Opening a single restaurant alone is no easy undertaking, establishing a chain is a whole different and much more complex story.
As a restaurant owner or operator, the tale of restaurant chain success is an interesting one that should be read with gusto. The famous chains that we all know started out as a single location, and later went on to become a household name.
Each restaurant brand has its own playbook for success, but look closely we notice broad patterns that can be extrapolated to the success of our own restaurant.
Each restaurant brand has its own playbook for success, but look closely we notice broad patterns that can be extrapolated to the success of our own restaurant. Some of the examples of why these restaurants succeed where others failed are they were creative enough to experiment with unique flavors, they were not afraid to stray away from traditional cuisines, they were smart enough to create new technology solutions, and they were strategic about customer trends.
In this post, we try to bring these restaurant themes together by sharing their stories of origin, some of the unique strategies these restaurant chains adopted to establish and expand their brand. We won’t stop there, but also throw in some quirky restaurant facts to make it a fun read.
These stories give us multiple takeaways and should help us think about and craft strategies for our restaurant businesses.
Their success and acclaim should help us get motivated to take our establishments to the next level.
They help us dream a bit bigger, putting those dreams into plans of action for our restaurants. Most importantly, they affirm that we can start small and grow into a giant restaurant chain. So let’s get started!
The piece covers 5 household names (in no particular order of size, valuation or ranking).
Table of Contents
The List of Large Restaurant Chains
When you think of a fancy valentine’s dinner, a Waffle House is not the first name that comes to one’s mind. Yet, reservations on valentines at waffle houses (an experience with white table cloths, rose petals, candles, and of course, hash browns) sells out year after year.
Waffle House is known for its cult following, but the dedication to the chain is truly unreal.
Although it is perceived as the common brand, the uber-rich do not shy away from joining the cult either. We have heard about Kim and Kanye West’s double date with Chrissy Teigen and John Legend at the Waffle House or watched videos of Sean Brock and Anthony Bourdain sharing poetic expressions for their love for the waffle house. The country music artists love Waffle House as well, with many country music tracks being shot at or quoting Waffle Houses.
How Did It All Start for Waffle House?
Joe Rogers, a general manager for a restaurant chain called Toddle House, and Tom Forkner, a real estate agent, met in 1949 for the first time when Rogers purchased a house from Forkner. A little over 6 years later, they stayed in touch and decided to open a restaurant together. They felt that their town needed a place that is open around the clock (a 24-hour establishment) that also offered table service for fast food at an affordable price.
At the time, it was a novel concept in the suburbs of Atlanta (Avondale Estates).
Owing to their backgrounds, Forkner was responsible for building the restaurant and Rogers to run it. It was the unique mix of owners that allowed the franchise to set an unprecedented track record in its space. Just a few years later, in 1960, they began franchising slowly and this later picked up steam in the 1970s and 1980s.
The chain now covers almost half of the US (in 25 states) and has approximately 2,100 restaurants, mostly concentrated in the SouthEast.
The name Waffle House came from the simple theory that Waffles was the most profitable item on the menu. And naming it the Waffle House would encourage people to order more of these from their then 16 item menu.
Talk about suggestive marketing!
Tell Me More About Waffle House!
Waffle house has a flair to connect with people. They started off as a restaurant that wanted to focus on people and that carries with them today as they still like to think of themselves in the service business and not the food business. You will experience this when the waiter or waitress welcomes you with a warm smile calling you “honey”, or when one of the wait staff serves you with a compliment before serving your food.
Rogers was quoted saying “People never get tired of having their egos built up. You tell them something good about themselves, and they’ll come back for more.” And it is still a common experience decades later that waffle houses use to build their brand following.
A strong partnership is when partners’ skills and interests complement each other, and Waffle House is a good example of this. Folkner was responsible for building the chain (growing the number of units) and his thought process was known for being very straightforward. For instance, to scout locations, he would say “One supreme test of whether it’s a good location—take a real rainy, blistery Tuesday or Wednesday night at two o’clock in the morning, park your automobile there and see how many cars pass. If you don’t have many cars, you don’t have a good spot.” While other restaurants of the time did not think of the night time as a profitable strategy, Folkner had his eye open for the perfect locations to bring in cash at odd hours. While Folkner chose the best spots, Rogers helped with the next chapter.
