Restaurant Stocks to Buy

7 Restaurant Stocks to Buy: Starbucks (SBUX)

Starbucks185 7 Restaurant Stocks to Feed Your Appetite for ProfitsOne of most famous poster children of discretionary spending is Starbucks(SBUX). Most people still see this as the trendy coffee spot, but over the past few years, SBUX has begun to up its food game.

It’s kind of reverse engineering a casual dining model from a cafe, whereas Panera (PNRA) built a casual dining restaurant with a cafe feel. What it does for SBUX is help boost revenue per customer and extend its revenue stream across the day and evening. The food is fast but quality and surprisingly reasonably priced.

You won’t get a half-pound burger for $5, but you can get grilled cheese, a panini, healthy bistro boxes with hummus and fruit, as well as wraps. All quick, all healthy and all fresh.

This isn’t going to be a gamechanger for SBUX, but it does give the stores more dimension than just a morning place to grab a coffee, or make an afternoon run for an iced macchiatto.

In the last six months the stock is up more than 25%, and there’s a lot of good news that could kick it higher

Darden Restaurants (DRI)

Darden185 7 Restaurant Stocks to Feed Your Appetite for ProfitsDarden Restaurants (DRI) was famous for its Red Lobster and Olive Garden restaurants. But it sold Red Lobster and is now in the midst of updating Olive Garden.

The company also owns LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s Prime Seafood, Wildfish Seafood Grill and Yard House. Many of these are more upscale than their sister shop Olive Garden, and that seems to have been the recent trend in acquiring and growing these brands.

Restaurant stocks are great barometers for the economy. When times are good restaurant stocks soar; when times are bad, only the strong survive. And DRI is certainly one of the savviest restaurant stocks out there.

Last year was tough on DRI but it has turned things around after the sale of Red Lobster and it’s firing on all cylinders again. Net profit margin has more than doubled last year; return on assests has tripled.

The stock is up almost 30% in the past year.As the economy regains momentum and more business start to spend DRI is in great shape to reap the benefits. Add to all that, DRI has a nice dividend around 3.4%.

Cracker Barrel (CBRL)

CrackerBarrel185 7 Restaurant Stocks to Feed Your Appetite for ProfitsCracker Barrel (CBRL) is one of the great American restaurant chains, especially for travelers. The first one was built in Lebanon, Tennessee, between Nashville and Knoxville by Dan Evins in the late 1960s. His idea was simple; give travelers good homestyle food in a homestyle setting once they get off the road for bit.

The first one opened in September 1969. By 1977 there were 13, from Tennessee to Georgia. Today there are more than 600 in 42 states.

Sales for restaurants open for at least a year (a key measure in this market) were up 5% in the most recent quarter. It also raised its dividend and declared a special $3 a share dividend on Aug. 5, for shareholders as of July 17.

CBRL has a nearly 3% dividend, which is certainly a nice bonus to its 46% stock price move in the past year.

The biggest surprise is, most Americans have yet to hit the highways, so its recent quarterly surprise suggests that coming quarters will also be strong as well.

Jack In The Box (BOX)

jack in the box jack stock 185 7 Restaurant Stocks to Feed Your Appetite for ProfitsJack In The Box (JACK) is a classic West Coast burger joint that over the decades established a national foothold. But it’s always been a quirky chain, without the spark and brimstone of McDonald’s (MCD) or Burger King(BKW). But it’s a major player; it just doesn’t act like it.

Let’s just say it’s the class clown of quick-service restaurants. It also runs Mexican eatery Qdoba, which is a new “fresh and fast” style of burritos, tacos and salads. Combined the operation has 2,888 stores across the country.

Recently Qdoba has been the engine of growth for the company. In the first quarter, same store sales were up 14% and the average check was up 9%.

JACK stock overall was up 4.4% in same store sales for the quarter. Some of the difference could be the fact that since JACK specializes in hamburgers and the cost of beef rose, its margins were a bit tighter than Qdoba, which has more non-beef options.

Qdoba is a great asset for JACK since it offsets the classic burger joint fare by adding products and a niche that can draw in an entirely different kind of customer — and is doing so.

