Chain restaurants are out. Restaurant groups are in
Picture this: you walk into a new, buzzy, chef-driven restaurant. It’s the only one of its kind, and by all appearances, it looks like an independent spot.
But dig a little deeper and it turns out the independent restaurant is actually one of more than a dozen owned by the same company.
The business model of a restaurant “group” has, of course, been around for years.
But experts say these groups are becoming bigger players as the industry struggles post-pandemic amid declining alcohol sales and lower customer spending.
Being big, they say, offers better buying power and a barrier against risk.
Most people love checking out that trendy new restaurant in the city, but some might not realize what seems like an independent spot could actually be part of a much bigger group. CBC’s Paula Duhatschek breaks down why more companies are moving toward a new model of restaurants.
Vince Sgabellone, a food industry analyst with the market research firm Circana Canada, said there’s “strength in numbers.”
“It’s very difficult for an independent restaurateur.”
Unlike at a restaurant chain, where every location is emblazoned with the same name, menu and décor, customers at a restaurant group business may never know the spot where they’re dining is part of a broader company.
But some say that past a certain scale, the trend can still involve a certain amount of homogenization, where even seemingly standalone restaurants start to look and taste a little bit the same.
A chain that’s not a chain
The extent of the growth of the restaurant group model is difficult to pin down. Restaurants Canada doesn’t track it; neither does Statistics Canada.
But Sgabellone said Circana data shows that between 2020 and 2024, smaller chains and independent restaurants (restaurant groups are tracked as part of both categories) grew at more than twice the pace of large restaurant chains in Canada.
And experts like Bruce McAdams say the trend is picking up as part of a generational vibe shift around the concept of a chain restaurant.
There’s an admittedly fine line (and potentially, some overlap) between a company running a chain of restaurants and a multi-concept restaurant group.
But broadly speaking, whereas in the 1970s and 1980s it was desirable for restaurateurs to bring their local joint to every city in the country, that’s no longer the case, said McAdams, an associate professor of hospitality at the University of Guelph.
“The whole dining marketplace has changed dramatically,” said McAdams, who worked for the Toronto-based restaurant group Oliver & Bonacini before becoming an academic.
As the country has become more diverse, Canadians have been exposed to different kinds of food. Customers are more interested in trying the next new thing, and less keen on familiarity (though McAdams noted some large chains, like The Keg and Earls, still do quite well).
For companies offering…
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