P.F. Chang’s is joining the counter-service ranks, as more and more sit-down chains find themselves doing in recent months. The company told the Chicago Sun Times it plans to open its first “P.F. Chang’s To Go” February 3 at 213 W. Hubbard St. in the Windy City’s River North neighborhood.
The company said it expects to open at least three of the carryout, catering, and delivery focused units in Chicago. And the first debuts weeks after the closing of P.F. Chang’s last traditional location in the city, which stood for 20 years before shuttering January 14. Senior VP of off-premises dining Chris Demery told the Sun Times a non-renewable lease was to blame, and the closure played a key part in the brand’s decision to begin its To-Go journey in Chicago.
“People want good quality food at their door, whether that’s their car door, house door or business door,” he said in the story.
P.F. Chang’s is targeting locations in Chicago’s Loop and Fulton Market to follow, with New York City, Washington, D.C., and Houston as future possibilities.
The stores will feature a stand-up counter and not much room for seating. Demery said P.F. Chang’s was inspired to build the model from shifting consumer preference—where off-site dining is growing at two to three times the pace of four-wall visits.
The company added that it has no plans to phase out dine-in restaurants, of which there are 219 nationwide and roughly 100 more in 25 countries (as well as three airport locations). The broader Chicago area has four units—Lombard, Northbrook, Orland Park, and Schaumburg.
P.F. Chang’s said the To Go store will still feature from-scratch, in-house cooking and a pared down, subset of the traditional menu. Demery told the Sun Times it will showcase about 80 percent of P.F. Chang’s usual offerings. There won’t be alcoholic beverages, however. At least not for now.
The location will offer delivery through two channels—direct via its app and website and through third-party vendors, including UberEats, Postmates, Grubhub, and DoorDash.
In recent weeks, Dine Brands’ two brands, IHOP and Applebee’s, have unveiled quick-service iterations, although the latter appears more of a one-off effort than the first. IHOP’s “Flip’d” concept, which plans to launch next April in Atlanta, is already exploring sites in New York City, Washington, D.C., Denver, and San Francisco, the company said. Additionally, Dine Brands said Flip’d would represent a stand-alone concept within its portfolio. There will be kiosks as well as a build-your-own pancake bar and menu designed for on-the-go occasions.
Applebee’s fast casual, which quietly opened in Birmingham, Alabama, was created by franchise group Quality Restaurant Concepts, a 60-unit Applebee’s operator. It’s a 2,500-square-foot store that features a 72-seat dining room and abbreviated menu with a focus on core classics.
Cracker Barrel is also currently converting its seven Holler & Dash units to Maple Street Biscuit Company stores, a brand it recently acquired for $36 million in cash. The Cheesecake Factory debuted an Asian counter-service brand, Social Monk Asian Kitchen, in February. Bloomin’ Brands tested Outback and Carrabba’s Express models. After first shifting from quick-service, Buffalo Wild Wings rolled a B-Dubs Express prototype in 2017 (there’s one in Hopkins, Minnesota). Part of Hooters’ July sale to Nord Bay Capital and its adviser, TriArtisan Capital Advisors, included the potential growth of Hoots, a fast casual introduced nearly three years ago. Red Robin scrapped Burger Works in 2016.
As for P.F. Chang’s, Paulson & Co. Inc and TriArtisan Capital closed a previously announced deal for the Chinese chain March 1. Financial terms of the acquisition from Centerbridge Partners, L.P. was not disclosed. But Bloomberg reported last January that the sale was for about $700 million. P.F Chang’s more than $675 million of total debt was taken out at part, a private notice sent to investors said.
Headed into the deal, P.F. Chang’s liabilities included about $375 million of secured debut, including $5 million of capital leases, a $317 million first-lien term loan, $25 million of revolver borrowings, and $28 million of secured notes provided by the sponsor. Its borrowings also included $300 million of unsecured bonds, Bloomberg reported.
P.F. Chang’s was founded 1993 in Scottsdale, Arizona.
That move split P.F. Chang’s from its fast-casual counterpart, Pei Wei, which remained in Centerbridge’s portfolio.
The company acquired both brands in 2013 in a deal valued at $1.1 billion. Operationally, the chains were already headed in different directions. Pei Wei moved its headquarters the previous August from Scottsdale, Arizona, to Irving, Texas.
News of a possible transaction began that July, when Centerbridge said it was “an exciting time to explore a sale.” P.F. Chang’s, at that report, was generating average-unit volumes of $4.1 million in its restaurants.
Before the 2012 sale to Centerbridge, P.F. Chang’s reported a 42 percent drop in first-quarter profit to $6.3 million, Revenue was $318.9 million as guest counts sagged. The brand was “fighting to recover from ill-timed price increases,” Reuters reported at the time.
