Red Robin - The Rise and Fall?

Red Robin, the casual dining restaurant with quite possibly the catchiest jingle, has had an eventful decade. Just so we are all on the same page here, it is famous for serving gourmet burgers and my own personal favorite, bottomless steak fries. It can be found throughout most of the United States, with a bigger concentration in the western part of the country. It originated as a tavern near the University of Washington in the 1940s, and even though it has been headquartered in Greenwood Village, Colorado for about 30 years now, Washington remains its second biggest market, only behind California. However, depending on how it has been performing, there is a chance that the Red Robin in your area has shut down over these past few years. Restaurants have been consistently closing since 2017, and the exact number keeps getting revised, but that trend is likely to continue. Really, by almost any metric, Red Robin has been declining. Revenue has been consistently falling after reaching an all-time high in 2017, which was also the final year that they reported a net profit. After 8 consecutive years of losses, as you might expect, investors have lost their confidence in the company, reflected by its stock price falling over 90% from its peak in 2015, representing over a billion dollars in value. I mean, this is a major story, with countless reports talking about turnaround strategies and comeback plans that have showed promise at times, but as you can tell, the overall results have not been overwhelming. Most recently, in May of 2026, they announced the sale of 30 company-owned locations to franchisees, followed with a similar announcement the following month for the sale of 86 more locations, raising almost 100 million dollars between the deals. Shifting to a more heavily franchised model is clearly an effective way to raise money, which they could certainly use right now to pay down some of their debt, but it will lower their revenue even further, and they have to be careful that the new owners stay on top of things and maintain certain standards. That's the risk involved. So for this video, I want to discuss some of these recovery efforts while outlining what I believe to be five of the main reasons behind the potential fall of Red Robin. Yum. Starting out the list with something fairly basic, but casual dining as a concept has not been doing well. You know, the restaurants where you sit down and the waiter takes your order, well, for a number of reasons that I have discussed in previous videos, they have become less desirable. The very fact that I have made so many videos like this shows that some of the biggest names in the industry have been struggling. I am not saying it is impossible to succeed in the segment, but it has become much tougher, to a point where these restaurants really have to offer something attractive to stand out and get people in there. Plus, consider that some of the best performing chains lately, like Texas Roadhouse or Chili's, are considerably larger and have more resources to compete with things like portion sizes or national ad campaigns, motivating Red Robin to focus on efficiency to raise profits, which at times has been a misstep, leading me into the next reason behind their potential fall, labor issues. See, back at the start of 2018, when things were still going fairly well, there was this big minimum wage increase in 18 states, including California, their biggest market, where it went from $10.50 to $11 per hour. So, in an effort to lessen the impact of it, they decided that they would cut out bussers from all of their restaurants, you know, the people who clear the dirty dishes from the tables and keep things tidy. So then, that became the responsibility of the servers, which did not go as planned. According to Denny Marie Post, the head of the company at the time, unfortunately, we did not execute this well at all, and it impacted us most during peak periods. We have seen both our wait time and the number of people walking away without being seated increase year over year. So now, the servers were busier, the tables were dirtier, the wait times were longer, so, not surprisingly, customer complaints went up while satisfaction went down. Remember, it has been a competitive environment, so it sure seems like a lot of their customers started to avoid going there in favor of other, cleaner, more attentive restaurants. At the time, they estimated that the change would save $8 million per year, which is such a small benefit compared to all of this trouble it caused. In the years following that decision, Red Robin has lost a combined $540 million, and clearly this is not the only reason behind it, but it really does feel like that spark that ignited a lot of issues that followed. I am just going to try to simplify things by combining it all into the next reason on my list, constant changes. In April of 2019, more than a year after the decision, Denny Marie Post abruptly retired from her CEO position, which left the company without a permanent replacement until September of that year. Meanwhile, there was an activist investor named Vintage Capital Management that publicly criticized the company's recovery efforts and how everything was performing. They went so far as to demand the departure of five board members and even tried to acquire full ownership of the company in an offer that was ultimately not accepted. So finally, they hired Paul Murphy as their new CEO, who was considered a turnaround specialist. He had spent eight years as the head of Del Taco and most recently was the chairman of Noodles and Company, where he was credited with some positive changes. But then, as luck would have it, only months after taking control, the pandemic started, making it difficult to execute any lasting changes, so everything was essentially put on hold. For example, they were experimenting with serving Donato's Pizza in select locations under a