U.S. Chain Restaurants Capitulate: Brand Protectionism is Not Working

 

For decades, brand protectionism was the cornerstone of chain restaurant growth. By guarding against menu change, resisting cross-channel innovation, and doubling down on rigid identity, many restaurant brands enjoyed an era of seemingly unstoppable expansion. In the 1970s, 1980s, and 1990s, those strategies attracted investors, fueled store counts, and created household names. But history has shown us that “protecting the brand” for too long often leads to stagnation, consumer irrelevance, and market share erosion according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Lessons From History: Three Times Brand Protectionism Failed

1.       Howard Johnson’s – Once the largest restaurant chain in America, Howard Johnson’s refused to adapt to shifting consumer tastes and clung too tightly to its limited menu. By the 1980s, as fast-food competitors embraced speed and new flavors, Howard Johnson’s stores looked and felt outdated. Its decline stands as one of the clearest examples of brand protectionism gone wrong.

2.       Steak and Ale – Known for introducing affordable steakhouse dining, Steak and Ale stuck with its dark interiors and dated “salad bar” format long after consumer preferences shifted toward fresher, lighter, and more open dining environments. Competitors innovated while Steak and Ale clung to its past, eventually forcing bankruptcy.

3.       Chi-Chi’s – Once a go-to casual Mexican chain, Chi-Chi’s resisted evolving its menu and décor even as more authentic and fresher Mexican concepts gained traction. Combined with operational missteps, its inability to pivot left it irrelevant to both younger diners and multicultural consumers, sealing its fate.

Each of these chains clung too long to “what worked yesterday.” They misread consumer dynamism as a passing trend. History suggests they weren’t exceptions — they were warnings.

Today’s Legacy Chains: Stuck in Yesterday

Fast forward to the 2020s, and some of America’s biggest names are repeating the same mistakes.

1.       Applebee’s – Still tethered to “neighborhood bar and grill” branding, Applebee’s struggles to engage younger generations who value food discovery, wellness, and convenience over oversized appetizers and cocktail promotions.

2.       Olive Garden – While still beloved for comfort dining, Olive Garden has resisted modernization in plant-forward menus, off-premise innovation, and digital loyalty compared to competitors like CAVA or Sweetgreen. Its “never-ending pasta” approach resonates less with a wellness-driven audience.

3.       TGI Fridays – Once synonymous with casual dining excitement, Fridays is now viewed as tired. Overreliance on legacy bar promotions and dated décor has left the brand struggling to differentiate in a crowded midscale market.

Meanwhile, grocery store prepared meals and convenience-store foodservice are growing at 6.5% annually, according to NielsenIQ. Black Box Intelligence™ reports that U.S. chain restaurant sales fell -0.7% in August with traffic down -3.9%, signaling that consumers are voting with their wallets — and increasingly choosing alternatives.

Why Consumers Are Moving On

Today’s food shoppers are explorers. Millennials and Gen Z spend more time researching, trying, and sharing new foods than any generation before them. A OnePoll/Sweet Earth Foods survey found that millennials try 46 new foods a year, with 57% subscribing to diets like plant-based, Keto, or vegan. The fact that 77% of consumers buying JUST Egg are still meat eaters proves this is not about niche diets — it’s about discovery, values, and flexibility.

Legacy chains that cling to old models miss these undercurrents. Consumers are dynamic; food brands must be dynamic as well.

Four Insights from the Grocerant Guru®

Steven Johnson, Grocerant Guru® of Foodservice Solutions®, offers four insights for restaurants seeking relevance:

1.       Consumer Relevance Beats Brand Consistency – Protecting yesterday’s brand image at the expense of tomorrow’s consumer needs is a losing formula. Adaptation must take priority.

2.       Embrace Food Discovery – Consumers are looking for new flavors, new formats, and new experiences. Integrate limited-time offers, plant-forward dishes, and global flavors that evolve with customer curiosity.

3.       Cross-Channel Is Critical – Competing with grocery prepared meals, convenience stores, and third-party delivery means being present across platforms. A “restaurant-only” mindset is outdated.

4.       Convenience Is Currency – Speed, portability, and personalization now define value. Restaurants that ignore consumer demand for frictionless meals risk irrelevance.

 

Bottom line: History has shown that clinging too tightly to brand protectionism leads to decline. Today, legacy restaurant chains risk repeating the mistakes of Howard Johnson’s, Steak and Ale, and Chi-Chi’s. Consumers are dynamic, and the only way forward is to evolve — quickly, consistently, and with the consumer, not the brand, at the center.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter