Name: Chili’s CEO Kevin Hochman Breaks Down the Changes That Turned the Restaurant Around
Uploaded: 2025-04-14T19:37:00Z
Duration: 11 min 3 s
Description: Chili’s CEO Kevin Hochman has spent the past three years working to revive the chain. It’s paying off: Sales and traffic are up, even as the wider industry slides. He tells WSJ how he plans to keep up the heat.

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Chili’s CEO Kevin Hochman has spent the past three years working to revive the chain. It’s paying off: Sales and traffic are up, even as the wider industry slides. He tells WSJ how he plans to keep up the heat. Photo: Andy Jacobsohn for WSJ

https://m.wsj.net/video/20250417/4cd54151-ff9a-44a4-a735-a6c9579906eb/1/hls/manifest-hd-wifi.m3u8

Chili’s CEO Kevin Hochman has spent the past three years working to revive the chain. It’s paying off: Sales and traffic are up, even as the wider industry slides. He tells WSJ how he plans to keep up the heat.

Chili’s CEO Kevin Hochman Breaks Down the Changes That Turned the Restaurant Around

A lot of players in casual dining, and Chili's was one of them. Forgot about why do people go out, and if we don't deliver on that, why will we expect our business to grow?

Narrator: The restaurant industry has been struggling. 2024 had the highest number of bankruptcies since the pandemic.

T.G.I. Friday's filed for bankruptcy.

Hooters is the latest casual restaurant chain to file for Chapter 11 bankruptcy.

Now to Red Lobster, it has officially filed for bankruptcy.

Narrator: But on the flip side, Chili's is thriving. It's got more customers, more sales, more hype.

This is so good. Chili's, you popped off.

Narrator: And this man is the reason why. His name is Kevin Hochman, and he's the CEO of Chili's. The Wall Street Journal's restaurants reporter, Heather Haddon, sat down with him to learn how he's steering Chili's through the industry's challenges and his strategy to keep it the hottest casual dining chain in the country.

I know the kitchen was a big focus in making it more efficient. What were top changes you made there and what was the payoff?

One of the ideas actually came from our culinary team. We had an executive leadership team having a meeting. They served all of us two identical Oldtimers with cheese, that's our most popular burger. And they had us taste each one, and then say, "Oh, what was the difference?" And one of the executives was like, "Oh, the burger is different." Another one was like, "Oh, the cheese is different." Another one was like, "Oh, the bun is toasted differently." We all got it wrong. The pickles were different, right? That was the only thing that was different. And so they bring out the current pickle, at the time, and it was like a five-gallon jug, and it looked like a painter's jug, and they had a special tool to pry open the pickles. And then about a minute later, you liberate the pickles because the thing flies off, but then all the pickle juice spills over.

Oh my goodness.

So you got to clean up the pickle juice and the dill. And then they said, "Here's the other pickle that you didn't know the difference of." And they brought a jar out and they opened it up and they took two pickles out, right? They said, "Oh, by the way, this is over a half a million dollars cheaper than."

Oh my goodness.

"Than the liberated pickles, right? And then I remember one of the executives like, "Well, we should test this." Like, what is there to test? There's 200 years of experience in this room and none of us could pick which pickle it was, right?

Narrator: Hochman has also zeroed in on the equipment. His team looked for small changes they could make to save cooking time and money.

So for example, on a burger and fries, sounds simple, right? Lot goes into that. And the fries, well, what we found was, one, they weren't as hot as they could be, and two, they weren't seasoned properly. And he said, "Well, why is that?" Well, it's not the cook's fault, it's not the restaurant team's fault, it was the home office's fault because we gave them two fries to make. So we had a curly fry and a straight fry. So if you just have one fry, you can make it hotter and fresher. And then the seasoning process was almost impossible. So after the fries are cooked, they're put on what's called a save-a-week pan. And then they're supposed to take the shaker and do it 30 times. After five, your arm just starts getting tired. So like nobody is doing it 30 times, and then we wonder why isn't the fries properly seasoned. So we used incredible innovation, we made a shaker with bigger holes, that more seasoning came out. And now, you put them in a bowl, you go shake, shake, shake, toss, toss, shake, shake, shake, fries are properly seasoned. And they're hot and fresh every time.

Was there things about consumer surveys or what have you seen when you first started that said to you, "The food's got to be better and this is what I need to do?"

Well, I mean, you could talk to guests, but you also talk to the team members. I mean, the team members would tell you that the food needed to be better. You know, I do these listening sessions all around the country. I do about 16 a year. I'll have 15 to 20 area managers, in a restaurant just like this, before it opens. We spend two to three hours. I open my laptop up, I'm taking you know, notes. And the main question I ask them is, "If you were the CEO, what would you change tomorrow?" It's a very provocative question. Sometimes like they're a little hesitant, I'll be like, "Hey, when you're cursing under your breath that the corporate made you do X, this is your chance. Like I'm the CEO, I can make change. Like if you don't tell me now, you can't complain about it," right? And they get all fired up, and they give me lots of good ideas.

