As more capital becomes available and interest rates decline, financial experts suggest investments from private equity firms will spur more restaurant mergers and acquisitions in 2025. This environment also benefits operators, who are expected to increase their footprint.
In 2024, some of the restaurants that changed hands include Roark Capital’s completed acquisition of Subway and Blackstone’s acquired majority ownership in Jersey Mike’s. Craveworthy Brands acquired Fresh Brothers Pizza, and Trive Capital and Blue Marlin Partners acquired a majority stake in Mo’Bettahs Hawaiian Style Food.
And what about the bankruptcies that infiltrated the industry in 2024? According to Restaurant Dive’s industry sources, these are expected to lessen. Driven by high capital costs and over-leveraging, as the financial environment shifts, the reduced pressure should lead to fewer filings and restructuring.
Wondering which brands are taking the expansion plunge. Here, we’ll explore the chains and independent restaurants braving the uncertain economic environment.
The Current Economy
There are several reasons to expect increased activity in the restaurant sector. Inflation has cooled from its 2022 surge, and the threats of a recession have quieted. While more selective, consumers are still choosing to spend their discretionary income on eating out. Restaurants account for over 50% of consumers’ food spending, generating stronger sales than grocery stores.
According to Forbes, if unemployment remains just above 4%, inflation stays close to 2.5%, and the U.S. economy continues to grow, the short-term interest rate prediction comes to 4% by the end of 2025, a reduction in the current 4.25% to 4.5% range. Of course, that’s a lot of ifs, and a lot depends on the changing presidential administration. Increasing tariffs, a tighter immigration policy, and easing regulations could all impact the likely scenario.
Chains Embracing 2025
So, what chains are throwing caution to the wind and proceeding with their long-term goal of taking over the world?
Burritobar, Dave’s Hot Chicken, Bonchon, and Hey Magoo’s are a few of the names to watch for.
Buritobar expanded into the U.S. in 2020. Despite the bad timing, it currently has four locations. This burrito franchise, however, is aiming for massive expansion. With franchise agreements in Ohio, Michigan, New Jersey, Florida, Virginia, Mayland, Iowa, Texas, Illinois, Tennessee, and Nebraska, it’s set to open 750 restaurants across the country.
Dave’s Hot Chicken has seen significant growth, reaching $406 million in domestic sales in 2023. What started as a small pop-up in a parking lot in East Hollywood in 2017 became a major player in the “Chicken Wars” thanks to the power of social media and influencers taking notice. In 2021, it had seven locations. By 2023, that figure had risen to 180. It currently has about 950 locations in development in six countries.
The brand’s powerful social media influencers have racked up 2.3 million followers on TikTok and 1.2 million on Instagram. Some investors behind Dave’s Hot Chicken include Usher, Samuel L. Jackson, Michael Strahan, and Maria Shriver.
Bonchon, a brand well-known for its crispy Korean-style fried chicken, plans to open about 1,000 locations over the next five years, with up to half of those expected in the U.S. This global franchise powerhouse was founded in South Korea in 2002. Business Insider referred to the brand as the “gold standard for fried chicken.”
Florida-based Huey Magoo’s, another not-surprising chicken chain, currently has about 250 restaurants in development across 15 states. Founded in 2004, it’s known as the “filet mignon of chicken.” Expansion plans include venturing into Texas, Arizona, and Virginia.
Independent Restaurants Taking the Plunge
Restaurant Business gathered up some of the exciting independent restaurants expanding their brand or additional concepts.
The Goat Girl
Restauranteur, chef, and television personality Stephanie Izard brought Girl & the Goat, Little Goat, Duck Duck Goat, and Cabra to Chicago before expanding, taking Girl & the Goat and Cabra to Los Angeles in 2024. In 2025, she’s looking to head to the heart of Silicon Valley with Valley Goat.
Valley Goat will offer a globally inspired, shareable menu. Locally sourced ingredients make up the seasonal items served in large outdoor patios and an indoor dining room. It looks like she’s checked off all the popular calling cards of today’s restaurant-goers, including seasonal cocktails with low- and no-ABV options.
Elias World Hospitality
The founder of Spain Wine Bar and Bistro Cotiere, a French fine dining restaurant in Ocean City, Maryland, is expanding his reach with two new restaurants. Peter Elias is opening The Bistro and Lounge, a restaurant that seats 750 guests and replicates the feeling of dining in Europe. Sand & Cedar Taverna will serve up Greek, Lebanese, Moroccan, and Turkish dishes accompanied by Mediterranean wines and cocktails.
And that is just the tip of the iceberg. About 50,000 new restaurants open every year in the U.S., and that figure is growing.
At Emerging Concepts, we help restaurants expand successfully. Data scientists, real estate experts, and restaurant developers work together, analyzing the data that leads to the least risks and the greatest rewards. To learn more about our process or to schedule a consultation, contact Emerging Concepts.
