How quick-serve restaurants are scaling the food chain

Lisa Mason stood outside a Chicago restaurant at 9:15 a.m. on a recent sunny Monday, where she would continue to wait for two hours. She wasn't there for breakfast. She was there to get a $1 burrito. Mason was the first person in line at the new Chicago outpost of Dos Toros, a New York-based fast-casual taqueria opening its second location in the Windy City. By the time the doors opened at 11:30 a.m., more than 200 people stood on the sidewalk in a line that stretched across the West Jackson Boulevard bridge over the Chicago River. Prelaunch, Dos Toros did almost no marketing (think teaser signs in its windows pitching the new location, and promoting the $1 opening-day offer on social media), just some grassroots outreach. It included visiting employees in the office building where the restaurant is located, a soft opening days before the launch at which tenants got free burritos and tacos, and an email from the building concierge to tenants reminding them of the $1 deal. "The term 'influencer' gets thrown around, but simply, somebody that works upstairs is a huge influencer for you, whether they have an Instagram or not," says Marcus Byrd, marketing manager at Dos Toros. Leo Kremer, who founded Dos Toros nine years ago with his brother, Oliver, says this approach to marketing works because the most-needed piece has already been placed: the location. The new Dos Toros is in an area filled with office buildings, and close to a commuter train station. "It's a cliché, 'location, location, location,' but it's a cliché for a reason, and half that reason is literal awareness to the most actionable customers," says Kremer. Smaller restaurant chains such as the fast-casual taqueria are increasingly eager to take big bites out of the competitive restaurant industry, and it shows: While the number of new locations opened by the Top 100 restaurant chains (measured by U.S. system-wide sales) rose just 1 percent in 2017, according to Technomic's 2018 "Top 500 Chain Restaurant Report," the number for chains ranked 401 to 500 rose 3.9 percent. (Dos Toros is too small to make it into the Technomic report.) And they're expanding mostly with localized, grassroots campaigns and strikingly limited traditional marketing. When Chicagoland hot-dog chain Portillo's was preparing to open its first Florida location in Tampa, the Chicago Blackhawks had just defeated the Tampa Bay Lightning to win the 2015 Stanley Cup. So the marketer put a full-page ad in the Tampa Bay Times that read, "Cheer up Tampa, there's good news from Chicago today." Peppered with a heavy dose of food puns, the ad announced that the fast-casual chain was on its way to the city. (A version congratulating Tampa Bay residents had also been prepped in case the local team won.) The ad also directed people to the company's website, giving Portillo's a large group of informal brand ambassadors in a new market ahead of the restaurant's 2016 opening. It has continued to gather emails via newspaper print ads, as well as social media, from potential customers in each new market, such as Minnesota and Wisconsin. In return, people can sign up for free meals days before the opening. Portillo's also tells them to bring friends who haven't had the food before, helping drive even more awareness by word-of-mouth marketing. Those early events, like the ones at Dos Toros and other chains, also help the staff work out any last-minute kinks. And since Portillo's food is free, no one really complains if the service takes longer than usual while employees train. Portillo's began with a single hot-dog stand in Villa Park, Illinois, back in 1963. Founder Dick Portillo soon named it Portillo's and grew the chain in Illinois, including its first Chicago location in 1994. By 2000, his eponymous chain was also offering consumers countrywide a shop-and-ship option so they could re-create the menu at home (e.g., its Italian beef sandwich package includes beef, gravy, giardiniera, roasted sweet peppers and Italian rolls). Those shipments were critical to the company's expansion plans outside Illinois, the company says, as Portillo's could track its orders and know where its fans were. When it opened its first location outside its home state, in Buena Park, California, in 2005, it knew it had a good chance of succeeding there. "Mr. P. was very opportunistic and saw that he was getting a lot of requests from [certain] areas," Nick Scarpino, VP of marketing at Portillo's, says of the chain's founding father, who sold his company to Berkshire Partners in 2014. Choosing locations—it now has restaurants in seven states—is also a matter of knowing where Illinoisans go to escape Midwestern winters. States including Arizona and Florida are hits because "those are places where there's former Chicagoans," Scarpino says. "The brand awareness is very high." The marketing for the chain's openings—it's on track to open seven more restaurants this year—is done by an internal team of about five people. Wagstaff Worldwide helps with media outreach. And its only TV spots to date come from Chicago-based Schafer Condon Carter and began airing in