⛫ Taco Bell is Unstoppable

We just completed a successful sale of the largest Aussie Pet Mobile franchisee. Our team has deep experience helping franchise owners sell their business, which is why we’re the trusted partner for current engagements as large as a 41 unit QSR group.

Taco Bell posted +8% same-store sales growth in Q1 off the back of 9% last year. To put up +17% over two years in the current environment is absolutely ridiculous.

This brand is the cockroach of fast food, and I say that as a major compliment - they can thrive in any environment.

In a macro environment that’s incredibly difficult for many brands, Taco Bell is just taking market share while their competitors are struggling.

There’s a reason this brand sells at a 10x EBITDA multiple. It’s simply the most consistent concept in all of fast food.

• KFC: +2% SSS

• Pizza Hut: flat

• Habit Burger: 5%

Taco Bell is the clear out-performer in the Yum! Brands portfolio. KFC will no longer be breaking out U.S. sales, which is an obvious tell from corporate that performance isn’t great, and they need international units to boost the numbers.

Pizza Hut was flat, which was predictable given the Domino’s outlook (see below). You can expect that brand to be spun off sometime this year based on the rumors.

Domino’s posted just 0.9% same-store sales growth and is now lowering expectations for the rest of the year.

The brand blamed the macro environment that is making it harder to reach low income consumers, and forcing them into value offers.

That said, they did mention how they’re far better positioned relative to Pizza Hut and Papa John’s, who have much weaker per-store economics.

Starbucks had a massive quarter with US same-store sales up 7.1%. And it’s not mere price inflation driving that, as they had a 4.3% increase in transactions.

They think low-income consumers are coming back and ultimately raised guidance to 5% same-store sales growth for the full year.

Perhaps the “back to Starbucks” plan is working…

Wingstop is coming back down to planet Earth with sales down 8.7% in Q1. The brand was a roller coaster for legitimately 20+ years straight, so some turbulence had to happen eventually?

Joe Pedatella discovered KidStrong when the brand had ~12 locations. Today, he owns 16 units himself and is marching towards 100.

Already the owner of a very successful fitness club, Joe Pedatella wasn’t even considering franchises. But after his son was born, he discovered KidStrong ~5 years ago, and things changed.

Now, he’s not only the largest franchisee, he’s a close partner to the franchisor. With 16 locations open, Joe is just getting started:

Subway Enters the Value Wars The sandwich chain’s Fresh Value Menu offers 15 items and joins McDonald’s and Taco Bell in targeting specific pricing to help drive traffic and improve affordability**.**

McDonald’s Beverage Line-Up Officially Launched High-performing crew members will be trained for the beverage station, with all crew members eventually rotating into the role.

Applebee’s Franchisee Sues Chain Operators in Texas claim adding Applebee’s to existing IHOP restaurants broke development exclusivity agreements.

Beverage Wars Still in Full Swing Fast food and coffee chain giants are racing to reinvent their drink menus, betting beverages will continue to drive visits all on their own.

Walmart Growth Slows The 3% year-over-year increase in food and beverage sales during the retailer’s latest fiscal year reflects a decline in its grocery market share.

Albertson’s CEO in Make/Break Year The chief executive has stabilized the business following its failed merger with Kroger, but faces continuing challenges. 7-Eleven Announces ReOrg The restructuring is part of 7-Eleven’s transformation plan. The number of layoffs is unknown, although individuals in several departments, including people in leadership roles, appear to be impacted.