While 2024 left casual chains battered by major bankruptcies and widespread closures, fast casual restaurants continued to gain steam.
At the front of the pack, Chipotle, Wingstop and Shake Shack were all able to speed up their development trajectories. Qdoba started 2025 off with the announcement of franchise agreements for 77 new stores.
And a number of fast casual chains posted shocking same-store sales growth, despite heightened consumer price sensitivity. In Q3, Wingstop’s sales jumped nearly 21% year-over-year, Chipotle’s same-store sales rose 6% and Cava’s same-store sales grew 18%. These results followed comparable sales growth for each company in the previous quarter, as well.
Still, fast casual chains are not immune to bad business decisions or macroeconomic pressures. BurgerFi filed for Chapter 11 bankruptcy in 2024, less than three years after it acquired Anthony’s Coal Fired Pizza & Wings for about $160 million. Noodles & Company has struggled to draw back consumers, and its extended sales problems contributed to stock price declines to the point that the brand is at risk of de-listing from the Nasdaq.
Overall, however, fast casual restaurants saw their stars rise in 2024. This year, industry leaders say fast casual is poised to replicate its sectoral success.
A comfortable middle ground
Potbelly CEO Bob Wright said that fast casual has benefited from the changes of the last few years relative to QSR and casual dining.
“Fast casual is the place to be,” Wright said. “It's the best combination of high quality and high value for the customer. It fits the lifestyle of the current consumer.”
Cava CEO Brett Schulman believes the fast casual category exists at the confluence of a number of longstanding trends.
“As the country gets more diverse, people's pallets are shifting, seeking bolder, more adventurous flavors, and at the same time, they're more interested in health and wellness, and they don't want to make sacrifices or have restrictions,” Schulman said. That consumer desire for fresher ingredients and perceived healthy foods means fast casual brands can justify their pricing in a way QSRs might not be able to.
“Value is a combination of factors,” Schulman said.
Brad Sandler, an attorney with the restructuring specialist law firm Pachulski, Stang, Ziehl & Jones, said that data indicates consumers are still willing to spend and go out, and this is unlikely to change in 2025, barring a major macroeconomic shock.
“Consumer-facing industries should be okay,” Sandler said. But consumer price sensitivity remains high, and brands have started 2025 off with a string of value menu updates as the competition for consumer visits intensifies. Wright said that consumers have pulled back from some restaurant occasions.
For fast casual, Wright said, the key to consumer satisfaction has less to do with price and more to do with quality and lifestyle.
“Value doesn't always come in a big discount,” Wright said. Consumers are willing to pay premiums for fresh food and for better experiences.
Fast casual formats allow for greater hospitality than traditional QSR, Wright said, but without the long waits and higher prices associated with full-service restaurants. While this dynamic has long been the central appeal of the sector for consumers, the increase in prices at QSRs could be making fast casual more price competitive.
Balancing efficiency and hospitality
The design of many fast casual menus offers advantages, too. At restaurants like Chipotle, Cava or various poke bowl chains, frontline workers are primarily assembly workers. Much of the culinary work — prepping, seasoning, cooking and even some portioning — is done in the back of house, ahead of any individual order. This makes it easy to serve a large menu from a limited series of fresh ingredients: customization creates the perception of variety without necessarily requiring operational complexity.
Cava’s bowl-heavy menu and walk-the-line assembly process “is a highly productive operating model that drives great labor productivity and efficiency, that allows us to reinvest in our team, reinvest in our guests [and] reinvest in the food quality,” Schulman said.
Assembly then becomes the choke point. Chipotle has discovered this in recent years. As consumer demand has grown, the fast casual giant struggled with throughput. To solve that problem, the chain has turned to increased labor deployment in the front of house.
Chipotle is also trying to improve its prep efficiency with the deployment of dual-sided grills at dozens of high-volume restaurants, allowing for faster production for steak and chicken, then-CEO Brian Niccol said on the chain’s Q2 earnings call.
Potbelly’s approach to solving the throughput assembly problem has involved the retooling of its secondary makelines — once reserved for catering — to digital orders. An emphasis on multiple ordering channels, particularly digital pickup, has been a strength for fast casual in recent years.
Digital pickup has become a key element of Chipotle’s success through its Chipotlane store design. Other brands are embracing digital pickup, as well. Dutch Bros, which is a coffee chain on the edge of the fast casual sphere, recently launched mobile ordering with Olo, Olo CEO Noah Glass said. The new channel, according to Glass, is driving repeat consumer visits and increasing throughput.
The operational design of fast casual, including bowl-based makelines, limited menus and multiple ordering channels, favors speed. But speed is only part of the equation. The erosion of consumer interest in casual dining could explain why some brands are emphasizing their in-store experience more.
Schulman said Cava’s ability to offer in-store experiences and seamless digital ordering has been key to its success — 36% of its orders come from digital channels. But the company is balancing that with in-person experience; recently the brand began shifting toward warmer interiors and softer seating.
“A lot of the legacy casual dining chains are struggling to deliver [value] with the format they're working within,” Schulman said.
The human touch offered by fast casual restaurants, where face-to-face interaction is often integral to the ordering process, complements a strong digital base, Schulman said.
“A lot of writers and even analysts have overly focused on technology and automation,” Schulman said. “If you solely focus on removing friction and expense, you can really remove the joy.”