licensing agreement with plans to greatly expand the program, installing special ovens at Red Robins across the country, but instead chose to delay that plan in favor of having access to the money. But they have since slowly expanded it to over half of their restaurants. During that time, he cut 55 items off the menu to simplify things, I believe most of which have not yet returned. Just a crazy time and probably not the best use of the big turnaround expert they hired that had only agreed to be there for three years as a transitory leader. So after those three years, they hired G.J. Hart, who was another industry expert and actually a former CEO of Texas Roadhouse. He went on to implement his own five-point turnaround plan called North Star that heavily emphasized the guest experience. Notable parts of it include reinstating the bussers back into full force, hiring even more servers so they can concentrate on fewer tables, and major menu and preparation changes. Overall, customers do seem to be more satisfied with their experience, but it has still been a struggle to win back those customers that they lost. In 2025, Dave Pace replaced him as CEO with an altered version of the North Star plan called First Choice that focuses more on creating better value for their customers. If you have been counting, that is four different CEOs with four different turnaround plans over the past decade, not to mention all of the other executive changes, so things have been chaotic. I am just saying that it is hard to have much faith in a business as a customer or as an investor while things are constantly changing and you never know what to expect. Going back to the list, I at least have to briefly mention the economy. The National Restaurant Association estimates that total expenses for an average restaurant have gone up 36% since 2019, specifically when it comes to food and labor. In fact, trying to save on labor was sort of what got them into this whole mess. Lower margins make it more difficult to attract customers who are seeking out lower prices, which has been a lot of them lately given the rate of inflation. You get the idea here, and even as they continue to report losses, Red Robin has introduced some aggressive promotions. I don't know if you've heard about this, but they now have an entire bottomless menu that includes 30 different sides and drinks, in addition to the $9.99 Big Yum Combo Meal, the yum-iest deal in town as they put it. Introduced in the summer of 2025, it includes Red's Double Tavern Burger, a bottomless side, and a bottomless beverage. Let me know what you think about it, but I would say not a bad deal. Most recently, for a limited time, they came out with the Dinner Double Feature Meal, two half-entrees, a bottomless side, an appetizer, or a dessert for $17.99, which again, not a bad deal. And all of this has been complemented by their revamped loyalty program, Red Robin Royalty, that now uses a point system that makes it easier to earn rewards than it was before. Look, I do not know how sustainable any of this is, but for right now at least, they really need to get people back into those restaurants. My final reason behind the potential fall of Red Robin has been right in front of us this entire time, Gourmet Burgers. The official name of the company is Red Robin Gourmet Burgers because that is arguably the main reason to go there, right? Burgers tend to be associated with fast food, like at McDonald's or Burger King, and the whole idea here is to offer a higher quality or gourmet version of what they offer. There was a time where that really made Red Robin stand out with a strong unique identity, but now, there are national burger chains that offer all sorts of quality levels. I'm sure that many people watching this would prefer to eat a burger from Shake Shack or Five Guys or whatever other chain is in your area that may not have been there 10 to 20 years ago. In fact, in 2011, Red Robin tested out a more comparable fast-casual concept called Burger Works that grew to 12 locations before effectively shutting down in 2016. Later on, in the words of former CEO G.J. Hart, the bar has been raised over the years on what it means to deliver a truly gourmet burger, we are upping the ante. Yeah, identifying that as one of their weak points, he really made an effort to improve them. They used to cook them using a conveyor belt system that was replaced with flat-top grills. I am not a chef, but they claim that the grill creates crispier edges, seals in the juices better, and since less of the meat gets cooked off, the end result is 20% larger. They upgraded the meat and the buns and most of the other ingredients used to make the burgers, and even tried to elevate the presentation by serving it on a plate instead of in a basket like they had always done before. I don't know, it is mostly subjective, but they have been making an effort to create burgers that are, at the very least, different than they used to be. Let me know in the comments, what are your thoughts about Red Robin? It might be a hard question to answer because things just keep on changing. If you are one of the people that stopped going there around 2018 or really anytime since, you might want to give it another try because your experience will almost certainly be different in some way. Also, I realize that this video focuses almost entirely on the more recent years of the company, so I want to mention that I made a video about Red Robin back in 2019 during their 50th anniversary that is mostly about their history. For example, I talk about how the name Red Robin comes from an old song called so plenty of interesting stuff like that. And finally, I guess the big question here is what do you see for the future? Will they ever be able to fully recover? What do they have to do to make that happen? And any other thoughts you have about Red Robin, leave them in the comments. I'd like to hear what you have to say. Thank you for watching.