emerging category is defining itself.

ON THE COVER

Greg Flynn and his team have a lot more growth on the table. PHOTOGRAPHY: FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

2 EDI TOR S’ L ET TER

IND U S T RY- W ID E I S SU E

6 BR A NDED CON TEN T

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Four Advantages Multi-Unit Restaurants Gain from Cloud POS

oint-of-sale systems have been around for a long time, but today’s cloud-based systems have catapulted the standard POS into a robust engine filled with capabilities. The past POS was the center of your operation, but today’s cloud platforms have capabilities that are far beyond legacy POS solutions. Cloud POS restaurant management platforms help manage virtually every aspect of your enterprise: front-of-house to kitchen, inventory, recipes, schedules, staff timekeeping, waitlists, reservations, employee communications, manager coordination, customer interaction, digital everything, customer loyalty, marketing, and more.

Why Switch to Cloud POS?

Traditional client-server POS setups involve bulky terminals connected to a central server through a network of wires and hardware. Cloud POS offers tangible advantages in cost, simplicity, flexibility, and functionality, shifting away from the need for physical servers and reducing data center costs.

Avoid or Reduce Data Center Costs

1 | Leaders who budget for and manage IT resources know

the high cost of acquiring and maintaining infrastructure for corporate and store operations. In-store, client-server POS and other systems require hands-on updating and troubleshooting. Some of these systems are mission-critical, so you may have redundant data centers if one goes down. Cloud restaurant systems avoid these expenses because the cloud technology provider handles them.

Avoid Up-front Capex and Per Terminal Fees

2 | Cloud POS eliminates the need for a server and moves

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traffic flow to someone else’s data center. The end result is much simpler: devices running apps connected to cloud computing.

Cloud solutions offer simplicity while lowering costs without sacrificing performance, scalability, or security.

Gain Visibility Beyond

3 | the Four Walls

Data is the currency of success. By design, cloud technology makes it easy to access important metrics even when you’re not onsite. This also seamlessly gives a multi-unit restaurant operator visibility into important metrics across multiple locations from a centralized reporting portal.

Benefit from More (and Better) Integrations

4 | Cloud POS in restaurants uses modern programming

languages, so systems can easily integrate with other systems used to serve guests—such as third-party ordering—and manage restaurant tasks—such as staff scheduling. Simplified, native connections and integrations make it easier to serve today’s guests in the way they want to be served. It also tends to lower overhead IT costs and reduce finger-pointing.

Ready to Consider Cloud POS?

A modern Cloud POS restaurant management platform launches a restaurant to new heights of success, saving you money and turning trends and customer insights into sales and competitive advantages. When searching for a POS provider, look no further than Xenial. There’s noise in the POS space, so parsing out the best system for your restaurant also requires choosing the best partner for your business. With over 35 years of experience in the quick-service restaurant space and a digital technology ecosystem, Xenial, a Global Payments company, is the onehand-to-shake solution. ◗

To find out more about Xenial Cloud POS or the full stack ecosystem visit www.xenial.com or email: sales@xenial.com

M A R C H 2 0 24

IND U S T RY- W ID E I S SU E

to be careful because we need to honor confidentiality between brands, and we are very careful about that, but that doesn’t mean there aren’t lots of general lessons that we can and have learned that we can bring to bear on any of our brands.” NEXT GEAR OF GROWTH When Flynn talks about chapter three, he references two major growth channels—one of those being international expansion. “The good news is that international is unlimited opportunity,” Flynn says. “It’s a big world out there and there are literally millions of restaurants, and I don’t see why we can’t effectively operate internationally. But I wanted to be conservative about it and take baby steps out of the country.” The move is already underway in Australia. In June, Flynn Group announced that it agreed to take over Pizza Hut’s roughly 260-unit master franchising business in the country. The chain is the second-largest pizza player in Australia, behind Domino’s, which has close to 800 units. With the backing of Flynn Group’s capital and franchising experience, Flynn says there’s no reason why Pizza Hut couldn’t reach at least 1,000 restaurants in the country. The company looked at international avenues for a while, COO Ron Bellamy says. Flynn Group wanted to put capital to work, but with a brand it knows well, a geography that isn’t too different from the U.S., and a team it really believes in.

IND U S T RY- W ID E I S SU E

FLYNN GROUP IS NOW IN CHARGE OF BUILDING PIZZA HUT IN AUSTRALIA. 

“We’ve seen a lot of success in adding brands and building scale in the U.S.,” Bellamy says. “And the question becomes, how can we do that in other regions? So Australia is the first step, which I think is a really good one in that it was a light first step. I mean, a heavy first step would have been to go buy 2,000 restaurants in Asia. Had that not gone well, that could really hurt us. And I think this is a really good first step to learn on. We feel really confident in it. But if, for some reason, it doesn’t break our way, life’s going to be OK. I don’t think that’s going to be the case.” Establishing roots in Australia felt right in a lot of ways for the company. It’s the same language, there are good, nonstop flights to and from headquarters in San Francisco, and the residents have demonstrated an affection for American brands. Plus, Pizza Hut was already a high-functioning business in Australia with a 100-person team in place. Phil Reed, CEO of Pizza Hut Australia, has been in the position since 2018 and in the quickservice segment overall since 1984. Flynn Group doubled down on its Aussie aspirations by agreeing to debut Wendy’s in the country—to the tune of 200 stores over 10 years. “The combination of the two opportunities was serendipitous but excellent,” Flynn says. “It was a way to, in a low-risk way, get into an overseas market, but do it with a business that had growth potential. But then later on another business that we knew well with a partner we knew well on top of that, and now it can make it a much more substantial opportunity.” Bellamy says restaurant culture is broadly similar between the U.S. and Australia. If a store has a high-performing manager and general manager, the restaurant is going to do well. The mechanics, however, are different. Flynn Group controls all the locations for Wendy’s and Pizza Hut in a country of 25 million people. Master franchising means it will work with smaller, local franchise partners who will own and operate the restaurants. Pizza Hut sales in Australia are similar to the U.S. in that the cuisine was one of the least impacted food groups during the pandemic because of its close association with delivery and takeout. Previously, the brand was big on buildings with red roofs and sit-down occasions, but that’s significantly shifted to much smaller offpremises-only outlets. Flynn Group plans to do the same in Australia. As for Wendy’s, there is no asset base, so the company has the rare opportunity to configure the chain’s personality in the country.

