Restaurant Business Quarterly | Q3 2026

JULY, 2026

Check out the list of the country’s largest restaurant chains. P. 30

7 Brew’s World P . 8 | Casual-Dining Comeback P . 10 | Family-Dining Divided P . 12

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CONTENTS JULY 2026

MARKETING TROPICAL SMOOTHIE CAFÉ WANTS TO TURN ON ITS MARKETING ENGINE..........................................................26 OPERATIONS FAST-CASUAL RESTAURANT SALES GROWTH COOLED IN 2025...........................................28 SPECIAL REPORT THE TECHNOMIC TOP 500...........................30

FINANCE CHAIN RESTAURANT SALES SLOWED AGAIN IN 2025...........................................4

THIS IS 7 BREW’S WORLD. WE ALL JUST LIVE IN IT....................................................8

THE CASUAL-DINING COMEBACK STARTS AT THE TOP...............................................10

THE FAMILY-DINING SEGMENT IS DIVIDED BY DINNER................................................12

IN THE BURGER BUSINESS, CULVER’S AND SHAKE SHAKE ARE GRABBING MARKET SHARE.......................................................14

QUICK-SERVICE PIZZA SALES TURNED NEGATIVE LAST YEAR...............................20

Photo Courtesy of Jonathan Maze Cover Photo Courtesy of Sue Pearsall

JULY 2026 RESTAURANT BUSINESS

FINANCE

CHAIN RESTAURANT SALES SLOWED AGAIN IN 2025

The bulk of the Top 500 chain restaurants’ growth came in just three categories: coffee, beverages, and chicken. For everybody else, it was a market-share game at best. C hain restaurant sales last year slowed to their lowest rate of growth, outside the pandemic, since the Great Recession, according to the 2026 Technomic Top 500 Chain Restaurant Report. lower than the 3.5% growth in 2024, as the industry encountered a host of challenges, from weak consumer confidence to the growing use of weight-loss drugs to bad weather and an immigration crackdown. Even that might overstate the industry’s performance. A lot of the growth last year was driven by high-performing restaurant chains in specific sectors, notably chicken, coffee, beverages and snacks. Total U.S. sales generated by the 500 largest restaurant chains grew just 3% to $451.5 billion. That was lower than the 3.8% menu price inflation last year, and it was

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Image by Sue Pearsall

RESTAURANT BUSINESS JULY 2026

Median sales growth last year among the Top 500 chains was just 2.5% so, when adjusted for menu-price inflation, the typical chain last year saw a 1.3% decline in sales on a real-dollar basis. “It was a very, very weak year for the Top 500 overall from a sales perspective,” said Joe Pawlak, managing principal with Technomic, a sibling company of Restaurant Business and Nation’s Restaurant News. But unit growth remained strong last year, though fewer companies actually added new restaurants last year. Total unit count grew by 1.4%, again driven by high-growth chains like the beverage brands 7 Brew, Dutch Bros and Swig along with chains such as Dave’s Hot Chicken, Smalls Sliders and Super Chix. Yet that was slower than the unit count growth in 2024, when chains grew units by 1.6%. And nearly half, 48%, of the 500 largest chains either didn’t add new restaurants last year or closed some. And there was some surprising weakness at the top, as 19 of the 50 largest chains, including seven of the largest 20, finished the year with fewer locations than which they started. That includes mega chain Staarbucks along with Burger King and Subway. Nevertheless, last year’s weak performance has again raised questions

about whether the chain restaurant industry is overbuilt, six years after a pandemic led to wide swaths of industry closures. Inflation and weak sales performance have put pressure on restaurant-level sales and margins. Many chains closed underperforming restaurants in a bid to cut their losses on weak locations and strengthen their financial profiles while shifting sales to nearby restaurants. Subway, the fast-food sandwich chain that famously overdeveloped for years, has now closed 9,000 restaurants since 2015 as franchisees walk away from locations as leases and franchise agreements expire. “We’re adding too many units,” Pawlak said. “We just overbuilt. And that certainly has been a problem in the past. We just haven’t learned from our history.” There certainly were plenty of bright spots last year, none brighter than the coffee and beverage-snack sectors. Coffee café sales grew 6.1% last year, nearly double the rate of growth in 2024. But that masked

TOP 500 CHAIN RESTAURANT SALES

JULY 2026 RESTAURANT BUSINESS

even Pawlak noted that, if Starbucks is not included in that total, the sector’s sales grew 12.2%. stronger performance. No restaurant chain grew like 7 Brew. The coffee brand has made triple-digit sales growth a habit in recent years as its drive- thru shops open to long lines of thirsty customers. System sales at the chain grew 138% last year after unit count increased by nearly 90%. The brand finished 2025 with 604 restaurants and nearly $1.2 billion in system sales. Last year, the chain surpassed Scooter’s and Tim Hortons to become the country’s fourth-largest coffee brand, after Starbucks, Dunkin’ and Dutch Bros—which itself grew sales by 22% and generated more than $2.2 billion last year. The wild success of those two chains plus Swig, the drive-thru dirty soda chain whose sales grew 65% last year, are pushing much of the industry to reconsider the variety of beverages they serve at their restaurants. McDonald’s and Taco Bell are expanding their beverage lineups, but all kinds of chains are adding new types of drinks to their menus to lure younger, Gen Z consumers that are flocking to chains serving colorful, customizable, mostly cold drinks. Other beverages and snacks also continue to grow. Such chains, which include a broad array of brands that serve either specialized drinks or treat items like cookies or doughnuts, grew sales by 5.9% last year. Limited-service Asian and noodle chains likewise generated strong sales in 2025, with 7.8% sales growth that outpaced every other segment in the industry. The full-service sector was a mixed bag. Total sales among such chains rebounded from a brutal 2024, when its sales grew just 1.3%. Sales at full-service chains grew 2.3% in 2025, thanks largely to strong performance by its biggest players. Texas Roadhouse, the largest casual-dining chain with $5.9 billion in sales, grew total revenue by 7.2%. Chili’s, which has been on a tear for three years, grew sales by 20.6%, leapfrogging Olive Garden (5.6% system sales growth) to become the second-largest casual-dining brand. “We know that people will pay more if the experience and the quality and the service is there,” Pawlak said. “Value is not just about price. Those chains that we’re seeing growth or above-average growth figured out that formula.” Still, he noted, full-service sales aren’t where the sector needs them to be, and