Roger never pictured Waffle House as a takeaway restaurant. The menu items like hash brown and waffles were simply too flimsy if they are eaten later and are truly table items. To bring in efficiency and accomplish his dine-in goals, he created a system that got the food order to the kitchen in 8 minutes and on the customer table within 20 minutes. It was the perfect spot, the menu was loved and service was good and quick – all of these contributed to the initial and even continued success of the chain.
Waffle House’s most distinct feature is its ability to be open always (they have a very good disaster preparedness, and can keep running without power and less than optimal supplies). Even under very difficult circumstances, they might only have a few menu items but are still open.
In fact, it closes so seldom that the government uses the Waffle House diners as a barometer for disaster recovery. FEMA (Federal Emergency Management Agency) even has an informal index named after it, that determines the severity of a tropical storm, hurricane, or another natural disaster.
Fun Fact About Waffle House!
Waffle House also has its own record label which produces waffle house themed songs and music videos. These songs play on the jukebox that are at all their locations. Some of the songs are really well known including their first song “Waffle House Family” and their music video “Bert”.
Waffle House is a perfect example of simplicity at its best. Everything that makes them unique – how they came up with the name, decisions they make, the strategies they follow, their no-frills atmosphere, their ever so friendly wait staff make you feel welcomed, their simple menu, and so on, is simple.
Their genius lies not in their unique proprietary technology, Michelin star menu, or business savvy but that a simple plan executed well can be a success.
Known not just for its whimsical Mexican food, but also it’s out of the ordinary marketing campaigns, Taco bell is an international household name.
Always up on the latest trend, be it plant-based meat, recyclable packaging, it’s Doritos tacos, and much more, the company knows how to keep its customers fully engaged and happy.
The first location of Taco Bell was not how we picture Taco Bell today. The first unit was an outdoor hangout that featured fire pits and mariachi bands. It had a walk-up window and no indoor seating. Instead, people could sit around fire pits on the patio and listen to live mariachi bands.
From the pompous first start to a worldwide chain, Taco Bell has a fascinating journey to restaurant chain success, with great lessons for any restaurateur.
How Did It All Start for Taco Bell?
There was once a hamburger stand owner named Glen Bell in a Latino neighborhood in San Bernardino. He noticed that the Mexican restaurant across the street was very popular for its hard-shelled Tacos. He spent two years going there regularly and dining there often in an attempt to figure out the taco recipe, ultimately failing to do so.
Eventually, he got lucky when the owner was kind enough to show it to him himself. As one can expect, Glen went on to open his own taco stand Taco-Tia along with a business partner. The place was really successful, and Glen and his partner expanded it to more Taco stands. This was just part of the story of how Taco Bell came to be.
Glen’s partner was not open to the idea of expanding Taco Tia further, and this is when he founded another short-lived Taco restaurant with a new partner. In 1962, Glen sold off all of his existing restaurants and opened the very first Taco Bell in Downey, California. He had a franchisee plan right from the start and hence was able to accelerate his business pretty swiftly.
Within just two years, he sold his first franchisee and in 4 years, there were already 100 Taco Bells in Business. Taco Bell has now expanded to almost 30 countries and even opened its own hotel and resort in Palm Springs, California.
Tell Me More About Taco Bell!
Taco Bell has a rich history. It is known to have pioneered many new movements in the restaurant and franchise industry. For instance, Taco Bell was the first chain to hire women managers to run their franchise stores (unheard of at the time). The founder, Glen, spent a lot of his time helping his aunt in her bakery as a child helping him understand and value having women leaders in the workplace. So, during the expanding phase, when the stores did not have enough managers and the existing ones were all men, Taco Bell hired women managers and brought about this unprecedented change in the industry.
The innovation is continuous at Taco Bell. From the days of being the first Mexican fast-food chain to now introducing items like Doritos Loco Taco, innovation is in the heart of their operations. Being an innovator is never easy, and even for such a giant business with all the resources, talent, and access to capital that Taco Bell has, it does not come easy.
For instance, just for Doritos Loco Taco – it took food designers and engineers two years and 40 different recipes to create it. Taco Bell is not shying away from involving people in their process. In 2017, Taco Bell started welcoming the public to its test kitchen, where the popular items get started. Definitely worth a visit for all those food innovators, restaurant owners, or taco lovers.
