Chuy's Business Quality Report (CHUY)
Chuy’s is a Tex-Mex casual dining restaurant. This Chuy’s Business Quality Report explains the Average Quality ranking that Chuy’s received under my quality ranking system.
Basic Company Information
Company Name: Chuy’s
Quality Ranking: Average (3)
Primary Reason: Faces High Competition
Last Updated: 09/29/2018
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Operates in the highly competitive restaurant industry
Lacks a moat which would protect it from competition or provide pricing power
Earns good returns on capital by steady expansion into additional locations
The store count expansion is in the early to middle phases
Chuy’s Business Quality Description
Chuy’s operates over 90 Chuy’s branded restaurants across the United States. The company originated in Austin, Texas and operates full-service dining establishments in the Mexican and Tex-Mex food genre. This is in contrast to Chipotle Mexican Grill which operates in the fast-casual dining industry. For comparison, Chipotle operates over 2,000 restaurants in the United States.
Chuy’s restaurants are known for their unique decor. Every restaurant is slightly different and management is encouraged to adapt to the local culture. Chuy’s has coined the phrase, “If you’ve seen one Chuy’s, you’ve seen one Chuy’s” to highlight the uniqueness of each individual restaurant. This is one chain restaurant that seeks to be seen as anti-chain.
As a Mexican restaurant, Chuy’s has positioned itself on the lower end of the expense spectrum compared to competitors. The average check is cited as $14.93 as of the end of 2017. This includes a mix of 18.5% alcohol. This is important because Chuy’s derives a significant portion of its revenue from alcohol sales. In its local markets, Chuy’s is often very busy during happy hour. Most restaurants have traditional seating and bar seating available.