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These are the 5 fastest growing restaurants in America

20 Feb 2018 1423 Views
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For a long time, restaurants were focused on providing homogenized meals at the fastest pace possible. These days, customers aren't just looking for uniformity and speed of service, they want an experience.

Companies that have been able to adapt to these changing needs have found their booths filled with hungry customers and their sales skyrocketing.

There are 177 restaurant brands that each generated at least $200 million in U.S. systemwide sales in 2017, but some are growing faster than others, according to Mark Kalinowski of Kalinowski Equity Research.

Systemwide sales include sales from company-owned and franchised locations, but not any royalties or franchising fees.

Kalinowski looked at the sales growth of each of the companies to determine which had the biggest percentage change between 2016 and 2017. While these restaurants may not have made the most money in 2017, they saw the biggest jump in sales.

Here's a look at the restaurants that are growing the fastest in the industry:

5. Cooper's Hawk

Full-service concept Cooper's Hawk Winery and Restaurant saw its systemwide sales grow more than 30 percent in 2017, to $241.8 million.

The restaurant, which was founded 13 years ago, is basically the largest wine club in the U.S., with more than 300,000 members. Its menu suggests wine pairings for all of its dishes and provides members with discounts and exclusive programs.

Members also receive a bottle of wine each month, which they can pick up at a Cooper's Hawk restaurant. They can either take the bottle home or crack it open and pair it with a dish at the restaurant.

The company does not do traditional advertising, instead relying on partnerships with celebrity chefs to market to customers.

Cooper's Hawk is sometimes grouped with a new breed of entertainment-dining venues, sometimes called eatertainment, because of its interactive and experiential nature. As of the end of 2017, the company had 30 locations in the U.S.

 4. First Watch

Breakfast gets a twist at First Watch, which saw systemwide sales jump nearly 32 percent between 2016 and 2017, to $313 million.

The company has been working in earnest over the last five years to bolster its menu of classic breakfast offerings with creative new dishes, CEO Ken Pendery told CNBC. In particular, the restaurant's quinoa breakfast bowl and its line of fresh juices have been a big draw.

Pendery said the company has invested heavily in culinary efforts as well as remodeling its stores to have a "more comfortable atmosphere."

The brand has been around for more than 30 years and at the end of 2017 had 243 locations in the United States. Pendery said First Watch doesn't fit the mold of a fast-casual restaurant because it is a full-service business. He added that it offers casual dining but makes food fast.

3. Shake Shack

Fast-casual burger brand Shake Shack is the only publicly traded company on the list having grown systemwide sales by 33.6 percent in 2017, raking in $358.8 million.

New menu items have helped boost sales. The chain recently concluded its limited-time offer of Texas-style chili, which resonated well with customers. It expects to continue rolling out limited-time menu items.

The brand has also been testing technology innovations, including a kiosk-only store in New York.

As of the end of 2017, Shake Shack had 100 U.S. locations. By the end of 2018, Shake Shack is slated to open 32 to 35 domestic company-operated locations, with about 20 percent of the new "shacks" expected to open in new markets.

Shake Shack did not respond to CNBC's request for comment.

2. Blaze Pizza

Fast-casual chain Blaze Pizza has been expanding fast since it was founded in 2011. Now with more than 230 U.S. locations, the Lebron James-backed restaurant has continued to grow its sales.

From 2016 to 2017 systemwide sales jumped 48.9 percent, to $274.4 million, according to Kalinowski. However, co-founder Rick Wetzel, who also founded Wetzel's Pretzels, said that number is closer to 51 percent.

Wetzel told CNBC that Blaze has "caught a big wave" and is focusing on innovation in its menu and adding more stores in the U.S. and abroad.

The brand has already added more variety to its toppings selection and created lower-calorie drinks, but expect to see more seasonal ingredients and salads as well as dough-knots, savory baked dough bites.

1. MOD Pizza

Fast-casual pizza joint MOD Pizza saw the biggest growth in 2017, with systemwide sales skyrocketing more than 80 percent to $270 million.

MOD added 110 stores in 2017, the second-straight year it added more than 100 stores, and now has more than 297 U.S. locations.

"We accomplished this during a difficult period for the broader restaurant industry, and we believe our remarkable growth was enabled, in significant part, by our continued commitment to make a positive social impact," said Scott Svenson, co-founder and CEO of MOD Pizza.

Svenson said the company contributed more than $1 million to support local communities and its employees.

♦ Source: CNBC