The Profit

Spotting the next Chipotle: 10 restaurants to watch

Share

What's hot on the dining scene

Project Pie's pizza #5 (Mozzarella, Ricotta, Gorgonzola, Parmesan, Cracked Black Pepper, Olive Oil, Garlic, Fresh Chopped Basil)
Source: Project Pie

In a fiercely competitive market, investors are constantly looking for the next big thing—the next Chipotle or Starbucks that will beat the restaurant odds.

To spot these up and comers, predictive analytics company Czar Metrics sifted through data from Twitter, Foursquare, online review sites, Facebook and blogs to create a list of the top-10 emerging restaurant brands.

"We basically harvested every bit of information we could find about emerging restaurants across all of the different review and social media channels, and then we synthesized the data into the most important themes to help us understand levels of enthusiasm for the different emerging brands," said Michael Lukianoff, CEO and founder at Czar Metrics, a predictive analytics firm.

Czar Metrics then compared comments about the themes—the food, atmosphere, service and price—to those about more established brands. It found diners at emerging restaurants focused more on the dishes and culinary experience rather than just price or service.

These brands face a transitioning industry as millennials' dining habits change the space, said Fred LeFranc, founder and president of Results Through Strategy, a hospitality industry consulting firm.

LeFranc sees millennials as a "generation of diners that wants to have an event when they go out rather than a stodgy meal."

In the top 10, several trends jump out—from restaurants that emphasize all-natural ingredients to those that focus on pizza and burgers.

California concepts also figure prominently on the list.

"I think California and New York tend to be the birthplace of a lot of the trends," Lukianoff said. "California is always on the cutting edge of more health conscious trends."

Click ahead to see the top 10 emerging restaurant brands.

Correction: This slideshow has been updated to reflect Project Pie's current location counts and expansion plans.

—By CNBC's Katie Little

10. Burger Lounge

Lounge Burger
Burger Lounge

What sets it apart: No animal feed here: each Burger Lounge burger is made from 100 percent American grass-fed beef that's sourced from two family ranchers. The restaurant also offers quinoa veggie burgers and turkey burgers, along with salads and shakes.

Locations: 12 locations

Expansion plans: A 13th location is set to open early next month in Los Angeles. The company plans to expand into Orange Country, Calif., soon while continuing to look for locations in San Diego and Los Angeles. During the next few years, growth will pick up as the chain tries to avoid the pitfalls of expanding too rapidly, CEO J. Dean Loring said via email.

"The restaurant industry is littered (with) casualties of small brands that grew too fast. It's like buying stocks at the peak of a market. People continue to do it, their memories are short," Loring added.

Investors: The company has outside private equity partners.


9. CineBistro

Source: CineBistro

What sets it apart: Lights, camera, appetizer! This Alabama-based movie theater-meets-restaurant serves an American bistro menu along with first-run movies and indie films. Perhaps, the biggest perk for those wary of crying kids is a strict no-kids policy at most locations that varies by time.

"We are a premium restaurant experience that shows movies," Executive Director Fred Meyers, said in a phone interview. "We're really a restaurant first and foremost that shows movies."

The chain, which operates in the Southeast and in Vail, Colo., incorporates local ingredients and produce as much as possible while striving for a high-quality, chef-driven experience, Meyers said.

"Unlike the typical movie experience that most people experience, we are the antithesis of that," he said.

What's missing? To start with, diners won't find nachos or hot dogs. "You won't find sticky floors" either, Meyers said.

Locations: seven

Expansion plans: By the end of 2016, the brand will open at least five new restaurants. Another 10 to 15 deals for new restaurants are in the works over the next five years, Meyers said.

Investors: CineBistro is a subsidiary of Cobb Theatres, a privately owned company. There are no other investors.

8. Tender Greens

Chinese chicken salad from Tender Greens
Source: Tender Greens.

What sets it apart: Co-owners Erik Oberholtzer, David Dressler and Matt Lyman founded California-based Tender Greens in 2006 to fill what they saw as a gap—high-quality food at a more affordable price. Each location has its own executive chef who operates and manages the restaurant at this fast casual farm-to-fork concept. "We didn't do farm-to-fork because that's what was trendy at the time, it's just how we always ate and cooked," Oberholtzer said in an email.

Locations: 13 locations

Expansion plans: 30 total locations by 2016

Investors: Funding comes from a variety of sources, including private equity funds, the family farm where Tender Greens sources its produce, family and friends.