M A R C H 2 0 24

FLYNN GROUP (4)

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“And for that, I think we really do have to take into account recent customer trends, how big the dining rooms have to be for us,” Bellamy says. “It’s going to be interesting too because we’ve got to balance what might be the most efficient with how to have the biggest brand impact coming out of the gate. So you might actually conclude as an example, hey, we actually don’t want a dining room. We think the right way to do this is it’s drive-thru and it’s carryout and it’s third-party delivery and that’s what we’re focused on and that asset might look like something. But we might say that’s not the way that we want to begin because we want to put a stake in the ground of what we’re going to be about and you might want those first couple of restaurants to look a little bit different. So we’ll have to play through that.” The second half of chapter three was about entering consumer-facing brands outside of the restaurant industry. The company did just that in late 2023 by acquiring 37 Planet Fitness locations from Alder Partners, LLC. This prompted a change from “Flynn Restaurant Group” to simply “Flynn Group.” When the company was evaluating potential complementary segments, fitness became a primary target. Flynn Group said Planet Fitness fit its “investment thesis built on concepts that offer consumers a substantial value proposition and expertise in operating multi-unit and multistate consumer facing franchised businesses.” At the time of the announcement in November, the company said it would continue growth under the current area development agreement and open three stores within the next four months. There were reports in early February Flynn Group was looking to sell a majority stake in its business, which could be valued at more than $5 billion, including debt. The company declined to comment on the news as of press time. A PROFITABLE FUTURE Flynn Group’s sales have been favorable since its recovery from the COVID pandemic. For the quick-service brands, it was a matter of weeks. For full-service, it took about a year. Flynn describes the comeback as “epic” in 2021 and “very strong” in 2022. The company was hit with inflation in the middle of its P&L in 2023, but strength in sales leads him to believe consumer demand—down to the lowest-income levels—remains robust. Flynn has predicted a soft landing in the economy for a couple of years after a rise in real wages

IND U S T RY- W ID E I S SU E

“ I think the key to success in the restaurant industry for a franchise or any other kind of operator is running your restaurants well, each and every day consistently everywhere.”

put more money in people’s pockets. The company is seeing consumers use that cash on restaurant experiences. Flynn Group took between 8-12 percent price in the past year and a half, but it hasn’t seen a material decline in traffic. The company has built hundreds of restaurants—still actively doing so—but that’s limited by finding the right opportunities. Over the years, Flynn Group has acquired more restaurants than it’s developed, but done so at a cost that’s cheaper than constructing its own. The franchisee is almost everywhere in the U.S., with flags in 44 states. There are a couple of surprising markets that Flynn Group hasn’t cracked yet, like Arizona, Nebraska, and Connecticut. However, Flynn feels confident in reaching these places soon. He’s also optimistic about the company adding another restaurant chain in the future. Taking competitive conflicts into consideration, there’s still space in segments like Asian, Mediterranean, steak, fine dining, coffee, and tea. Flynn Group will be careful with any choice it makes because there isn’t necessarily a need to tack on any more brands. Also, the company will keep its filter of only joining premier chains. Flynn can’t say he had a vision of Flynn Group becoming exactly what it’s evolved into. But he can say he was always attracted to the prospect of growing something. He’s an entrepreneur at heart, so he set out to build an enterprise. It’s done well thanks to a “combination of good luck and a lot of teamwork,” Flynn says, although he’s more interested in discovering where Flynn Group goes from here. “I think the key to success in the restaurant industry for a franchise or any other kind of operator is running your restaurants well, each and every day consistently everywhere,” Flynn says. “And that’s the main hurdle you have to overcome to succeed. It’s not about buying restaurants cheaply or it’s not about building restaurants quickly or it’s not even about your franchisor coming up with the latest great promotion or advertising. All those things matter and have contributed to success. But the thing that we need to get right and focus almost all of our energies on, especially as the franchise operator, is running our restaurants well each and every day and creating consistent, great guest experiences because that’s the heart of the business.”  BEN COLEY IS THE EDITOR OF QSR. HE CAN BE REACHED AT BCOLEY@WTWHMEDIA.COM

M A R C H 2 0 24

FLYNN GROUP / ERIC JAMISON/STUDIO J INC 2023

FR ANCHISEE DE VELOPMENT

Clarity in Every

Transaction The AI-Driven Revolution of Drive-Thru Efficiency

Here Comes NextGen Casual /

IND U S T RY- W ID E I S SU E

BY DANNY KLEIN

M A R C H 2 0 24

I N D U S T R Y DATA

NEXTGEN BRANDS ARE THE LONG-AWAITED ANSWER TO FAST CASUAL.

A new breed of full-service restaurants are finding plenty of whitespace in the post-pandemic world of dining out. In the fall of 2021, FSR unveiled “NextGen Casual” as a category definer. But it was hardly a novel idea. For years, full-service chains had taken to labeling themselves in hopes of placing some type of proverbial line in the sand. Terms like “upscale casual,” “polished casual,” “elevated casual,” “fine-fast,” “craft casual,” and on it went. The idea was a plain one: “casual dining” had become a blanket descriptor for larger players in the space, from how they operated to what they looked like, but didn’t capture what was taking shape in the middle—a restaurant movement closer to independent restaurants, in terms of food, sourcing, and nuance, yet with the scale, model capabilities, and ambitions of multi-unit chains. In many respects, it was a long-awaited answer to fast casual. The quick-service disruptor didn’t simply crash fast food and force change from the top down; it also grayed the proposition for full-serves.

M A R C H 2 0 24

QSR

FSR

IND U S T RY- W ID E I S SU E

Was the food quality in sit-down establishments materially better than fast casual? And if the answer wasn’t so clear all of a sudden, then how could operators justify the added cost of table service? Even before COVID-19, brands had started to solve the riddle through a combination of experience, accessibility, agility, hyper-focused menus, technology, and differentiated designs. The pandemic sped the cycle, and it’s only solidified in the aftermath. Picture higher prices across the foodservice industry and a growing divide between transactional brands and those that are hospitality-driven. As challenging as the dynamic is, it’s uncovered opportunity for brands that lead with the latter to reframe value as “what it’s worth” versus “what it costs.” All said, though, what “NextGen Casual” means going forward remains fluid. Just like fast casual when it landed, or “better burger,” etc., how a brand gets credit for stepping into a fresh space comes down to what guests care most about. And so, FSR and QSR this year commissioned a consumer study with consulting firm King-Casey to develop an understanding of diner wants/needs for the next generation of full-service restaurants. The answers won’t just matter to sit-down chains, however—everybody will be paying attention. To begin, we set out to assess the relative appeal of five alternative benefit themes for differentiating NextGen Casual restaurants from existing concepts: menu differentiation; technology; health and the environment; non-chain experience; and convenience and comfort. Nearly 630 people were polled who eat at/from restaurants at least once per month (64 percent visited weekly) and had annual household incomes of $35,000-plus (30 percent reported $100,000 and above). Each survey covered restaurant usage behaviors, reasons for visits and priorities, overall response to one of five NextGen Casual concepts, diagnostic questions to assess attitudes, and relative degree of influenced sponsored by varied attribute/benefit nomenclature. Here were the results.

The Takeaways/ RESTAURANT USAGE BEHAVIORS AND PRIORITIES

Age affects frequency of restaurant use, chain preferences, and types of food consumed in past year. Based on frequency of use, 55- to 69-yearolds are the least desirable segment.

