Niche concepts are usually at the center of trend-focused conversations throughout the restaurant industry, and most of the concepts discussed will fit this description: it has a specialized menu with only a handful of items.
Many large chains used to fit this description. There was a time when McDonald's only had 9 menu items and a clearer focus on burgers. Perhaps the most extreme example is Schlotzsky's, which was founded with a single menu item.
Similarly, we heard about Chili’s days as a niche concept, albeit with the more familiar burger, from Chuck Winship in Theory of Evolution. The casual-dining brand now synonymous with ribs and fajitas started with a one-page menu emphasizing burgers.
In Location, Location, Location, Jim Mizes made an interesting point about niche concepts: they sometimes struggle to grow out of their niche. And if a brand can’t grow out of its niche, then it’s stuck in a smaller market or with a smaller customer base. For Chili’s, it meant only appealing for customers who were in the mood for a burger. They were missing out on diners craving ribs, fajitas, chicken, salads and so on. Indeed, the evolution of Chili's demonstrates how menu additions can drive incremental visits.
“One of the struggles for wonderful niche concepts is breaking out of their niche. That’s hard.”
But of course, there must be a balance. In the same way niche concepts struggle to grow out of their niche, there’s a similar struggle among brands with overly broad menus with no clear focus. They don’t have a niche. So, there must be a balance: menus can’t be too small, and they can’t be too big.
Once more, let’s look at Chili’s. An expanded menu of fajitas and ribs helped elevate the burger brand to the next level in the 1980s. But more recently, the company drastically reduced the size of its menu with a similar goal of elevating the brand. But what items weren’t cut? Burgers, ribs and fajitas.