Minneapolis this year. Portillo's, like many other chains, also markets its new restaurants by showing affinity with a location via the addition of localized design elements. So its largely Chicago decor, which often has a Prohibition-era theme—including pictures of Al Capone and vintage posters about the ban on alcohol sales (most locations, by the way, serve beer)—gets tweaked. In Mishawaka, Indiana, a restored 1932 Studebaker truck, one of only 500 ever produced, and which was made at a manufacturing plant outside the city, hangs from the dining room ceiling. Barreling cross country Cracker Barrel, the Tennessee family-dining chain known for comfort food and games that can be played at the tables, also has local memorabilia on the walls of each location. In Victorville, California, where it opened in early February and which is home to the California Route 66 Museum, that includes antique car parts, plus retro labels from California produce brands, vintage UCLA memorabilia and more. In the last two years, Cracker Barrel, which is mostly located in the eastern half of the U.S. and is expanding westward, also opened its first stores in Las Vegas and Portland, Oregon. A Sacramento location is set to open this summer, followed by additional California shops over the next couple of years. "Overall, 75 percent of our new-store pipeline over the long term is outside of our core Southeastern market," says Don Hoffman, senior VP of marketing at Cracker Barrel Old Country Store. Before the opening in Victorville, Cracker Barrel studied social media posts to identify fans with large followings who grew up eating at the restaurants but now live in the Golden State. Those fans got personalized mailers of Cracker Barrel goodies and invitations to the store's VIP preview breakfast. Two Cracker Barrel devotees even reached out to the company with an idea of their own: Brothers Matt and Nick Jackson, aka the Young Bucks, a professional wrestling tag team. The chain suggested some sort of co-branded merchandise, got the OK from the Jacksons, and then came up with the idea of "Biscuit Party"-labeled trucker hats, which were given out to attendees at the Victorville preview. "The hats proved to be quite popular and allowed the brand to show up in a fun, unexpected, yet still authentic way," Hoffman says. Build it and they will lunch Many larger chains take the grassroots route as well. Chick-fil-A, the nation's seventh-largest chain by sales, has a localized promotional process so ingrained in its culture that it has a name: The First 100. The Atlanta-based chain, expanding both in markets where it's established and newer ones, like New York—its fourth New York location opened in the Financial District in March—currently opens as many as four restaurants a week. Before a new restaurant opens, the company invites 100 locals to camp out the night before, then provides them with free breakfast the next morning and gift cards for a year of free meals. People used to travel hundreds, sometimes thousands, of miles to go to a grand opening, the company says. So now participants must reside in a nearby ZIP code to sign up. If more than 100 locals go for the deal, a drawing is held to pick the participants. "We get a combination of what we call 'raving fans' and then we get people who have never even had Chick-fil-A," says company spokeswoman Carrie Kurlander. While attendees often camp out in restaurant parking lots, sometimes the chain has to get creative. When its third New York location opened earlier this year in Midtown in a spot that doesn't have a parking lot, the campout took place in nearby Bryant Park. If the weather is particularly harsh, plans can change. Before an Atlanta opening in January, when there were subfreezing temperatures, the hours of the campout were revised and participants had the option of spending the night inside. Still, Kurlander, who attended that opening, says some hunkered down outside, as they'd come prepared with their own gear to stay warm. Even when Chick-fil-A, which has restaurants in 47 states, opens a restaurant in an established market such as Houston, "it's like 'Field of Dreams'—build it and they will come," says Kurlander. "It may be the 10th campout, if not the 20th campout, in a given market [and] people are still there and lining up for The First 100." And little more is done than The First 100, which itself is mostly publicized via a Facebook page. "It's more of the grassroots, earned media, if you will, that precedes the more traditional marketing tactics" that follow once the location is open, says Kurlander. And those types of grassroots efforts, it would seem, can do double duty: Not only do they get people to an opening, but the word of mouth that follows can have its own robust results. Take the Dos Toros opening in Chicago. A line for $1 entrees? Now that makes sense. But the next morning, when prices were back to normal, employees were greeted with a surprising sight outside the doors: a line of Chicagoans, waiting for some of that California-style Mexican cuisine.

How quick-serve restaurants are scaling the food chain

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