IND U S T RY- W ID E I S SU E

brands had started to solve the riddle through a combination of experience, accessibility, agility, hyperfocused menus, technology, and differentiated designs.

NEARLY

630 PEOPLE WERE POLLED WHO EAT AT/FROM

RESTAURANTS AT LEAST ONCE PER MONTH

64 VISITED WEEKLY

Reasons for restaurant visits, though, are largely independent of age. Consumers have mainly visited establishments for a relaxing meal, to celebrate special occasions, to socialize, avoid cooking and/ or to have a particular type of food. Consumers do not exhibit much, if any, exclusive loyalty to either types of restaurants, specific chains or to specific types of foods. On average, they have, in the past year, visited more than six of the chains studied, consumed more than eight types of foods and have visited fast casuals and quick-service restaurants as well as full-service venues. Although quick-serves foster the most frequent visits, fullservice restaurants earned the highest levels of satisfaction. Interestingly, fast casuals are no more satisfying than quick-service brands. Providing a relaxed, comfortable atmosphere with physical menus, meals prepared to order, and popular pricing for everyday dining are, by far, the most important considerations for choosing a restaurant to visit. Those benefits are far more broadly desirable than many of the current “hot buttons” for the NextGen themes like technology, health, and the environment and/or limited menus. Nonetheless, there are significant minorities of consumers who find those NextGen themes to be desirable. A quick editor’s note on the above: Much of the NextGen movement isn’t necessarily tied to recreating what guests expect of full-service dining—it’s to take the hallmarks and do them better/more consistently. That’s where fast casual first threw the quick-service game into chaos. Chipotle reset the bar by taking the pillars of the category (speed and convenience) and bringing them forward with reimagined food quality and more customization than ever. You don’t always have to reinvent the wheel to spin it. RESPONSE TO NEXTGEN CONCEPTS

Consistent with the earlier findings that consumers like to visit different chains and different restaurant formats, all five of the NextGen concepts studied enjoyed high levels of positive response. On average, more than four of five consumers liked the ideas and would visit them if conveniently located. Largely, broad interest in the concepts can be traced to their common prom-

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I N D U S T R Y D ATA

RESPONDENTS HAD ANNUAL

ise of highly desirable benefits—new, full-service restaurant that offers a varied menu with great tasting food, comfortable seating, table service, and a relaxing atmosphere. Consumers were most attracted to the idea that emphasizes convenience and comfort—satisfied—well-fed and comfortable, better food, and convenient service at affordable prices; in a hurry, want to relax, order ahead, have your order delivered. Almost two-thirds of consumers liked that concept a lot (61 versus 39–51 percent) and more than half claimed they would definitely visit (53 versus 36–47 percent). This concept was particularly associated with dinner meals and was disproportionately appealing to 55- to 69-year-olds.

A slightly narrower appeal was expressed for the concepts that promised menu differentiation (the most innovative, chef-inspired creations) or a nonchain experience (we don’t look, feel, or operate like a chain restaurant). Menu differentiation was also associated with dinners and, particularly, special occasions. Interest in a non-chain experience was particularly expressed by women and consumers with higher incomes. Least appealing were the concepts that focused on technology or health and environment. It is important to note, however, those concepts still had strong levels of appeal, but to a smaller audience. Notably,

HOUSEHOLD INCOMES $

35,000 +

% REPORTED $

100,000 AND ABOVE

The Charts

•Reasons for visiting

6065+ 6755+595056+ 575056+ 5546+534441+ 28 restaurants in the past year/ ■■ 18–34

YEAR OLDS

■■ 35-54

■■ 55-69

YEAR OLDS

% 67 % 65

YEAR OLDS

% 59 55 55 %

% % 57 56 %

% 56 55% %

46% 46

% 53 %

44% 41%

Having a Celebrate relaxing meal special occasion

IND U S T RY- W ID E I S SU E

Socialize

Didn’t want to cook

Have particular type of food

Save time

M A R C H 2 0 24

ADOBE STOCK / PRINS PRODUCTIONS

28%

I N D U S T R Y D ATA

both of these concepts were disproportionately associated with dining alone and particularly attractive to men. Interest in the technology theme was skewed to 18–34 year-old single Black men. The health and environment theme was particularly appreciated by 35- to 54-year-old married men with kids living at home.

ON AVERAGE, MORE THAN

4 OF 5

CONSUMERS LIKED THE IDEAS AND

WOULD VISIT THEM IF CONVENIENTLY LOCATED. CONSUMERS WERE

Another note: One of the secret weapons of NextGen concepts is their ability to flex technology by fit. Customers generally aren’t going to say they want tech in their sit-down experience unless it’s supplementing what they expect of the brand. That’s generally on the restaurant to figure out. So a brand like bartaco and its QR code ordering complements the approach with a team of customer-experience providers in the dining room, running food and answering questions. Other chains

MOST ATTRACTED

might have pay-at-the-table tech and tablets to enable servers to cover more ground and have information at the ready, or KDS systems in the back to boost consistency and open them to a wider labor pool that can train faster. Tech can be invisible, or not, but NextGen concepts find ways to deploy innovation to improve the experience rather than take something away.

For several of the concepts, specific words/phrases evoked positive consumer attention and disproportionately led to interest: “Convenience” and “comfort”—reasonable prices; freshly

prepared foods; foods I crave; good wait staff and/ or the promise of saving time.

3735+ 26 66+47 4644+ 30 3634+ 232944+ 193134+ 223029+ 172723+ 192617+ 7 TO THE IDEA THAT EMPHASIZES

CONVENIENCE AND

COMFORT

•Visit Frequency/

Menu differentiation—customized food order; foods

made-to-order; freshly prepared foods; choices you can’t get elsewhere; limited, but great choices.

■■ 18–34 YEAR OLDS ■■ 35-54 YEAR OLDS

66% 66%

Once per week, or more

■■ 55-69 YEAR OLDS

47 %

37 % 35%

FULL SERVICE

30%

QUICK SERVICE

FAST CASUAL

44%

36% 34%

31% 34

RESTAURANT ICONS: ADOBE STOCK / ICONS-STUDIO

46% 44%

19%

30% 29%

17%

27% 23%

19%

26%

17%

Try place that had been recommended

M A R C H 2 0 24

Family meal with kids

Try new type/style of food

Pickup food en route to school/work

Try place that had been advertised

Watch sporting event

IND U S T RY- W ID E I S SU E

I N D U S T R Y D ATA

tally conscious/sustainability; organic ingredients. Although most people (84 percent) were suspicious of the concepts in one or more ways, only a fear of prices being too high (45 percent) was articulated by more than a third of consumers. At lower levels, to varying degrees by concept, consumers, on average, were concerned with portions being too small, the restaurant being too noisy/ busy, bland food that doesn’t look appetizing, etc. Independent of the concepts studied and totally consistent with the foregoing findings, consumers would be far more influenced by words and phrases related to fresh preparation of

their meals and/or unique recipes than to the use of healthy, good-for-you ingredients. Here again, however, these data points do not mean that there is not a market for restaurants that cater to the health conscious. But rather, that there would be far broader appeal in flavorful descriptions than to those related to healthful ingredients.