“WE KNOW PEOPLE WILL PAY MORE IF THE EXPERIENCE AND THE QUALITY IS THERE.” Joe Pawlak, Managing Principal with Technomic

a lot of chains struggled badly last year, including brands like TGI Fridays (down 45%), Pinstripes (down 27.5%), On the Border (down 32.5%) and Bar Louie (down 28%), each of which landed in bankruptcy and closed mass locations. Several other sectors had so-so to difficult years in 2025, notably limited-service burger chains, which account for about one-fourth of total Top 500 sales. That sector grew sales by just 1.5%. McDonald’s, the largest chain in the U.S., with $55.1 billion in sales, grew that figure by 3%, including the addition of 149 locations, the most growth it’s had in that metric since 2002. But there were some real struggles.

Wendy’s, the second-largest burger chain in the U.S., saw sales fall 5.2% among management and marketing challenges. Dunkin’, the coffee and doughnut chain that grew sales 5.1% last year, leapfrogged Wendy’s to become the 5th largest chain in the U.S. In the burger sector, for every Culver’s (14% sales growth) and In-N-Out (9.6%) there is a Jack in the Box (down 4.3%) or a Hardee’s (down 5%). The pizza sector’s struggles worsened last year, again due to weakness among some of its biggest players. Limited-service pizza sector sales declined 0.3% last year, the third straight year of deteriorating overall

performance. While Domino’s (4.8% sales growth) did fine, its biggest rivals did not. Pizza Hut’s system sales fell 8.2% in the U.S. last year. Papa Johns declined 1%. Both are poised to lose more ground this year due to store closures. Little Caesars, the third-largest chain, grew by 1.4%. Pizza chains, like much of the restaurant industry, have had to contend with a host of challenges, including a customer base that is cutting back on dining frequency. But they have also faced growing competition from third-party delivery companies like DoorDash and Uber Eats that have eaten into their long-term dominance in delivered prepared food to customers’ homes.

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FINANCE

THIS IS 7 BREW’S WORLD. WE ALL JUST LIVE IN IT.

7 BREW IN SUBURBAN ST. PAUL, WITH ITS SHORTEST LINE OF T PHOTO BY JONATHAN MAZE.

A t just after 3 p.m. on Thursday, workers at a 7 Brew in a suburb north of St. Paul were given a bit of a break by the day’s onslaught of cars through the double drive-thru. That is to say there were only about 20 or so cars there at the time, rather than the line that had extended into the parking lot, down the road, around the corner and into a busy thoroughfare just out front for most of the day. Such lines have been commonplace in the six weeks since the store opened and, if we are being honest, at such openings across the country. A location of the drive-thru beverage chain doesn’t open without these lines. They can generate waits as long as 45 minutes while local officials reconsider traffic flow around the locations and sparking vociferous complaints in places like Springfield, Missouri, Florence, Kentucky or suburban St. Paul. Welcome to 7 Brew’s world. The drive-thru coffee shop chain may well be the biggest phenomenon the restaurant in- dustry has ever seen. The Fayetteville, Arkansas, chain did not exist at the start of 2017. It is already the fourth largest coffee shop chain in the U.S., going from $3 million in sales in 2017 to $1.2 billion last year, according to the Technomic Top 500 Chain Restaurant Report, an absurd 111% annual growth rate. Only Crumbl hit the $1 billion mark faster, and 7 Brew is about to surge past the dessert chain on the Top 500 ranking, and it operates in a far more competitive market. 7 Brew, Crumbl and Dave’s Hot Chicken, which was just sold to Roark Capital for $1 billion, were all founded in 2017. The average age for restaurant chains in the Top 100 is 50 years. Only six other chains in the Top 100 have even been founded this century. The coffee chain opened its first stand in Rogers, Arkansas, in 2017. The brand quickly generated a following and grew to seven stands around Arkansas before it was sold in 2020, when John Davidson became the CEO. The brand received an investment from Jamie Coulter and Jimmy John Liautaud in 2021 and from the private-equity firm Blackstone in 2024. We were hearing early on, when the brand had just a few locations, that it was one of the more intriguing growth brands

The Bottom Line: The drive-thru beverage chain has gone from nothing to the country’s fourth-largest coffee chain in less than a decade, and it is just getting started.

