CHICAGO, March 17, 2025 — Co-branding is making a major comeback, and not just with restaurant concepts.

Two or more quick-service brands first began sharing a single structure decades ago, convinced the strategy would double or triple a location’s drawing power while cutting each twinned operation’s usual development and operating costs in half. 

The formula was so enticing that the parent of Taco Bell, Pizza Hut and KFC acquired the A&W burger chain and quick-service seafood specialist Long John Silver’s specifically to provide more mix-and-max combinations.

Yum Brands was far from alone in pursuing the strategy. Even McDonald’s gave it a try. It greenlighted an experiment where an old-line dinner concept was retrofitted to the usual Golden Arches setting, creating what was marketed as McDonald’s with a Diner Inside.

But they and others discovered that dual concepts often provided twice the usual problems with far less than twice the sales. Each of the paired operations had their own operating systems, making the sharing of employees across the brands more difficult than anticipated. 

Plus, the concepts were often inequal in the business they generated, prompting their operators to favor one over the other in terms of staffing, marketing and space allotments.  A KFC-A&W hybrid benefited far more from the sale of $10 bucket of KFC chicken than it did from selling an A&W burger for a buck.

The issues largely derailed the trend, leaving only a few notable diehards. 

Fast-forward to the pandemic and its aftermath, when soaring occupancy and labor costs brought new commitment to dual branding. 

Village Inn, the venerable family dining concept, announced that it would be shoehorned as a breakfast option into units of sister concept Granite City, a brewpub-operation that’s busiest at night.
Fat Burgers decided to twin 40 of its stores with units of Round Table Pizza, another holding of parent Fat Brands.

McDonald’s gave co-branding another try, though not in the classic sense. It started selling Krispy Kreme-brand doughnuts within its stores. Last year it announced the co-venture would be expanded to the whole U.S. Market.
Now the phenomenon is picking up steam, and beyond the quick-service sector. Dine Brands Global, the parent of Applebee’s and IHOP, recently revealed that it will triple the number of locations where its two full-service brands are paired, to 56 worldwide. About 15 will be located in the U.S.

The co-branding isn’t taking place merely between restaurant concepts.

The venerable pizza chain Mr. Gatti’s says it has a deal to install pizzerias in 100 Walmart stores. 

7-Eleven has been assembling a stable of restaurant concepts to share space with its c-stores, including the cult favorite Laredo Taco Co.

Rutter’s, a c-store rival, just revealed plans to outfit some of its retail operations with full-service bars, though it has yet to reveal the brand name they’ll sport.

The flurry of activity hasn’t alleviated the strategy’s challenges, according to Jim Holthouser, CEO of GoToFoods. 

The company, the parent of seven quick-service concepts ranging from McAlister’s Deli to the Carvel soft-service ice cream chain, is one of the franchisors that never walked away from co-branding.

At COEX, the conference for the food-away-from-home industry, Holthouser said that GoToFoods probably has about 1,000 dual-brand locations in operation right now. “It’s a lot harder than it looks,” he said. “It’s a lot of work, but for us it’s really paying off.”

Most of the two-in-ones, he indicated, consist of snack or treat concepts, like a Carvel and an Auntie Anne’s. Traditionally those sorts of operations were developed within malls, which aren’t being built with the frequency they once were.

“We were running out of runway in the U.S.,” said Holthouser. “We had to figure out how to get these brands streetside.” But the economics of a snack concept often can’t support the rent of a streetside location.
“When you put a Jamba and a Cinnnabon together, you get double the AUVs, and then it makes sense,” he said, referring to average unit volumes. “You’re getting a lot more mileage out of your real estate.”

COEX, or the Chain Operators EXchange, is the annual conference hosted by IFMA The Food Away from Home Association. Next year’s gathering is scheduled for March 8 – 10 in Atlanta. 

More information on the event is available here. 
 


As Managing Editor for IFMA The Food Away from Home Association, Romeo is responsible for generating the group's news and feature content. He brings more than 40 years of experience in covering restaurants to the position.