If you can’t beat ’em, join ’em.
Fast-casual restaurant chains like Chipotle Mexican Grill and Sweetgreen have been stealing customers from full-service restaurant chains like Outback Steakhouse and IHOP. To fight back, some casual dining chains have been launching spinoff restaurants that copy that business model.
Fast-casual restaurants are smaller in size, with less seating and fewer employees serving customers, which means that they are cheaper to operate than a full-service restaurant. Menus are usually designed for convenience and fast service, and customers order at a counter, sometimes moving along an assembly line.
Some casual dining chains have tried and failed to make a fast-casual chain work for their company. Cracker Barrel announced in October that it planned to scrap Holler & Dash, the fast-casual spinoff it launched in 2016, after it acquired Maple Street Biscuit, a fast-casual chain with a focus on breakfast and brunch.
Here are four casual dining chains trying to make them work:
Applebee’s
The interior of the Applebee’s Express
Applebee’s
A franchisee of the Dine Brands chain opened an express version of the bar and grill in December in Mobile, Alabama. The location, which is smaller than the Applebee’s, seats 56 customers. Its menu is simplified but still keeps Applebee’s classics, like the boneless wings and its signature Riblets.
Dine Brands’ CEO Stephen Joyce has told investors that the company, which also owns IHOP, is looking to acquire a fast-casual or fast-food chain as well.
Dine Brands, which has a market value of $1.5 billion, has seen its stock rise more than 10% over the past 12 months.
IHOP
A rendering of a Flip’d by IHOP restaurant
Source: IHOP
IHOP, Applebee’s sister chain, will open its first Flip’d by IHOP in April. The fast-casual restaurant will have faster service and a menu that features convenient breakfast entrees like Pancake Bowls.
It will debut in Atlanta, with plans to open several more this year. The chain is exploring additional sites in New York, Washington, D.C., Denver, Chicago and San Francisco.
IHOP’s strategy is to use the fast-casual chain to break into urban areas that have expensive real estate and consumers who are short on time. Online ordering for pick-up or delivery will also be available as part of an effort to keep growing IHOP’s off-premise business.
Outback Steakhouse
Exterior of Aussie Grill by Outback
Source: Bloomin’ Brands
The Bloomin’ Brands steakhouse opened its first U.S. location of Aussie Grill by Outback in Tampa, Florida in 2019. The company first envisioned the fast-casual chain as a way to grow sales abroad but has since opened two locations in Florida.
“We opened the Aussie Grill locations in Tampa, near our headquarters, to test ideas for the international menu,” spokeswoman Elizabeth Watts said. “The concept quickly proved to also be popular with American guests, so we are now assessing opportunities for new U.S. locations beyond the Tampa area.”
Its international locations in Saudi Arabia and Hong Kong feature most of the same menu items as U.S. restaurants, like sandwiches, salads and burgers, along with a few recipes inspired by local tastes.
In 2018, Bloomin’ opened several express restaurants that made menu items from Outback and Carrabba’s Italian Grill, another one of the company’s brands. Customers could only order for catering, delivery and carryout.
Bloomin’ Brands has a market value of $1.9 billion, and its stock is up 15% over the past year.
Cheesecake Factory
Social Monk Asian Kitchen
Source: The Cheesecake Factory
Social Monk Asian Kitchen is a fast-casual restaurant from the Cheesecake Factory. Its menu includes salads, sandwiches and rice and noodle bowls with flavors from Thailand, Vietnam, Malaysia, Singapore, Indonesia and China.
The Asian-inspired eatery opened its first location in February in California.
The Cheesecake Factory made another bet on fast-casual restaurants in October through its acquisition of Fox Restaurant Concepts.
Previously, Cheesecake Factory invested in two of Fox Restaurant Concepts’ chains, Flower Child and North Italia, in anticipation of the deal. Flower Child, a health-focused fast-casual chain, has more than two dozen locations nationwide. North Italia serves up lunch, dinner and a weekend brunch featuring pizza, pastas and entrees with the flavors of northern Italy.
Cheesecake Factory has a market value of $1.7 billion, and its stock has fallen nearly 16% over the past year.