It’s no surprise that businesses with happier customers tend to generate stronger sales than businesses with less happy customers. The correlation has been studied for years, by the Harvard Business Review and elsewhere, and it certainly isn’t unique to the restaurant industry.
But since Nation’s Restaurant News’ job is to focus on the restaurant industry, we’ve decided to take a deeper look at this correlating data to showcase some brands that are checking all of the customer satisfaction boxes, from timeliness and cleanliness to price/value and loyalty. In doing so, we’ve created The Happy Customer Index, leveraging proprietary data from customer feedback aggregator Merchant Centric that monitors and measures brand sentiment from millions of ratings, reviews and comments across sites such as Google, TripAdvisor and others. Merchant Centric collects data on over 1 million restaurant locations spanning 1,400 brands with over five locations.
To kick The Happy Customer Index off, we’re taking a deeper look at three key themes — food, price/value and loyalty/referral — to determine the strongest established and emerging fast-casual brands in terms of guest satisfaction related to these themes. Merchant Centric calls this measure a brand’s Theme Performance Score. If the measured Theme Performance Score is higher than one, it indicates that guests mention the brand positively more often than negatively; for instance, a score of 3.5 indicates that a guest mentioned that theme positively 3.5 times more than it was mentioned negatively. Conversely, a score of 0.5 indicates the theme is mentioned positively half as much as it is negatively.
The Happy Customer Index will offer a quarterly look at the top performers across a variety of categories with the highest Theme Performance Scores as measured by Merchant Centric’s AI technology. First up: fast casual.
The fast-casual segment
A glance at Merchant Centric’s data from the fast-casual segment shows some erosion in guest satisfaction scores from December 2021 through November 2022, but not necessarily an erosion of sales. According to Adam Leff, cofounder of Merchant Centric, this anomaly is in line with a broader, anomalous environment, as operators have been pressured by labor, inflation, supply chain challenges, you name it — and as consumers have more fervently prioritized value. Notably, the segment hit a satisfaction low point in September 2022 and has since started to rebound.
At the brand level, however, a strong correlation still very much exists between locations that are performing well and higher guest satisfaction and their related Theme Performance Scores (TPS).
Top established brands
Established brands are defined as having more than 20 locations. Here are the top 10 established fast-casual brands, per Merchant Centric’s TPS ratings system:
- Chicken Salad Chick, an Atlanta-based chicken salad concept founded in 2008 that now includes over 225 restaurants. The brand scored 7.7 for food, 1.8 for price/value and 4.4 for loyalty/referral. Chicken Salad Chick’s food scores received nearly eight times as much praise as complaints and likely drove a high score for loyalty and referral.
- Cheba Hut, a Fort Collins, Colorado-based toasted sub concept that was founded in 1998 and now includes nearly 50 locations. This brand scored a category-leading 8.2 on food, a 1.6 on price/value and a 3.8 on loyalty and referral.
- Clean Eatz, a healthy food franchise founded in North Carolina in 2011 that now includes more than 85 locations in more than 20 states. The brand scored high for food quality (6.3), price/value (1.4) and loyalty and referral (2.4).
- Velvet Taco, a Dallas-based concept founded in 2011 that now includes 30 locations. The brand scored 6.4 for food, 0.7 for price/value and 5.2 for loyalty/referral. Velvet Taco’s scores show that more customers expressed negative feedback than positive feedback on price and value, but those customers continued to show loyalty and referral likely because of high food scores.
- D’Angelo Grilled Sandwiches, a Massachusetts-based sandwich concept founded in 1968 that now includes over 80 locations in five states. D’Angelo follows a similar pattern to Velvet Taco, with high food and loyalty/referral scores, but an inverted 0.5 score on price/value.
- Skyline Chili, a Cincinnati-based concept founded in 1949 that now includes more than 150 locations. The concept scored 5.4 on food, 1.6 on price/value and 2.4 on loyalty and referral.
- Maple Street Biscuit Company, a comfort food concept founded in 2012 that has grown to about 50 units and was acquired by Cracker Barrel in 2019. The brand scored a 5.0 on food, a 1.0 on price/value and a 4.6 on loyalty/referral.
- Biscuitville, with about 70 locations, is a made-from-scratch biscuit concept that was founded in 1966 in North Carolina. This brand scored a 6.8 on food, a 3.1 on price/value and a 3.0 on loyalty/referral.
- Muscle Maker Grill, a health-focused, Texas-based concept that was founded in 1995. The brand scored a 2.5 on food, a 0.6 on price/value and a 1.1 on loyalty/referral.
- Greek’s Pizzeria, an Indiana-based pizza concept dating back to 1969 that now counts more than 140 restaurants on its roster. The brand scored a 4.7 on food, a 2.1 on price/value and a 2.0 on loyalty/referral.
Notably, Clean Eatz is one of four established fast-casual brands that increased its customer satisfaction scores by double digits in 2022; perhaps it is no surprised that the company also experienced record growth last year.
