Editor's Note
Seven casual-dining closures landed in one week, including a chain that shut every company-owned restaurant it had with no warning. Written from the chain's side that's an obituary. Written from yours it's a hiring window, and it closes fast. Tech Spotlight has a finding about why your regulars come back that has nothing to do with how good the food is.
Let's get into it.
— James, Founder of Savory Bites
This Week In The Industry
Your Next Best Hire Got Laid Off on Wednesday
O'Charley's closed every company-owned restaurant it had. On a Wednesday, no warning. A handful of franchised locations are still standing, which Restaurant Business reads as all but defunct.
It wasn't alone. Bravo Italian Kitchen shut at least four locations in a matter of days, after sister brand Brio Italian Grille closed several earlier this year. Red Lobster closed more in what it called a right-sizing. A Denny's operator filed for bankruptcy and closed five restaurants across Minnesota and Wisconsin. A Domino's franchisee closed thirteen in Ohio. Marmalade Café in Los Angeles filed Chapter 11. A Qdoba franchisee defaulted on a $20 million loan.
That's one week.
The trade press will write this as a verdict on full service, and it probably is. That's not the useful part if you run one restaurant or five. The useful part is that a lot of trained people just found out they don't have a job, and a lot of regulars just found out they don't have a Tuesday spot.
Both of those are perishable.
Start with the people. A server who worked a casual-dining floor knows how to run six tables, fire a check, and handle a table that's unhappy without calling a manager. A line cook out of a chain kitchen has worked a ticket rail under volume with someone timing them. That's expensive training somebody else already paid for, and right now it's sitting at home in a market where restaurants just led every industry in the country in August job growth. The good ones will be placed within two weeks. Not two months.
Then the guests. People are loyal to a routine more than they're loyal to a restaurant, which is why the closure of a mediocre chain location still leaves a hole. Somebody who ate at that O'Charley's every other Thursday now has a Thursday with nothing in it. They are not going to run a search and read reviews. They are going to drift to whatever is convenient and looks open.
Restaurant Business makes the point that when somebody with money decides to eat out, a casual-dining chain is only one name in the set, competing against the interesting new independent down the street. Unlike big fast food, those chains can't bulldoze you with marketing spend or a loyalty program. This week a few of them stopped competing for that slot at all.
This is the part most independents get wrong. They assume displaced customers will find them eventually. Eventually is a month, and by then the routine has re-formed somewhere else.
Three things worth doing this week.
Find out what closed near or about fifteen minutes from you. Not nationally, in your actual trade area. If one of these is in your radius, everything below matters this week and not later.
Post a hiring note that says you're hiring specifically because a place nearby closed, and name the shift you need. "Looking for a closer, Thursday through Saturday" beats "now hiring" by a distance, because the person reading it is trying to work out whether they'd be starting over or just moving.
Then go get the Thursday. If a nearby restaurant closed, the people who used it have an empty slot on a specific night. Put something on that night worth driving to and say so where locals actually look, which is your own page and the neighborhood groups, not an ad.
Tech Spotlight
A 4.6 From 40 Strangers Is Not a 4.6 From 40 Regulars
Zest, an AI dining discovery app, compared what people save with where they actually go. Cofounder Mario Gomez-Hall: "Most dining decisions aren't really decisions, they're defaults, and defaults are invisible in review data because nobody reviews their routine."
The part that should interest you is how they identify a hidden gem. It isn't the rating. It's a high repeat rate on a small base. Not many people have found it, and almost everyone who goes, goes again. As Gomez-Hall puts it, a 4.6 out of 5 from 40 strangers and a 4.6 from 40 regulars are completely different businesses, and a star rating can't tell them apart.
The ones that hold up share a shape: a short menu run for years, an owner in the room, and hours built around when the neighborhood actually eats. They mostly don't spend on marketing, which is exactly why review platforms miss them.
Source: Modern Restaurant Management
Ellie's Corner
Every week this space is dedicated to something we're building at Ellie Carte. An AI phone ordering and restaurant management platform built for independent restaurants and hospitality operators.
If a place near you just closed, some of those customers are going to call you, and they'll call at exactly the hour nobody can get to the phone. That first call decides whether they come back. Ellie knows every special and BOGO you're running and offers them without being asked, so a caller who has never ordered from you gets steered to the thing you most want them to try. She answers the calls your staff physically can't get to during a rush. The order lands on the dashboard before she's hung up.
👉 Learn more at elliecarte.com
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