The nature of full-service restaurants

Adam Jones - Author

Dec. 2 2014, Updated 12:01 p.m. ET

Full-service restaurants

As we saw earlier, full-service restaurants make up 44% of the market share in the United States. Full-service restaurants usually serve breakfast, lunch, and dinner. At a full-service restaurant, someone seats you at a table, and the restaurant staff provides full service. Typically, you pay after you have eaten your meal. The food usually takes longer to prepare and serve compared to limited-service restaurants, and the restaurant does not offer a drive-through ordering facility. You may have  greater control over customizing your order. Items on the menu are typically more expensive than at a limited-service restaurant.

Full-service restaurants can be further classified into casual dining restaurants and family dining restaurants.

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Casual dining restaurants

Some famous casual dining restaurant include Chili’s and Maggiano’s Little Italy under the umbrella of Brinker International (EAT), Outback Steakhouse under the umbrella of Bloomin’ Brands (BLMN), The Cheesecake Factory (CAKE), Olive Garden under the umbrella of Darden Restaurants (DRI), Texas Roadhouse (TXRH), and Buffalo Wild Wings (BWLD), to name a few.

Family dining restaurants

Family dining restaurants include IHOP under the umbrella of DinEquity (DIN), Denny’s (DENN), Cracker Barrel Old Country Store (CBRL), and Bob Evans Restaurants (BOBE).

It is important to note that the $683-billion restaurant industry is highly fragmented with a total of 990,000 restaurant locations in the United States, according to the National Restaurant Association.

Some of the above names are also held by a broader portfolio exchange-traded fund (or ETF) Consumer Discretionary Select Sector Standard and Poors depositary receipt (or SPDR) (XLY).

In the next parts of this series, we will discuss each of these formats in detail.


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