texas roadhouse steak, corn, and mashed potatoes
If all goes according to one highly ambitious expansion plan, a new steakhouse restaurant could be coming to a location near you—especially if you live in a smaller town.
Texas Roadhouse announced plans last week to head out on the road in a major way with an ambitious goal of growing to 900 U.S. locations. The steakhouse chain already boasts 596 restaurants, and has been following a trajectory to 700 or 800 stores, but blossoming sales have led to a more ambitious growth projection.
The company had a fantastic 2021, bringing in over $3.7 billion in revenue, which makes it the fourth largest casual-dining chain in the country, behind Olive Garden ($4.2 billion), Applebee’s ($4.2 billion), and Buffalo Wild Wings ($3.7 billion). In fact, the chicken wing chain just barely beat out the steakhouse for the third spot, even though it boasts more than double the footprint at 1,212 locations.
Texas Roadhouse was able to generate average unit volumes of over $6 million, which are the highest in the casual-dining segment, according to Restaurant Business. At 900 locations, the chain could potentially generate $5.4 billion annually and take the top spot of casual dining.
Another factor that bodes well for Texas Roadhouse: Both Applebee’s and Olive Garden have slowed down national expansion efforts in recent years. While the Roadhouse has seen its U.S. location count increase by 23% since 2016, Applebee’s shrunk by 15%, while Olive Garden saw a modest increase of 4.3%.
So what’s the secret to Texas Roadhouse’s success? Smaller markets. Founded in 1993, the steakhouse brand originally focused on medium-sized cities and metropolitan areas. Over the past decade or so, however, the brand ventured into smaller towns with populations around 40,000 to 60,000 people.
“We changed that number because we do see the upside, and the success in some of the smaller communities that we’ve been able to go in really allowed us to up that number,” CEO Jerry Morgan said of the more ambitious growth plans during an earnings call last week. “If we continue to do it right and all the world works with us, we think that we can get to that number.”