% WERE SUSPICIOUS OF THE CONCEPTS IN ONE OR MORE WAYS

\ WITH MORE THAN A THIRD OF CONSUMERS SAYING

RECOMMENDATIONS AND CONSIDERATIONS

FEAR OF

PRICES BEING

TOO HIGH

There is definitely an opportunity for a NextGen class of full-service restaurants built around a common theme of great tasting food with comfort in a relaxed atmosphere. Consumers are ready and willing to try almost any type of new restaurant concept because they like varied

44 36 + 39 27 20 + 21 2+ 7 3 + 7156+ 60 2436+ 34 1+21+ •Satisfaction/ ■■ FULL SERVICE

■■ QUICK SERVICE

27%

■■ FAST CASUAL

% 39 36 %

20 21% %

•Most important considerations for restaurant selection/

■■ DESIRABLE ■■ EXTREMELY DESIRABLE

Relaxing atmosphere

85%

% 60 56

Extremely Satisfied

36% 34%

Satisfied Net

IND U S T RY- W ID E I S SU E

Somewhat Satisfied

Very Satisfied

7 % 3%

Knowledgeable, attentive wait staff

84%

71%

85=39= 39

84=43= 43

Comfortable seating

84%

84=41= 41

Not feeling rushed

81%

Not Very Satisfied

81=40= 40

Popularly priced for everyday dining

79=32= 32

1% 2% 1%

79%

Not at All Satisfied

Meals prepared to order

78%

78=38= 38

ADOBE STOCK / GIRAFCHIK

Health and environment—healthy items; environmen-

I N D U S T R Y D ATA

CONSUMERS ARE

experiences as well as varied menus. Under that overall umbrella there are numerous opportunities that appeal to varying numbers of consumers based on their differential priorities. The broadest opportunity is for full-service restaurants that combine the promise of a relaxed on-premises experience with the convenient efficiency for those in a hurry or with takeout needs—and all at affordable prices. Whether or not this triple-benefit restaurant can be successful from an operations and financial perspective must be carefully evaluated. Lower, but not insignificant opportunities, exist for new full-service restaurants that focus on menu differentiation or a non-chain experience

Can customize ingredients in order

72%

72=33= 33

Physical menus to hold and read

72%

72=32= 32

Entrees under $12

71%

71=32= 36

70=29=

Easy to get meal in short amount of time

70=29= 29

Menus with detailed descriptions

61=24= 24

Able to get in/out quickly

61%

61=23= 23

60%

CONCEPT BECAUSE THEY LIKE

Taken together, it is likely that the Next Gen era of full-service restaurants will not be a singleminded, homogeneous group, but rather niche oriented clusters of restaurants targeted to specific/ unique consumer need/benefit segments rather than trying to broadly appeal to the masses. 

VARIED EXPERIENCES AS WELL AS

VARIED MENUS

DANNY KLEIN IS THE EDITORIAL DIRECTOR OF QSR AND FSR. HE CAN BE REACHED AT DKLEIN@WTWHMEDIA.COM.

Environmentally sensitive plates, etc.

39=16= 16

Some locally inspired menu items

Lots of low-calorie/ low-fat items

59%

59=23= 23

Décor consistent with type of food %

Electronic paying at table

56=23=

23%

Offering alcoholic beverages

55=26=

Menus with pictures of every item

52%

52=26= 22

Not having look/feel of a chain

60=22= 22

NEW

RESTAURANT

39%

52%

Many unique items/recipes

WILLING

TO TRY ALMOST ANY TYPE OF

■■ DESIRABLE ■■ EXTREMELY DESIRABLE

56%

29%

AND

•The lesser considerations/

Entrees from $12–$24

70%

or technology and/or a healthy, environmentally conscious theme. There is some evidence that the alternative themes can be disproportionately used to attract specific demographic groups.

READY

52=17= 17

47=17= 17

47%

47=23= 13

39% %

Soft background music

44%

44=17= 17

43=13= 13

50=19= 19

42%

42=16= 19

37=17= 17

37=14= 14

Live music/ entertainment

35%

42=19= 19

39=16= 16

Modern, high-tech décor

37%

Sustainable to-go packaging %

40=14= 14

All/mostly organic ingredients

37%

Traditional, classic décor

43%

40%

Electronic ordering at table

Simple menu (not too many choices)

Kid friendly

Modern, contemporary atmosphere

50%

47%

37=14= 13

TV monitors

35%

37=14= 13

Lots of gluten-free items %

25%

25=11= 11

I N D U S T R Y D ATA

•Likelihood of visiting

•Overall opinion of concept/ 86%

restaurant due to concept/ 86%

51+35+86+1+0+13 46+40+86+13+2+0 42+33+75+11+2+12 36+40+76+16+6+2 39+34+73+5+2+20 40+41+81+14+3+2 51+37+88+1+0+12 47+38+85+13+2+0 61+26+87+2+0+12 53+35+88+10+2+1 51%

