Everyone’s Talking About Cracker Barrel…But What About Chili’s?
How Chili’s Reinvented Its Business Model for Gen Z (and Beyond)
Everyone’s buzzing about Cracker Barrel’s recent changes—but if you really want to see a case study in entrepreneurial thinking, take a closer look at Chili’s. This isn’t just about Nashville Hot Mozzarella Sticks (though those cheese-pull videos went viral for a reason). Chili’s has been quietly innovating its business model for years: cutting its menu in half, refreshing dining rooms, leaning into a catchy but self-aware brand, and most importantly, rethinking its competitors.
And the results?
In an era when many U.S. dining chains face precarious futures (Red Lobster and TGI Fridays are filing for bankruptcy), Chili’s is celebrating its 50th anniversary with a TikTok-fueled renaissance. Its parent company, Brinker International, recently reported a 31.6% increase in quarterly sales compared to last year.
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Substitutes and Competitors
Instead of only focusing on casual dining rivals, Chili’s decided its real competition was McDonald’s. They didn’t position themselves as “cheaper.” They positioned themselves as a better value. Their $10.99 burger deal doesn’t just come with bottomless chips and a drink; they went straight for McDonald’s Quarter Pounder by name, calling out that their burger had more beef. It worked.
Purchasing Power
Chili’s went all in on Gen Z and for good reason. Too often, businesses underestimate just how much buying power Gen Z already has. Yes, they influence family dining decisions (if a teenager wants Chili’s, the family often ends up there). But beyond influence, Gen Z also has their own money to spend. From part-time jobs to side hustles, they’re paying for themselves, and they’re intentional about where their dollars go. By leaning into value, fun, and a brand that speaks their language, Chili’s tapped directly into both Gen Z’s influence and their wallets.
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Bottom Line
Thinking entrepreneurially and leveraging an understanding of economics has helped Chili’s stay alive when most of its competitors are struggling. This is economics and entrepreneurship at its core:
Seeing your competitors differently.
Identifying opportunities in the market (inflation = value repositioning).
Connecting with today’s customer, not yesterday’s.
It raises a bigger question: if Gen Z is already changing the market this much, what happens when Gen Alpha’s buying power arrives? Are CEOs ready to market for the new generation?
Don’t just copy what’s been done; anticipate and question assumptions. Do your research on where the market is shifting and adapt.
 | A guest post by
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Very interesting. I hadn't paid much attention to either of these. I dont eat out much and understood cracker barrel perspective they need to grow the audience in order to grow sales, but now they may reduce that. The chili's counter point is very valid and somehow as you said went unnoticed. Consumption is subjective we should never forget that in economics.