Chains chase better food to win back diners

Why menus are suddenly the story

Over the last two years, diners have cut back on restaurant visits and become choosier, per Black Box Intelligence. That shift pushed executives to say value is bigger than price tags, and that coupons can spike visits for a week, but the food itself drives long-term sales and healthy franchisee margins.

In recent weeks, chiefs from Wendy's to Chipotle walked through upgrades on earnings calls. Chipotle CEO Scott Boatwright told analysts in late October that the chain's brisket is back for a limited run, adding, "We think the product's improved and even better."

Turnarounds built on taste

Wendy's rolled out a five-part turnaround, with "quality food at real value" as one of the pillars. CEO Bob Wright said the company is piloting bacon cooked for extra thickness and crunch, a Frosty made richer and creamier, switching to whole leaves of lettuce on sandwiches, and upgrades to salads. The same day, Wendy's posted its seventh consecutive quarter of falling same-store sales and turned down a $1.4 billion offer to acquire the company spearheaded by Nelson Peltz's Trian Partners, arguing the offer overlooked the potential unlocked by its plan.

There is a playbook for food-led rebounds. In 2009, Domino's reworked its pizza by overhauling the sauce, adding garlic to the crust and switching the cheese to shredded mozzarella blended with a touch of provolone. Ads leaned into past complaints, comparing the old crust to cardboard and the old sauce to ketchup, and U.S. same-store sales rose 9.9% the next year.

That same mindset is now guiding Burger King's U.S. refresh. The chain started with its core items, first upgrading the Whopper by introducing an improved bun and a new mayonnaise, then in September redoing nuggets with 100% white meat, a crunchier coating, and a more flavorful marinade, plus new sauces. "We've tried to look at our biggest categories first," Josh Kobza, CEO of Restaurant Brands International, told CNBC.

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"We've also thought about the ones where the fixes are more straightforward and less operationally involved." After the changes, he said Whopper sales rose double digits in the third quarter and nugget sales were up more than 35%, while U.S. same-store sales gained 8.4%. Ads now feature Burger King U.S. president Tom Curtis, a former Domino's executive, calling out old gripes about the Whopper and nuggets.

Beyond burgers: proteins and coffee

Even brands posting strong growth are tweaking recipes. Chili's same-store sales have climbed 52% over three years, and parent Brinker International CEO Kevin Hochman said salads and steaks are next after revamps to baby back ribs, burgers and nachos. "We're going to be doing more dry aging of our beef to make it more tender, versus doing it in a plant," he said. "It's a little bit more expensive, but we think the taste is going to be a whole lot better."

Applebee's rolled out a juicier chicken tender last quarter. In 2027, it plans to overhaul more protein choices. "We think proteins are, number one, our biggest opportunity," Dine Brands CEO John Peyton said. "Number two, they're a big focus of the way people are thinking about eating right now, leaning into proteins and a little bit less with the carbs."

McDonald's has pilots under way for hand-breaded wings, strips, and a sandwich at a small set of Chicago-area locations, with broader U.S. and Ireland tests slated for early 2027. Executives said at its September investor day that the company is also aiming to upgrade its coffee by using fresher beans and newer equipment. Chicken and coffee are growing faster than its signature beef burgers, giving the company more room to lift sales.

Execution is the hard part and what it means for your portfolio

None of this matters if kitchens cannot deliver the new recipes consistently. McDonald's U.S. business has stumbled recently after its value strategy fell short of expectations, with third quarter U.S. same-store sales down 0.2%. To tighten operations, it launched "Make It Golden" in October, a multiyear training effort for corporate staff, restaurant workers and franchisees.

In plain English: watch whether quality upgrades sustain higher per-store sales after the launch buzz fades. If they do, management teams may have found a longer runway for growth and franchisee profits, not just a coupon bump that disappears in a month.

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