The quick-service restaurant (QSR) industry has experienced significant shifts in recent years, influenced by economic challenges, evolving customer behaviours, and innovations. Wendy Derzai Minnett, Senior Vice President with the MTY Food Group, shared her insights into the sector and the performance of her brands.
Economic Pressures and Customer Focus
“The QSR industry has been facing some pretty serious economic challenges—labour shortages, rising operational costs which keep coming, and increased competition pretty much for every brand,” Minnett explained. While some chains have struggled, she noted a positive outlook for a rebound in 2025, driven by strategic initiatives and a focus on value and efficiency.
“(The industry) still remains optimistic about a potential rebound in 2025 for a lot of them, driven by strategic initiatives and focus on value and efficiencies, which we’re all looking at. I mean, you see the value everywhere now in every QSR brand,” she added.
“They’re trying to meet the needs of the customer. 2024 for my brands for the majority, the two big ones (TacoTime and Extreme Pita), was actually quite good. It ended positive for both brands.”
For TacoTime, Minnett highlighted their strong value-driven promotions, including their trademarked Taco Tuesday and the increasingly popular Burritoful Thursday. “Those are pretty deep discount days for us. Finding an offer that’s compelling to a customer and sub $10 is key,” she said.
Brand Performance and Growth
TacoTime has seen steady growth, with 127 locations currently operating and plans to open 15 more this year. “TacoTime’s had great growth and continues to move forward. I have a lot of interest from our internal franchisees that all want new stores,” Minnett noted. This internal demand highlights the brand’s strength and profitability.
The challenge is finding good real estate at a good price.
However, Extreme Pita faces challenges. “Extreme Pita, unfortunately, is one of those brands that’s sort of failing in the sense that it was a big brand at one point. The company that owned it also owned Mucho Burritto. They came to us combined as a pair,” Minnett said, citing an “older feel” as one of the factors. There’s less than 20 across Canada.
“I have opened a very successful Extreme Pita in the Dulles airport in Washington and it’s doing exceptionally well . . . We are doing sort of a revamp on the brand itself this year and trying to do charcoal grills inside the venue. We’re just going to try something new. There’s some innovations we’re trying to do . . . We are going to do a test of one store and change the name.”
The MTY Group has more than 90 brands in the fast casual, QSR and casual dining category.
Minnett also manages the Mr. Souvlaki brand which she said is doing well.
Digital Innovations and Delivery Channels
The shift toward digitalization has been a key focus for Minnett’s brands. “All the delivery channels . . . we have our own delivery service, so it’s in-store pricing,” she emphasized. Unlike traditional third-party delivery systems that mark up menu prices, TacoTime and Extreme Pita offer delivery at in-store prices, making it more affordable for customers and franchisees.
“The digital world is really advanced, and it’s a huge way that all of our brands are speaking to our customers,” Minnett said, highlighting how digital tools help understand and meet consumer needs.
Resilience and Entrepreneurial Growth
“We actually thought during the pandemic that there was going to be a decline in the QSR and the restaurant business because of the difficulties in the supply chain and all the things that happened during that time. And it actually kind of was a reverse.”
Minnett observed an unexpected trend during the pandemic: the QSR sector’s growth as more individuals sought entrepreneurial opportunities. “It’s owning your own business,” she said. “A lot of people who had jobs that maybe went away or if people didn’t come back after the pandemic, they didn’t want to deal with the ups and downs of that industry anymore. They decided to go work for themselves.
“This is the perfect sector to get into. It’s easy for everyone. There’s a training program. The brands all train you on what to do and how to run the business. So it’s actually an easy one to walk into. It’s a modest investment because the banks are pretty good at loaning you a large portion of the money that you need.
“It’s a hard industry. You can’t say that the QSR business is easy. It’s not. But at the same time we see them growing. I think that’s where it comes from. People want to own their own businesses. They want to be masters of their own destiny.”
She cited TacoTime’s history during the 2009 economic downturn as an example of resilience. “We opened around 40 TacoTimes during that time,” she recalled. “When people are uncertain about their day-to-day work lives, they just say, ‘I’m just going to work for myself.’”
Future Outlook
Looking ahead, Minnett expects QSR brands to emphasize value propositions throughout 2024, catering to cost-conscious customers. Innovations like Mr. Souvlaki’s Apollo Bowl, a Greek-inspired meal, showcase the sector’s creativity in adapting to changing tastes.
Despite challenges, Minnett remains optimistic. “The industry continues to see a lot of expansion… it just goes to show that the brand is strong,” she concluded.