JONATHAN MAZE

JONATHAN.MAZE@INFORMA.COM

RESTAURANT BUSINESS JULY 2026

THE DAY.

in the country. 7 Brew has now attracted some of the country’s best and most sophisticated fran- chisees, most notably Greg Flynn, who had largely avoided emerging chains since he got into franchising in the late 1990s. Last year, Flynn signed a 160-unit development agree- ment with 7 Brew. The brand, along with the publicly traded Dutch Bros, has pushed the restaurant indus- try to rethink and broaden their beverages, as younger consumers flock to the shops for their colorful, customizable and social me- dia-friendly beverages—most of which are served cold. Demand for these beverages is such that these concepts are booming even though there are more than 32,000 coffee shop loca- tions in the U.S. Indeed, as we noted earlier this week, coffee brands are generating or- ganic growth despite the aggressive develop- ment. But the real story in 7 Brew is in the shops. A typical 7 Brew costs between $940,500 and $2.3 million to build, according to the compa- ny’s franchise disclosure document. They op- erate in modular buildings that are 510 square feet and cost $310,000 to $600,000 before freight and installation. Those long lines of customers mean a typical location makes $2.7 million. Do the math, and that is $5,213 per square feet. By comparison, a standalone Chick-fil-A, which generates $9.2 million in sales per year, does $1,700 to $2,000 per square foot. That is an almost unfathomable sales level. All of this has made 7 Brew a lucrative business. The company generated $113 mil- lion in revenues last year and $45 million in net income, according to the FDD. But affili - ates that sell the modular buildings and other

supplies to franchisees generated another $93 million in revenue, for $205 million. The company has a unique, tiered royal- ty requirement based on sales. Stores that do less than $20,000 in sales per week pay 4.5% of their revenues as royalties. They pay 5.5% if they make from $20,000 to $25,000 and 7% if more than $25,000. That both benefits the company when stores do well and provides relief for those that do not do well—and many of the stores perform exceptionally well. 7 Brew is showing no signs of slowing down. Buoyed by its well-capitalized and ag- gressively developing franchisees, the com- pany is projecting another 437 locations this year, which will put the brand over 1,000 and make it easily a Top 50 chain.

The company can do all this because it is a franchise, and one that generates strong sales and profits. The franchisees are well-capitalized, op- erate in a hot sector and make a lot of mon- ey doing so. That prompts more and more growth and the franchisor doesn’t spend its own money in the process. There is danger, of course. Fast growth can ultimately be its own worst enemy, as companies outpace their demand and fickle consumers turn to other options. The world has been full of them, notably Krispy Kreme and the entire frozen yogurt sector. Yet 7 Brew has the economics, and cer- tainly the long lines and the traffic problems, to justify all these new locations.

JULY 2026 RESTAURANT BUSINESS

FINANCE

THE CASUAL-DINING COMEBACK STARTS AT THE TOP Sit-down restaurant chains showed signs of life last year. But much of the growth came from just a few brands, primarily Chili’s.

BY JOE GUSZKOWSKI

F rom a bird’s-eye view, the casual- dining segment had a nice year in 2025. Total sales among Technomic’s Top 500 casual-dining chains rose 2.9%, to $67.7 billion. The growth was roughly in line with inflation, but still, it was a marked improvement over 2024, when sales rose just 1.5%. And it came amid a period of extended economic uncertainty and consumer unease. It was good enough to give rise to some murmurs: Is casual dining back? Well, yes and no. A closer look at the numbers shows that the bulk of casual-dining’s growth last year came from just a few very large chains, with one red-hot brand in particular carrying most of the load. In terms of total dollars, Top 500 casual- dining sales grew by about $1.9 billion in 2025. Almost all of that—$1.7 billion—came from Texas Roadhouse, Chili’s Grill and Bar and Olive Garden, the three largest casual- dining chains in the U.S. by sales. And most of that growth was from Chili’s, which added nearly $1 billion in total sales by itself in 2025, an increase of 21% year over year. So it was a year of winners and losers in casual dining. Choosy consumers rallied around some brands more than others. And Chili’s was definitely one of those brands.

PHOTO: SHUTTERSTOCK

The 1,200-unit chain had a tremendous year, continuing a turnaround that began to take shape in mid-2024. Its 31.6% year over year same-store sales growth in the first quarter stands as one of the best performances by a publicly traded restaurant chain in at least two decades. In the next three quarters, it posted same-store sales of 24%, 21.4% and 8.6%, which lapped a 31.4% increase the year prior. The hot streak has been driven by better operations, savvy marketing, improvements to core menu items and a big focus on value. The brand has also gotten some help from social media, where its Triple Dipper appetizer platter went viral in the spring of

2024 and hasn’t stopped selling since. All of that has helped bring new customers into Chili’s restaurants and keep them coming back. It was the ninth-fastest- growing casual-dining chain in the U.S. by sales last year, even though it didn’t add any locations. (In fact, it closed a few.) The Chili’s renaissance, as well as the consistent success of Texas Roadhouse and Olive Garden, has helped create a new playbook for casual dining: Focus on the basics of food and service and good things tend to follow. It’s not all that new or novel, really. But that philosophy got lost a bit during the pandemic, when many full-service chains

RESTAURANT BUSINESS JULY 2026

dining’s value perception with consumers, an important factor at a time when many diners are looking to stretch their dollars as far as they can go. “Consumers are figuring out that casual dining is a great value, and so they’re coming to casual dining more,” said Olive Garden CEO Rick Cardenas during an earnings call in June. “Consumers want to go out and spend their hard-earned money, and we think we’re taking some wallet share from fast food and fast casual.” That could be true: Top 500 quick-service sales rose 2.4% in 2025, slower than casual dining, and while fast casual grew by 6%, it was a notable deceleration from previous years, per Technomic data. It’s another bit of evidence that casual dining is back, or at least on its way. But again, the comeback has not been evenly distributed. For the second straight year, casual dining witnessed a crop of bankruptcies, most notably the 200-unit Hooters last March. On the Border, Bar Louie, Bravo/Brio, Bertucci’s, Pinstripes and Razzoo’s also restructured. Most of them blamed some combination of lingering pandemic effects, inflation and slower consumer spending. Razzoo’s noted that it was losing customers to larger brands with more pricing power, like Chili’s and Applebee’s, underscoring the notion that consumers are being picky—and looking for value. Also for the second straight year, Top 500 casual-dining chains closed more restaurants than they opened. Unit count was down by 0.3%, or about 45 units, to 16,269. It’s not necessarily the sign of a thriving segment. But it may not be the worst thing in the long run, Pawlak said. “I still think our industry has too many seats chasing too few butts,” he said. “Population growth is basically flat, and we’ve overbuilt over a number of years. So I think there’s still some room to take locations out.” Overall, 2025 was not a bad year for casual dining. Some of the largest chains in the country had real success, and there are signs that it could be trickling down. Weaker locations are being weeded out, creating more opportunity for restaurants that remain. After a turbulent five years, the segment is finding its footing. And even better things could lie ahead. “The bleeding has stopped,” Pawlak added. “Now, it’s time to renourish and replenish that part of the industry, and I think the consumer’s ready for it.”