Taco Bell is also known in the industry for their out of the box ways to connect with their audience. Taco Bell serves more than 2 billion tacos and more than 1 million burritos each year. An average customer comes back every 11 days to the store. These phenomenal numbers have got to do a lot with their successful marketing campaigns.
One creative example would be their Taco Emoji campaign. In the early stages of emojis, when they were just starting to get popular, there was no taco emoji. There was an emoji for pizzas and hamburgers, but unfortunately, tacos were left out. Taco Bell saw this as an opportunity to step in, launched a change.org petition to bring about the taco emoji, and managed to gather more than 25k signatures. Apple gave in to this and launched the taco emoji in 2015. Taco Bell made use of the emoji to engage with the customers on platforms like Twitter and successfully continues to use it in marketing today.
Fun Facts About Taco Bell!
A chihuahua named Gidget was the face of Taco Bell in the late 1990s and early 2000s. You probably even recognize the face, as the dog had a famous film career as he starred in Legally Blonde 2: Red, White, and Blonde and a series of Geico commercials. The chihuahua lived a celebrity life, she flew first class, even opened the New York Stock Exchange and appeared at Madison Square Garden.
Taco Bell is a perfect example of involving customers in their success, be it coming up with new products that are fan favorites (who does not love Doritos), or joining the trends such as launching a whole line of health-conscious items (their Cantina menu).
Perhaps it’s just making use of public emotions to create virtual emojis. It is these connections with their customers that help them stay relevant and popular in the competitive fast-food space.
When the conversation is centered around restaurant chains, we would be remiss to not mention Starbucks. Having spent long hours sipping on coffee at Starbucks while writing posts for this website, I know their model too well.
Their annual pumpkin spice latte launch has lines out the door and the branded cups are coveted around the globe.
This chain sells experiences and not just coffee. The Starbucks chain is now valued at billions of dollars but was started by (almost) a poor working-class man. The Starbucks chain that changed how people consume coffee outside of their home and work. The chain that will someday get all our names correct (still waiting for this).
The Starbucks chain has stories for anyone striving for restaurant and hospitality success.
How Did It All start?
Starbucks was not initially started by Howard Schultz who is today synonymous with the brand (and who many think launched the coffee empire). It was actually way back in 1973 when 3 college friends came together and got into the coffee business. Alfred Peet, founder of Peet’s coffee was already well acquainted with the business, and helped the group of 3 to educate them about the industry, connected them to coffee brokers, and helped them set up their own roastery and source their own beans. The 3 friends, Zev Siegel, Jerry Baldwin, and Gordon Bowker, then worked hard to set up their business and in the next years, opened 5 more locations in Seattle. But Starbucks was still not a cafe, but rather a coffee store.
At the time, they simply wanted to bring high-quality beans to a market that dominantly only had instant or canned coffee.
Then came Howard Schultz, he was hired as the director of marketing and sales in the firm. Even then, Schultz believed that the business should sell beverages and not just beans. A trip to Italy inspired Schultz to turn Starbucks into a cafe and then there was no stopping him.
Within 4 years, Schultz managed to partner with some investors and bought out the previous Starbucks owners, turning it into the successful coffee chain as we see today.
Tell Me More About Starbucks!
Branding is one of the core strategies of Starbucks, and the most explicit approach to this is standardization of its stores, items, and merchandise. Whether you enter a Starbucks in New York, Mexico, Tokyo, or India, there is a level of familiarity that you will recognize almost immediately. Consistency helps the customers with loyalty, expectations, and as a mental shortcut (to get them in with money and out with coffee quickly).
The uniformity across their stores also creates a strong attachment to the brand.
Many high-performing organizations owe their success to attention to detail, and Starbucks is no different in this regard. Their intricate details make up for the wholesome experience for which we go to Starbucks. For instance, their music playlist is in partnership with Spotify and carefully curated for their stores. The aroma of coffee when you enter the shop is no coincidence, but rather a well thought out strategy.
This aroma is so important that a few years ago they reformulated their heated breakfast sandwich, as the smell of eggs and cheese masked the coffee aroma. They pay attention to every small detail of the customer experience and this is what truly separates them from their competition.
Another pillar where Starbucks also stands out is its philosophy to portray itself as an ethical company. Be it their purchasing practices, their support to coffee farmers, their initiatives for forest conservation programs, the steps taken to reduce environmental footprint, and much more. Starbucks not only executes them well but also communicates this to the customer strategically.
