Even giants stumble. The past few years have brought huge shakeups in the foodservice industry, as fast-casual dining and technology innovations have dramatically altered customers’ expectations for eating out. As a result, big chains like Pizza Hut, Applebee’s and McDonald’s have had to change their game plans to regain the popularity they once took for granted. 
Here’s a look at what can smaller chains and independent operators can learn from the turnaround efforts of America’s biggest restaurant companies.
Challenge: Competitors have the digital edge.
Pizza Hut (owned by Yum! Brands) may be the nation’s biggest pizza chain, but in recent years it has lost market share to Domino’s, Papa John’s and other competitors. The reason doesn’t appear to be consumers’ preference for one crust over another, but rather differing digital strategies.
Domino’s Anyware digital ordering program seeks to make the pizza-ordering process as effortless as possible. Once you set up your favorite “Easy Order,” you can have it delivered by texting a pizza-slice emoji, sending a tweet, speaking your order into an app or telling your Amazon Echo what you want. You can even order by doing (almost) nothing: if you open the Zero Click app on your phone and wait 10 seconds, Domino’s will automatically deliver your Easy Order.
As Domino’s has launched these quirky (but still functional) digital initiatives, Papa John’s has focused more on driving people to order digitally with improved usability and marketing. And its efforts have paid off: in May 2016, Papa John’s said fully 55 percent of its total sales now come from digital ordering.
Meanwhile, as of April 2016, Pizza Hut reported that just 46 percent of delivery and carry-out orders came from digital channels. And it had a head start: in 1994, a Pizza Hut pizza was the first product ever purchased online.
Turnaround strategy: Match digital innovations to customers’ desires.
Pizza Hut had a revelation: customers wanted faster pizza, not higher-quality pizza. Yum! Brands CEO Greg Creed put it succinctly when he said, "Easy beats better." In 2016, Pizza Hut is getting serious about digital innovations that lead to speed.
To compete with Domino’s popular Pizza Tracker, Pizza Hut launched a similar feature that peers into the future. "Visible Promise Time" shows customers how long it will take to prepare and deliver their pizza before they place their order. It factors in how busy the location is, how many drivers are working and how bad the traffic is at that particular time. Pizza Hut is also testing a service that allows customers to track delivery drivers’ GPS location.
This turnaround strategy seems to be helping Pizza Hut hit its stride again. Business Insider reports that U.S. same-store sales grew 5 percent in the first quarter of fiscal 2016 due to “increased customer loyalty thanks to new tech innovation.”
Challenge: The casual-dining market is saturated and falling out of favor.
As fast casual restaurants have ascended in popularity, casual-dining establishments are suffering. Toward the end of 2015, restaurant sales results showed that, as Nation’s Restaurant News put it, “diners like everything but casual dining.”
A prime example of the suffering sector is Applebee’s, the largest casual-dining chain in the U.S. Despite efforts to remodel the menu and space in recent years, Applebee’s has seen poor sales. Those efforts to revamp the restaurant were “not big enough, bold enough or disruptive enough to really change the conversation about Applebee’s,” Patrick Lenow, vice president of communications and public affairs for parent company DineEquity, told NRN.
Turnaround strategy: Get back to basics. Namely, beef.
Recognizing that consumers want freshly prepared meals — not frozen steaks and microwaved, premade food — Applebee’s is trying to refocus on quality and flavor. The chain has replaced the gas grills with wood-fired grills at all of its 1,900 locations. Applebee’s is also buying fresh, higher-grade beef and training its staff to slice it on-site.
The effectiveness of Applebee’s turnaround plan remains to be seen. “The wood-fired menu could help Applebee's differentiate itself in the sea of sameness that is hampering many casual dining establishments and reawaken its top line, and stock price,” The Street reports. There’s one huge stumbling block: the cost. DineEquity is sinking $75 million into this transformation, including equipment, training and marketing.
Challenge: Fast-casual competitors are luring away customers, but trying to imitate them isn’t working.
When McDonald’s began to stumble a few years ago, people began to wonder if the era of fast-food supremacy was coming to an end. McDonald’s was suffering from fast-casual competition, from slower service, from menu bloat — it had 145 items on the menu in 2014 — and from bad publicity related to workers’ demands for higher pay.
The chain’s initial efforts to turn things around made it seem as if McDonald’s was trying — and failing — to mimic fast-casual restaurants. Its new custom-built burger, for instance, could only be served inside the restaurant, took 7 to 8 minutes to prepare and required a $100,000 investment from franchisees.
Turnaround Strategy: Remember who you really are, then improve from there.
Instead of swimming further out to sea, McDonald’s regained its foothold on dry land. Why have people always loved McDonald’s? It has good-tasting food that’s convenient and cheap. Customers love the Egg McMuffin and the Dollar Menu. So McDonald’s gave them what they wanted: all-day breakfast and a revamped McPick 2 for $5 menu. Thanks in part to these decisions, McDonald’s performance sharply improved in 2016.
But McDonald’s also realized it needs to match customers’ expectations that food will be wholesome and locally sourced when possible. The company announced plans to phase out the use of certain antibiotics in its chicken, and its locally sourced Gilroy garlic fries have been a sell-out hit in California.
Smaller companies can find some valuable lessons by studying McDonald’s turnaround efforts, says Julian Birkinshaw, who is Professor and Chair of Strategy and Entrepreneurship at the London Business School. Chief among them is that you have to anticipate market trends while also understanding your core customers’ needs.
“It doesn’t necessarily have to mean making lots of big changes. Don’t destroy your core. Be very flexible and experimental around what you sell, but don’t ever violate the reasons why you’re selling your core offering in the first place,” Birkinshaw tells Forbes.
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