Menu Differentiation

46%

35%

• LIKE IT A LOT

• LIKE IT A LITTLE

• LIKE IT NET

• DISLIKE A LITTLE

• DISLIKE A LOT

75%

42%

• LIKE IT NET

• DISLIKE A LITTLE

NEITHER LIKE NOR DISLIKE

• DISLIKE A LOT

• LIKE IT NET

• PROBABLY WOULD

• DISLIKE A LITTLE

• DEFINITELY WOULD

• PROBABLY WOULD

81%

• DEFINITELY WOULD

• PROBABLY WOULD

• LIKE IT A LOT

• LIKE IT A LITTLE

• LIKE IT NET

• DISLIKE A LITTLE

• DISLIKE A LOT

• DEFINITELY WOULD

• PROBABLY WOULD

• WOULD NET

• MIGHT/ MIGHT NOT

• PROBABLY NOT

• DEFINITELY NOT

Non-chain Experience

• MIGHT/ MIGHT NOT

• PROBABLY NOT

• DEFINITELY NOT

Convenience and Comfort

34%

26%

2 •

• LIKE IT A LITTLE

• DEFINITELY NOT

88%

Convenience and Comfort

61%

• PROBABLY NOT

Health and Environment

13%

12%

• NEITHER LIKE NOR DISLIKE

38%

87%

• LIKE IT A LOT

• WOULD NET

85%

47%

37%

• MIGHT/ MIGHT NOT

14%

• NEITHER LIKE NOR DISLIKE

• DEFINITELY NOT

41%

Non-chain Experience

• WOULD NET

20%

• DISLIKE A LOT

• PROBABLY NOT

Technology

16%

12%

• NEITHER LIKE NOR DISLIKE

• MIGHT/ MIGHT NOT

40%

88%

51%

• WOULD NET

76%

40%

34%

• LIKE IT A LITTLE

• DEFINITELY WOULD

Health and Environment

• LIKE IT A LOT

•

13%

36%

73%

39%

13%

33%

• LIKE IT A LITTLE

40%

Technology

11%

• LIKE IT A LOT

Menu Differentiation

• LIKE IT NET

DISLIKE A LITTLE

0 •

DISLIKE A LOT

12%

• NEITHER LIKE NOR DISLIKE

10%

• DEFINITELY WOULD

• PROBABLY WOULD

• WOULD NET

• MIGHT/ MIGHT NOT

• PROBABLY NOT

• DEFINITELY NOT

I N D U S T R Y D ATA

•Occasions/

82 +33+20 62+46 46+38+24 3436+ +65 77+66+35+17 54+43 42+30+32 2332+ 71+76+40+26 67+52 42+33+34 2438+ 72+64+38+20 54+38 43+38+24 28+26 82+69+37+21 56+43 46+40+24 2636+ 82%

Menu Differentiation

65%

62%

• DINNER

77%

• LUNCH

46%

• BREAKFAST

46%

• LIGHT MEALS/ SNACKS

• WEEKENDS

66%

54%

35%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

71%

• LUNCH

• BREAKFAST

72%

• WEEKENDS

76%

67%

• DINNER

• LIGHT MEALS/ SNACKS

• LUNCH

• BREAKFAST

42%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WEEKENDS

30%

• WITH FAMILY, INCLUDING KIDS

52%

42%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

33%

• WITH FAMILY, INCLUDING KIDS

54%

40%

43%

38%

20%

RESTAURANT ICONS: ADOBE STOCK / BRO VECTOR

82%

• LUNCH

• BREAKFAST

• LIGHT MEALS/ SNACKS

69%

• LUNCH

• WEEKENDS

56%

37%

• DINNER

• EVERYDAY MEALS

• ALONE

34%

• SPECIAL OCCASIONS

32%

• EVERYDAY MEALS

• ALONE

23%

• SPECIAL OCCASIONS

34%

38%

• EVERYDAY MEALS

• ALONE

24%

• SPECIAL OCCASIONS

Non-chain Experience

64%

38%

• DINNER

36%

Health and Environment

• LIGHT MEALS/ SNACKS

• WITH FAMILY, INCLUDING KIDS

Technology

17%

• DINNER

38%

• BREAKFAST

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WITH FAMILY, INCLUDING KIDS

• WEEKENDS

28%

• EVERYDAY MEALS

• ALONE

26%

• SPECIAL OCCASIONS

Convenience and Comfort

43%

46%

40%

21%

• LIGHT MEALS/ SNACKS

24%

• WEEKDAYS

• WITH ADULT FRIENDS/ RELATIVES

• WITH FAMILY, INCLUDING KIDS

• ALONE

36%

• EVERYDAY MEALS

26%

• SPECIAL OCCASIONS

I N D U S T R Y D ATA

•Reasons for interest in restaurant/

4532+ 2926+ 2322+ 20+ 17+ 16+ 13+138+ 50+4241+ 4038+ 3734+ 33+ 29+ 26+ 2523+ 2118+ 1714+ 9 TOTAL

They have good food Reasonable prices

Freshly prepared foods Relaxing atmosphere

Food is made to order

Customize food order Foods I crave

Friendly, helpful, courteous personnel Located near home/work

Wide variety of entrees

Consistently good/well prepared

Saves me time

Unique foods/recipes

Choices you cant get elsewhere

Menu has healthy items

Menu has limited, but great choices Foods that are better for you Environmentally conscious/sustainability

Uses organic ingredients

Closest source when time limited

Lots of off-premises options

IND U S T RY- W ID E I S SU E

•Reasons to not dine/

TOTAL

45% 32% 29% 26% 23% 22% 22% 20% 20% 17 % 17% 16% 13% 13% 13% 8%

Prices too high

Small portions

Too noisy/busy

Food is too bland

Food doesn’t look appetizing

Entrees not freshly prepared Tables too close together

Food not hot enough when served Not enough variety of entrees

Menu is too complicated

Not enough variety of sides Menus are not easy to read

Not enough variety of healthy choices

Pre-orders not ready upon arrival Takeout packaging doesn’t keep temperature right

Too many food/beverage choices

M A R C H 2 0 24

ADOBE STOCK / RAWPIXEL.COM

50% 50% 42 % 41% 40% 38% 37 % 34% 34% 33% 33% 29% 29% 26% 25% 23% 21% 18% 17 % 14% 9%

•

I N D U S T R Y D ATA

Most influential characteristics and terms/ ■■ INFLUENTIAL

■■ GREATLY INFLUENTIAL

Made fresh daily

96%

96=39= 39 95=69=

69%

Fresh-baked breads

93%

93=60=

60%

Customizable

93%

88%

88=44= 44

93=54= 54 91=55= 55

87%

87=44=

87%

86%

86=47= 47

Local favorite

Fast service

90=47= 47

Authentic

90%

90=52=

Craveable

89%

89=50=

50%

89=46= 46

Down-home cooking

88%

88=51= 51

M A R C H 2 0 24

73% %

78=38= 38

74=31= 31

73=28= 28

Free-range

72=31= 31

72%

85%

Hormone-free meats

85=39= 39 85=39= 39

70% %

84 %

84=39= 39

83%

82%

82=38=

38%

82=33= 33

81%

81=42= 42

80=35= 35

69=31= 31

69=25= 25

Curated

69%

69=20= 20

Non-fat and low-fat options

67%

67=24= 24

Non-GMO options %

61%

61=26= 26

Vegetarian options

47%

47=20= 20

Gluten-free options

Hand breaded

80%

70=34= 34

Superfoods

69%

83=40= 40

Organic ingredients

69%

All-natural %

79=34= 34

Whole grain breads/rolls

Slow cooked

Bold flavors

89%

Secret family recipe

52%

78% 74%

Healthy choices %

79%

Grain-fed meats

Quick preparation %

■■ GREATLY INFLUENTIAL

Wholesome goodness

85%

91=49= 49

86=44= 44

91%

■■ INFLUENTIAL

Succulent

87=44= 44

Marinated

91=55= 55

44%

Clean ingredients

86%

terms/

Hand-cut/diced

Chef-inspired recipes

Seasoned to perfection

91%

Signature recipes

Premium meats

91%

Special sauces and seasonings

Original recipe

Hot, fresh, and delicious

95%

•Less influential

47%

47=16= 16

IND U S T RY- W ID E I S SU E

The

Now NextGen

QSR

FSR

Restaurants Backed by recent data and insight from restaurant leaders, the emerging category is defining itself with chefinspired menus and fresh ingredients, top-notch hospitality, and more as it evolves and grows into the future. And it’s all happening today. /

BY CALLIE EVERGREEN

IND U S T RY- W ID E I S SU E

M A R C H 2 0 24

I N D U S T R Y D ATA

A STUDY BY KING-CASEY SHOWS MOST GUESTS ARE DRAWN TO FULL-SERVICE CONCEPTS THAT COMBINE DIVERSE MENUS AND COMFORTABLE ATMOSPHERES.