This helps them build a stronger brand and a true cult-like customer following.
Fun Facts About Starbucks!
The name Starbucks comes from a fictional character Starbuck, the first mate of Captain Ahab in the book Moby Dick, written by Herman Melville. The founders found the name fitting as their first store was in Seattle, a port city. Also, the logo, which at first glance one might think is a mermaid is actually a siren. Sailors have long feared sirens for their habit of luring unknowing seafarers into danger.
Also, like her ancient counterparts, the Starbucks siren differs from mermaids because she has two tails.
Even though not all of our businesses have million-dollar marketing budgets, the story of Starbucks has a lot to teach us. Their strategy gives us the framework and a thinking guide to implement changes in our businesses.
Their attention to intricate details should send us on a reflective route about our restaurant.
McDonald’s is to date one of the first names that come to mind when we talk about a major success in the franchise space.
The McDonalds company has revolutionized how people eat and produce fast food. They have literally changed the fast-food space since inception.
It is said that one in every 8 American workers has been employed at McDonald’s at some point in their lives. How is this possible? Well simply put, the scale of the McDonald’s organization. This list includes celebrities like Jeff Bezos, Pink, Sharon Stone, and a few more. It is a food company that is also the world’s largest distributor of toys. Even as adults, we do not shy away from binging on those happy meals, just ask my grandmother who orders it every time! McDonald’s hamburger university has a lower acceptance rate than the prestigious Harvard and has 7 campuses worldwide.
Whether as a food company, toy distributor, or hamburger university, whatever McDonald’s does, it knows how to excel.
How Did McDonald’s Get Its Start?
Two brothers, Richard and Maurice McDonald opened up a small hamburger restaurant and bought appliances for their new kitchen from a man named Ray Kroc. Kroc was filled with wonder as to why they would need so many appliances for one kitchen and went to visit the brothers. The efficient format, for instance, the self-counter eliminating the need for waiting staff, preparing hamburgers in advance and heating them under heat lamps, was one of the many reasons Kroc was thoroughly impressed. He proposed to the brothers to become a franchisee and went ahead and opened the first McDonald’s franchise.
He eventually bought out the brothers and went on to build the McDonald’s empire as we know today.
Tell Me More About McDonald’s!
McDonald’s has the ability to closely listen to their customers and to respond to them in a timely fashion. For instance, their drive-thru feature started when a group of soldiers wanted to eat at McDonald’s but could not get out of their cars due to fatigue. Their first drive-thru was located near a military base in Arizona to serve the soldiers there, and soon the feature followed at other franchises.
Their all-day breakfast menu was also a result of customer feedback. They were hesitant to implement the all-day breakfast menu at first, as it could slow down the kitchen speed during the day due to the large volume of items.
They still found a way to make it work, giving their customers what they wanted, and were able to simultaneously grow the top and bottom line for their franchises and the parent company.
McDonald’s knows how to leverage the power of its large franchise group. While most other chains have a test kitchen and a team of experts solely responsible for new items and food innovation, McDonald’s does not shy away from giving a chance to their franchise owners. For instance, some of their popular menu items like McFlurry, the Egg McMuffin, and Hot Apple Pie – they are all results of some of the franchise owner’s innovation.
Don’t mistake this for an easy feat as consistency is at the core of McDonald’s fast-food culture.
Fun Facts About McDonald’s!
McDonald’s was once thought to be a forerunner of peace. Famous Economist Thomas Friedman published a theory called “Golden Arches Theory of Conflict Prevention”. It cites that no two countries with branches of McDonald’s had gone to war.
Unfortunately, this did not last long as in 1999 the US along with NATO bombed Serbia (the country had about 7 units back then).
The Mcdonald’s corporation that has been successful for close to a century is packed full of lessons to share. McDonald’s has had its own share of problems, their food was under scrutiny for being unhealthy, sourcing their meat, and it has also been challenged by many activist groups including the powerful London Greenpeace.
It has bounced back each time with a new approach which is worth studying and analyzing. McDonald’s is and will remain one of the favorite restaurant chains in the world.
Subway overtook many longstanding players in the fast-food sector. The genius of the brand does not lie alone in their healthy dining options at reasonable prices, but the brand has excelled in many aspects of the restaurant industry.