Texas Roadhouse (TXRH)

texas roadhouse txrh stock 185 7 Restaurant Stocks to Feed Your Appetite for ProfitsTexas Roadhouse (TXRH) is a family-oriented oriented steakhouse; theOutback Steakhouse of the American west. This isn’t a bargain spot, it’s a mid-priced restaurant focused on family … and steak.

It’s working. It reported its most recent quarterly numbers in early May and TXRH is growing top line and bottom line. This is a classic restaurant stock in growth phase mode.

TXRH has 450 restaurants and expects to add 30 more by the end of 2015, including some of its new Bubba 33 sports bars in select markets.

Revenues were 16% for the quarter, operating income grew 21% and net income jumped 22%. Sales growth was led the industry — 8.9% for company restaurants and 8% for franchise restaurants.

The stock is up 38% in the past year, but the current numbers are very encouraging, considering it hit these numbers in bad weather with prices for many inputs spiking. The spring and summer look very promising indeed.

TXRH also has a nearly 2% dividend. Even as it places its money on growth, that’s a good shareholder-friendly sign.

Sonic (SONC)

sonic sonc stock logo 185 7 Restaurant Stocks to Feed Your Appetite for ProfitsSonic (SONC) has been one of the winners from the devolution of McDonald’s. As MCD has lost market share, SONC has gained it. This hold true for a number of other burger joints, both large and small.

The thing is, it’s easier to increase market share if you’re SONC than it is if you’re say, Wendys (WEN).

And this has helped boost SONC’s numbers as well as its stock price. The stock is up almost 40% in the past year. But as the fast-food model changes, it’s companies like SONC that will be the winners.

The thing about SONC is, this isn’t some retro fad; this is the real deal. From the company’s website:

“Sonic revolutionized the ordering process in 1953 by using curbside speakers that allowed customers to place food orders without ever leaving their cars. This technology spawned the slogan “Service at the Speed of Sound,” which translated to one word: Sonic. Troy Smith Sr. aptly changed the name from Top Hat to Sonic Drive-In in 1959.”

There’s plenty of opportunity here for SONC and having such a long history in the business but having such a enduring and unique footprint should serve the companies 3,500 restaurants well in coming quarters

Denny’s (DENN)

DennysLogo 7 Restaurant Stocks to Feed Your Appetite for Profits“To serve the best cup of coffee, make the best donuts, give the best service, offer the best value and stay open 24 hours a day.” That was the commitment of the owner of Harold Butler when he opened Danny’s Donuts in LA in 1953.

The name changed, but the commitment never has. Denny’s (DENN) now has 1,700 restaurants across the country.

And this classic all night diner with the bargain meals has made a shift to upgrade its restaurants as well as its menus for a generation of nighthawks. And it’s working. Same store sales were up 7.2% in the first quarter and the company is saying that more people are shifting away from the value meals and buying up on the menu.

That is indicative of two things: they customers like the food they’re getting and are willing to try more expensive items; and customers have more money to try new things beyond the reliable bargains.

Either way, it’s a bullish sign. The stock is up 62% in the past year and there’s plenty left where that came from.

Franchising Your Business : Real Estate Office as an example

Franchising Your Real Estate Office.

Summary of the article / our services in franchise development

Here is the actual letter I wrote a client last year :

Jack A. Bass will provide:

Documentation to permit you to franchise your  business( Real Estate company ) in the State of (now doing business as HRM Realty)

Basic documents required :

At a minimum, you will need a written franchise disclosure document, a franchise agreement, an offering circular, and audited financial statements. We can work together to develop training manuals, operation manuals etc. and can assist you in selecting suitable franchisees.

There is a lot of paperwork to be developed. You may need a Master Franchise Agreement if you are selling territories to be developed.You will need Conversion Agreements for each real estate office that will convert to your new brand.

The Federal Trade Commission (FTC) regulates franchising at the national level and has adopted minimum standards.

We will provide you with a handy reference guide –    To read more please click on the link Franchising Your Real Estate Office.

