Rise and shine: Why breakfast chains are Booming

Restaurant Dive
Rise and shine: Why breakfast chains are booming
By Julie Littman
March 21, 2023

How full-day concepts are competing

All-day breakfast concepts are also benefiting from continual demand in the morning daypart and are developing points of differentiation to compete.

Denny’s bought A.M. eatery Keke’s Breakfast Cafe last year as a way to diversify its portfolio. IHOP is growing its off-premise channels through virtual brands that work alongside its breakfast daypart. Black Bear Diner leans into in-store ambiance as a competitive advantage; each restaurant has carved bears out front and mountain motif murals and a jukebox inside, CEO Anita Adams said.

“With us relative to AM eateries, we are three dayparts. We have a healthy AUV of $2.8 [million]. That is a function of the fact that we do have that dinner component,” she said.

Black Bear Diner, which has over 150 units, had a steady pace of new unit growth, opening 15 to 20 restaurants per year, split between franchised and company-owned prior to the COVID-19 pandemic, Adams said. During the pandemic, the chain didn’t permanently close any units, except one that was unrelated to the economic conditions caused by COVID-19. Black Bear kicked off a renewed development push in mid-2021 and opened 10 units in 2022. This year, it expects to open 15 units and potentially reach 20 to 25 in 2024, Adams said.

Black Bear’s corporate stores are largely in Texas — its first Dallas diner opened in 2022 — and it’s been growing in Houston, where it has about 10 units, Adams said. Franchise partners have largely been focused on the West Coast and California, specifically, while corporate is focused on bringing the band east. The company also has units in Oklahoma and Arkansas, she said.

The company will still target smaller metros that have populations of around 100,000, which do well for the chain given its flexible footprint and broad demographic appeal.

The segment remains healthy as seen by the number of players that have come into the market, even QSRs, she said. Wendy’s, for example, entered the breakfast daypart in 2019 and reached an average weekly sales of over $3,000 per restaurant in Q4 2022.

“Frankly, I love the fact that you’ve got a lot of competitors out there in the breakfast space,” Adams said. “The more breakfast is top-of-mind, we think we’re in that shortlist of selections for guests.”


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