OVERALL, 2025 WAS NOT A BAD YEAR FOR CASUAL DINING. SOME OF THE LARGEST CHAINS IN THE COUNTRY HAD REAL SUCCESS, AND THERE ARE SIGNS THAT IT COULD BE TRICKLING DOWN.

had to rethink their whole operations to survive. Delivery, takeout and technology became priorities. Consumers stayed home. Only in the past year or two has the full- service ecosystem had a chance to return to its natural state. “Casual dining in general is starting to understand what consumers are looking for,” said Joe Pawlak, managing principal at Technomic. “At the end of the day, consumers still want experience. They still want to have quality food at a reasonable price. And so now chains have gone back to what they do best.” Indeed, brands in search of a Chili’s-like turnaround are investing in foundational elements like better ingredients, more hands- on service, and refreshed restaurants. BJ’s Restaurants, for instance, has made numerous changes to its menu over the past year, including revamping its pizza recipe and turning its signature Pizookie dessert into a social media star, with a new flavor arriving each season. It has also cleaned up its operations, removing unnecessary steps for servers and improving its training for hourly staff. Those changes have delivered seven straight quarters of same-store sales and traffic growth for BJ’s, as well as 3.1% total

sales growth last year. “It’s not like all ships are rising in casual dining,” said CEO Lyle Tick, “but I think those that are, are getting refocused on the things that matter.” Applebee’s has been on a similar journey of late. A focus on menu innovation produced a pair of best-selling cheeseburgers, and it has also hit on a value proposition that works: Two meals for $25. And more recently, in a bid to improve service, the chain has asked managers to spend more time in the dining room interacting with customers. “In this environment, I would argue, regardless of brand, [success] is about being a company that is focused on running good restaurants,” said John Peyton, CEO of Applebee’s parent Dine Brands, in an interview. Like much of the industry, casual-dining chains have also pushed out a wave of value meals and lower-priced items aimed at price- conscious consumers. Chili’s, Applebee’s, BJ’s, Red Robin and Outback Steakhouse all have their version of an Extra Value Meal. Even The Cheesecake Factory, strictly opposed to discounting, has added a selection of affordable “bites” that have proven popular. All of the above has boosted casual

JULY 2026 RESTAURANT BUSINESS

FINANCE

PHOTO COURTESY OF EGGS UP G

THE FAMILY-DINING SEGMENT IS DIVIDED BY DINNER Family-dining chains that serve only breakfast and lunch are soaring, while those covering all three dayparts have stumbled, according to Technomic Top 500 data. W ant to know whether a family-dining chain is doing well these days? Check if it serves dinner. family-dining chains

compared to $2.07 million for brands that serve breakfast, lunch and dinner. The fastest-growing of these daytime- dining players last year was 105-unit Eggs Up Grill, where sales surged by 32.3% on unit growth of 20.7% in 2025. The Spartanburg, South Carolina-based franchise focuses on down-the-middle breakfast staples like omelets, Benedicts and pancakes in a friendly environment. It’s nothing fancy, and customers seem to love it: Eggs Up has recorded 21 straight quarters of same-store sales growth. CEO Ricky Richardson said the brand’s approachability, convenience and affordability are resonating with customers. Diners can be in and out of Eggs Up in under 40 minutes and will spend just $12 to $14 on average. Some are replacing fast-food breakfasts with what they view as a better all-around experience. “When you have a positive, upbeat, energetic ambiance like that, a team that really believes in the brand, and then the breadth of consumer appeal, all those things are working well for us,” Richardson said. For other daytime-dining concepts, there’s a focus on culinary invention. At First Watch, for instance, customers will find global takes on breakfast classics, such as a chimichurri steak and eggs hash, and unique flavors, like sweet-spicy Million Dollar Bacon. Everything is made fresh in the restaurant, including the juice. First Watch sales rose 16.1% last year.

Among on Technomic’s Top 500 ranking that offer breakfast, lunch and dinner, average sales declined by 0.3% in 2025. Those that serve only breakfast and lunch, meanwhile, saw average sales growth of 11.6% in 2025. For reference, Technomic defines family dining (also known as midscale) as sit-down concepts with accessible prices, sitting somewhere above quick-service and fast casual but below casual dining. It includes brands like IHOP, Cracker Barrel, Denny’s, Waffle House and First Watch. Overall sales in this segment grew by just 0.3% in 2025, the smallest increase in five years, per Technomic data. And a clear divide has emerged between the old-guard concepts that cover all three dayparts, like IHOP and Cracker Barrel, and a burgeoning crop of so- called daytime-dining chains that open early and close by midafternoon. Almost all of the fastest-growing chains in the segment are in that latter group. Led by 648-unit First Watch, other players include Another Broken Egg, Snooze, Eggs Up Grill and Denny’s-owned Keke’s Breakfast Cafe. They are also generating more sales per location, despite their limited operating hours. Average unit volumes at Top 500 breakfast- and-lunch chains were $2.09 million in 2025,

