Hello!

This week we’re talking:

• Dutch Bros' monster quarter

• A quick-hit earnings roundup

• And the businesses moving into old Pizza Huts

Read on…

3 Numbers

3.9%

Same-store sales growth for McDonald’s in its first quarter, slightly above Wall Street’s expectations. The chain also reported a slight year-over-year increase in net income. On the earnings call, CEO Chris Kempczinski took a bite (heh) at evaluating the state of the consumer, noting that customer spending “could be getting a little bit worse.”

33%

DoorDash’s year-over-year jump in revenue, coming up at $4.04 billion in the first quarter. Profit slipped slightly as the company continues to spend billions on customer acquisition, the results of which have resulted in a platform that now facilitates a mighty number of orders — $33 billion worth in Q1 (for context, McDonald's global system sales run about $35 billion a quarter).

- 6.4%

Drop in comparable sales for Papa Johns in Q1 2026. The chain cited a decrease in side and dessert orders — along with customers trading down from larger and more premium pies — as contributing the sales slide. To help rebuild its average ticket size, Papa Johns plans to overhaul its menu innovation pipeline.

The Big Story

In the time you read this sentence, Dutch Bros just crushed a couple of energy drinks and opened another store. Via QSR Magazine:

Aside from its sales growth and new store openings, the chain is winning on several different fronts:

• Rewards members now account for 74% of all transactions. (The company sells a habitual product, but still: the rewards program is only 5 years old.)

• The company can afford to be highly selective in who it hires. CEO Christine Barone said on the company’s earnings call this week, “In 2025, we received over 780,000 applications for just 19,000 shop roles.” That’s a 2.4% acceptance rate — lower than Harvard’s 4.2%.

• Its customer awareness is growing. 16.3% year-over-year unit growth has contributed to the brand gaining market density; according to a recent research note, its unaided awareness has more than doubled in the past year and a half.

So it's a good time to be Dutch Bros. In fact, it's a good time to be a beverage concept in general: Last week's big story was Starbucks' turnaround. Coupled with 7 Brew (which is still privately held but, by all accounts, is killing it) and McDonald's expansion of its McCafé program, beverage-forward concepts are clearly having a moment — they’re among the industry’s most innovative players and posting top-of-the-class sales numbers.

In the Headlines

• An update on Burger King president Tom Curtis giving customers his phone number: he’s taken 1,500 calls so far this year, and was exiled to the porch to take weekend customer calls. The initiative seems to be working — Burger King’s same-store sales rose 5.8% in the first quarter.

• In other RBI news, Popeyes did not have nearly as strong a quarter, reporting a same-store sales decline of 6.5% (the chain’s worst performance in two decades). Popeyes’ turnaround plan is focused on streamlining its menu and improving store operations and service.

• Wendy’s decreased the decrease a bit last quarter, with its U.S. comparable sales falling 7.8%, a better mark than the 11.3% plunge in Q4 of 2025. Interestingly, international stores fared much better — global sales dropped just 0.4%.

• Some quick Q1 hits on a few full-service stalwarts: Texas Roadhouse rode an improved to-go program to a 7.1% comparable sales increase; First Watch saw improvements in both sales and restaurant-level margins; and Applebee’s got a sales bump from its extremely cheesy O-M-Cheeseburger, as same-store sales grew 1.9%.

• And in the land of Fast Casuals: Sweetgreen is counting on wraps to improve things after another brutal sales quarter; Shake Shack grew sales but saw margin compression due partly to increased beef costs; and Portillo’s reversed a traffic slide and reported positive transaction counts. (Perhaps more importantly… I recently had an Italian Beef at a new Texas location and it was quite good.)

• The future rolls on: One of the largest foodservice distributors in the country, McLane, plans to deploy autonomous trucks to select Sun Belt routes by the end of the year.

• One of capitalism’s greatest achievements is the Cheesecake Factory, which sells over 250 unique items every day in faux-Egyptian palaces. If you read this newsletter, you will enjoy this behind-the-scenes video of their kitchens.

• Some real Millennial catnip here: Cinnabon partnered with the Harry Potter franchise to launch two limited-time, Butterbeer-inspired items.

• A new documentary explores businesses — ranging from flower shops to funeral homes — that have moved into former tiered-roof Pizza Huts.

• And Anthony Bourdain is the subject of an upcoming A24 coming-of-age film.

Name That Chain!

I was told last week that I’ve gone “too obscure” in this section. Therefore, I present to you a 31-unit chain located mostly in Eastern Tennessee:

• Founded in 1956 in Kingsport, Tennessee, a year after the founder attended a restaurant convention in Chicago where he met Ray Kroc and ate lunch with him at the first McDonald's — he later said, "I didn't know who he was. Wish I'd known that at the time. I might have gone in with him."

• Average drive-thru time from order to handoff: approximately 20 seconds. Order accuracy: one mistake per 3,600 transactions. Generates $2,500 in sales per square foot — roughly 4x the average burger chain.

• The only restaurant company ever to win the Malcolm Baldrige National Quality Award, a federal honor previously given to the likes of Cadillac, FedEx, and Ritz-Carlton.

Find the answer at the bottom of the email…

Power Moves

Here are some notable C-suite moves from the past week:

• Shake Shack appointed Portillo’s vet Michelle Hook as its CFO.

• And CEC Entertainment — the parent company of Chuck E. Cheese — hired Chris Monroe as its CFO.

• As it continues to prep for an IPO, Wonder hired former Nextdoor exec Antonio Silveira as its CTO.

• Joel Chick is the new CEO at 115-unit Miller’s Ale House.

What’s New at FS Supply

Last week we mentioned that catering now makes up 9% of full-service chain restaurant orders — and it's growing fast. At FS Supply, we’re building out a catering packaging line for chains that are scaling their off-premise programs.

Catering is one of those categories where the packaging is doing triple duty: it has to hold up during transport, present well on arrival, and make the brand look good on someone else's conference table. If your catering program is outgrowing its packaging, we'd love to talk.

Thanks for reading! I’ll see you next week.

NAME THAT CHAIN ANSWER: Pal’s Sudden Service. A pretty fascinating story