GINGER BRANDS HOSPITALITY GROUP, GAUGE ICON: ADOBE STOCK / EMIL’

It’s no surprise consumers are flocking to restaurant concepts where the guest experience is the primary focus, which is

M A R C H 2 0 24

why the emerging NextGen Casual segment continues to be a winning formula for success. Combining the best of the fullservice sector’s focus on hospitality with the technological advantages, comfort, and convenience seen in quick-service and fast-casual concepts, the category has become synonymous with constant evolution, improvement, and sustainable growth. A recent consumer report by King-Casey (page 68), a leader in restaurant and foodservice business data analytics and consumer insights, reveals the evolving preferences of diners have significantly shifted toward full-service restaurants that blend the allure of diverse menus with the comfort of a relaxed dining atmosphere. One revealing outcome: Though quick-serves foster the most frequent visits, full-service restaurants earned the highest levels of customer satisfaction, surpassing fast casuals as well. The net satisfaction score of quick service was 56 percent, fast casual 60 percent, full-service was 71 percent. “To see that full-service restaurants create the highest levels of satisfaction suggests that full-service brands have reinvested appropriately in the guest experience following the deep staffing challenges of the pandemic in 2020,” says James O’Reilly, CEO of Ascent Hospitality Management— whose portfolio includes more than 600 Huddle House and Perkins restaurants. IND U S T RY- W ID E I S SU E

I N D U S T R Y D ATA

“It’s also reassuring to see that guests continue to value great tasting food, a comfortable relaxing environment, and affordable prices,” he continues. “While this is a difficult balance to strike sometimes in a highly inflationary environment, it reinforces my belief that a renaissance for family dining is on the horizon, which we intend to lead at Ascent.” When consumers are deciding where to dine, the most important considerations are a relaxing atmosphere, knowledgeable and attentive wait staff, comfortable seating, and not feeling rushed, which were all rated desirable by more than 80 percent of study respondents. “These usage behaviors and priorities ring true at Firebirds,” says Christine Lorusso, senior director of digital marketing at NextGen Casual concept, Firebirds Wood Fired Grill. “We cater to guests looking for a relaxing meal at a decent price point, as well as those who are celebrating everything from birthdays to engagements. Our goal is to create extraordinary experiences, no matter the reason for dining, so that guests continue to make us their restaurant of choice.” Firebirds kept innovation at the forefront following the pandemic, where many brands fizzled on initiatives after COVID. The classic chain found a way to blend technology that speeds up

operations while balancing hospitality and the guest experience. Examples include fully integrating third-party delivery and training delivery service providers to use Flybuy, a dashboard platform where workers can see incoming orders all in one place. Wait times dipped as low as 30 seconds while increasing repeat visits, and it also cut down carbon emissions by 11,857g each month by keeping cars from idling in the parking lot, FSR previously reported. Another illuminating statistic is Firebirds’ customer visit frequency. Before the pandemic, patrons frequented the brand about six times

FIREBIRDS GUESTS VISIT THE RESTAURANT 10 TIMES PER YEAR ON AVERAGE, UP FROM SIX TIMES PER YEAR PRE-COVID.

“ We cater to guests looking for a relaxing meal at a decent price point, as well as those who are celebrating everything from birthdays to engagements.”

 CHRISTINE LORUSSO

 FIREBIRDS KEPT INNOVATION AT THE FOREFRONT DURING COVID.

FIREBIRDS WOOD FIRED GRILL (5)

IND U S T RY- W ID E I S SU E

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FIREBIRDS WOOD FIRED GRILL

I N D U S T R Y D ATA

per year. Currently, this figure has risen to more than 10 visits annually, which can be attributed to offering more diverse dining options, such as family meals, feasts, and takeout services. While a relaxed and comfortable dining environment and attentive staff were the keys for consumers per the study, “hot button” NextGen themes like a limited menu, health, the environment, and technology fell further down on the list. But, it’s worth noting there are significant minorities of consumers who find those NextGen themes to be desirable. “It doesn’t surprise me that ‘hot buttons’ fall a little bit lower on the priority list,” Lorusso says. “Themes like technology, sustainability, and chefinspired menus should enhance the experience, not overshadow the importance of food quality or service.” Liz Moskow, a food futurist and principal at Bread&Circus Ltd. says, “when asked, most consumers will tell you they want to make more sustainable choices for the planet and be early adopters of technology to enhance convenience, but when it comes to dining, and food consumption in general, this data only confirms what hospitality experts with restaurant experience already know to be true; emotions rule the day when choosing what to eat and where to eat it. This is the core of hospitality; precisely catering to human needs and paying attention to what drives people to motivate, act, choose, purchase, eat, return.” Ginger Flesher-Sonnier, owner and CEO of the Ginger Brands Hospitality Group, agrees. “People say they flock to Throw Social because we provide

M A R C H 2 0 24

IND U S T RY- W ID E I S SU E

I N D U S T R Y D ATA

 GINGER FLESHER-SONNIER

a casual, comfortable, relaxed vibe with plenty going on if they choose to participate,” she says. A math teacher turned entrepreneur, Flesher-Sonnier founded the experiential hospitality group that includes brands THRōW Social, Escape Room Live (sold in 2021), Kick Axe Throwing, and coming in 2024, Yacht Club Social. “They love that they can spend two to four hours—or more—with us and never feel rushed to leave, but know that they can pop in and out if they just want a quick bite. In particular, having music and games combined with fresh and tasty food seems to be a winning ticket,” she says. “The NextGen customer wants fresh-made food in a comfortable setting. They also want it to be quick and convenient. Staff engagement matters a lot as well. It is important to strike the right balance of convenience and hospitality,” adds Scott Lawton, CEO and cofounder of bartaco. Meanwhile, the largest potential concern for customers when trying a new restaurant was a fear of prices being too high, which was articulated by more than a third of consumers. At lower levels and to varying degrees, consumers were concerned with portions being too small, the res-

“ They love that they can spend two to four hours—or more— with us and never feel rushed to leave, but know that they can pop in and out if they just want a quick bite.”

GINGER BRANDS HOSPITALITY GROUP (3)

IND U S T RY- W ID E I S SU E

M A R C H 2 0 24

I N D U S T R Y D ATA

taurant being too noisy/busy, and bland food that doesn’t look appetizing.

CONSUMERS ARE CLAMORING FOR MORE SOCIAL ENTERTAINMENT. 

