Hello!

Conversation starter: is there a national restaurant chain of 500+ units that you’ve never been to? (I’ll start: I’ve somehow never experienced a Red Lobster. And some say you haven’t lived until you’ve had a Cheddar Bay Biscuit.)

3 Numbers

$250,000

Amount the McDonald’s National Owners Association (an independent advocacy group of over 1,000 franchisees) projects California’s $20 hour minimum wage floor will cost each one of its CA locations. In a memo, the group called the recent legislation a “devastating financial blow” to state franchisees; the increase is expected to go into effect on April 1.  

$100 million

Investment that Chick-fil-A is making in the U.K. over the next decade, with the inaugural store opening in early 2025 and four more locations expected to open over the expansion’s first two years. This will be the QSR juggernaut’s second attempt to win British hearts and minds with Waffle Fries, after a mall location closed in 2019.

383 billion

Number of unique latte combinations available at Starbucks. The sheer number of customizations — coupled with the continuing pandemic-era trend of customers ordering highly-personalized drinks through the app — is bringing in over $1 billion annually, but it’s also slowing down operations. The company is investing heavily in speeding things up, rolling out portable cold foamers and smaller ice cubes that are easier to scoop.

What can Burning Man tell us about the restaurant industry?

It's been a couple of weeks now since the world (okay, Twitter) was captivated by the saga of heavy rains and stranded crowds at Burning Man, the annual arts festival in Nevada's Black Rock Desert.

Predictions that the event would turn into a Fyre Festival 2.0 seem to have been exaggerated, but the news coverage did once again provide a good opportunity for many to ask why, exactly, participants spend thousands of dollars to congregate each year in one of the most physically inhospitable places in the U.S.

Or for that matter, why millions now participate in Spartan Races, or why Disney is doubling its capital investment in its parks, or why Taylor Swift and Beyonce fans are simultaneously spending thousands to attend the two highest-grossing tours in music history.

I want to say one word to you, just one word: Experiences.

Consumers are exhibiting a voracious appetite for unique experiences — cutting against any reasonable prediction of how they'd be expected to act in an inflationary environment.

And restaurant operators continue to take note, investing heavily in building  experiential brands, the more unique and social the better. To take a few examples:

• Pickleball-themed concepts - which combine food-and-drink programs with up to 15 courts - are proliferating, with new units opening at a dizzying rate.

• 13-unit food-and-bowling concept Pinstripes is going public at an expected $540 million valuation.

• Dallas is getting a cricket-themed eatertainment concept.

• And also a 13,000 square foot Tiger Woods-owned mini golf concept.

• People are still giving Salt Bae money.

The risk? Building out experiential concepts requires significant capital. And they're not exactly cheap to run.

Even considering the savvy development strategies some brands are deploying (many pickleball venues are moving into closed mall anchors, for instance), if and when a recession arrives, one has to wonder how much value a consumer will place on being the first in his friend group to post a 'Gram at the new Putt-Putt/artisanal cocktail bar.

But people are clearly starved for connection. And with daily life increasingly online — plus the very real possibility that more and more of the "people" humans interact with on a daily basis will actually be AI — maybe spending a week in a remote desert with friends seems like a reasonable thing to do.

Or better yet, going to play Putt-Putt.

Name That Chain!

You get three hints to guess this week’s mystery chain:

• This chain began its life as a bakery concept; later, the founder’s son expanded the business with a restaurant.

• It has several international locations, including one in Dubai that sits at the bottom of an indoor ski slope.

• Drake is a fan, namedropping it in a 2016 song.

WHAT IS THIS MYSTERY CHAIN? (The answer lies at the bottom of the email.)

Quick Hits

• Italian Beef takeover… At an Investor Day presentation this week, Portillo’s announced that it now believes it can open 920 locations in the U.S. The company previously estimated the market could support 600 locations, but after opening a smaller-box store design that retained its silly-high average-unit-volumes, the company sees a pathway towards more unit growth.

• DoorDash et al v City of New York… A federal judge ruled this week that third-party delivery companies can sue New York over its cap on delivery commissions. The city first capped commissions at 15% in May 2020, then made the Covid-era law permanent in August 2021.

• A boon for jam bands… The California state legislature sent a bill last week to the governor that would allow Amsterdam-style cannabis cafes to open in the state. Customers over 21 would be permitted to smoke pot at the joints, while also enjoying coffee, live music, and many, many pastries. (In a bit of a head scratcher, while the bill does allow the cafes to serve coffee, actual coffee shops would still not be allowed to sell pot.)

• Uber Eats unveils new features… Uber is updating its grocery eCommerce offerings to bring it in more direct competition with DoorDash and the newly-public Instacart. The delivery company will soon allow SNAP and healthcare benefits for payment, and it’s adding an AI assistant that will guide users to grocery deals and ingredients for meal plans.

• Darden announces earnings… Darden beat sales and profit estimates, despite its fine dining segment performing slightly worse than expected. With nine full-service concepts spanning the gamut from Olive Garden to the Capital Grille, Darden tends to be a good bellwether for American consumers, and CEO Rick Cardenas summed them up this way: “Overall, we think the consumer continues to be resilient, but they seem to be a little bit more selective.”

#Content Recs

• “I can’t imagine it working on a day-to-day basis here.” Customers react to credit cards being accepted at Burger King in 1993.

• The case for America’s greatest fast food restaurant being… Costco’s food court.

• With deviled eggs, baked Alaska, and meatloaf making its way on more menus, are we witnessing a 1950s food revival? (I think we can officially call it a trend when an all-casserole concept opens.)

• I try not to link to ads in the newsletter, but I can’t turn away from the new Dunkin’ spots, which feature the deeply unlikely Ice Spice-Ben Affleck collaboration, as well as Affleck dialing up his Boston accent by roughly 75%. They’re Art.

• The Restaurant Business Future 50 has been released, and it features a strong showing of both coffee-centric and full-service brands.

See ya next week.

Trivia answer: The Cheesecake Factory