JOE GUSZKOWSKI

JOSEPH.GUSZKOWSKI@INFORMA.COM

RESTAURANT BUSINESS JULY 2026

GRILL

Alcohol is also a differentiator for daytime dining. Many concepts play to the boozy brunch crowd, including Keke’s, First Watch, Toasted Yolk and Ruby Slipper, making them destinations for large groups (and giving check averages a boost). Some daytime-dining brands do cater to a slightly higher-income consumer, which may be helping to insulate them from economic headwinds that have hurt other brands in the segment. But daytime dining’s biggest advantage over more traditional family-dining chains

may be an operational one. Narrower menus allow staff to focus on doing a few things very well, and the limited hours mean they get their afternoons free to pick up kids, pursue a hobby or even work a second job. And the restaurants’ strong unit economics mean they can offer competitive wages. At Eggs Up, that equation has helped the chain hire better people. “The lifestyle element of working at Eggs Up is really appealing,” Richardson said. The year was not all bad for breakfast- lunch-and-dinner concepts. Twenty-eight

unit Elmer’s Restaurants grew sales by 23.4% as it added four locations to its footprint in the Pacific Northwest. Out East, 68-unit Metro Diner grew by 9.7% and opened six new stores. But success stories like those were outweighed by significant struggles at chains like Shoney’s, where sales declined 21.1%, and Big Boy, down 9.3%. And among the very largest such brands— IHOP, Cracker Barrel, Denny’s and Waffle House—only Waffle House achieved positive sales, with 3% growth.

JULY 2026 RESTAURANT BUSINESS

FINANCE

IN THE BURGER BUSINESS, CULVER’S AND SHAKE SHACK ARE GRABBING MARKET SHARE Sales among limited-service burger chains remained weak in 2025 amid consumer weakness and a shift to chicken or other items. But higher-quality growth chains are grabbing share and making noise.

PHOTO: JONATHAN MAZE

JONATHAN MAZE

JONATHAN.MAZE@INFORMA.COM

I t’s tough to be a burger chain these days. Beef costs are through the roof amid one of the most extensive value pushes the industry has ever seen. And everybody seems to want to eat more chick- en. Sales among limited-service burger chains grew just 2%, lower than menu price inflation. It’s also the second straight year of generally anemic growth for a sector that ac- counts for about a quarter of the sales gen- erated by chains on the Technomic Top 500 Chain Restaurant Report. But within that space there are winners and losers. Some brands are resonating with

consumers right now. Some are not. For the most part, upstart concepts with high-quality reputations have done well. Legacy chains that have struggled to keep consumer interest have lost share. Many larger, older chains are ceding share to smaller upstarts. McDonald’s, of course, remains the dominant player, rep- resenting close to half the $113 billion in limited-service burger chain sales last year, according to the Top 500. And it has aver- aged 4.6% annual growth the past four years, including 3% in 2025.

CONTINUE ON PG 15

RESTAURANT BUSINESS JULY 2026

JULY 2026 RESTAURANT BUSINESS

But among the weakest performers in- clude such legacy brands such as Steak n Shake (2.8% system sales decline in 2025), Hardee’s (-5%), Checkers (-9.9%), Carl’s Jr. (-6%), Sonic (-2.6%), A&W (-3.8%), Rally’s (-6.6%), White Castle (-6.7%), Fatburger (-8.1%), Krystal (-2.9%) and Jack in the Box (-4.3%). Wendy’s, the second-largest burger chain in the U.S., lost its status as a Top 5 restaurant chain after its system sales fell 5.2%. The com- pany almost symbolically was overtaken by the beverage chain Dunkin’.

On the other hand, there are numerous larger, high-growth brands that are taking share. Shake Shack (15.2% system sales growth), Culver’s (14.2%) and In-n-Out (9.6%) have taken considerable share in the burger space along with brands like Freddy’s (5.3%) and Whataburger (4.6%). Smaller brands like Hop- doddy (6.2%), Cookout (8.1%) and Jack’s Fam- ily Restaurants (7.2%) have also thrived. Consider this: Sonic, the drive-in burg- er chain owned by Inspire Brands, is the

fourth-largest burger chain in the U.S. Cul- ver’s is No. 5. At their current rates of growth, Culver’s should overtake Sonic within the next two years. Indeed, if we assume that Culver’s and Shake Shack keep their average rates of growth from the past four years—a decent assumption, given that they’ve generally kept that up for some time now—both will more than double by 2030. And they will take sub- stantial market share.

RESTAURANT BUSINESS JULY 2026

PHOTO: ENVATO

service-oriented model. Shake Shack, for instance, has averaged 18.5% annual sales growth since 2022, more than any other burger chain. It was started based on the “Enlight- ened Hospitality” model of cofounder Danny Meyer, who built his reputation with fine-dining establishments in New York City. “Shake Shack is bringing the experience of a $25 burger to a lot of people who don’t typically get to eat $25 burgers,” the chain’s CEO, Rob Lynch, said in a January interview. Culver’s, meanwhile, has averaged 14% growth over the past four years and is now a Top 25 restaurant chain, bigger than such burger stalwarts as Jack in the Box, Hardee’s and Carl’s Jr. The chain was modeled after supper clubs in its home state of Wisconsin and has become popular for its table service model and smashed “Butterburg- ers.” Culver’s operators typically come up through the ranks and are required to be in the restaurants. Cofounder Craig Culver once said in an interview that if your workers can’t recognize the CEO, the CEO is doing it wrong. That service level provides a strong value for the chain, even though it doesn’t push value meals and discounts the way many of its competitors do. “We’re not a cheap brand,” Julie Fussner, Culver’s CEO, said in an inter- view last year for the A Deeper Dive podcast. “You take your family to a Cul- ver’s and you get an amazing meal and a great experience. But we’re providing a value to that. “The only way to do that is if we never lose present, engaged, owner-oper- ators. So that is a non-negotiable for us.”

