Sonic Corporation (SONC), Jack in the Box Inc. (JACK), Dunkin’ Brands Group Inc (DNKN): Can These Quick-Service Restaurant Chains Serve Long-Term Profits?

This company seeks to capture customers well into the afternoon hours. To that end, more than 1,800 franchise locations have been remodeled in the last four years. They recently introduced a strikingly modern update to their restaurant design. Features include a refrigerated “Grab N’ Go” cooler — presumably, the customer stays long enough to pay — and electrical outlets for customers who want to sit down, relax and use their smartphones and computers.

This is an excellent idea on the part of Dunkin Brands Group Inc (NASDAQ:DNKN) to utilize its space for a bigger portion of the day. After all, the company or the franchisee is paying rent for the full day. In my view, they could do a little better job of promoting this aspect of their strategy. They start off behind in the mid-day sandwich race by virtue of the name of their company.

Quickly serving up my choice

My favorite of these three companies is Dunkin Brands Group Inc (NASDAQ:DNKN). Although they have expanded their menu, they haven’t gone overboard and added more items than they can execute well. As industry observer Carol Tice pointed out in Forbes.com, large menus translate into having to manage the costs of more ingredients and offer more employee training to execute all of these choices.

Consistently increasing same-store sales each quarter is the hallmark of a restaurant chain that understands its customer base extremely well. Dunkin Brands Group Inc (NASDAQ:DNKN) also expanded aggressively despite industry-wide concerns about the economy. They added 108 new restaurants worldwide during the quarter. This shows management’s confidence in the future of its brand. And in view of the company’s excellent same-store sales growth performance, the market is definitely receptive to more Dunkin’ locations opening.

Brian Hill has no position in any stocks mentioned. The Motley Fool recommends McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX). The Motley Fool owns shares of McDonald’s and Starbucks.

The article Can These Quick-Service Restaurant Chains Serve Long-Term Profits? originally appeared on Fool.com.

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