In Restaurant Finance, Optimism Abounds for 2025
Investors are itching to come off the sidelines. There was a buoyant sense of optimism at mid-November’s Restaurant Finance and Development Conference (RFDC) in Las Vegas, fueled by a decisive election favoring a candidate many believe to be pro-business, easing interest rates, more amenability and interest from regional banks, and an uptick in non-traditional capital options. Above all, however, there was the benefit of hindsight — of 2024 being largely behind us. The year was dominated by bankruptcy, closure, and restructuring headlines and turned out to be much more challenging than anyone anticipated. But challenges can often create opportunities. “I think in tough times, that’s when you as a business, as an operator, you figure out how to operate. Then when good times come back, you’re more efficient,” Shauna K. Smith, CEO and cofounder of Savory Fund, said during a panel at RFDC. “I think that’s why there are more deals on the horizon. I’m refreshed by all the silver-linings talk.” Savory Fund focuses on emerging brands, but it’s not the only equity investment firm expected to come off the sidelines in 2025. The general consensus — at the conference and elsewhere — is that it will be a very active year ahead for mergers and acquisitions after a relatively quiet 2024 (give or take Blackstone’s deals with Jersey Mike’s and Tropical Smoothie). According to a TD Bank survey, 84% of restaurant operators believe mergers and acquisitions activity will increase in the new year. “There is some pent-up demand,” said Alicia Miller, cofounder and managing partner of Emergent Growth Advisors. “Those who want to trade can find buyers. Others have the capital to deploy but have been sitting on the sidelines for two years. I’m cautiously optimistic we’re heading toward stability that will allow more transactions to take place.” That stability comes largely from a bank environment that has settled down following the failure of many regional players in 2023 — registering the biggest disruption in the sector than at any time since the 2008 financial crisis. High interest rates through 2024 further pressured balance sheets, and the result was mismatched supply and demand. With easing rates and a focus on higher-quality loans, many banks have been able to recover heading into the new year. “A lot of banks backed off this industry and that is easing. They’re in better shape now and it’s time to reallocate their portfolio,” said Mark Wasilefsky, head of TD Bank’s Restaurant Finance Group. “The banks that pulled back are putting the car back into first gear”…
‘4 Walls, 4 Blocks, 4 Miles’
Strategy can transform your restaurant marketing. Knowing your neighbor—and their neighbor—is key to building relationships that drive long-term success. Success in the restaurant industry isn’t just about serving great food—it’s about creating a strong presence within your community. Early in my career, I learned that marketing isn’t just an external effort; it’s about how you position your brand from the inside out. From my time as an Assistant Manager at O’Charley’s, where I became the “mayor” of my four walls, to my role as a Franchise Business Consultant for Moe’s Southwest Grill, overseeing brand consistency across multiple locations, I’ve seen firsthand how layered marketing efforts can drive long-term success. The “4 Walls, 4 Blocks, 4 Miles” strategy provides a clear roadmap to engage customers at three levels—inside the restaurant, within the immediate neighborhood, and across the broader community. By taking control of these key areas, restaurant owners can build strong connections, enhance visibility, and ultimately, increase sales. This structured approach ensures that every interaction, from the guest experience to local partnerships and digital outreach, contributes to a cohesive and sustainable marketing plan. 4 Walls: Maximizing the Guest Experience Inside Your Restaurant. Your restaurant’s marketing starts from within. Before you can attract new customers, you need to ensure that your existing guests have an exceptional experience that encourages them to return and spread the word. The thing I always remember most about 4 Walls Marketing is that it is one of the few areas where you have the most control. From what people see on the exterior windows to the content they encounter as they walk through the doors, every detail plays a role in shaping their experience. Even the message at the bottom of a receipt can be a strategic touchpoint. We have the power to write our own story and create a journey, whether it’s a fine dining experience or a fast-food stop. The question is: Do we think about customer journey placement as we connect with our marketing partners? Every menu, sign, and interaction should be intentional in leading guests through a seamless and engaging experience. Key Tactics to Implement…
Bielat Santore & Company – Restaurant Industry Alert
BURLINGTON COUNTY NJ RESTAURANT & BAR FOR SALE…
Photo used to illustrate “Restaurant/Bar” only and not actual representation.
This neighborhood tavern/restaurant has developed a loyal clientele due to its high-quality food & drink; generous portions; reasonable prices and friendly service. Lively bar business as well with strong package goods and take-out sales. Reviews are five-star! The pub/restaurant atmosphere is attractive to locals, business owners, municipal workers, military, and passers-bye to the strategically located corner location. Only a short drive from the Joint Naval Base – McGuire-Dix-Lakehurst, the restaurant receives strong support from the active military and civilian personnel from the base for both lunch and dinner…
Contact Richard Santore 732.531.4200 for additional information.
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Has Restaurant Delivery Reached a Customer Experience Tipping Point?