Culver’s, for instance, currently accounts for 3.85% of the burger chain market. It will have 6.62% of the market by 2030 at current growth rates. For Shake Shack, that share will jump from 1.32% to 2.48%. To be sure, consumers often shift allegiances to hotter, younger brands with innovative business models and differ- ent offerings. Consider chicken, where older, bone-in chains like KFC have long ago given way to brands like Chick-fil-A or Raising Cane’s. But unlike chicken, where the upstarts typically serve dif- ferent types of products, many of these newer burger chains simply offer a product with a better reputation from a more

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* NCA, National Coffee Data Trends 2025

when every cup delivers a café-quality experience.

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FINANCE

QUICK-SERVICE PIZZA SALES TURNED NEGATIVE LAST YEAR

The overall industry’s sales cooled to 3%, marking the fourth consecutive year of deceleration, but pizza was the only category in the red.

BY ALICIA KELSO

Q uick-service pizza sales have been coming back down to earth since the category’s pandemic highs. In 2025, however, the category slipped below the surface, registering a 0.3% year-over-year sales slide following a nominal gain of just 0.6% in 2024 and an increase of 2.8% in 2023, according to the Technomic Top 500 Chain Restaurant Report. Unit count has followed a similar trajectory, with just a 0.1% gain last year, following 0.6% in 2024 and 1.1% in 2023. Like much of the industry, the quick- service pizza category’s performance has been all over the map — some big winners, some major laggards and plenty of in-betweens. That said, in 2025, the category’s performance was skewed by an outsized impact from some of its biggest players hemorrhaging sales. Pizza Hut, No. 2, lost 8.2% of its sales in 2025, for instance. In fact, six out of the top 10 QSR pizza chains were negative last year. In addition to Pizza Hut, they included:

Cheese (No. 9, 0.6%) were steady as it goes, while Domino’s extended its market share dominance with a 4.8% gain and No. 7 Jet’s Pizza provided a bright spot with an 11.5% increase. Notably, the overall restaurant industry was up just 3% in 2025, marking the fourth consecutive year that Top 500 sales gains decelerated compared to the prior year. Within that overall cooldown, pizza was the only category to turn negative for sales year- over-year. Every single category in Technomic’s newly released Top 500 report turned in a stronger year-over-year sales performance in 2025, including sandwich, which was up just 0.2%. The QSR pizza category was No. 6, outpaced by burger ($113.3 billion), chicken ($56.3 billion), coffee/café ($53.9 billion), sandwich ($37.4 billion), and Mexican ($35.1 billion) categories, with $31 billion in sales According to Technomic, much of pizza’s challenges have come from an increase in competition from other food segments. Sales at Asian concepts last year, for example, rose 7.8%, while the Mexican category was up

4.7%. Chicken sales increased 5.3% in 2025, following a 9.1% gain in 2024 and five straight years of double-digit growth prior. Some of the category’s plateauing is also likely driven by third-party delivery apps like DoorDash and Uber Eats leveling the playing field for a convenience channel once dominated by pizza. BEYOND THE TOP 10 Not only did pizza underperform every other category in 2025, it also had fewer rocket ships. There were 103 out of 500 chains that generated double-digit sales increases in 2025. Just three were limited-service pizza chains: Lost Pizza Co., a Mississippi-based company founded in 2007, which jumped 15.4% to end the year with $64.3 million and 36 locations (a 16.1% unit count increase) Crust Pizza Co., a “Chicago-style thin” concept headquartered in The Woodlands, Texas, which increased sales by 13.7% to end with $66.4 million and 37 locations (a 15.6% increase) Jet’s Pizza, a Detroit-style pizza concept founded in Detroit in 1978, which increased

No. 4 Papa Johns, -1% No. 5, Marco’s, -2.4%

No. 6, Papa Murphy’s, -3% No. 8, MOD Pizza, -10.6% No. 10, Hungry Howie’s, -5.2% Little Caesars (No. 3, 1.4%) and Chuck E.

RESTAURANT BUSINESS JULY 2026

PR67BZ 67” PIZZA PREP TABLE

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YR LABOR PARTS COMPRESSOR

JULY 2026 RESTAURANT BUSINESS

THE PIZZA CATEGORY’S SALES SLID -0.3% IN 2025 PHOTO COURTESY OF PAPA JOHNS

sales by 11.5% to end with $613.4 million and 474 locations (a 5.8% increase) Out of the 35 limited-service pizza chains in the Top 500, 16 gained sales in 2025 versus 19 that registered declines. The three chains that generated the steepest drops were all fast casual pizza chains, including Blaze Pizza (-9.6%), MOD Pizza (-10.6%) and Pieology Pizza, which fell by a whopping 26.5%. Blaze named John Owen as its new CEO earlier this year and his comeback plan includes balancing hospitality with speed, while also improving brand awareness both inside and outside of its core markets. Notably, Blaze closed 43 locations in 2024 and is nearly 60 units smaller than it was at the end of 2020. MOD was sold to Elite Restaurant Group after closing a significant number of locations in 2024. Like Blaze, its system has significantly retrenched, ending 2025 with 447 locations compared to 485 at the end of 2024 and 489 at the end of 2020. As for Pieology, its challenges accelerated in 2025. In 2024, the California-based chain lost more than 10% of its sales while its system was whittled down to 45 units last year after finishing 2024 with 103 locations. The chain filed for Chapter 11 bankruptcy in November. The company grew to about 150 locations by 2017, including about a dozen international locations, after receiving investments from Panda Express founders Andrew and Peggy

