Rumors of the restaurant industry’s lack of growth potential, especially in the United States, have been greatly exaggerated, at least according to a new analyst report.
This week, Brad Ludington at KeyBanc Capital Markets said in a note to investors that the restaurant industry still has room for domestic growth, especially as younger brands begin to mature and fast-casual concepts continue to gain market share.
“The ability to grow in the restaurant industry is not dead as many have claimed,” Ludington said. “While we do not expect to see many restaurant companies resume the aggressive growth rates seen throughout much of the past decade, we believe that there is room for many brands to resume some level of unit expansion.”
Looking at 25 restaurant concepts under Ludington’s coverage universe, his research team at KeyBanc conducted a three-phase analysis on U.S. state populations needed to support individual restaurants concepts; a population saturation analysis using Census Bureau Metropolitan Statistical Area data; and a look at unit growth assumptions for individual concepts based on public company data.
The results show future U.S. unit growth potential from current base unit counts of as high as 544 percent for the Brio casual-dining concept to as low as 16 percent for the more mature Chili’s Bar & Grill.
See chart here. 
“While there were the obvious growth brands such as Brio, Bravo!, BJ’s Restaurants and Pei Wei, we feel that there were a few surprises, as well,” Ludington said.
He estimated future unit growth expectations for Darden Restaurants’ Seasons 52 at 453 percent, for Bob Evans at 105 percent, and for The Cheesecake Factory at 73 percent, especially as that chain’s smaller prototype begins to expand.
Contact Sarah Lockyer at [email protected] .