Subway is continuously awarded as one of the top franchise opportunities, applauded for their relations with franchisees, studied for their expansion plans, analyzed for their efficiency, and appreciated for their quality.
Many factors go into making Subway a success and represent lots of restaurant lessons for business owners to learn from.
How Did It Start for Subway?
A gentleman named Fred DeLuca in 1965 tried to open a sandwich shop in Bridgeport, Connecticut. Back then, he did not even dream or visualize the Subway of today. He dreamt of being in a medical school and sandwiches were a tasty bridge towards funding his tuition. To open up this shop, he borrowed $1,000 from his friend Peter Buck. And together they opened up the sandwich shop naming it Pete’s Super Submarines.
Just a year later, with plans to expand their restaurant empire, they formed a holding company called Doctor’s Associates (owing to DeLuca’s dream of funding his medical studies). As we know today, Subway had quick success and by 1984, less than 20 years after its launch, the restaurant had begun to expand internationally.
From Pete’s Super Submarine to a worldwide chain, Subway now has over 40,000 shops worldwide. Subway has one of the highest numbers of chains around the world and even beats the big giants like McDonald’s in the number of locations.
Tell Me More About Subway!
One of the best strategies of Subway is to make their franchise simple to operate. For instance, Subway restaurants are very efficient to build as they do not require a large back-end kitchen. Most of their preparation is performed in front of the customer in the restaurant space. Due to this configuration, the franchisee shop requires less square-feet of space compared to other fast-food chains. This also makes Subway franchises easier and cheaper to open.
Additionally, they also allow for non-traditional locations. You will find Subways in hospitals, on campuses, airports, in busy shopping centers, and almost anywhere. The efficient shop model and flexibility about locations allow for Subways to open up almost anywhere where it has sales potential.
Needless to say, Subway has mastered customer engagement at the highest level. Their core model is built on the premise that the food is made in front of the customers as per their instructions. Even though they have a pre-set menu, customization is at the heart of their dining experience. This reassures customers about what is in their food (by letting them choose), allows them to be in the process of product creation (when they customize their sandwich), allows the shop immediate feedback collection (this is how Subway is catching up trends almost immediately, for instance launching low-fat dressings when health consciousness expanded).
All of this results in Subway is a leading restaurant in customer engagement.
The most important lesson to learn from Subway is the flexibility of the brand. To explain better, think of McDonald’s. When the consumers began to demand less-fatty options, their sales lagged even when they introduced healthy items such as salads or fruit desserts. It was because consumers always associated them as unhealthy.
With Subway, it was a different story, they have a very flexible model. If tomorrow, a trend catches on for cannabis bread, Subway can almost immediately ride the wave. It has made itself a brand that can shift as consumer sentiment changes.
Fun Facts About Subway!
While most companies move away from their original logo, Subway has had the same logo since its inception. The Subway logo dates all the way back to Pete’s Sandwich shop we mentioned previously. Until 2002, when Subway had some of the first significant changes (thicker italicized characters and also changed the color scheme), the Subway logo was pretty much a variation of the original logo design.
There are multiple aspects that make Subway a smashing hit. One would not imagine Subway when you talk about the most “innovative brand”, there is no fancy item on the menu yet they have their own unique breads, there are no complicated ingredients yet they have everyone’s favorite sandwich fillings ready to be served.
Subway innovated in its own unique way, and this allowed them to be both unique and successful.
Final Thoughts on the Largest Restaurant Chains
Going through some of the most successful restaurant chain stories, we are now more sure than ever, that success in the restaurant industry takes time. These brands took years to build themselves to the restaurant giants they are today and had to show resiliency time and time again.
These restaurant groups also showed us that while thinking out of the box is essential, sometimes new and creative ideas can be found in simplicity or details.
The story of Starbucks showed us that even as an employee, with ideas and dreams you can build a restaurant where the world goes every morning.
The story of McDonald’s showed us how by just being efficient in your operations, you can build a name every generation will know. With the story of Taco Bell, we see how a wild imagination can change the face of traditional cuisine.
The story of Subway showed us that it’s okay to pivot in life and work endlessly in the new direction.
And the story of Waffle House showed us that everyone loves waffles including Kanye West and Kim Kardashian. Time to write our own story, build a great brand, and get the critical (and celebrity) acclaim you deserve!