Cherng, as well as NBA player Kevin Durant. Pieology was founded in 2011 and is widely considered to be a pioneer of the fast-casual, build-your-own pizza category, alongside Blaze and MOD, as well as Your Pie, PizzaRev, Uncle Maddio’s, Fired Pie, and others. Of note, the entire category has been struggling for years, with challenges exacerbated by the pandemic and changing consumer habits. Your Pie’s sales fell 3.2% in 2025, while its unit count was down 1.6%. Since 2020, more than 16% of the system has closed. PizzaRev received an investment from Buffalo Wild Wings in 2014 when it had just three locations and had 200 more under development. It grew to over 40 locations but is now down to just four. Meanwhile, Uncle Maddio’s once surpassed 40 locations and is now down to 11, and Fired Pie filed for bankruptcy in 2024 and is now down to eight locations.

RESTAURANT BUSINESS JULY 2026

Connect with Top C&U Decision Makers Across the Country

This isn’t just networking – it’s where industry leaders exchange transformative ideas that impact menus, operations, and careers.

August 3-5, 2026 University of California Davis Campus, CA

October 19-21, 2026 NC State University Raleigh, NC

March 9-11, 2027 University of Michigan Ann Arbor, MI

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CLARK NATIONAL ACCOUNTS

THE BEST KEPT SECRET IN NATIONAL FOODSERVICE SOLUTIONS

Reese noted how value is driving the needle in 2026. "We are seeing a shrinking of the middle of the menu, which shows national brands are focused on a ‘less is more’ business strategy to meet customers' demands." Reese’s path brought him into contact with providers like Clark long before he joined the company. Now, as Vice President of Clark National Accounts, Reese brings his accumulated perspective to multi-site foodservice businesses where operational friction is both common and costly. A NATIONAL PLATFORM YEARS IN THE MAKING What surprised Reese most upon joining Clark wasn’t CNA’s existence, but the depth of its development. Clark National Accounts has been methodically built over the past eight years, evolving from a foundation of regional expertise into a national platform built for multi-unit restaurant brands. Rather than prioritizing rapid expansion, CNA fertilized their business landscape with investments in supplier relationships, infrastructure, and internal capabilities, cultivating the soil for restaurant brands to grow in. Backed by WebstaurantStore, the leading online wholesaler of restaurant equipment and supplies, CNA leverages its distribution center network and purchasing scale to strengthen both sourcing and logistics. The result is a model that combines national buying power with precision partnership. That deliberate approach also explains why CNA has remained relatively under the radar. Growth has been driven by execution, not promotion. But recognition is starting to follow. Most notably, in 2026, CNA earned a Supplier of the Year award from Domino’s for exceptional supply chain reliability. This award brings years of growth and innovation into the spotlight,

any restaurant operators are no strangers to national purchasing programs. Some have tried them. Some have grown wary, because scale multi-unit

as CNA continues to refine their business structure to best support their partners’ needs. CNA IS A STRATEGIC PARTNER, NOT A SERVICE At its core, CNA blends national scale with local intelligence. Clark’s regional presence spanning over 30 states across the U.S. allows the organization to standardize pricing and programs while accounting for market-specific realities such as service availability, regulations, and labor conditions. For operators, that distinction matters. Consistency isn’t about rigid uniformity but about predictability and accountability. The emphasis on accountability also extends internally. By investing in extensive, hands-on vendor training, CNA develops deep institutional knowledge across its team members. Reese regards this as equally advantageous as purchasing leverage. CNA is in the business of simplifying business. They’re a strategic partner ready to walk side by side with operators to meet their goals. Whether they're looking for smallwares distribution or opening a new location, CNA understands that improving systems improves the lives of the people operating within them. As Reese put it, “We’re in the business of building genuine relationships,” a perspective that shapes how CNA engages both internally and with its customers. “WE’RE IN THE BUSINESS OF BUILDING GENUINE RELATIONSHIPS.”

doesn’t guarantee a strategic partnership. Enter Clark National Accounts (CNA), a quietly built platform within the Clark Associates organization that bridges the gap between promise and performance. With years of industry experience, Vice President Jason Reese is turning up the volume and drawing attention to the platform designed to help restaurant brands simplify purchasing, improve consistency, and catalyze growth across markets. A CAREER SHAPED BY OPERATIONAL EXPERIENCE Reese's introduction to the foodservice industry started as most do, with the need for employment and independence during high school. The adrenaline of a fiery kitchen and the dining room’s choreographed chaos hooked his interest. By college, he recognized both the appeal of the team environment in a kitchen and the complexity of the business behind it. After graduating from Penn State’s Hotel, Restaurant, and Institutional Management program, he focused on helping restaurant brands grow. He worked with national and international concepts, including Nando’s Peri-Peri and Wagamama. With a background spanning frontline operations and brand-level strategy, Reese has a practical understanding of how purchasing systems and foodservice industry operations play out in real life. Over time, he saw firsthand where national programs succeed and where they break down. When asked about emerging trends in the food service section,

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LEVERAGING DATA AND REDUCING FRICTION A growing part of CNA’s approach centers on data — specifically, how purchasing behavior can be analyzed and improved at scale. By evaluating spending, CNA helps operators identify opportunities for SKU consolidation, cost savings, and process simplification. The goal isn’t just to reduce spending; it’s bringing structure to an often-fragmented purchasing environment. CNA also reduces friction in day-to-day purchasing through their innovative e-commerce platform. They’ve incorporated new software features to support self-service payments for more convenient, easy purchases. CNA is rolling out an invoice consolidation option that will allow customers to receive a single invoice per order rather than per shipment. The change is relatively simple, but the impact is meaningful: fewer touchpoints, less back-office complexity, and a more streamlined purchasing process. “We developed an entire payment portal that services our partners' health, while also making sure we have the resources to support enterprise level customers,” Reese said. He went on to say that CNA has built the technological infrastructure to support curated solutions while still providing access to quick, reliable human service coordinators and full-service, hands-on support.

