Midterm wins and uneven earnings reset the restaurant outlook

By Olivia Hart

Top 500 chain restaurant sales slowed again in 2025 as consumers cut back on dining, while coffee, beverages, snacks and chicken thrived in Technomic’s Top 500 ranking. That split frames the restaurant industry’s two immediate tests: how the midterm results may alter labor and purchasing costs, and which chains can withstand uneven demand.

What do the midterm results change for operators?

In Nation’s Restaurant News’ Extra Serving discussion, editor in chief Sam Oches and senior editor Joanna Fantozzi assessed the Democrats’ large midterm wins. Fantozzi identified likely Democratic priorities, including immigration and healthcare reform. Oches weighed a different possibility: the industry could benefit from an end to the war in Iran and from the tariffs President Trump put into place against several countries.

The discussion identifies likely priorities and potential relief, but not new operating rules for restaurants. For operators, the practical questions are whether immigration policy shifts labor availability and wage pressure, whether healthcare reform changes employer costs, and whether tariff relief lowers the cost of purchased goods. The episode gave no specific immigration provision, healthcare mandate, tariff savings estimate or effective date. On that evidence, the election changes the watch list, not the operating budget. Oches also offered no savings estimate for ending the Iran war.

Earnings divide strong brands from pressured ones

The episode’s third-quarter earnings roundup produced a clear three-tier assessment. BJ’s, Red Robin and Texas Roadhouse posted “strong” quarters, according to Oches and Fantozzi. McDonald’s, Dine Brands, First Watch, Portillo’s and Sweetgreen landed in the middle with “so-so” quarters. Wendy’s and Papa Johns posted “bad” quarters.

Taco Bell, Cava and Dutch Bros each underwhelmed in different ways. The editors framed the three results as a return to earth after years of high-flying performance. Taco Bell’s quarter also carried a specific operating problem: a Cyclospora outbreak weighed heavily on third-quarter results.

The ratings show direction, not the economics beneath each result. The episode summary did not provide same-store sales, check averages, food-and-beverage costs, restaurant margins, labor percentages or a company-operated versus franchised breakdown. That omission matters. A strong quarter could come from traffic, price, menu mix or cost control, while a weak quarter could reflect a different mix. Without the underlying figures, operators should treat the rankings as a screening tool rather than a margin comparison.

Reading the Top 500 category split

The category split also points operators toward a more disciplined reading of demand. Coffee, beverages, snacks and chicken thrived while the broader Top 500 slowed, so restaurant demand did not move as one market. For menu and pricing teams, the next task is to determine which occasions retain traffic and whether value, mix or price supports the check. The discussion disclosed no pricing changes, sourcing shifts or menu launches that explain the divergence, so none should be treated as the proven driver.

The split also raises the cost of ignoring unit economics. Labor, ingredients and purchased supplies determine whether stronger categories convert traffic into profit, yet the episode offered no cost percentages or commodity detail. The defensible conclusion is narrow: consumers favored several categories, restaurant spending remained pressured, and company performance diverged.

Other episode developments

The policy and earnings segments sat within a broader industry program. Fantozzi attended a Women’s Foodservice Forum workshop in Columbus, Ohio, while Oches traveled to Cannes, France, for the Global Restaurant Leadership Conference, where he reported on speaker Mark Blyth. The episode also included a conversation between NRN managing editor Leigh Anne Zinsmeister and Prince Street Pizza CEO Lawrence Longo.

The next earnings cycle should show whether the stronger chains can preserve demand while labor and tariff questions become clearer. Until then, the election supplies direction rather than dollars, and the quarterly labels show dispersion rather than a broad industry recovery.