The full-service industry is witnessing one of the most transformative periods in its history.
The restaurants capitalizing on this climate, thriving and growing today, don’t play by accepted rules or constraints accepted by preset definitions of what a restaurant looks like. Think streamlined menus. Clean, fresh, and craveable food. Adaptable, flexible, and dynamic footprints. Entrepreneurial cultures. Tech-ready and off-premises savvy. Hybrid models unafraid to cross segments.
Just like fast casual, these brands are also serving as change-agents for an entire category, establishing a new standard for employee care, culture, sustainability, vendor relationships, and expansion prospects. You see their effect already at big-box brands like Outback Steakhouse and Chili’s, which have pared down menus in favor of better execution. Or Applebee’s and its recent refocus on value and core equities. This emerging full-service segment has sapped the all-things-to-all-people mindset casual chains gripped a few years back.
But what do you call it? Some refer to this group as “polished” or “upscale” casual, yet both terms gloss over a key element: the accessibility and approachability of better food and better service at an affordable price point.
The biggest opportunity at hand for these full serves lies in meeting shifting guest preferences, but also satisfying a desire for experience in ways counter-service concepts never could.
Simply put, existing classifications don’t do the movement justice.
So FSR is putting a label on the future of full service: NextGen Casual. Over the coming months, we’ll dedicate more coverage to the rising sector and track how it’s growing, evolving, and, importantly, how it’s influencing everything around it, from fine-dining brands becoming more approachable to the casual giants stepping up their game.
If you consider yourself a NextGen Casual restaurant, we’d love to hear from you (please feel free to email firstname.lastname@example.org). We see this sector as any full-service brand from five to 200 units with plans to grow, chef- or quality-driven, sustainability-minded, contemporary, modern décor, and ingredient-conscious, with checks falling somewhere in the $12–24 range.
But first, let’s introduce some of NextGen Casual’s leading players, what makes them tick, and how they view the full-service sector of tomorrow.
Editor’s note on charts: FSR teamed up with Bruce Reinstein and Tim Hand, partners at Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm, to take the pulse of what matters to NextGen Casual restaurant brands, and what opportunities are worth investing in at this stage of the pandemic journey. Kinetic12 conducts quarterly online surveys of 100 senior managers from leading emerging and growth chains followed by one-on-one interviews. Twenty-three brands were surveyed for this study.
Unchaining the chain
At one point, True Food Kitchen executives held a brainstorming session. The reality, CEO Christine Barone says, is there wasn’t a moniker to encapsulate what the brand offered and stood for: a restaurant based on science and the anti-inflammatory food pyramid—the brainchild of its founder, Dr. Andrew Weil. “We were saying, it feels like ‘conscious casual,’” says Barone, a former senior vice president of food at Starbucks, who joined True Food Kitchen in 2016.
“I think for so long in the restaurant industry, the experience was about providing service, which was really kind of similar, although executed differently, across the spectrum. And great food. But I think what this next generation of concepts offers, and how I would think of ourselves, is we’re doing awesome food, awesome service, and we’re taking that experience to a really different level.”
“And,” Barone continues, “really differentiating ourselves and who we are in our mission, right as you walk through our doors.”
Casual dining, for decades, hung its hat on a comfortable notion: the idea you could step into a restaurant in any town, at any time, on any date, and the experience would feel like slipping on your favorite sweater. It’s the same banner point Shake Shack (and others) crashed when it chose to “unchain” the multiunit experience in an effort to reflect independents and the localization of food. Plus, younger consumers, powered by social media, began to care more about the ability to become brands themselves. They sniffed out insincerity from larger corporations. Neutrality on societal issues was a major red flag.
Thus, the idea a blanket approach would appeal to a generation obsessed with self-expression was a tenuous one at best. You either had to give them a herd to belong to or risk becoming culturally irrelevant.
True Food Kitchen had 12 stores when Barone came on board. There are now 39 and each looks a bit different. “In the past, it’s like, here’s the art program and here are the things you can choose from and you might walk into Topeka, Kansas, and it’s the same artwork as Tampa, Florida,” Barone says. “So I think that’s a piece of it: differentiating the restaurant environment to really reflect your mission and purpose.”
Kyle Noonan, the owner and CEO of FreeRange Concepts, a multi-concept operator out of Texas that runs dog-park-themed franchise MUTTS Canine Cantina, as well as The Rustic, Bowl & Barrel, The General Public, and Joe Leo Fine Tex Mex, says casual dining “had become a sea of sameness, with a lot of big brands that all started to resemble one another both from a design and food perspective.”
