Thanks to innovation, AUV has doubled over the past dozen-plus years.

Silver Diner can’t be put into one box.

There’s family dining, a category known for its value prices, simple comfort menus, cozy decor, focus on breakfast and lunch, and quick service. On the other hand, the brand also likes the polished casual label, which comes with higher prices, quality ingredients, upscale decorations, contemporary menus, two dayparts, and reservations.

Preferring not to align solely with one segment, Silver Diner created its own hybrid called “family polished dining.” Under this banner, the chain offers the best of both worlds, including everyday pricing, quality farm-to-table sourcing, distinctive designs, a broad menu served over four dayparts, and faster service. By mastering this balance, Silver Diner has “built a competitive moat around the business that results in incredible sales comps,” said cofounder Bob Giaimo.

“We doubled our [sales] volume over the last 10 years, and 10 percent [in 2023] because no one does what we’ve done under one umbrella,” Giaimo said.

The first Silver Diner opened in 1989 in Rockville, Maryland. Twenty years later—during the Great Recession when most operators moved toward pricing discounts—the company decided to reinvent itself with a “fresh and local” menu. It was a time when terms like “organic” and “all-natural” were surfacing in the industry. A few years later, Silver Diner followed up with a new flexitarian menu. The food and beverage selections now feature pancakes with unbleached flour, nitrate-free hot dogs and bacon, and eggs and milk from nearby Lancaster, Pennsylvania. Cofounder Ype Von Hengst—who won Food Network’s “Chopped” and appeared on “Beat Bobby Flay”—handles all menu development, purchasing, and sourcing.

Since 2010 and the launch of that revamped menu, AUVs have doubled from $3 million to $6 million. The 6,000-square-foot Rockville store earned $5 million back then and has increased to $11 million. With an average check of $20, the restaurant is putting 2,000 customers through the door on the weekend.

The Maryland-based brand has grown to 24 restaurants across four markets—Maryland, New Jersey, Virginia, and Washington, D.C. Two more are scheduled to open this year. The chain believes it has an opportunity to double in size within a 100-mile radius. Growth will be backed by Goode Partners, a New York-based private equity firm that invested in 2016.

Silver Diner earns about $1,000 per square foot. This year, it will reach about $140 million in annual revenue, $11 million in EBITDA, and 23 percent new unit cash-on-cash returns. In 2023, the company saw same-store sales rise 20 percent compared to 2019. Versus 2022, Silver Diner’s comps rose 9 percent, and 5 percent of that came from increasing guest counts.

“The food we serve, to the ambiance we have, to the service that we align with the food and with the ambiance, but at affordable everyday prices for what families are looking for,” said Glenn D’Amore, describing Silver Diner’s basic proposition. “We’re a $20 average check. So doing that kind of volume, it means that a lot of folks are walking through our doors. So it gives us the opportunity to keep ourselves busy day and night.”

Silver Diner uses a variety of prototypes, the workhorse being the suburban freestanding unit. Newer versions are inline stores based in mixed-use entertainment districts earning twice as much alcohol sales as their predecessor (6 to 8 percent versus 12 to 13 percent).

“As we continue to grow our restaurants, really, what we find is very little cannibalization,” D’Amore said. “The brand just gets deeper exposed and the sales go up not just for the locations that we open here, but we have strong opening volumes in our new locations as well.”

In terms of customers, D’Amore said Silver Diner attracts anywhere from “kids going to their prom to CEOs and everybody else in between.” Thirty-seven percent are 35 to 54 years old, followed by 27 percent in the 18-34 range and 36 percent aged 55 and older. Fifty percent of guests have household incomes below $100,000. Thirty percent are above $150,000 and 20 percent are between $100,000 and $149,000.

Restaurants open at 7 a.m. and close around 11 p.m. to midnight on weekdays and 1 a.m. to 2 a.m. on the weekend. Thirty-seven percent of sales come at dinner and 34 percent are at lunch. Breakfast mixes 23 percent and late-night accounts for 6 percent of sales.

D’Amore attributed much of the success to Silver Diner’s employee retention. He has been with the company for 28 years and isn’t the only one. Ninety percent of restaurant leaders started at the associate level, such as dishwashers or servers.

“If I was to walk you into our restaurants and introduce you to folks who are part of our executive team, I would be telling you about 29 years, 30 years, 33 years. I walk you into our Rockville flagship location, I’d be introducing you to servers and cooks that have been around for 20 years plus and that’s like that in many of our restaurants,” D’Amore said. “So very proud of the culture.”

Chain Restaurants, Feature, Growth