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Our 2017 Restaurant List Looks Healthy

OC-based restaurant chains are seeing such life that a few split from our list for a new chart.

This year the Business Journal made like cells dividing or stocks splitting and carved out five firms from last year’s list of the largest restaurateurs ranked by systemwide sales, to present a significant sub-category of the local market: large groups of franchisees within chains—including some on our main list.

This didn’t affect the top 10 OC-based restaurant chains—which shifted order based on growth or decline but not due to the breakout of franchisees—and it gives a more precise picture of a local industry posting strong results.

The 38 OC-based chains on our list rang up $16.7 billion in sales at about 12,200 locations systemwide—up 7% and 6%, respectively—for average unit volume across the list of about $1.37 million, up 1% year-over-year.

Local employment at the chains is up 5.3%, our research shows.

It’s National

The numbers show solid growth amid a national picture that suggests a flattening has begun.

Nation’s Restaurant News, a New York City trade journal, and Black Box Intelligence, a Dallas-based industry tracker, recently reported declining same-store sales for restaurant operators in an industry that’s added 40,000 restaurants in the last six years—an average of 18 a day.

NRN said industry sales grew 4% last year, and Black Box said employment was up about 1.5% in the last year, both of which trail the OC-based chains’ numbers.

If OC restaurants are increasing sales in this environment, “it’s typically the result of strong marketing, differentiation and good service,” said Darren Tristano, chief insight officer for Chicago-based restaurant consultant Technomic Inc., which provides some of the data for our list.

One more way that OC-based chains buck national trends is in (not) franchising.

The current vogue is for parent companies to franchise more and sell company-owned locations in big blocks to franchisees.

Two big-name burger chains based in Irvine buck the trend: No. 3, In-N-Out Burgers Inc. never has, and Habit Restaurants Inc. rarely does.

Think Local

OC is an incubator of food concepts, as well as growth. New entries on the list include:

• No. 25, Panini Cafe in Irvine

• No. 27, Nick’s Restaurants in Irvine

• No. 33, Chronic Tacos in Aliso Viejo

• No. 36, Creamistry in Yorba Linda

• No. 38, Slapfish in Huntington Beach

Big jumps in ranking this year came from:

• No. 7, Johnny Rockets Group Inc. in Lake Forest, up seven slots

• No. 14, Pieology Pizzeria in Rancho Santa Margarita, up 11 slots

One of the steepest drops came from Real Mex Restaurants Inc. in Cypress, which fell from No. 8 to No. 11 as it closed 22 locations. Its website showed 92 systemwide restaurants, down from 114 a year before.

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