By Heather Haddon | Photographs by Kevin Serna for WSJ

When social-media feeds lit up with complaints about how pricey fast-food meals had become ("By the time you buy a meal for yourself and someone else, you've spent well over $20," one woman said in a TikTok last year.), Kevin Hochman saw an opportunity in the outrage.

The chief executive of the company that owns casual-dining chain Chili's decided it was time to touch a third rail of restaurant marketing: He compared Chili's to McDonalds, a surprising tactic since casual-dining chains in the past didn't consider themselves rivals to fast food. Chili's diners, the company pitches, get similar burgers to a Big Mac but served at a table with unlimited chips and soda for the same price as a combo meal. And if they are in the mood, a margarita for $6 too.

"Twice the beef of a Big Mac," one Chili's ad promised last spring, playing up Chili's own burger deal starting at $10.99 -- not far off the average price of a large Big Mac meal at McDonald's. Another touted the chain's new Big Smasher 's superiority to "just some other burger at a drive-through."

The average cost of a fast-food burger meal has climbed to $12 from $7.50 in 2019, market-research firm Technomic said.

This month, Chili's is back at it, advertising a new Big QP burger with "85% more beef than a Quarter Pounder with Cheese" for $10.99, a not-subtle reference to one of McDonald's signature burgers.

For most consumer companies, inflation has been a curse. But Chili's has found an unusual way to turn inflation into a marketing pitch: since your fast-food burger costs so much, why not go just a little bit more upscale. While casual-dining chains as a group barely eked out a 1% increase in U.S. sales last year, at Chili's they grew by 15%, Technomic said.

The ads were "like a spark to get people to reconsider coming to Chili's, " said Hochman, 51, a consumer-products and restaurant-industry veteran. People are saying a fast-food meal at around $16 dollars "is ridiculous, " he said.

Chili's owner Brinker International, which also operates the Maggiano's Little Italy chain, in January raised its revenue and profit expectations for its current fiscal year. Chili's U.S. sales last year eclipsed rival Applebee's revenue for the first time in decades. Brinker shares have tripled in the last 12 months.

The rest of the $1 trillion restaurant sector could use some sparks. Wallet-watching consumers have Applebee's and Outback Steakhouse posting sales declines and weak growth targets. Fast-food giants -- usually relative winners in times of economic turbulence -- are struggling to convince diners that their burgers and slices are still a good deal.

Barbecue and blush

Chili's got its start in 1975 with a strategy to serve hamburgers, drinks and, yes, chili in a place nice enough to bring a date. Norman Brinker, a casual-dining pioneer who launched the Steak and Ale chain, bought Chili's in 1983, created Brinker International and took it public. Brinker, based in Dallas, spread Chili's margaritas, fajitas, ribs and burgers across the country.

"Chili's was very consistent whether you were in Houston or in New York. That appealed to a lot of people," co-founder Larry Lavine said.

Lavine wanted to create a fun workplace. Early in the company's history, employees became known as "Chiliheads." The motto was: "Take your job seriously, but not yourself." Chiliheads celebrated work anniversaries and promotions with cake, and considered themselves part of the Chili's club for life.

Chili's "Baby Rack Ribs" jingle helped embed the chain in American culture in the 1990s. Its appearance in a 2005 episode of "The Office" kept it in people's consciousness.

But competition grew: TGI Fridays, Applebee's and other casual-dining rivals muscled into malls and suburbs. Brinker's U.S. sales peaked in 2008, and then struggled to recapture the old momentum, despite menu updates in the 2010s with pulled pork sandwiches and salads with pineapple and mandarin oranges.

Covid-19 dealt another blow. Chili's launched new delivery-only brands to try to reach customers, but wasn't able to consistently boost profits.

At the time, Hochman was the president of KFC U.S., and in 2020 had also taken on leadership of Pizza Hut's domestic business, working with franchisees of the fast-food brands to help them navigate the pandemic. (KFC and Pizza Hut are both owned by restaurant giant Yum Brands.)

The youngest of three brothers, known as "baby Kevin," the Miami native studied communications at the University of Pennsylvania and economics at its Wharton School. At age 21, Hochman landed as a financial analyst at Procter & Gamble's Baltimore cosmetics plant, where he soon realized he knew nothing about mascara and lipstick.

He quizzed other P&G executives about marketing products, and how to secure shelf space at Walmart and other retailers.

"You've got to check your ego at the door and be OK with the idea that you don't have all the ideas," Hochman said during an interview this past March on the podcast "Thirty Minute Mentors." By 2012, he was leading P&G's North American cosmetics business, helping to run a division that needed a turnaround.

A former P&G colleague, Brian Niccol, was rising through Yum's ranks at the time, and periodically reached out to pitch Hochman on a move to fast food, Hochman said.

Hochman, who met his wife at the consumer-products giant, needed some convincing. "I always thought I was going to retire from P&G. And then at some point, I decided I wasn't going to retire from P&G, and then answered his call," said Hochman. Niccol went on to lead Taco Bell, then Chipotle Mexican Grill, and now Starbucks.

In 2014, Hochman joined Yum to run marketing at its U.S. KFC division. The vintage brand had been humbled -- KFC had just ceded the title of America's biggest chicken fast-food chain by U.S. sales to Chick-fil-A. Hochman turned to Colonel Sanders, recruiting a series of actors to play KFC's famous mascot.

KFC's U.S. same-store sales grew 3% in 2016, and the following year Hochman became KFC's U.S. president. In 2022, with sit-down chains still reeling from Covid, he decided to take on a bigger challenge: proving casual dining wasn't dead.

Hochman wound down the Chili's to-go brands, scrapped an experiment with server robots and took a knife to the menu. He focused on making Chili's most popular food and drinks taste better, and ended laborious practices like lining fry baskets with paper. He directed waiters to cover fewer tables, to improve service.

He also sought to imbue the Chilihead spirit again in the restaurants, and heard employees' concerns about cumbersome technology and kitchen procedures.

'Really hope I get a cheese pull'

Chili's sales started to grow in 2022 and 2023, but customer traffic lagged behind. Chili's strategists last year showed Hochman the posts people made of their pricey burger receipts on social media. He decided to go after his old fast-food domain.

Restaurant prices had soared roughly 30% from prepandemic levels. Within days of promoting the "Big Smasher" meal's relative affordability in early May, Hochman said Chili's sales surged.

New customers came, including younger ones who Hochman said previously never looked twice at Chili's. Some took to ordering Chili's "Triple Dipper" spread, a nearly two decades-old option offering three appetizers and a dip for around $17. Some posted videos of themselves slowly pulling apart ropes of the fried mozzarella.

"I really hope I get a cheese pull, otherwise I'm driving home," said one TikTok reviewer in a post with more than a million views. (She indeed got the cheese to ooze.)

Chili's quickly introduced a Nashville hot mozzarella option and hired social-media influencers like Dude Perfect to spread the word. The chain offered a Triple Dipper themed holiday bedspread that sold out in less than a week. Diners' antics have racked up about 225 million TikTok views as of this month.

The Triple Dipper represented 14% of Chili's total U.S. sales in the three months ended Dec. 25, double the prior year, Brinker said.

The company now has 72,000 Chiliheads in its U.S. restaurants, up from 60,000 when Hochman first started, he said, and Brinker has increased pay and benefits for many workers.

Around 200 of Chili's 1,200 U.S. restaurants look tired, Hochman said, and he wants to overhaul them, mainly refreshing the restaurant exteriors and other parts needing maintenance. He plans to spend millions to improve the chain's classic ribs, and hopes to introduce the old jingle to a new generation.

Hochman, the father of two teenagers who frequently wears zipped up fleeces, often fans out to Chili's restaurants to hear from managers and workers. He and his wife throw dinner parties for friends, and he runs around 3 miles a day to stay in shape enough to eat his favorite Chili's dish: the Oldtimer burger, a classic with cheddar, pickles, red onions, lettuce and tomato. "I run to eat," he said.

Despite his laid-back manner, Hochman has ushered in a more intense workplace culture at Brinker that is focused on outcomes, and a lot of change, former employees said. Brinker has had several rounds of corporate reshufflings, with a number of veterans departing as a result, according to employee emails. Brinker has recruited executives from Pizza Hut, Taco Bell, Yum Brands, PepsiCo and 7-Eleven.

While restaurant industry executives hoped sales and profit would grow this year after a sluggish 2024, harsh weather, rising consumer jitters and tariff threats have dulled that optimism. Restaurant traffic is expected to fall 3.3% this year, according to market-research firm Black Box Intelligence.

Still, analysts expect Chili's same-store sales to grow by 26% this quarter, then flatten by the end of the year. Brinker's valuation, hovering at record highs, leaves little room for error, some analysts said.

Hochman said he can keep making money off burger deals as long as customers buy other higher-priced items on the menu. He is investing in improving the selection and prices of its margaritas -- Chili's sells more tequila than any other U.S. restaurant chain, serving over 25 million margaritas last year. The current margarita of the month is the Watermelon Wave.

Write to Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

April 24, 2025 20:00 ET (00:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.