“Today’s consumers want something differentiated in their dining experiences, whether that is the physical aesthetic of the space, a unique menu offering, or something that offers an element of entertainment,” he says.
To put it plainly, guest expectations forced the historical lines between restaurant categories to blur. Because of that, there’s been a meaningful shift in how full-service restaurants must respond, says Ricky Richardson, CEO of Eggs Up Grill, a brand that reached 50 locations in August. Eggs Up Grill has set opening records for three straight years, growing an average of 25 percent.
Richardson understands this shift better than most. Before coming to Eggs Up Grill in 2018, he served as president and chief operating officer of TGI Fridays. “For many years, full-service restaurants operated in a way that made guests abide by the brand’s expectations of what they wanted to eat,” he says. “[This forced] a level of ambiance onto the guest and required every customer to dine on the brand’s timeline.”
“That all has changed,” he adds. “Guests expect restaurants to be very focused, do what they do very well, and consistently so.”
Hence, the narrow menus that define this NextGen category. “They want quality, convenience, and value, and to be valued,” Richardson says. “Both in how they’re treated and in what they receive.”
Eggs Up Grill worked to create an open, airy, light, and “happy” vibe through its colors, décor, and layout. But this is a conversation that stretches well beyond visual cues.
To Richardson’s point, asking guests “to dine on the brand’s timeline” has become an archaic notion.
Speed that fits
Chris Artinian, CEO and president of Condado Tacos, has clocked 31 years in the restaurant business, working angles from fine dining to casual to “you name it.” Seventeen years came from Morton’s The Steakhouse, a restaurant where customers plan their day around showing up to eat. There remains ample demand for that drawn-out occasion, Artinian says, but not so much in the middle ground.
Casual-dining stalwarts emerged over the decades as less expensive versions of fine-dining staples and far removed from fast food. Yet while they were quicker, they were hardly speedy. “What we’ve learned with fast casual is that folks’ attention spans have just shrunk,” Artinian says. “And they don’t have the time. They’re always on the run, especially when you’re talking about lunch. But what I think has been starving in the business for the last couple of years has been experience.”
Can you create a differentiated experience within a model that has the ability to get people food in eight to 12 minutes? And can you use that same potential to serve a visit 45 minutes or longer for those who want it? It’s in the answer to that key question where NextGen Casual splits so far from counter service. “I think that’s the magic,” Artinian says.
Being able to deliver a full-service experience to somebody hoping to reconnect with family, significant others, and friends, and not just roll through a drive-thru, is how full service has always won. The difference today, though, can be found in balancing experience with convenience and value in a way that doesn’t automatically forfeit business to fast casual or quick service.
“I think there’s still the desire to have that fun group experience, but it’s in a more casual way, and I think that’s where we’re coming from,” Artinian says.
At Condado Tacos, where average check runs $15–$16, a broad service model began as a check-the-box on the card, build-your-own taco joint—not unlike your average sushi restaurant. These systems went digital over the past year, with guests having the choice to either tap a QR code for their experience, with a server walking them through options, or grab a paper menu if they still wanted it.
The nature of Condado Tacos’ streamlined menu, though, centers on core ingredients, all easy to assemble and execute, Artinian says. It allows the brand to maintain a nimble staff in the kitchen and pay “a little bit more.”
“Our execution of our products just requires fewer people, which allows us to invest more in our folks,” he says.
Paul Macaluso is another restaurant executive approaching full service with an outside perspective. He took the reins of Another Broken Egg Cafe as CEO in 2019. Macaluso’s previous post was as CEO of quick serve Krystal Burger, and, before that, president of FOCUS Brands’ chain McAlister’s Deli.
While Another Broken Egg Cafe was an introduction to the sit-down world for Macaluso, things shifted quickly—but not further apart. “The next generation [of full service] is an elevated dining experience in an upscale casual environment that reduces downtime or wasted time for the guests,” he says. “That includes having more accurate wait times and more efficient ordering and payment processes. For us, that means unique and innovative brunch entrées paired with handcrafted cocktails and the ability to add yourself to the waitlist so you can be in and out in 45 minutes.”
