FSR 50: Top 10 Groups

Olive Garden

Each of the leading restaurant groups is a billion-dollar empire, with at least two or more full-service brands.

This is the powerhouse list of groups that own and operate the industry’s highest-performing full-service chains. Ranked based on the group’s 2014 U.S. sales, each parent company owns at least two chains and more than 40 brands are represented in this who’s who of chain operators. Perhaps more significantly— based on each chain’s 2014 sales—22 of these individual brands are leaders in their own right and qualify to be counted among the top 50 full-service chains in the industry. Many achieved impressive year-over-year growth, meeting the challenges of the industry head on.

In 2014, as the leading restaurant groups raked in a combined total of $34.6 billion, maintaining relevance became paramount for each brand. Competition from fast-casuals and independent operators has prompted many companies to give their brands a facelift in design, menu, and ingredients.

“Full service’s traditional areas have become saturated,” says Jeff Davis, chief operating officer at Sandelman, a California-based market research and consulting firm for foodservice companies. “We’re seeing pushes into new service models, so that might be online ordering, carry-out, or using a tablet. Certainly lunch is the biggest daypart that full-service restaurants are trying to attack and [compete] aggressively against fast casuals and quick serves.”

The fact that many of the full-service chains are following similar paths—refreshing their prototypes, adding better-quality ingredients, flirting with technology on the table—just makes it more important that its competitors do so as well, Davis adds.

Darden Restaurants

$7.63 billion

2014 was mostly upbeat for Darden, which shed low-performer Red Lobster in a bold move in July and saw success with its myriad brands, but continued to struggle with how to redefine its flagship restaurant, Olive Garden. Nonetheless, the Red Lobster move makes sense, Davis says; Darden could not continue to invest capital and time in revitalizing two brands, so it narrowed in on Olive Garden, the one with the most potential.

Despite a year-over-year increase of 10 units, sales slipped 1.3 percent at Olive Garden. For its favorite child, Darden prescribed a regimen of heavy changes: A national remodel began last year, along with the rollout of an updated website, an online to-go platform, and a new logo. The changes will continue, with tabletop tablets expected to be in all locations by the end of 2015. Darden expects Olive Garden’s sales will increase 0.5 percent to 1 percent this year.

On the plus side, each of Darden’s other brands enjoyed sizable sales gains, most prodigiously Yard House (up 15 percent) and Eddie V’s (up 25 percent).

Darden also expects its Specialty Restaurant Group—Seasons 52, Yard House, The Capital Grille, Eddie V’s, and Bahama Breeze—to see a same-store sales increase of 3–3.5 percent in the current year. Davis adds that Darden has strategically positioned itself to have a portfolio of brands with untapped, raw potential, laying the groundwork for future success at the restaurant group. Positioning seems key to this success: Upscale steakhouses like Eddie V’s and beer-centric taverns like Yard House are experiencing a revival, led by brew-happy Millennials and a rejuvenation of consumer spending.

Olive Garden: $3.6 billion
LongHorn Steakhouse: $1.4 billion
Yard House: $425.6 million
The Capital Grille: $380 million
Seasons 52: $214.9 million
Bahama Breeze Island Grille: $205.1 million
Eddie V’s Prime Seafood: $87.7 million

Company Namesort descending2014 Total US Sales ($000)2013 Total US Sales ($000)2014 Total US Units2013 Total US UnitsKey Activity
American Blue Ribbon Holdings LLC1,352,9431,321,000641637Known for revitalizing older brands.
Bloomin' Brands Inc.4,173,0004,084,0001,2881,288In January, sold the Roy’s brand.
Brinker International Inc.2,971,049*2,863,149*1,3151,311After a five-year quiet period, Maggiano's began opening new locations in 2014.
Darden Restaurants Inc.7,627,0418,630,5771,515*2,135*Sold Red Lobster in July 2014.
DineEquity Inc.7,588,3007,341,9003,4493,425Applebee's reigns supreme as the full-service brand with the highest sales at $4.57 billion.
Golden Gate Capital3,140,3001,066,305889362Acquired Red Lobster in July 2014.
Landry's Inc.1,852,8001,811,400359364Growing through strategic acquisitions.
Sentinel Capital Partners1,840,000**1,830,000**897**923**Acquired TGI Fridays in May 2014.
Sun Capital Partners Inc.2,264,6002,265,2231,5121,588Johnny Rockets plans expansion to China.
The Cheesecake Factory Inc.1,976,624*1,877,910*189*181Plans to grow flagship brand to 300 U.S. locations.

Sources: © 2015 Technomic Inc. - Digital Resource Library. and Technomic estimates. * From SEC filings. ** Sales and units for full-service brands only.



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