7. Bruxie

Source: Bruxie

What sets it apart: Bruxie is not your typical waffle spot. With toppings like Gruyere, smoked salmon and lemon cream, the restaurant is a fresh take on Belgian-style waffles for modern taste buds. The name's a mashup of "Brux," which comes from the French spelling of Brussels," and Belgie," a Flemish term for Belgium.

Locations: Seven locations in Southern California, one in Denver

Expansion plans: The chain is also planning additional expansion in Los Angeles, another San Diego location next year and one in Las Vegas by early 2016.

Investors: Private equity firm Catterton Partners is an investor along with co-founders, Dean Simon and Kelly Mullarney, family, friends and industry veterans.


6. Nick's Restaurants

Garrett West (left) and Tony Gonzalez of Nick's Restaurants
Baldemar Fierro Photography

What sets it apart: Established in 2008, this chain of American restaurants offers a mix of classic dishes, like short ribs and fried chicken, along with some trendier ingredients, like kale and quinoa.

Locations: five in California

Expansion plans: For the next decade, the company's owners say they want to add about one to two new locations per year. Possible locales include Northern California, Portland, Seattle and Hawaii

Investors: The restaurant chain has stayed privately owned and funded despite outside overtures from large chains and investors about possible mergers, buyouts and strategic alliances. "We are simply not ready for that yet," owners Brian Harrington and Nick Nickoloff said via email.


5. PieOlogy

PieOlogy pizzas

What sets it apart: A personalized pizza in less than five minutes: that's the pitch at PieOlogy, another entrant in the custom fast-casual pizza market. Each pie costs about $8 plus tax.

Locations: 23 locations mostly in California, but also in Colorado, Oregon and Texas

Expansion plans: The company plans to double its number of locations by the end of the year.

Investors: friends and family


4. PizzaRev

Source: PizzaRev

What sets it apart: For less time than it can take to call up the local pizza delivery man, PizzaRev lets customers build their own pies with a variety of more than 30 toppings for less than $8.

Locations: 10 California stores, one in Minnesota

Expansion plans: 65 total locations open by 2015.

Investors: Buffalo Wild Wings is a minority investor in the pizza concept.

By email, PizzaRev Co-CEO and co-founder Rodney Eckerman called the business' partnership with Buffalo Wild Wings a "game changer," giving it access to economies of scale. Eckerman was drawn to opening a fast-casual restaurant since the market segment is such a bright spot of growth within the industry.

"There has been little innovation in the pizza space in decades, and we're driven by the opportunity to revolutionize an American favorite," he added.


3. Mendocino Farms

Mendocino Farms location.
Source: Mendocino Farms

What sets it apart: It's all about the sandwich at Mendocino Farms, which is known for emphasizing seasonal and local fare. The chain tries to deconstruct entrees seen more often at the fine-dining level and transform them into sandwiches on artisan bread.

Locations: eight locations in California

Expansion plans: The company plans to add three more locations in California by 2015.

Investors: In mid-2012, Mendocino Farms received a significant investment from Catterton Partners. GrowthPoint Restaurants, which helps early stage restaurants expand, also invested in the restaurant. Mendocino Farms declined to comment about its investors.

2. Hopdoddy Burger Bar

Hopdoddy Burger Bar in Austin, Texas

What sets it apart: Craft, artisanal, all-natural. Hopdoddy's menu includes many of the culinary buzz words du jour in a new spin on the classic burgers and beer concept with ingredients like Tillamook Cheddar and Texas Akaushi Beef. The company's website highlights its transparency by listing where it sources its ingredients.

Locations: five locations in Texas and Arizona

Expansion plans: The burger chain plans to add three more locations this year and a number of new restaurants next year, focusing growth in the west part of the country.

Investors: Catterton Partners is a partner.


1. Project Pie

Project Pie's classic pizza.
Source: Project Pie

What sets it apart: The most emerging of the emerging restaurants was founded by a man who's no stranger to the fast-casual pizza space. James Markham also founded Mod Pizza in Seattle and PieOlogy in California, two other customizable pizza chains before launching Project Pie, a chain that describes itself as "everyday artisan" pizza.

As part of his effort to create the next generation of the fast-casual custom pizza market, Markham says Project Pie sets itself apart from what he describes as "cookie cutter" restaurants with the company's vibe and feel.

"Our goal is to be a chain of one-offs so each one feels like an independent," Markham said in a phone interview, adding that each location aims to incorporate original details into the decor rather than merely gutting the space.

Locations: five domestic stores, eight international stores

Expansion plans: It plans to add 14 to 15 domestic stores and another two to seven international stores by year end.

Investors: Private equity firm Lee Equity Partners is a minority investor in the business.