As tipped in the latest edition of Fast Food Week… Taco Bell franchisees can now opt out of serving breakfast. It’s a curious development amid the big shift that’s taking place in Fast Food business models as AI phases in, and dining rooms phase out…
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Taco Bell has never been high on my list of potential breakfast joints. That’s not to say that their breakfast fare isn’t just dandy. It’s that I – and, I suspect, many others – simply don’t associate the Tex-Mex titan with breakfast…
A little history…
“Taco Bell first started serving breakfast in 2014, and it contributed to a long run of same-store sales growth for the brand in pre-pandemic years,” RestaurantDive recounts. “In 2023, Yum expanded Taco Bell’s hours and saw growth in both the late-night and breakfast dayparts.”
In fact, the Bell was following an industry trend. “[This was] in keeping with broader QSR (Quick Serv-ice Resto) efforts to use unconventional dayparts to help fortify brands against consumer pullback during core hours.”
What’s up?
Taco Bell announced last week that it was allowing its franchise operators (a minority of Bell outlets) opt out of serving breakfast. Reading between the lines, and it’s sounding like the franchisees aren’t all too keen on the hassle of setting up a breakfast shift that’s markedly different in menu and oper-ating requirements from their lunch and supper routines.
And one suspects their request to opt out may also be spurred by tanking breakfast sales in their specific micro-markets.
Nevertheless…
The Bell’s head office has confirmed that it will give franchisees the option of closing down their breakfast sittings starting next month.
In response to a RestaurantDive inquiry, the Bell’s head office says the decision is just part of a larger strategy designed to ‘give franchisees the flexibility to focus on key drivers of growth’.
“Franchisees have expressed appreciation for the gesture, saying that they feel like their needs are being heard to flex their menu to better support what their community craves, while others shared that they look forward to focusing on other dayparts like lunchtime and the new Cantina Chicken Menu,” Taco Bell said in its statement.
The chain also emphasized, it expects only a relatively small number of franchisees will opt out.
Still a strong ‘daypart’
Taco Bell says breakfast is still a strong ‘daypart’ in its overall picture. And corporate-run stores will continue to offer it.
In its recent Q2 earnings report, Yum Brands (the chain’s parent company) reported that Taco Bell’s same stores sales were up 5 percent. A sharp contrast to other Yum fast food holdings which saw sales slumps. Yum confirmed that the Bell’s breakfast sales increased during the second three months of 2024.
My take
Of greatest significance to industry observers was the increasing flexibility Taco Bell is showing its franchisees. The Fast Food industry has traditionally demanded its ‘partners’ toe the corporate line on menus and service models. It’s been considered essential to any brand’s success that locations observe the same opening hours, serve the same menu items, and offer the same amenities – to ensure fans a ‘consistent experience’.
But there’s a hurricane of change blasting through the Fast Food sector. McDonald’s is getting rid of self-serve soda fountains. Starbuck’s is getting rid of its iconic comfy chairs. And that’s just a samp-ling of what’s to come. The Fast Food ‘Resto of the Future’ movement is driving evolution not only in technology, service models and menus, but in the very gospel tenets of brand husbandry.
I’m with observers who predict ‘flexibility’ in many aspects of the Fast Food business will be an in-creasingly important factor in how the chains tackle the challenges facing them over the latter half of this decade…
~ Maggie J.