Restaurant operator Cheesecake Factory (NASDAQ:CAKE) has gained a reputation for serving large portions of upscale food and decadent cheesecake. As a result, customers have been willing to endure long waits and higher check prices. In contrast, the stock market continues to mark the shares down to fast-food levels.

Cheesecake Factory's stock price reached nearly $40 a year ago but fell just below $22 last fall due to challenging same-store sales trends at the namesake restaurants. Fellow Fool Rick Munarriz recently highlighted that comps fell into negative territory last year for perhaps the first time in the company's history. The share price has since recovered to almost $27, but has treaded water for over six months now.

The stock would probably be even lower if it weren't for the buzz surrounding Grand Lux Cafe, the latest and slightly more upscale concept as compared to the original Cheesecake Factories. For the just-announced first quarter, namesake comps were flat but Grand Lux posted a 7% improvement, continuing an impressive run of gains.

Grand Lux locations currently account for only about 5% of total company restaurants, but management plans to aggressively ramp expansion. The company believes the United States can support up to 150 Grand Lux Cafes, implying many more years of expansion opportunity. It also sees more than 200 Cheesecake Factories, or 60% greater than current levels. If that's not enough growth for you, the company is currently testing a high-end Asian cuisine restaurant.

The restaurant industry is a precarious space to invest in as new and exciting concepts can turn south quickly, as occurred at Krispy Kreme Doughnuts (NYSE:KKD) and Boston Market. They can also limp along indefinitely, as is happening at OSI Restaurant Partners' (NYSE:OSI) Outback Steakhouses and certain Landry's (NYSE:LNY) concepts before it decided to move to higher-end restaurants.

So far, Cheesecake Factory has been able to differentiate itself with a diverse menu, convenient mall-based locations, and decor that consumers have been willing to pay up for. It has also been able to post impressive cash flow generation, a key Foolish investment metric.

The stock is still expensive at more than 22 times projected earnings for this year, but the growth is there, as are the ingredients for significant stock gains -- assuming recent comparable struggles are a near-term blip and not indicative of a namesake concept past its prime in terms of popularity. Time will tell if the company flames out or catches fire again, as is occurring at Buffalo Wild Wings (NASDAQ:BWLD).

For related Foolishness:

OSI Restaurant partners is a Motley Fool Inside Value selection. Buffalo Wild Wings is a Motley Fool Hidden Gems selection. Both newsletters have excellent menus and samples that are free for 30-days.

Fool contributor Ryan Fuhrmann is long shares of Cheesecake Factory but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.