After years of quiet development, CNA is reaching an inflection point. The infrastructure is in place. The team is experienced. And operators are actively looking for partners who can bring clarity to increasingly complex purchasing environments. For brands that believe they’ve already explored every national account option, Clark National Accounts may come as a surprise. Not because it’s new, but because it was built deliberately, with an operator’s reality in mind. “[CNA] plugs into the business nuances of our partners and helps build a bespoke system or program that aids their core network operations,” Reese explained. Sometimes the most effective solutions don’t announce themselves. They take shape over time and appear when the market is finally ready for them. With a solid foundation and an excellent team at the ready, it’s time for the restaurant industry’s best-kept secret to emerge. THE MOMENT FOR CNA WE SPECIALIZE IN MULTI-UNIT BRANDS. SEE HOW CNA SIMPLIFY YOUR BUSINESS.

Reese is using his background to shape how CNA approaches equipment and asset strategy. Increasingly, restaurant brands aren’t just asking what equipment costs. They want to know how long it lasts, how often it fails, and what it takes to keep it running. Those questions are becoming harder to ignore. Operators are feeling the impact of reactive maintenance more than ever: emergency repairs, repeated fixes, and inconsistent service across markets slowly kill a national restaurant business. Even emerging technologies face the same fundamental challenge. “Robotic chefs look great when they're working,” Reese said. “The real question operators should ask is: how do we fix it when it breaks?” Without a reliable service network of trained technicians, available parts, and national coverage, many innovations struggle to scale beyond early adoption. While CNA is careful not to overstate future initiatives, Reese sees asset management and lifecycle visibility as natural extensions of the organization’s philosophy. Understanding service histories and replacement cycles, even at a high level, can fundamentally change purchasing decisions. “If you can see the full picture, you can make better decisions — even if that means spending more upfront on equipment that performs better over time,” he said. CNA helps operators see that bigger picture.

THE REAL QUESTIONS FOR FUTURE-FOCUSED OPERATORS

MARKETING

TROPICAL SMOOTHIE CAFE WANTS TO TURN ON ITS MARKETING ENGINE

The smoothie chain that also sells food has had strong growth and customer value scores. Now it just needs to build brand awareness. It has a plan to do that.

BY JONATHAN MAZE

also slowed to less than 10%. System sales still grew 6.5%, more than the 3% average for the Top 500, but that is still below expectations for a brand that had done so well for so long. But Wetzel believes the chain has a lot more in the tank, thanks largely to the company’s brand awareness. Or lack thereof. Tropical Smoothie was founded as a beachfront fruit smoothie shop in Destin, Florida, in 1997, started its first franchise the next year and added food by 1999. More than a quarter-century later the chain remains an under-the-radar concept, even though it has 1,700 locations. Tropical Smoothie’s brand awareness remains below 25%, according to data from Technomic Ignite. That is remarkably low for a brand with that many units. Similarly sized chains average brand awareness of 44.6%, according to Technomic. A bit of marketing, in other words, could go a long way. And then the chain can let its customer satisfaction scores do the work. “It’s probably one of the biggest opportunities we have,” Wetzel said. “We’ve developed so quickly, because the economics are good within the system. We expanded so quickly. In some ways, it’s like our brand is catching up to that.” A year ago, Wetzel said, the company and franchisees agreed to consolidate their marketing budget. About 5% of the chain’s system sales now goes into marketing, which could provide some real firepower behind the drive to build awareness. The company brought in a new creative agency and since then the company’s awareness has improved.

PHOTO COURTESY OF TROPICAL SMOOTHIE CAFE

T ropical Smoothie for years has been one of the more underappreciated growth stories in the restaurant industry. Fron 2017 through 2024, the chain averaged 21% annual sales growth. Average- unit volumes increased almost annually, growing from $640,000 in 2016 to more than $1 million in 2024, despite double-digit annual growth in unit count. And yet that might not be the most impressive part about the chain. According to consumer data from Restaurant Business sister company Technomic, more than 93% of the chain’s customers rate their overall satisfaction with Tropical Smoothie either excellent or good. That is a remarkably high satisfaction rate, particularly given that more than 55% rate the brand “excellent.”

“We’re solving this problem,” Max Wetzel, the chain’s CEO, said in an interview. “Sometimes indulgence can be guilty. Sometimes indulgence can be extreme. Sometimes cravings can be a little clinical and too health-oriented. And we’re sitting right at the middle.” The sales performance and those satisfaction scores all played a role in the chain’s sale two years ago to the private- equity firm Blackstone, the same one that has an investment in the high-growth brand 7 Brew and which just bought Jersey Mike’s. Wetzel, the former chief executive of CKE Restaurants, was given the keys to the chain the next year. Yet Tropical Smoothie stumbled a bit last year. Average-unit volumes declined 4% in 2025, according to Technomic. Unit growth

RESTAURANT BUSINESS JULY 2026

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