Thanks for this write-up. This stock has popped up in screens that I run. It has performed well and may continue to do so. Surely the only possible moat would be to generate economies of scale through bulk discounts on procurement, negotiating more favorable lease terms, scaling HQ costs over an expanding revenue base, etc. There are a handful of exceptions but consumers typically don't stay loyal to restaurants over a multi-year period.
Thanks for your comment! You're right that achieving economies of scale can be a key moat for restaurant businesses, especially through the examples you've given. While consumer loyalty can be fickle, I'd say a strong brand is also an underappreciated moat for these types of businesses (McDonalds, Chipotle, Texas Roadhouse). A strong brand will maintain, or even increase, customer retention over time. Were there any parts of the write-up you didn't agree with or liked?
Thanks for this write-up. This stock has popped up in screens that I run. It has performed well and may continue to do so. Surely the only possible moat would be to generate economies of scale through bulk discounts on procurement, negotiating more favorable lease terms, scaling HQ costs over an expanding revenue base, etc. There are a handful of exceptions but consumers typically don't stay loyal to restaurants over a multi-year period.
Thanks for your comment! You're right that achieving economies of scale can be a key moat for restaurant businesses, especially through the examples you've given. While consumer loyalty can be fickle, I'd say a strong brand is also an underappreciated moat for these types of businesses (McDonalds, Chipotle, Texas Roadhouse). A strong brand will maintain, or even increase, customer retention over time. Were there any parts of the write-up you didn't agree with or liked?