Another Broken Egg Cafe is working with new point-of-sale and loyalty partners to develop a system to quicken service times and provide the brand with consumers’ order history and preferences. Servers will be able to approach the table with info at hand, helping them personalize each experience, Macaluso says. While this might sound like something a fast casual or quick serve might preach, “that attention to detail goes above and beyond what counter service can offer,” Macaluso says.
The 75-unit brand already opened seven stores in 2021, with four more on the way. It signed agreements for another 14 as year-to-date same-store sales surged 20 percent over 2019 levels. Between comps gains and new openings, Another Broken Egg Cafe expects systemwide sales growth north of 35 percent this year, and had to bump its five-year projections. Macaluso says it’s now well within possibility the chain hits 200-plus units by the end of 2026.
A better off-premises experience
Recent success brings Macaluso to another hallmark of NextGen Casual, and a vast departure from traditional full service—the rise and stickiness of off-premises business.
“At its core, full service has always been about the elevated service and hospitality elements, and although we see those as still critical for most of our guests, more and more of them are willing to forgo that element of our brand and just get our amazing food, either for pickup or delivery,” he says. “We expect that percentage of guests will continue to grow over time.”
Another Broken Egg Cafe set up an online ordering platform within 45 days during the depths of COVID. That would have normally taken 4–6 months, Macaluso says. The pandemic pushed the chain’s business outside of its four walls from 2 percent of total sales to 15 percent.
“That change has had a domino effect on other components of our tech stack and roadmap including a new, cloud-based and open interface POS system and a new guest loyalty program, which will all be launched later this year,” Macaluso says. “Those initiatives would have normally taken 2–3 years to complete.”
It’s a common tale unfolding in the COVID bubble: pent-up demand plus off-premises gains pushing full-service concepts far above 2019 sales marks. But what’s the lasting effect?
Artinian says you can’t understate it. Operators have the chance to build an extra visit in ways counter-service peers cannot. The guest who shows up Friday and Saturday night now realizes they can also grab dinner on Thursday as they drive home. During COVID, it was on full-service restaurants to figure out logistics so the experience wasn’t messy. Guests crowding lobbies. Struggling to find parking. Unsure who to speak to when they walk in. All things that could send them to the quick serve down the road.
Condado Tacos launched a new app in August that delivers loyalty in tiers, not unlike Starbucks and other counter-service mainstays. It also offers mobile ordering for pickup or delivery, storage for gift cards and credit cards, and access to favorite orders and restaurant updates.
Steve Kislow, CEO of Firebirds Wood Fired Grill, a 53-unit chain with plans to add five new stores in 2022, says it isn’t just where customers are dining with full-service restaurants that’s changed—it’s when. “For one thing, the traditional intentionality of menu dining patterns has changed,” he says. “We are noticing an emerging trend that indicates a shift as to when people are eating lunch and dinner.” Thanks to remote work, customers are eating around the clock. And it’s not just Dunkin’ and Starbucks experiencing that.
Full-service restaurants are just scratching the tech surface. James O’Reilly, who spent four years as CEO of quick serve Long John Silver’s before joining Smokey Bones in fall 2019, says casual dining—five to 10 years ago—was entirely built around a comfortable environment with a good experience. That was enough to provide a strong value proposition compared to traditional quick serves.
“Full-service restaurants of the future are changing to reflect new and elevated guest expectations, which have been fueled by technology advancements, innovations in convenience, and the elevated food quality needed to deliver value to the casual-dining guest in an industry that is growing and improving every day,” he says.
Smokey Bones adopted an “anywhere/anytime” tech vision that puts guests fully in digital control of their experience, on- or off-premises. Smokey Bones stores of late were designed with smaller dining rooms, more tech, and dedicated off-premises access. Some menu items were discontinued, O’Reilly adds, so the chain could separate from being a “generalist” casual-dining chain. The brand refers to itself now as a “protein candy store” on the shoulders of its “Meat is What We Do” vision.
“The opportunity for aspiring, next-generation full-service concepts is to embrace the permanently altered perceptions of restaurant dining held by guests and their elevated expectations for frictionless digital experiences, food quality, and dine-in memories that continue to make casual dining a leading value proposition in the restaurant industry,” O’Reilly says.
“Previously, restaurant owners were more focused on the taste of their food,” echoes Tomo Takahashi, founder and CEO of Jinya Ramen Bar. “Recently, there has been a need for restaurant owners to analyze their target demographics to reach them through brand marketing.”
