Hello!

Today we’re covering… a lot of stuff:

• Earnings week for most public chains

• Salad and Go’s final chapter

• The $100 hot dog

Read on…

3 Numbers

+8.5%

Burger King’s domestic same-store sales growth in Q2, its first quarter above 8% since 2023. Same-store sales growth for the Golden Arches in the same quarter? 0.8%. (More on BURGER WAR 2026 below.)

$105M

What Dutch Bros is paying for up to 65 shuttered Salad and Go drive-thrus. Dutch Bros is buying just the real estate and equipment — when filing for Chapter 11 bankruptcy, Salad and Go closed all its remaining locations, seemingly marking the end for a brand that was valued at over $1 billion just four years ago.

8,171

Restaurant locations that closed across the US and Canada in the first half of 2026, per RestaurantData. Closures affected chains and independents in nearly equal measure — chain-affiliated locations made up 52.1% of the data set, compared with 47.9% for independents.

The Big Story

It was a jam-packed week for earnings reports. Rather than focus on just one or two companies, join me for a tour around the industry:

• Begun, the Burger Wars have:

  • Last Tuesday, McDonald's reported US same-store sales up 0.8%, down from 2.5% growth a year ago, with guest counts negative. The same morning, it named Skye Anderson president of McDonald's USA, replacing Joe Erlinger after nearly seven years running the division. CEO Chris Kempczinski didn't dress the decision up too much, saying the company sees an opportunity to raise the bar in the US.

  • On Thursday, Burger King reported US comps up 8.5%, powered by the Whopper overhaul from earlier this year (featuring, among other improvements, a new bun, new box, and new mayo), plus strong numbers from the chain’s newly-remodeled stores.

  • And on Friday morning, Wendy's underwhelmed: US same-restaurant sales fell 7%, net income dropped 41% to $32.6 million, the global restaurant count shrank by 71 in the quarter (217 for the year), and new CEO Bob Wright withdrew the 2026 outlook entirely and cut the dividend.

• Outback found some margin. Bloomin' Brands stock jumped 31% on a quarter where Outback's comps grew by just 1.4%, mostly because average check rose 4.2% as diners traded up to pricier steaks and add-ons.

• Texas Roadhouse just kept killing it. Comps were up 6.5%, revenue rose 11.1% to $1.68 billion, and the only blemish was operating margin compressing to 8.5% from 9.7% on beef costs.

• Shake Shack hit a wall of costs. Revenue rose 17% to $417.6 million with comps beating at +3.5%, but profit slipped to $15.7 million from $17.1 million a year ago because expenses grew 19%. Management called it one of the toughest cost environments in years (so that’s fun).

• Papa Johns joined the dividend cutters. North America comps fell 8.3% on lower order volumes, the full-year outlook came down, and the board is suspending the dividend. The bright spot was international, up 1.5% for a seventh straight positive quarter. Notably, after an 18-month strategic review, the board ruled out a sale of the brand.

• Sweetgreen continued to struggle. The hoped-for turnaround quarter didn't materialize: comps fell 6.2%, the quarter's loss came in worse than expected, and full-year EBITDA guidance swung to a projected loss, with the company explicitly blaming reduced consumer demand for fresh prepared foods amid this summer's lettuce-linked cyclospora outbreak. (On a positive note, their wraps are legitimately good. Consider trying one this week!)

After reviewing a bunch of earnings reports, it's tough to find any signal amid all the noise.

You may have heard of a few macroeconomic forces currently slamming against the restaurant industry: gas prices, GLP-1s, tariffs, job losses, a confusing consumer economy propped up by the AI boom. But there's no sign of the industry experiencing a broad, secular downturn (or upturn, for that matter). Instead, companies continue to report highly individualized results.

Perhaps the best proof is in looking at what direct competitors are doing.

McDonald's, Burger King and Wendy's have been the three largest burger chains in the country for the past four decades. Even though McDonald's is significantly larger than its two competitors, you'd expect the fortunes of the three brands to broadly follow each other — they share a similar customer base and all three cover the same geography.

Instead, last quarter there was a 1,550 basis point difference between Burger King's sales increase and Wendy's decrease — enough that Burger King leapfrogged Wendy's to reclaim the No. 2 spot in the burger business by US sales. Wendy's new CEO Bob Wright told investors that struggles with execution have created a "quality degradation."

But BK will likely not be resting on its laurels, because, just a few quarters ago, Burger King was considered dead in the water, with large-scale franchisee bankruptcies and years of stagnant sales.

During that time (not that long ago!), BK was constantly being (unfavorably) compared to McDonald's, which rode several viral promotions and a reinvigorated menu to years of sales increases. But now, the Golden Arches are the ones treading water and looking to shake things up in the domestic market. CEO Chris Kempczinski put the whole week's lesson in two sentences on Tuesday's call: "We don't have a strategy problem. We simply didn't execute at the level we needed to."

Who knows what will happen next quarter. The pace of change, of brands rising and falling, has never been more rapid.

Elsewhere In the Headlines

• Bain Capital is acquiring Gong cha, the 2,200-unit global tea chain (289 stores in the US and Canada), from TA Associates. Terms weren't disclosed, but Nikkei pegs it above $635 million — a bit of a haircut from the roughly $2 billion valuation TA floated in March. Bain plans to push US expansion.

• The WSJ did a deep dive on the luxury hot dog wave: a $100 “Golden Glizzy” topped with Ossetra caviar and 24-karat gold flake, $39 mini caviar dogs at the MoMA, the $45, nearly two-foot-long “Glizzilla” at Coors Field. (Meanwhile, the Costco dog is still $1.50, and it still continues to represent all that is good and right in our civilization.)

• Newly minted NFL Hall-of-Famer Drew Brees has a collectible cup at Smalls Sliders (priced at $3.99 solo), with all proceeds going to Brees’ foundation. (He is a day 1 investor in the company.)

• Pizza Hut rolled out Triple Cheese Mac and S'mores Sticks as part of a new "Throwback Value Menu.”

• And the mad scientists in Taco Bell R&D are testing a Creme Brulee Crunchwrap Slider.

Name That Chain!

You’ve got three clues to name this issue’s chain:

• There is no founder by this name. A husband-and-wife team opened the first location in Austin in 1971 and invented the name out of thin air because it sounded vaguely like an old-world deli.

• For years the menu was exactly one item — a muffuletta-inspired sandwich on sourdough buns baked in-house — and the chain still calls its flagship simply "The Original."

• Today it runs about 300 locations and lives inside an Atlanta-based portfolio alongside Cinnabon and Auntie Anne's.

Find the answer at the bottom of the email…

Power Moves

Here are some notable recent C-suite moves:

• Kevin Kalicak is the new incoming CFO of Portillo’s.

• The 180-unit HTeaO named Brian Wise as its new CEO.

• Dave & Buster’s CEO Tarun Lal announced his retirement. CFO Darin Harper is stepping into the top job.

What’s New at FS Supply

This week's issue accidentally has a theme: a chain paying $105M for drive-thru boxes, a $3.99 souvenir cup funding a Hall of Famer's foundation, a $45 stadium hot dog…

The package keeps turning out to be just as much a part of the product as the food itself.

Which just so happens to be the business we're in — custom-branded cups, boxes, and bags for restaurant chains. If there's a packaging line item you'd like a second quote on, just reply to this email.

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

NAME THAT CHAIN ANSWER: Schlotzsky’s