How to tell whether an emerging restaurant chain will be a long-term success

A Deeper Dive

How can you tell if an emerging brand will be a long-term success?

It’s not an easy question to answer. A lot of private-equity firms, restaurant executives, real estate companies, consultants, vendors and others all spend hundreds of millions of dollars to try and answer that question.

This week’s episode of the Restaurant Business podcast A Deeper Dive does its best to answer that question and features David Henkes, senior principal with RB sister company Technomic.

Thousands of entrepreneurs start new restaurants every year. Many of them yearn to grow those restaurants into major chains. The vast majority of them fail.

This year has demonstrated just how hard it is to tell whether a brand will ultimately fulfill whatever promise it once had. Companies such as MOD Pizza, Uncle Julio’s, Rubio’s, Tijuana Flats and many others, all of which had major backing at one point, either filed for bankruptcy or came close to it after their once-promising futures did not come to fruition.

And we recently told you the story of Baja Fresh, which 20 years ago was considered a pioneer of fast-casual Mexican only to quickly lose its place to the younger Chipotle Mexican Grill, which has gone on to become the biggest such concept in the world.

The result is a fascinating discussion on emerging chains and what it takes to make them work, and why it’s so difficult to tell winners from losers, at least early on. So check it out.