Second 100: The next big things

Second 100: The next big things

Editor's Letter

Nothing in business is more exciting than watching an innovative company, brand or idea launch and then grow steadily toward success.

Instagram’s major valuation only three years post-inception has dominated business conversation, the rise of the iPhone changed how we all communicate, and let’s not forget how the Cronut craze put on the map the small, New York-based Dominique Ansel Bakery, which is now looking at ways to ship the cult pastry nationwide.

Any reports of the demise of business innovation or small-business success are greatly exaggerated. 

In the restaurant industry we know this. New concepts, menu items and ways to reach the consumer are what drive success. And ideas are plentiful. In this Second 100 [4], which is our companion report to the Top 100 [5] and ranks restaurant chains Nos. 101-200 based on U.S. systemwide sales, we dive into restaurant brand growth stories.

Take Noodles & Company. It booked its first appearance in the Second 100 report in 2010, which covered results from 2009, at No. 174 with $227 million in U.S. systemwide sales. In three short years Noodles has grown to No. 102, the second-largest chain in this universe, with $355 million in sales. It is arguably the most successful growth story in the restaurant industry today. Noodles held its initial public offering late last month and saw its shares more than double on day one of trading, drawing comparisons to Chipotle Mexican Grill. Noodles raised more than $96.4 million with its IPO, and as of July 15 its market cap was more than $1 billion.

I would put a pretty confident wager on the brand cracking the Top 100 next year.

Newcomer Seasons 52 debuted in 2003 and spent a few years as a small test from Darden Restaurants. It was exploring whether an upscale, better-for-you, local-centric restaurant could succeed at a large scale. Succeed it did. In its first qualifying year for the Second 100, Seasons 52 ranked No. 183 with an estimated $165 million in U.S. systemwide sales. It was a breakout year for the chain.

Other newcomers to this year’s Second 100 report, which are introduced on page 20, include better-burger juggernaut Smashburger; neighborhood pub chain Bar Louie; and big-box, middle-America magnet Quaker Steak & Lube.

Each of these brands came into their own during the years I’ve been with Nation’s Restaurant News. When I joined in 2004, these concepts were being discussed as potential Hot Concepts winners and were “must visits” on the road. I even fielded some phone calls from investors looking for more information as private equity interest heated up. You could tell they were on the cusp, and it was exciting.

For those of you who don’t know me, I geek out over numbers, data and stats, and I could talk for hours on private equity or Wall Street — all of which makes me salivate over NRN’s combined Top 200 census. But in some respects I like the Second 100 report a bit more than our Top 100 report, mainly because it tells more stories. Only in this issue do you find “the next Chipotle” or a truly new concept making its way.

It’s the future of restaurants, and who doesn’t like a glimpse of what’s to come?

Contact Sarah E. Lockyer at [email protected] [6].
Follow her on Twitter: @slockyerNRN [7].