Optimizing your pricing based on customer feedback can help you differentiate from the competition. Consumers quickly came to rely on apps like DoorDash and Uber Eats to conveniently deliver food to their homes and workplaces during the pandemic–and the trend shows few signs of slowing down. According to Statista, food delivery will grow at a compound annual rate of nearly 10 percent between 2024 and 2029. However, digging into customer feedback on the delivery experience reveals some concerning trends. According to Chatmeter’s AI analysis of more than two million customer reviews, more than half of delivery-related reviews are negative (46 percent) or mixed (6 percent). Customers regularly complain about incorrect orders, longer-than-estimated wait times, and negative staff interactions. As delivery fees and menu prices continue to soar, at what point will consumers determine it just isn’t worth it anymore? For restaurants, the reputation stakes of delivery are high. In a survey, half of consumers say they have had food arrive late and/or cold. Additionally, 44 percent have had items missing from their orders and 29 percent have received food that did not taste good. Following an experience like this, 50 percent would avoid ordering from that restaurant again–and more than a quarter (25 percent) would avoid visiting that restaurant in person. Restaurants who believe that when they hand an order to a delivery driver the experience is out of their control should pay careful attention to the fact that consumers are still closely associating delivery experiences with the restaurant they ordered from. For brands that want to deliver on their brand promises alongside customer orders, there are a few steps they can take to improve delivery experiences…
Will Trump Spare Restaurants from Tariffs?
The restaurant industry urges action to avoid raising costs for consumers. The restaurant industry is on edge, urging President Donald Trump to exempt food and beverage imports from a proposed round of tariffs set to take effect on March 4, which could cost the sector $12 billion. The National Restaurant Association (NRA) warned in a letter provided to Quartz that a 25% tariff on food and drinks from Mexico and Canada could lead to higher menu prices, putting the burden on consumers and make dining out more expensive. The tariff would further slim profit margins, which currently range between 3% and 5%, the trade group stated, noting that, on average, restaurants have only 16 days of cash on hand. “We urge you to exempt food and beverage products to minimize the impact on restaurant owners and consumers,” the NRA said. “This will help keep menu prices stable.” The group also emphasized that U.S. food production is limited by climate and growing conditions, making imports from neighboring countries essential to meeting demand. To remain an engine driver, the NRA argued that restaurants “cannot continue raising prices to offset higher costs.” They added that food and beverage products don’t significantly contribute to the U.S. trade deficit, a key focus of Trump’s trade agenda. “It remains unclear whether the tariffs will apply only to Canada and Mexico, to steel and aluminum, to reciprocal tariffs, or to all of these,” said Kevin Ford, FX & Macro Strategist at Convera. The warning follows similar concerns from other industries. Last year, the National Retail Federation (NRF) projected that American consumers could lose between $47 billion and $78 billion in spending power annually due to tariffs. Consumer sentiment also dipped, with a 5% drop recorded in Feb. 2025, partly attributed to fears of price hikes from tariffs. Retailers like Walmart, Target, and Costco have expressed concern over potential price increases and product shortages, with some indicating higher costs would likely be passed on to consumers. Supply chain disruptions similar to those seen during the pandemic are also a looming worry…
Restaurants at a Crossroad
Economic pressures and declining spend hit hard. As goes Main Street, so goes the overall U.S. economy. By the numbers, roughly 99% of businesses in the U.S. are small businesses — and they account for about 44% of GDP. They employ half of the private sector workforce, and $1 out of every $3 spent by consumers is spent at smaller firms. And 90% of the more than 1 million restaurants in the U.S. are small businesses. Restaurants are a tough corner of the small to medium-sized business (SMB) neighborhood. And that reality has been reflected in the latest reading of the Fiserv Small Business Index, which is based on card, cash, and check transactions in-store and online for 2 million small businesses. Sales data in the index is equivalent to payments data and is collected in real time. The index shows that foot traffic has been strong at restaurants but sales have not been keeping pace. Spend actually decreased in January, by 1.7%, from a year ago. “The average ticket size is decreasing,” said Prasanna Dhore, chief data officer at Fiserv, “and this is probably due to inflationary pressures” as consumers stretch their dollars. In fact, as he observed, restaurants grew sales 2.3% through all of 2024, but adjusting for inflation, sales were actually down 1.8%. “Margins are getting squeezed,” Dhore said, “because there’s only so much cost that they can pass on to the consumers.” Changing consumer behavior is also impacting the restaurant industry. Faced with rising prices, consumers are prioritizing nondiscretionary items and cutting back on discretionary spending. Within the restaurant sector, Dhore said, this shift translates to customers opting for lower-cost menu items as they try to stretch their dollars. While foot traffic remains relatively steady, the reduction in spending per visit suggests that this cost-cutting strategy may eventually lead to a decrease in overall foot traffic as well.
