One of the great American growth themes throughout the years has been quick-service restaurant (QSR) expansion. Success stories are abundant, with companies like McDonald's and Starbucks growing to have more than 13,000 locations in the U.S. alone.
Store growth is a powerful driver and has ultimately helped propel these stocks over the years. Now, not every restaurant expansion story is successful. Some restaurant operators struggle moving outside their region, like Jack in the Box. Others fail because they become too aggressive and try to expand too quickly, taking on debt, like Krispy Kreme.
That said, restaurant stocks with a lot of expansion still ahead can be great investments. Let's look at four potential great options.
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1. Chipotle
Chipotle Mexican Grill (CMG -0.69%) has been a restaurant expansion story for more than 20 years, and it still has a solid runway ahead. At the end of the first quarter, it operated 3,781 company-owned restaurants. It plans to open between 315 to 345 new company-owned locations in 2025, which would represent 9% unit growth this year.
Over the long term, the company has talked about operating up to 7,000 locations in North America. At its current pace, it would reach its goal in the next 12 to 13 years. That's a solid runway for one of the most successful restaurant operators of the last 20 years.
Meanwhile, the company has already begun to plant the seeds for international expansion. It has a few locations in Europe and plans to enter Mexico next year through a partnership agreement with Alsea. Chipotle is also currently expanding in the Middle East through a partnership with Alshaya Group, opening three restaurants in Kuwait and two in Dubai.
2. Cava
Cava (CAVA 0.57%) has been one of the hottest restaurants over the past year, with the fast casual chain reporting four straight quarters of positive double-digit, same-store sales. The company is seeing solid traffic gains despite increased prices, which is something a younger Chipotle saw in its early days.
With only 382 locations at the end of last quarter ended April 20, Cava is just at the beginning of its expansion story. The company plans to open between 64 to 68 new locations this fiscal year, which would be high-teens unit growth. Its goal is to reach at least 1,000 restaurants by 2032, which would be nearly triple the number of locations it has today.
The company has been using what it calls a "coastal smile" expansion strategy, beginning its initial expansion along the U.S. East Coast, down through the Sunbelt, and into California. With this, it has been able to take advantage of population trends and focus on areas most likely interested in Mediterranean cuisine. However, it has since begun to expand into the Midwest into cities like Chicago and Detroit.
The company is using a sound, measured expansion strategy that should set it up for long-term success.
3. Dutch Bros
Coffee shop operator Dutch Bros (BROS 2.17%) has the opportunity to be the next big regional-to-national expansion story. The Pacific Northwest company currently has 1,012 shops, of which 695 were company-owned, at the end of Q1 in only 18 states.
While the company primarily operates in the western U.S., it also has 27 stores in Tennessee that appear to be performing well, showing its opportunity in other areas of the country. It is currently looking to open at least 160 new locations this year, which would be about 16% unit growth. It believes it can reach 2,029 locations by the end of 2029 and sees a total market opportunity for 7,000 shops.
In addition, the company has been seeing solid same-store sales and has a real opportunity to grow its sales by adding more food items to its menu. Currently, only 2% of its sales come from food, while nearly 20% of Starbucks sales are food, so this is a big opportunity.
The company's stores are relatively small with no indoor seating, so its cost to build new shops is relatively inexpensive. Meanwhile, with systemwide annual unit volumes (AUV) of around $2 million per store, it tends to see short payback periods for its new opening investments.
4. Shake Shack
There is nothing more American than a good burger, and Shake Shack (SHAK 2.61%) arguably makes some of the best. It also has a strong expansion story in front it.
At the end of 2024, it operated 579 locations, of which 373 were in the U.S. However, more than 97% of its revenue came from the U.S., and it is looking to ramp up its U.S. expansion. It plans to open 45 to 50 new company-owned locations this year, which would be mid-teens unit growth. It also plans to open between 35 to 40 licensed restaurants.
The company said last quarter that it would open up the most new Shake Shack locations in its history this year, while reducing construction costs by 10% despite tariffs. It notes that it is entering new geographies and seeing a lot of success, and recently had the highest sales openings in the history of the brand in the Southwest for a suburban location with a drive-thru.
New York and California are more than 30% of Shake Shack's store base, so as it sees success in new markets, it has a long runway of expansion growth in front of it. It thinks it can support at least 1,500 locations in the U.S. over the long term, which would be about quadruple the number of U.S. locations it has today.
