Restaurants that found success during the pandemic.

Restaurant groups are individual restaurant concepts that are all managed by a single corporate entity. Each restaurant can offer different cuisines, decor, bar menus, etc. In fact, you may not even be able to tell that these restaurants even share an owner.

In recent years, this approach to restaurant ownership has become more popular than ever.

And, while the COVID-19 pandemic was particularly devastating for the restaurant industry, many mid-sized restaurant groups were able to not only weather the storm, but find success. Here are some of the factors that worked in their favor:

Economies of scale

Since restaurant groups own multiple locations, they can take advantage of bulk ordering — meaning less shipments and lower per-unit costs. This may have also helped avoid the supply chain and delivery issues that many businesses experienced throughout the pandemic. Some restaurant groups were also able to share staff, which became even more critical as labor shortages tore through the industry.

Serving customers where they are

Because they have locations in different parts of their areas of operation, restaurant groups didn’t necessarily need to shut down completely during the pandemic. Instead, they could choose which locations would be beneficial to keep open, and help keep revenue flowing. For example, when Parasole Restaurant Holdings, based in Minneapolis and St. Paul, closed their downtown locations in response to workers going remote, they were able to offset their losses through their suburban locations — where their customers were now both living and working.

Supporting local

Throughout the pandemic, there was a rallying call to support small and locally owned businesses rather than national chains. As many restaurant groups are owned and/or operated within a specific community, they certainly fit the bill. This was helpful both for maintaining relationships with existing customers, and creating new ones. And, as the industry has begun to recover, real estate developers are also reaching out to successful local restaurants to fill vacant spaces.

An opportunity to innovate

From adopting takeout-only models to creating DIY meal kits, many restaurant groups got creative to maintain business during quarantine. Some of these new offerings were so successful that they’re being added to the menu permanently. For example, Hakata Tonton, a beloved hot pot destination in New York City was forced to shut its doors early in the pandemic. However, its owners, Hand Hospitality, will be bringing it back as a delivery-only operation, offering both ready-to-eat meals and meal kits with less overhead costs than a traditional restaurant.

After 2020, I am happy to hear of any success stories in the restaurant industry. But, seeing a business model that is working across the US also has me intrigued. While many often debate the merits of mom-and-pop shops versus national chains, perhaps these mid-sized groups offer the best of both worlds.

Danilo Diazgranados is an investor, collector, and lover of fine wines and a member of the prestigious Confrérie des Chevaliers du Tastevin, a fraternity of Burgundy wine enthusiasts.