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Must-know: Why restaurants are so important to investors

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Part 6
Must-know: Why restaurants are so important to investors PART 6 OF 11

Key restaurant industry formats: The family dining business

Family dining

Family dining restaurants offer full table service. They’re similar to the casual-dining format, although most family dining restaurants don’t offer alcohol. Some family dining restaurants may be open for longer hours—also up to 24 hours a day for seven days a week.

Key restaurant industry formats: The family dining business

Key restaurant industry formats: The family dining business

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In addition to lunch and dinner menus, family dining restaurants offer breakfast menus. IHOP (DIN), for example, offers pancakes, sandwiches, appetizers, soups, salads, and desserts.

The average check at a family restaurant is anywhere between $20 and $60.

Apart from chain family restaurants, single-location restaurants also compete in this segment of the industry. According to IBIS, single-location restaurants will record $141 billion sales in 2014.

Like other restaurant formats, family dining restaurants are also concentrated in states with high population density, such as California, New York, and Florida.

The players

Cracker Barrel Old Country Store (CBRL) had sales worth $2.64 billion as of fiscal 2013. DineEquity Inc. (DIN), which operates IHOP, had sales worth $0.64 billion. Denny’s (DENN) had sales worth $0.46 billion over the same period.

Other family dining restaurants include names such as Waffle House, Bob Evans Restaurants (BOBE), and Perkins Restaurant and Bakery. You can also gain exposure to the restaurant industry through the exchange-traded funds PEJ and PBJ.

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