Texas Roadhouse attracts young diners with old recipe: CEO

Texas Roadhouse CEO: The recipe for success

Texas Roadhouse has been in business for more than 23 years and, according to a recent Morgan Stanley report, has the most-loyal fans of any restaurant across all dining categories.

That rabid following may be all the more surprising given the company's key strategy: staying the same in an industry known for chasing the latest dining fad. The strategy appears to be working: Texas Roadhouse's stock has spiked by nearly 35 percent in the last year, probing a new 52-week high in February.

"We continue to provide great service and great food to our guests, and we've really not changed that over the years," said Kent Taylor, the company's founder and CEO, in a recent interview with CNBC's "Power Lunch."

"I think more and more people are figuring it out."

The hometown favorite that hit it big

A man walks past a Texas Roadhouse restaurant in Arvada, Colo.
Matthew Staver | Bloomberg | Getty Images

Taylor opened the first Texas Roadhouse in Clarksville, Indiana, in 1993. Part of the dining experience includes line dancers and jukeboxes—and diners can hand-pick their steaks.

Read MoreThe McDonald's fight that could change franchising

In fact, Taylor said its No. 1 menu item—the six-ounce sirloin steak—hasn't changed since Texas Roadhouse first opened its doors. "You can get a smaller steak for $9.99 with two side items, plus we give you free rolls and peanuts," he said. "Plus it's a fun atmosphere, so I think it's the whole package."

The restaurant is also more of a hometown favorite than a chain, Taylor noted. It doesn't advertise nationally, and instead spends those marketing dollars on food and in local communities by supporting Little Leagues and Boy Scouts and hosting fundraisers.

Taylor also isn't interested in opening up store after store, overcrowding existing Texas Roadhouse locations.

5 restaurants growing faster than Chipotle

Michael Parrish Dudell, author of "Shark Tank Jump Start Your Business," said the overall concept at Texas Roadhouse also appeals to the younger generation.

"Millennials love to have an experience when they go to dine. They love customization and I think [Texas Roadhouse does] that very well," he said.

—CNBC's Jackie O'Sullivan contributed to this report.