Investing In A New Franchise / Concept

My client owns a successful restaurant . He does not have the funds to develop a franchise system so I proposed I would invest my fees in return for a one-third equity in the franchise system ( not including any ownership in his restaurant ). He agreed and I began my work.
Within two weeks of our first meeting he withdrew from our agreement. He insists on keeping 100 % of the equity . The result is he has 100 % of what I call ” The Big Shinny idea” – but nothing more of what could have been be a franchise / chain of successful businesses.

I believe that the reason small business remains small is that type of small thinking. What do you think?

McDonald’s Thankful GOP Millionaires To Battle Minimum Wage Hike

House Salad at Buffalo Wild Wings
House Salad at Buffalo Wild Wings (Photo credit: Tojosan)


You pay for what you get.

The world’s largest restaurant chain was the biggest hit to the Dow on Wednesday, after President Barack Obama announced a plan to raise the minimum wage. The blizzard that lashed the U.S. Northeast at the end of last week possibly hurting the company’s sales, and Buffalo Wild Wings’ (BWLD) report on Tuesday that same-store sales are declining this year, may also be affecting McDonald’s stock, but most analysts agreed Obama’s call to raise the federal minimum was the main driver.

Obama called for a federal minimum wage increase to $9 an hour, from $7.25; he also proposed tying the minimum wage to the cost of living. The current minimum wage has been in effect since 2009. McDonald’s and its franchisees don’t disclose what they pay their restaurant workers. Its franchisees, as well as other restaurant chains, such as Wendy’s (WEN) and Jack in the Box (JACK), spend money lobbying against minimum-wage increases.

McDonald’s, which has about 14,000 U.S. locations, has been vying with other eateries to lure cash-strapped Americans. Earlier this month, the chain reported that U.S. same-store sales gained 0.9% in January as it advertised its Dollar Menu and tested new items to help boost sales.

KFC vs. Popeyes

Popeyes Chicken & Biscuits biscuits
Popeyes Chicken & Biscuits biscuits (Photo credit: Wikipedia)

Oct 27

KFC Is Fighting To Stop Archrival

Popeyes From Buying Up Its

Bankrupt Restaurants


Popeyes is buying up 28 former KFC locations, mostly in the Minneapolis-St. Paul area


This all happened because the KFC franchisee went bankrupt, and there are 21 more restaurants that it has closed down. Popeyes is currently trying to get approval to purchase the rest.

Carol Tice at Forbes calls it “a move that sums up the ascendance of one surging brand and the decline of another.”

But KFC’s not going to lie down and get beaten by Popeyes. The statement the company gave Tice is evidence that it’s going to try to put up a fight:

KFC Corporation is intimately involved and intends to make every effort to see that as many restaurants as possible continue to operate as KFC restaurants with the same employee teams but under new ownership.”

Popeyes CEO Cheryl Bachelder made it abundantly clear in an interview with us in October that KFC’s not her prime concern. She wants to compete with the whole top five of the fast food segment, including McDonald’s and Wendy’s.

But, at their hearts, the bone-in chicken chains will always be archrivals, and Popeyes’ grab of all these dead KFCs has to be hitting a nerve.

Dunkin’ Brands Upbeat – This Early In The Morning !

Dunkin' Brands Logo
Dunkin’ Brands Logo (Photo credit: Wikipedia)

October 26

Dunkin’ Brands (DNKN : NASDAQ : US$31.37)

Despite my personal choice of McD ‘s coffee – America runs on…

Dunkin’ Brands was in the green following a solid third quarter as management was able to cut costs to offset slowing growth. Earnings came in at $0.37 per share on revenue of $171.7 million while analysts were expecting $0.35 on $168 million. System-wide sales grew by 4.7% with higher selling prices and increased traffic contributing to the gain.

Growth at its Dunkin Donuts locations outpaced Baskin Robbins in the U.S., while Baskin was the stronger international performer.Management expects to add 280 to 300 net new restaurants in F2012 and sees revenue growing between 6% and 7%, down form its previously forecasted range of 7% to 8%.

While some were disappointed with the reduced top line forecast, most remained focuses on the bottom line beat, and management’s affirmation of its in-line $1.25-1.27 EPS guidance. Additionally, the company declared a $0.15/share quarterly dividend, in line with its previous payout, implying a yield of roughly 1.95%.