The pandemic accelerated tech changes—there’s little gray area about that. Yet it also created new users in established channels, Richardson says. In other words, COVID significantly advanced people’s demands for efficiencies, both because they were using new outlets, like curbside and takeout, and also because they wanted contactless options.
“The experience was moving this way, but likely jumped 5–7 years in terms of guest expectation as well as business adoption due to demand,” Richardson says. “COVID also created users for channels and dayparts, like accessing breakfast meals through third-party delivery, that I don’t think would have ever happened short of a pandemic.”
More experience, less stuffiness
One way to look at it is COVID cleared the stuffiness out of the full-service room. Digital became a come-as-you-are occasion. The pandemic did its job introducing digital to people, especially among older customers, who had no choice when dining rooms closed. And agile full-service chains responded.
Being approachable is a tagline that also comes up often among NextGen Casual brands. They want to erase the stigma of special-occasion-only dining in full service and open their world to customers every day and daypart.
110 Grill COO and cofounder Ryan Dion built his Westford, Massachusetts–based brand around the idea of full service fitting any need. It’s one of the issues, in his view, with labeling brands “upscale casual.” It’s a mental disconnect, like putting milk and sparkling water on the same table.
“You can come in from the beach in shorts and sandals and have a burger and a beer at the bar, or you could come in in a business suit for a meeting in our private dining room and have a rib-eye steak and a nice bucket of Duckhorn Decoy Cabernet,” Dion says. “Either way, you fit into our concept, our ambiance. We’re in the sweet spot.”
And speaking to the earlier topic of store designs and the NextGen Casual category’s ability to cross-serve occasions, 110 Grill has five different seating areas in each of its restaurants. Guests can navigate from private to patio to lounge dining to a spot right in front of the kitchen to watch chefs in action.
“I believe that people want choices,” Dion says. “They want to be in control of their own dining experience and not have to go in for the same cookie-cutter experience each time.”
As a consumer of her own brand, True Food Kitchen’s Barone has also noticed this shift.
“What was really striking to me is that piece of wow, I’m eating here today, but I feel like I could put myself on this new journey to eat like this every day,” she says. “You can keep coming back.”
Like Condado Tacos, customers at True Food Kitchen can speed through lunch with a QR code for ordering and payment. Or they can drop in on the weekend and celebrate for hours on end.
“I think it’s really about thinking through that,” Barone says. “We want to set out to provide the experience that you want, but we don’t choose it for you.”
That latter point is critical.
“If today that’s what you want, that’s what you get,” Barone says.
COVID enabled True Food Kitchen and others to really examine the different needs of today’s consumer. For instance, the brand introduced family meals. But then it also launched a ghost kitchen with a limited menu near its corporate office. The spot is open Wednesday through Monday and closes Tuesdays for the brand to test out new items and plot innovation.
“COVID opened the door and said these are actually two different businesses,” Barone says of digital and dine-in. “They might be run out of the same kitchen and the same restaurant, but we need to start thinking about them differently and the guest who comes to us to celebrate a baby shower with her friends—she’s the same person but in a very different mood when she’s getting pickup on Thursday nights.”
The ecosystem of a NextGen Casual restaurant is far more nuanced than consumers have come to expect.
Raising the menu bar
Of course, none of this would matter if the food and beverages weren’t NextGen as well. True Food Kitchen considers food “a journey in itself,” Barone says. It’s not the way anybody would have talked about the category 20 years ago. Things like pineapples boiled in the back of the house or avocado Key Lime Pie with kudzu root, which is purported to stabilize blood sugar as you’re eating it.
“You can come in and enjoy delicious food but you can also keep peeling back layers and learning more and more, and go deeper into the journey of where was this sourced, and we have all of our stories and our passion of what goes into our sourcing,” Barone says.
“Food is absolutely functional,” she adds. “But it’s so much more than that. And I think what True Food Kitchen and this next generation captures is when you come in, food is also part of who you are. I dine at True Food and I’m part of True Food and I love True Food.”
At 110 Grill, Dion says creating a club-like feel has been essential. People want to latch onto brands they support and relate to. 110 Grill does so through a loyalty program where one point equals $1, and when guests hit a certain threshold, they get a reward. There are about 200,000 people in the program, and 110 Grill spends some $40,000 per month giving back to guests—an investment Dion says is well worth it.