Among the five lowest-scoring brands overall, food scores came in below 2.8, with just one brand scoring positive on the price/value theme. All of them also scored 1.5 or below on loyalty/referral. The average food score for established brand leaders is 4.9 versus 2.4 for the lowest-scoring brands, or “chasers.” The average score for price/value is 1.3 for the leaders, versus 0.8 for the chasers, while the average score for loyalty/referral is 2.8 for the leaders and 1.2 for the chasers.
“It is no surprise that praise for food is a key differentiator between the leaders and all others, driving similar advantages in loyalty and referral … and often for price/value as well,” Leff said. “This data shows that guests’ loyalty is driven by great food and guests will identify that as greater value, even if it means paying more for the experience of superior food.”
Top emerging brands
Perhaps it’s no surprise that the top 25 emerging brands — those with less than 20 locations — generated higher guest satisfaction scores than their established peers, as less scale tends to allow for more focus on such fundamentals. “We’ve seen some very impressive food scores from these brands, which are driving off-the-charts loyalty scores in many cases,” Leff said.
The top 10 emerging brands, in no particular order, include:
- Yats Cajun Creole: This concept bills itself as a “local New Orleans-style joint” but was founded in Indianapolis in 2001. It has since grown to 15 locations. This concept scored a staggering 13.9 on food, 6.3 on price/value and 7.7 on loyalty/referral.
- Gandolfo’s Deli: The New York-style deli first opened in Salt Lake City in 1989 and now includes about 15 locations in six states. It scored an 11.9 on food, a 1.1 on price/value and a 3.5 on loyalty/referral.
- Bellagreen: This eight-unit, Texas-based American bistro founded in 2008 prides itself on its Certified Green ingredients. It scored a 6.4 on food, a 2.0 on price/value and a 6.1 on loyalty/referral.
- Flatbread Company: Since 1998, this New Hampshire-based wood-fired pizza concept has grown to seven locations. This company scored a 9.0 on food, a 1.0 on price/value and a 3.4 on loyalty/referral.
- The Melt: California’s The Melt focuses on grilled cheese, mac and cheese and burgers and only recently surpassed 20 locations, including food hall locations. This company scored a 4.9 on food, 1.3 on price/value and a 3.2 on loyalty/referral.
- Mark’s Feed Store: This barbecue concept was founded in 1988 in Louisville, Kentucky, and now includes six locations. This concept scored a 4.2 on food, a 2.2 on price/value and a 2.4 on loyalty/referral.
- Joella’s Hot Chicken: This Louisville-based concept was founded in 2015 and has since grown to nearly 15 locations. It scored a 5.6 on food, a 0.8 on price/value and a 2.6 on loyalty/referral.
- Wildflower Bread: An Arizona-based restaurant and artisan bakery, this concept was founded in 1996 and now includes about 15 locations. It scored a 5.3 on food, a 1.8 on price/value and a 4.1 on loyalty/referral.
- The Great Greek Mediterranean Grill: This brand was founded in 2011 in Nevada and now includes over 20 locations. It scored a 4.6 on food, a 1.0 on price/value and a 4.6 on loyalty/referral.
- Taco Bus: This authentic Mexican concept has about 10 locations around the Tampa, Florida, market and was founded in 2011 originally as a food truck. It scored a 4.9 on food, a 3.0 on price/value and a 4.9 on loyalty/referral.
Also worth noting, The Kebab Shop out of Southern California was also positive across the board — 3.5 on food, 1.0 on price/value and 1.9 on loyalty/referral — while the Grand Traverse Pie Company scored a 7.0 for food. The Kebab Shop, founded in 2007, now has over 31 locations and has plans to expand into Florida this year. The Grand Traverse Pie Company first opened in 1996 and now includes 15 shops across Michigan and Indiana. Further, emerging brands with higher guest satisfaction score increases versus the previous year include Jumburrito, Uncle Maddio’s and The Melt.
The average food score for emerging fast-casual brand leaders is 6.8, versus 3.9 for the chasers. The top brands for price/value averaged 1.4, while the chasers averaged 1.0. On loyalty and referral, the top brands averaged 3.0 versus 2.3 for the chasers.
Want to dig deeper on The Happy Customer Index? Simply go here to access the quarterly index, plus profiles on top-performing brands. We’ll turn our attention to the family-dining segment in Q2.
Special note: All data and analytics presented in this article are based upon Merchant Centric’s findings and, like all data sets, are inherently limited in scope and nature. Data presented herein may not be comprehensive and may exclude certain brands or brand locations. Data is provided without guarantee as to its accuracy, completeness, or currency, and Merchant Centric expressly disclaims any and all liability resulting from reliance on information or opinions included herein. Brands selected are for illustrative purposes only and data should not be relied on as reflective of or attributable to all brands within a segment or cuisine. Please note that certain brands included herein are clients of Merchant Centric