Deja Vu

Bob Basham, a co-founder of Outback Steakhouse, and Nick Reader, a former executive for the Tampa Bay Buccaneers, founded PDQ in 2011. The idea was to create a more upscale fast-food chicken concept, one with food that Reader would feel comfortable serving to his kids. 

 

So, quality was a focal point. Even the name stands for People Dedicated to Quality. A subhead on the brand’s logo - “Just Made, Better” - reinforced the commitment to quality. Additionally, the concept’s website offered a long list of details adding to the story, telling how ingredients were sourced, handled and prepared. And they didn’t just focus on what they did, but also highlighted the things they didn’t do: freeze or microwave anything. 

 

Contributing to this image of quality was an open kitchen design. PDQ didn’t want to simply tell customers that they were preparing fresh, high-quality meals; they wanted guests to see it, hear it and smell it. This level of transparency was seemingly inviting guests into the back of house, showing that the company had nothing to hide. This helped the company establish a loyal following in Florida and expand to more than 50 locations by the end of the decade.  

 

A year after PDQ’s founding, Punch Bowl Social launched in Denver, Colorado. The brand stood out as a new type of ‘eatertainment’ chain, one symbolic of millennials’ growing desire for memorable experiences from restaurants. But the concept wasn’t just about entertainment, it was also serious about its menu. The company advertised a scratch kitchen and a mixologist-curated adult beverage menu. 

 

Punch Bowl Social continued to grow, and so did the idea of ‘eatertainment’. More entertainment-focused brands were growing, and traditional brands were similarly thinking of ways to provide guests a one-of-a-kind experience, at least at some locations. Krispy Kreme was building a flagship unit in Times Square with stadium-style seating and a glaze waterfall; Starbucks was opening large Reserve locations, including a five-story, 40K+ square-foot unit on Chicago’s Magnificent Mile.

 

Soon after Punch Bowl Social’s founding, DoorDash and Uber Eats were launched in 2013 and 2014, respectively. Third-party delivery then very quickly became one of the most disruptive trends in the restaurant industry, bringing forward a new convenience for consumers but headaches for operators. 

 

Delivery became a growing opportunity, but one that brought its share of challenges for restaurants. Some brands struggled to balance on-premise orders with those being placed through third-party delivery apps. So, operators started thinking of ways to mitigate this problem. Chipotle began utilizing ‘second lines’ throughout its system in part to handle digital orders. Other operators turned to ‘ghost kitchens’, which also took several other names, to exclusively focus on delivery orders, though many eventually offered takeout as well.

As an off-shoot of this delivery trend, we started seeing the idea of shared kitchens emerge. If some locations are only focusing on off-premise orders, then they don’t need the same amount of space as a typical brick-and-mortar unit. Instead, they could rent only a small part of a kitchen and storage area, and other operators could rent out the rest of the space. It could dramatically cut build and occupancy costs. 

 

These trends - transparency, entertainment, efficient off-premise business models and shared kitchens - were each defining traits of the restaurant industry in the 2010s. But these trends are far from exclusive to the 2010s. 

 

Looking back to the 1920s and 1930s, one of the challenges for restaurants was simply convincing guests that it was safe to eat there. As such, many of the early fast-food chains deployed seemingly over-the-top strategies to convey safety. White Castle modeled units after Chicago’s Water Tower; White Tower Hamburger had its staff wear nurses outfits; Krystal’s name related to crystal clean restaurants. In fact, names were also a part of the equation for White Castle and White Tower. And Royal Castle. And White Palace. The list goes on. 

 

Steak ‘n Shake, the original burger and shake chain, wanted to address these concerns differently. With a brand named after its menu as opposed to colors and royalty, owner Gus Belt would wheel in barrels of high-quality steaks and grind them into patties in front of customers, believing this transparency would speak to quality and safety. It led to the brand’s early catch-phrase, “In Sight It Must Be Right.”

 

A few decades after Steak ‘n Shake’s founding in 1934, Chuck E. Cheese launched in 1977. It would soon be thought of as the original eatertainment chain. 

 

Nolan Bushnell, the co-founder of the video-game company Atari, started Chuck E. Cheese in part as a way to sell video games and animatronics. The combination of family-friendly entertainment and pizza was a success, and over the years, countless other brands have pursued an eatertainment positioning. Perhaps the golden age of eatertainment was the 1990s. Concepts like Planet Hollywood and Rainforest Cafe got their start; Chuck E. Cheese turned it around in the late 1980s to enjoy the 1990s; and Dave & Buster’s, founded in 1982, expanded in the 1990s. 

 

Coincidentally, the eatertainment trends of the 2010s and 1990s were both accompanied by the idea of shared kitchens.  Bloomin’ Brands opened several co-branded Outback and Carrabba’s Express units in the late 2010s. In the 1990s, KFC, Taco Bell and Pizza Hut opened locations featuring 2 or 3 of the brands; A&W and Long John Silver’s opened co-branded locations; Carl’s Jr began co-branding with Green Burrito. Such units were seemingly transforming fast food and the drive-thru.

 

A few decades earlier, Wendy’s made its own notable contribution to the drive-thru’s transformation. Early in its history, Wendy’s began building separate grills specific for drive-thru orders so the company could essentially prioritize in-unit and drive-thru guests simultaneously and maintain fast service over time. Not unlike Chipotle’s second line allowing for prioritization of both digital and in-person orders.

 

The history of the restaurant industry is defined by innovative ideas routinely emerging and impacting how consumers use restaurants. This understandably and rightfully places an emphasis on looking ahead as we all search for the next big idea. But this doesn’t mean the past should be discounted - far from it, in fact. 

 

With more than a century under its belt, the chain restaurant landscape is rich in experiences, stories and insights that are still relevant today. Every brand and trend that has emerged and faded over time offers a case study to consider, ideas that can be copied and mistakes that should be avoided. Such a sentiment was addressed by multiple guests early on in our podcast.

 

“What I’ve learned through history is that history does repeat itself, the good and the bad, and to learn from the bad.”

-Richard Gonzmart, Episode 101, Est. 1903. 

 

“It’s a real lesson that you get after the fact….if you went through a bad experience, at least get the lessons out of it.”

-Lane Cardwell, Episode 102, Grady’s Not-So-Good Times

 

Lawsuits have shown that co-branded locations aren’t guaranteed to be as profitable as stand-alone units. Bankruptcies have shown that eatertainment brands can’t ignore menu quality, and that some concepts were particularly exposed to downturns in other industries, like tourism and malls. And successful concepts have shown that restaurants can’t focus on quality and cleanliness alone. As Ray Croc used to say, “If I had a brick for every time I’ve repeated the phrase, ‘Quality, Service, Cleanliness and Value’, I think I’d probably be able to bridge the Atlantic Ocean with them.”

 

But of course, every lesson from history has its caveat: just because something worked in the past doesn’t mean it will work today. And just because something didn’t work in the past doesn’t mean it shouldn’t be tried again. After all, things are always changing. 

For more information on the history of the restaurant industry, check out our timeline of chain restaurants. Or, check out our other articles and podcasts - each offering lessons from the history of the restaurant industry.