An improving economy and expected moderation in interest rates could set the stage for an escalation in restaurant industry mergers and acquisitions, according to a 2025 forecast report from consulting firm Technomic.
“As the industry rebounds, distributors will seek this activity to expand into new geographic regions, segments and categories,” the Chicago-based firm said in its annual trend and forecast report, noting an expected decline in interest rates and rising sales could encourage some chains to pursue “aggressive expansion.”
“This wave of mergers and acquisitions will reshape the food service landscape, resulting in a range of implications — from fewer supply sources to consolidated restaurant groups with greater purchasing power,” Technomic analysts said.
Several U.S. restaurant chains and franchisees have struggled in recent years to cope with rising costs and slowing sales, and multiple companies responded during 2024 with location closings, job cuts and bankruptcy filings. But acquisitions by some well-capitalized companies during the past three years sought to increase the buying firms’ overall footprints while also expanding their reach into new dining categories.
They included the Jack in the Box acquisition of Del Taco for $585 million; Denny’s $82.5 million purchase of Keke’s Breakfast Cafe; Dine Brands Global’s $80 million acquisition of Fuzzy’s Taco Shop; and Darden Restaurants’ $715 million purchase of Ruth’s Chris Steak House and $605 million acquisitions of Chuy’s.
Technomic analysts also predicted delivery services in 2025 “will continue to be de-emphasized” in favor of other off-premise dining options as consumers weigh convenience against delivery costs. The firm said the continued shift toward carryout, curbside pickup and particularly drive-thru services will spur more restaurant operators to invest in evolving store formats, including those with multiple pickup lanes dedicated to prepaid food orders versus on-site ordering.
Source: CoStar
About Topsail Capital Advisors (TCA): TCA is your trusted partner for all your Business Brokerage and M&A Advisory needs. Based in Greenville, South Carolina, TCA provides sell and buy-side consulting services for privately-held companies within the lower-middle market throughout the domestic United States. TCA offers unique sell-side advisory services and expertise in creating added value prior to the owner’s exit. Our experienced team of analysts, brokers, and business owners brings over a century of expertise, ensuring the highest level of qualified representation. Trust TCA for professional business valuations and exit plans that provide valuable insights beyond numbers, empowering informed decision-making and strategic planning for your business. When the time comes to exit, our deal team handles the entire deal process from initial IOI to close reducing risk and increasing the changes or a productive close, transition, and integration.