Chipotle and other fast-casual players ramped up promotional activity in an attempt to juice traffic. | Photo courtesy of Chipotle
What a difference a year can make.
It all started out so well for the fast-casual segment this year. Fiscal 2024 ended with largely positive projections all around for the year ahead.
Chipotle, for example, was expecting same-store sales to grow in low- to mid-single digits after a strong prior year. Cava was expecting comparable sales for the year between 6% to 8%, on top of double-digit growth in 2024.
Sweetgreen appeared to be inching toward profitability with high hopes for its automated Infinite Kitchen format. Noodles & Company was hoping to reclaim its pasta expertise with a menu overhaul in the works.
Portillo’s was merrily plotting rapid growth across the Sun Belt, boasting of record sales in markets like Texas.
Then came 2025. Cue the sound of screeching brakes.
It was certainly a news-filled year more broadly. A second-term Trump brought the word “tariff” into daily use and launched the economy onto a churning sea of uncertainty. Los Angeles caught fire and burned for weeks. There were tornados in the central U.S., and killer flash floods in Texas and West Virginia. Immigration agents detained, arrested and deported thousands, including many restaurant workers. The federal government endured the longest shut down in history.
By the end of the calendar year, the picture for fast-casual restaurants had changed considerably.
Across the segment, full-year projections among fast-casual players were downgraded into negative territory.
Some of the leading brands were being lumped together (cruelly) as “slop bowls,” with headlines saying (unfairly) they were falling out of favor.
Sweetgreen is focusing on protein-crazed guests with new protein-packed dishes. | Photo courtesy of Sweetgreen.
Portillo’s CEO Michael Osanloo, who last year was so convinced of the Chicago-based chain’s brand portability, was ousted on the urging of an activist investor, as the chain slowed growth and nipped a test of breakfast in the bud.
Noodles & Company put itself up for a potential sale (or other strategic alternatives) and has been warned (twice) about possible delisting because its stock price was too low.
And don’t even look at fast-casual pizza’s terrible, no good, very bad year.
Pieology filed bankruptcy. MOD Pizza’s own franchise documents warned the brand’s future is in doubt. And even the relatively stronger brands, Blaze Pizza and &pizza, also shrank considerably in number.
It was a big change from 2024, when the segment was seen as a safe haven among the Top 500 restaurant chains.
There were signs of trouble right from the start.
Chipotle in the first quarter reported its first same-store sales decline since 2020, with traffic down 2.3%.
And it got worse from there.
By the second half of the year, younger diners, in particular, struggled with unemployment, the burden of their student loans, lack of wage growth and high housing costs. Across the segment, fast-casual brands were impacted.
Forced to partake in the value wars long relegated to the quick-service and casual-dining realms, fast-casual chains ramped up promotional activity, hoping to capture diners who were clearly getting more choosy about where they were spending their dollars.
But it wasn’t all bad news for the fast-casual segment in 2025.
Dave’s Hot Chicken is now part of the portfolio that includes Subway, Inspire Brands and GoTo Foods. | Photo courtesy of Dave’s Hot Chicken.
This was the year Dave’s Hot Chicken was acquired by Roark Capital in a $1 billion deal, bringing the rapid-growth fast-casual brand into a portfolio that includes Subway, Inspire Brands (Arby’s, Sonic, Dunkin, etc.) and GoTo Foods (Cinnabon, Auntie Anne’s, Carvel, etc.).
Potbelly was also acquired in a $566 million deal that took the chain private. The new owner is RaceTrac Inc., the nation’s 17th largest c-store chain, which plans to grow the sandwich concept in its retail locations.
Potbelly expects to add 50 restaurants in 2026, which will get the sandwich chain to the 500-unit mark.
Wingstop, meanwhile, grew even faster than it expected this year.
The Dallas-based chain passed its 3,000th opening in November and was adding about one restaurant per day. Wingstop expects to open between 475 and 485 this year globally, about 100 more than previously expected.
The chicken chain also was on track to complete the domestic rollout of its new Smart Kitchen upgrades, which are expected to dramatically increase speed, cutting service times in half, from about 20 minutes to about 10.
Because of the Smart Kitchen move, CEO Michael Skipworth’s favorite term this year was “game changing.” Industry watchers who took a shot every time he said it during earnings calls likely suffered wicked hangovers the following day.
“As we enter 2026 and begin supporting this game-changing improvement in our speed of service levels with marketing, we anticipate this curve will start to accelerate and position us to win more share of occasions in our demand space,” said Skipworth during the chain’s third-quarter earnings call in November.
Raising Cane’s is going international with units planned in the U.K. and Mexico. | Photo courtesy of Raising Cane’s.
Nearing 1,000 units, Raising Cane’s also continued its aggressive growth pace this year, expecting to add more than 100 units and opening 14 restaurants in December alone.
Cane’s also announced plans to move into the United Kingdom for the first time, and the chain recently announced a deal with franchisee Alsea S.A.B. de C.V. to bring the chicken-finger concept to Mexico.
Another ray of sunshine in what is considered fast casual: Bakery cafes (that are not named Panera).
Panera spent the year continuing an attempted transformation, closing all of its dough-making facilities and reworking the menu, amid leadership changes. CEO Paul Carbone has a plan to invest in restaurants.
Meanwhile, the Korean-born Paris Baguette’s division operating and franchising the bakery-café brand across North America has reported 20 consecutive quarters of same-store sales increases, with 19 quarters of traffic growth (the negative quarter was during pandemic).
It’s considered a sandwich brand, but Paris Baguette has been leaning more into its bakery side, with its cakes, pastries and breads accounting for about 80% of sales.
And the chain is booming, with roughly 80 (mostly franchised) locations opening in 2025 for a total of 270 in the U.S. and Canada, and another 150 scheduled to open next year across North America.
CEO Darren Tipton said the chain expects to sign on a franchise partner in Mexico in 2026, and then move the brand into Central and South America. (Those markets would be part of the North America division. Paris Baguette has some 4,500 units globally.)
Tipton said bakery-café concepts are striking a note of nostalgia for the days when there was always a neighborhood bakery around the corner. Those bakeries had largely disappeared, he said, but Paris Baguette is bringing the notion back.
“There’s a tremendous white space in the U.S. and Canada, and we hope to continue that growth throughout Central and South America,” he said. “Bread is a common denominator around the globe.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.