THE NEW DEFINITION OF “VALUE” One of the largest recent shifts the restaurant industry has seen is the redefining of what “value” means to guests. “Value is not always perceived as being cost-based. Value can come at a higher price, so long as the quality and experience is worth it,” Lorusso says. Brandy Blackwell, vice president of marketing for Another Broken Egg Café, says the study “further validates that value is not always created through discounts and promotions. Value is also realized through the delivery of a consistently great dining experience and an environment where connections can be celebrated and fostered.” Another Broken Egg Café is one of the fastest-growing, franchised breakfast and brunch concepts in the nation, with 95 locations—nearly 20 of which opened in 2023—and more in development, part of its “Road to 100” plan for 2024.

GINGER BRANDS HOSPITALITY GROUP (6)

M A R C H 2 0 24

IND U S T RY- W ID E I S SU E

I N D U S T R Y D ATA

Black Bear Diner, which has more than 140 locations in 14 states and counting, is known for its home-cooked comfort foods and focus on providing guests with exceptional service. Its growth plan for 2024 includes welcoming at least nine new franchise-owned diners and five corporate restaurants. The new diners will be a combination of conversions and ground-up new builds and will incorporate recent design enhancements to better accommodate off-premises dining, including an exterior delivery and pickup window. “Our investments at Black Bear focus on providing efficiencies and enhancing the guest experience without removing the connection our teams have with our guests,” Adams says. “Our belief is guests continue to seek experiences that provide genuine hospitality, and our intent is to continue to emphasize this at Black Bear Diner,” she adds. “This has always been a pillar for us coupled with serving up an abundance of classic all-American fare in our beautiful cabin-themed diners. This heritage truly stands

IND U S T RY- W ID E I S SU E

the test of time and wrapped together provides the value guests are looking for.”

 CAROLINE SKINNER

 TUPELO HONEY IS KNOWN FOR ITS SCRATCH-MADE SOUTHERN FOOD.

A FOCUS ON SCRATCH-MADE FOOD NextGen Casual restaurants have innovative, chef-inspired creations, typically with a streamlined menu and customization options. The study defined NextGen Concepts in the following way: “We are not trying to be everything to all people—just delivering better product consistency of clean, fresh, and craveable food.” Last February, Asheville, North Carolina-based Tupelo Honey launched a program for its “raving regulars.” The brand empowered stores with budgetary money, tools, and marketing programs to recognize and reward loyal customers, including secret menu items, participation in focus groups, and tasting new products. A large part of what’s driving customers to return is the brand’s fresh and made-from-scratch food, from its blueberry compote that accompanies the blueberry buttermilk waffles for brunch to chef-inspired entrees like its Grilled Salmon and Creamy Quinoa with sustainably farmed Atlantic salmon, roasted carrots and cauliflower, smoked harissa sauce, and chives. “The study affirms what we see/hear from our customers about their affinity for our brand. It comes down to our commitment to scratch-made food and our unique niche in the Southern food space,” says Caroline Skinner, chief operating officer of Tupelo Honey Hospitality. “When these two things are paired with best-in-class hospitality and a comfortable dining experience, we excel at delivering a great guest experience.” As far as food categories go, 81 percent of respondents say they ordered a burger in the past year. Mexican food and tacos (71 percent) were a close second, followed by chicken (69 percent), sandwiches (66 percent), breakfast (64 percent), Chinese food (62 percent), coffee/tea (58 percent), Italian/pasta (57 percent), barbeque (48 percent), steakhouse/prime rib (46 percent), seafood excluding sushi (38 percent), Japanese/sushi (30 percent), Thai/Korean/other Asian (26 percent), then Greek, Mediterranean, and Indian ordered by less than 20 percent of study participants. Andrew Jaffe, chief marketing officer of Snooze, an AM Eatery, notes the brand’s focus on menu variety and creativity delivers on guests’ evolving needs and wants. “We pride ourselves in enhancing our Snooze experience with creative twists on our menu, unique multiethnic dishes,

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Moskow notes “it seems to be increasingly more important for all kinds of restaurants to provide value, both real and perceived to their consumers, in new and engaging ways; portion sizing to price value, and sourcing of ingredients, the usage of healthy and/or trending ingredients, and menu call outs that evoke emotions and feelings. These feelings are what ultimately enhance both in-house and off-premises dining experiences.” “Guests will continue to seek out brands that can deliver the full-value equation, which is much more than just the check,” adds Anita Adams, CEO of Black Bear Diner. “Enhanced technology is important to address a number of challenges restaurants face, however, will never be a substitute for hospitality.”

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balanced with morning breakfast staples and healthy lifestyle items. All of this begins with sourcing responsibly ingredients that are always thoughtfully prepared and fresh,” he says. Cai Palmiter, vice president of marketing for upscale ramen concept JINYA Holdings, notes the room for the growing ramen category to differentiate itself in the future, highlighting “an interesting challenge. It speaks to the broader issue of how specific cuisines are perceived and categorized by consumers,” she says. “It is our struggle with consumers to recognize ‘ramen’ and not ‘Japanese’ cravings in general because it is either broad or just focused on ‘sushi.’” “It’s about shifting perceptions and educating the market,” she adds. “This is a classic example of how businesses need to not only excel in their product offering but also in how they communicate their unique selling points to the market. By focusing on creating a strong association with ramen, JINYA is aiming to break through the barriers of generalization and carve out a distinct niche in the culinary mindscape of its customers.” Tomo Takahashi initially started the concept in Japan before bringing JINYA stateside to Hollywood, California, in 2010, and growing it to more than 60 locations. “At JINYA, the commitment to preparing food fresh and made-to-order truly makes a significant impact on customer perception and satisfaction. This approach, while more labor intensive, sets JINYA apart in a market often flooded with pre-prepared or quick-serve options,” Palmiter adds. TECH AND OFF-PREMISES Geo Concepcion, CEO of The Greene Turtle, recalls how important digital ordering and delivery became in the full-service world, which was crystallized in focus by the pandemic. “With that wave behind us, we’re now seeing that guests want a dine-in experience that offers great service and value. The study confirms what we’re seeing day to day as our sales growth is coming from our late-night and happy-hour periods rather than off premises, as it had in the past few years,” he says. In the end, NextGen Casual restaurants that find ways to enhance their offerings with human touches that are designed to amplify customer service, hospitality, convenience, and customization are poised to succeed. “We’re always looking for ways to utilize technology to help us more effectively deliver these

IND U S T RY- W ID E I S SU E

“ We’re always looking for ways to utilize technology to help us more effectively deliver these core expectations.”