They built the program to mirror travel-based platforms. It inspires repeat visits by being top-of-mind. Plus, 110 Grill can offer rewards on anniversaries and birthdays and try to pulse deals on slower days to incentivize behavior, like double points on a Monday. The brand also has an option on its website for guests to offer feedback to which 110 Grill promises to respond within 24 hours. “That consistent, memorable dining experience every time you come in, we want to make sure nothing falls through the cracks,” Dion says.
Nine-unit Whiskey Cake, of the FB Society family of concepts, opened 10 years ago and was at the forefront of the farm-to-table movement in the casual space. Remember when that was a unique selling point? “Farm to table” or “farm to fork” has been diluted by restaurants almost as much as “craft beer” has.
Whiskey Cake COO Ray Risley, a former Del Frisco’s Restaurant Group executive, says it’s easy to call yourself that in today’s market. But it’s not so easy to put it in place, and guests are going to hold you accountable. The same is true of claiming your F&B program is a step above casual and quick-service competitors and delivering on that promise.
So the need to differentiate becomes all important. When Jack Gibbons and Randy DeWitt created Whiskey Cake, they wanted to take a downtown, urban restaurant and bring it to the suburbs. What this meant was a bar program people normally didn’t see outside of major metros. Picture 250 whiskey labels, barrel programs with top producers, and fervent consumers who follow the brand just to track its latest offerings. Beverage, incidentally, is one of NextGen Casual’s most vital levers to pull in the race for consumers on the backside of the pandemic. No matter what changes, guests who walk into fast-casual or quick-service concepts typically don’t want to spend $20 or more, Risley says.
Over the next decade, Whiskey Cake continued to guard this equity while making sure it stayed ahead of a shifting landscape. A point about NextGen is that full-service chains aren’t just being pushed by local restaurants—it’s a collective surge upward that’s challenging brands to become more guest-centric versions of themselves.
“If you look at the progress being made right now and the quality of food being offered by some of the [quick-service] guys, consumers can find really good food for a low time and money commitment,” Risley says. “So people in the casual sector, people in [NextGen] or even in fine dining, they need to make sure that they elevate their operations to justify the consumer time commitment to sit and dine. You can’t get away with serving frozen product anymore. People know.”
Doubling down on hospitality
An element that can’t be forgotten is hospitality. If you’re going to ask somebody to up their check from fast casual, you can’t give them an experience they forget the minute the server walks away. “[The server] has to have a personality profile or an interaction quotient that the guest is looking for, or else why would they spend an hour or hour and a half dining, if they’re just going to be bored with the same-old server who shows up, takes an order, and then serves the food,” Risley says. “There has to be an entertainment factor that comes along with that.”
Many of the same core tenets of NextGen Casual, in terms of the guest and their desire to identify with the segment and the people who dine there, apply to employees as well. Given the country’s labor shortage and the fact restaurants might never return to previous staffing levels has reset the field in some respects. Employees want a company they believe in as much as diners do, Risley says. It’s an FB Society trait to hire people based on whether or not the company feels they’ll be a good fit as much as whether their resume looks in order. Whiskey Cake even gives new employees a plant to take care of throughout training to encourage mindfulness and commitment.
“If you look at cell phones and all of the tech that’s coming out, it’s not saving people money or costing them money; it’s saving time. So that hour and a half time commitment to dining has to be justified by what you’re giving them both in terms of food and service and interaction,” Risley says.
Walk-On’s Sports Bistreaux founder and CEO Brandon Landry shares a similar take. “To be a successful restaurant today, guests expect a certain level of service and accessibility, which makes these investments non-negotiable,” he says.
“When I think of experience, I think that’s captured in the positive emotional responses created in a guest during their visit,” Richardson adds. “I believe it’s hard to optimize that response in a limited-service environment, and that’s where full service, when executed well, is very hard to beat.”
The good news is these NextGen Casual brands are answering that call, more than ever. The mix of digital, corporate responsibility, accessibility, commitment to sourcing, and individuality has never been more visible or accessible in the full-service category. And customers are clamoring for it after months of lockdowns.
“It’s an incredibly exciting time to be part of the massive amount of change that’s been brought on,” Barone says. “COVID is an interruption to every single consumer habit. With that, it’s an awful year we’ve all gone through and also an incredible year of learning and opportunities ahead. So I think it’s a super-exciting time to be leading a purpose-driven brand and thinking of all of the different ways we can better serve our guests.”