Red Robin Plans to Close Dozens of Underperforming Restaurants
The company is evaluating approximately 70 locations that generated operating losses last year. Red Robin’s turnaround plan continued to gain traction during the fourth quarter, with the company reporting 3.4% same-store sales growth Wednesday after market. The company also reported sequential improvement in traffic through 2024, to the tune of 600 basis points. “While our improvement has been substantial, we have not yet reached the potential of our iconic brand and expect to drive further traffic improvements in 2025,” chief executive officer G.J. Hart said during the company’s earnings call. Red Robin has been focusing to get its sales back on track, mapped out on a five-point plan put into place in early 2023 when Hart came on board. That plan includes everything from operations to improving the entire menu. While 2024’s results showed some progress against the company’s goals, Red Robin is focused on several initiatives to keep its momentum going in 2025. Perhaps the biggest impact will come from the closure of dozens of underperforming restaurants. Hart said the company is evaluating approximately 70 locations (out of about 500 total) that generated a total restaurant-level operating loss of about $6 million last year. This equated to a drag of about 210 basis points on the company’s total restaurant-level operating profit, Hart said. “Inclusive of capital expenditures and (general and administrative costs) burden, we estimate the total cash burn associated with these restaurants at approximately $9.5 million in 2024,” he said. “In the fourth quarter, we have pared the majority of these assets, and it is currently our base case expectation that we will close the majority of these restaurants over the next five years at their lease expiration.” Ten to 15 restaurants are expected to close in 2025. “We believe the expected closure of a majority of these restaurants will allow the strength of our remaining portfolio to become clear over time and free cash that we expect to reinvest in the business,” Hart said. The portfolio restructuring could help make a dent in the company’s debt specifically. During Q4, Red Robin reported a nearly $40 million loss and $77.5 million for the year.
Why Restaurant Brands Need To Prioritize Function Over Flash
Too much creativity? Let’s get one thing straight: I love a good creative flex as much as the next guy. A slick animation, a bold color palette, an immersive digital experience that makes your brand feel like it’s dripping with personality — there’s real value in standing out. But here’s the hard truth for restaurant brand marketing leaders running large multi-unit systems: If your digital experience is so creative that it’s slowing down your guests or confusing them, you’re not just losing their attention — you’re losing their money. In the restaurant game, speed and convenience aren’t buzzwords; they’re table stakes. Your guests aren’t sitting there marveling at the artistic genius of your online ordering system or waxing poetic about the avant-garde layout of your mobile app. They want their food, they want it fast, and they want to pay for it without friction. When your team gets too caught up in the “art” of digital design, you risk building something that looks like a masterpiece but functions like a maze. And trust me, no one’s sticking around to solve it. The creativity trap: I’ve seen it happen too many times. A multi-unit restaurant brand hires a hotshot agency or an in-house creative team with big ideas. They pitch a digital experience that’s going to “redefine the category”— think parallax scrolling, interactive menus that dance across the screen, or a homepage that feels more like a short film than a functional tool. Everyone in the boardroom claps, the budget gets approved, and six months later, your conversion rates are tanking. Why? Because your guests aren’t art critics — they’re hungry. Take online ordering as an example. A guest lands on your site or app, ready to spend $50 on a family meal deal. But instead of a clean, intuitive flow — menu, options, cart, checkout — they’re greeted with a visually stunning but overly complicated interface. Maybe the “add to cart” button is buried under a cascade of animations. Maybe the menu categories are so stylized they’re hard to read on a mobile screen. Suddenly, that $50 order turns into a “forget it, I’ll just hit the drive-thru somewhere else” moment. That’s not a design win; that’s a sales loss…
Did You Know?
Still Facing the Same Restaurant Issues? Let’s Ask Why (Five Times). In the restaurant space, The 5 Whys Technique can be used to uncover systemic issues that undermine efficiency and sometimes, workplace safety. Struggling to stick to your goals or resolve team issues at work? You’re not alone. Every year, we’re bombarded with the “New Year, New You” mantra—gym memberships, self-help books, and ambitious (let’s be honest, often unachievable) goals, many times for both our personal and professional lives. By March, most of us have reverted to our old routines, wondering why those resolutions didn’t stick. The answer isn’t more willpower or self-discipline—it’s understanding what’s really holding us back. Enter the 5 Whys Technique, a problem-solving tool developed by Toyota founder Sakichi Toyoda in the 1930s. Originally designed for manufacturing, it’s now widely used in leadership and team dynamics, and personal development. By repeatedly asking “Why?” you can uncover the root cause of an issue and create real change…
Employee Tip
Fostering a Culture of Appreciation in the Restaurant Industry. Employee Appreciation Day, observed on March 7, offers organizations in the restaurant industry a special chance to honor the incredible dedication, hard work, and unique talents of their team members. Restaurant employees are the heart of the dining experience, and their commitment keeps the industry thriving. Working in a restaurant is no small feat. It’s a demanding profession that requires adaptability, resilience and the ability to excel in a fast-paced, high-pressure environment. Day in and day out, restaurant employees are on their feet—cooking, serving, bartending, cleaning, and ensuring every guest has a memorable experience, all while often working unusual schedules or long hours. Research has proven that employees who feel appreciated are more loyal to their employers…