 GEO CONCEPCION

 GREENE TURTLE EMPHASIZES THE IMPORTANCE OF SERVICE AND VALUE.

core expectations. While other revenue channels [delivery, catering, pickup, etc.] are certainly beneficial, they aren’t our primary focus,” says Greg Graber, founder and CEO of Heritage Restaurant Brands, the franchisor of nearly 50 restaurants with concepts including Cool Hand Luke’s, a steakhouse/saloon; Perko’s Cafe Grill, which serves American family comfort food; and Huckleberry’s, a breakfast and lunch concept that serves up “Southern cookin’ with a California twist.” “These revenue channels are primarily used by our loyal guests who enjoy the in-restaurant experience and then take advantage of our other options as needed,” he says. “If we take our eye off guests’ core expectations, we will eventually erode our loyal guest base and all revenue channels will decline. Consumers must be able to rely on your primary deliverables and, when they do, they’ll be much more apt to try new ways of experiencing the brand.” Moskow believes tech is meant to encourage customer loyalty, provide deeper perceived or real value, and bolster a sense of human importance, and/or provide consumers with enhanced convenience and speed. “I see sustainability practices and the use of technology tools as layers to effective restaurant management; these layers should be added on top of consistent hospitality practices to make that restaurant selection more appealing, more satisfying, and more frequent,” she says. “What good NextGen Casual concepts can take away from this is that by providing the value already inherent to the fast-casual segment— quality, price value, consistency—they are best positioned to layer on personal touches that will enhance hospitality and foster comfort and belonging,” she adds. “While this can be enhanced off-premises via pickup and delivery to some extent, most of the focus needs to be on enhancing the in-store experience (dine-in or pickup) to make people feel a sense of connection to the brand, the location, and to the people who make each unit run effectively. This focuses on the restaurant customer, but begins with educating and incentivizing internal teams with new training protocols, employee incentives, and real organizational indoctrination from the CEO down to the dishwasher on the power of what true hospitality and personal human connection and interaction can do.”  CALLIE EVERGREEN IS THE EDITOR OF FSR. SHE CAN BE REACHED AT CEVERGREEN@WTWHMEDIA.COM.

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The rise of digital signage at quickservice restaurants.

THE EVOLUTION OF

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How Personalization Leads to Customer Satisfaction Enhance customer’s dining experience with digital signage.

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n the dynamic world of quick-service restaurants, digital signage has emerged as a pivotal tool for enhancing customer experience and operational efficiency. The advancement of digital signage has played a transformative role in the restaurant industry, specifically impacting customer engagement, personalization, and the integration of advanced technologies. “Audience engagement remains a constant concern, requiring operators to produce captivating and interactive content to retain viewer interest consistently,” says Megan Zeller, senior director of business development at Peerless-AV. In the ever-competitive quick-service sector, capturing and maintaining customer attention is crucial. Digital signage offers an interactive platform to engage customers with visually appealing and dynamic content. This engagement is not just about displaying information; it’s about creating an immersive experience that resonates with the audience. The evolution of digital signage is largely driven by technological advancements. A key development in digital signage is the incorporation of AI and machine learning, which enhances the personalization of content. “The rise of AI and machine learning contributes to personalized content delivery by analyzing audience demographics and behavior, ensuring a more targeted and engaging viewer experience,” Zeller says. By leveraging these technologies, restaurants can deliver content that is not only relevant but also tailored to individual customer preferences, thereby enhancing the overall dining experience. This personalization technology is also critical in capturing and maintaining the attention of increasingly discerning audiences.

Peerless-AV

“Customers now expect digital signage not only to convey information clearly and quickly but also to provide a seamless, personalized experience.” Over the past few years, there have been several global chances, including the COVID-19 pandemic, that has driven a change in consumer behaviors and expectations. Due to this, digital signage has had to undergo an extensive shift. “The global pandemic acted as a catalyst, accelerating the implementation of digital solutions as businesses looked for innovative ways to engage with customers

in a contactless environment,” Zeller says. “As a result, customers now expect digital signage not only to convey information clearly and quickly but also to provide a seamless, personalized experience.” The pandemic has undoubtedly accelerated the adoption of digital technologies, pushing quick-service restaurants to innovate rapidly to meet changing customer needs. “The continuous growth of smart device SPONSORED SECTION | MARCH 2024

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overcome. “With audience attention spans shrinking, it’s vital to deliver captivating, valuable, content consistently,” says Shokouh Shafiei, CEO of DSA Signage. Other difficult challenges discussed by Theresa Hannen, marketing manager for LSI Industries, include whether or not a franchise has the bandwidth to create unique, timely content and the ability to post if at the appropriate departed times. “Or would hiring an experienced custom software solutions provider to create your quick-service restaurant content, in turn keep your team focused on other critical areas of customer service,” Hannen says. To address this, “Operators are turning to dynamic content management systems and data-driven content solutions,” Shafiei says. ”By harnessing real-time data, they can deliver personalized, relevant content that resonates with their audiences.” The pandemic has also led to behavioral changes among customers. “Another change, which was a result of COVID-19, is diners have become accustomed to relying on their mobile device to browse a menu, to order, and to pay,” says Rich Ventura, vice president of professional display solutions at Sony Electronics. Thankfully retailers have been able to make strides in their software developments. “Our new software allows consumers, shoppers, and guests to control or ‘take over’ content on a screen using their own personal device,” Glass says. “This solved for a pain point during Sony Electronics COVID, but still lives on as a use the use of technology and communicacase that seems to add value and personaltion tools to understand customer preferization to the journey.” ences better. “Retailers have started using “The pandemic also drove the resurtechnology and communication tools to gence of QR codes, kiosks, and mobile understand what their customers’ needs/ ordering,” Ventura says. “Customers are preferences are, and implementing digilooking for all of these technologies to be tal signage solutions to communicate they integrated to best suit their needs and proknow and understand their customers’ vide a cohesive experience.” Integration needs in a more direct and timely manis key to offering a seamless and efficient ner,” Glass says. This approach not only service, meeting the high expectations of modern consumers. enhances customer satisfaction but also Furthermore, years of experience have builds a sense of trust and loyalty. taught consumers new display technolHowever, keeping content fresh and ogies can help minimize order mistakes engaging is another difficult challenge to

CREATIVE REALITIES, SONY ELECTRONICS

“Trends that are watch-worthy are those that deliver a sense of intelligence – personalized experiences where the digital signage element reacts to an individual, or, that is driven by new business rules.”

usage also increased exposure to personalized online content, and advancements in interactive technologies have raised the bar for engagement and relevance in digital signage experiences,” Zeller says. “Customers now anticipate virtually stunning displays and context-aware content that aligns with their preferences.” Restaurant operators are adapting to these changes by focusing on trends that enhance customer personalization. This includes trends like reducing indoor dining space while expanding ordering options, introducing dual drive-thrus to manage increased traffic, synchronizing digital experiences across various platforms, and offering curbside pickup for convenience. “Trends that are watch-worthy are those that deliver a sense of intelligence – personalized experiences where the digital signage element reacts to an individual, or, that is driven by new business rules,” says Rodrick Glass, executive vice president of business development at Creative Realities. These trends are complemented by 92

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