So you skinny down the menu. Why is the menu that you have now the right menu?

Huge advantages come out of slimming down the menu, allows us to make the food better. So, for example, the chicken crispers, we used to have two chicken crispers, we had a tempura batter crisper called the Original Crisper. It's about 20% of the of the chicken crisper business. And then we had a conventional, extra crispy, we call it a Crispy Crisper. It's 80% of the business, right? And when you go into the back of the of the restaurant, the heart of the house, they have very small little pans with which they can bread each of those flavors, right? Because there's two flavors and the spreading station that's about this big. When we got rid of the 20% variant, we could now have one big vat where we can make 24 at a time. Versus the old way, you can make one or two at a time. So, sometimes, people say they love variety, and they do, but variety can sometimes get in the way of making things consistently really, really well. And that's a great example where, today, we only have one recipe, we sell 66% more sales in chicken crispers today than we did three years ago because we're doing it in a much more consistent manner. It's a better product.

Narrator: These types of trims have slimmed down the menu by 25% in the last two years. But the chain has also added an important new item.

So the Big Smasher, which you introduced last year, I know was a really important moment for you for the brand in terms of lifting your sales. Talk about developing the Big Smasher, and then, also, marketing-wise, going after fast food.

Yeah. So one of the things that our team saw, a little longer than a year ago, was, in social media, people were posting their fast food receipts, and they were complaining about how expensive things were. And so we came up with the idea of like, what if we made a burger that had familiar taste profile of a famous fast food burger, but done in the format of Chili's.

Announcer: Makes a quarter-pound burger look tiny and, well, yeah, tiny.

And then go after this idea that fast food pricing is high, right? And we did that May of last year, and the business was doing well before that, it just took off after that.

Is it profitable, though? I mean, that's the question with all these value deals that a lot of chains have rolled out, you know? It's sharp price points. They're very appealing to consumers who now are really feeling fatigued. Can you make money on it?

Well, we can, and we do. And I have shareholders, and I owe it to them to continue to make money, right? So, one of the things we call is a barbell strategy.

Narrator: That means that most customers buy an affordable option, like Chili's $6 base option margarita. But the chain also offers a premium option, like a Presidente margarita, for the few who want to splurge.

As long as we continue to play on both ends of the barbell, we're going to be fine because it allows us to manage the value mix with more premium mix that we can also make money on.

Narrator: But across the industry, sales haven't risen as much as Chili's, and rival chains are noticing.

So your competitors have definitely noticed your success. Applebee's last year came out with its $9.99 deal.

Announcer: Applebee's Really Big Meal Deal for only $9.99.

A little cheaper than your, you know, your entry point for three for me. Have you seen any impact from competitors stepping up?

So I have a monthly meeting with our vice president of operations. So I asked them about a deal that was undercutting us by about 10% on a similar value meal construct. And they all started laughing, I was like, "Why are you guys laughing?" They're like, "We don't think this is going to dent us in the least." Because it's not just about the lowest price, it's also about what you get for that price, and we think that what we have is unbeatable. And if you look at the results for that quarter, when that that new offer, the competitive offer came out, we were up 31% in sales, right? With, you know, plus 20% traffic growth. And that just tells you, the guest isn't just buying the lowest price out there. It's going to be very difficult for our competitors to catch up because it could take years of what we've been doing and investments that we've been making to get to where we are.

So let's talk about the Triple Dipper. So that has been on your menu for decades. I found ads going back to 2012. What have you done that's changed to make that such a sensation? Is it the food, is it the marketing, is it both?

Well, I think the first thing is the food is better and it's made more consistently. Point two, our marketing team really focused effort on bringing this into social media. ♪ Freak out ♪

A Triple Dipper is very consistent way a young person likes to eat. Like to have lots of little things. It's experiential. You've got cheese pulls. You've got products that you can dip. And we started marketing on social media, and I think that showed a young generation of like, "Wow, this is something that would be exciting." And then when they would came into the restaurant and had a similar experience, they would start posting about it too, right? And that thing caught on fire.

Narrator: From 2023 to 2024, Triple Dipper sales increased 70% according to the company. In the last quarter of 2024, it made up 14% of all sales.

With social media, how have you stoked this? Because some of it's organic, but then, obviously, you've played a role in making this go viral. Is it partnering with influencers? Is it being playful?

I mean, we don't have access to anything different than other restaurant brands. To me the biggest difference is, the product is really good. When you see this cheese pull and it goes like this, and you're like, "Hey, I want to go try that." And then you come into Chili's and it works just like that, and you're like, "Wow, like this is what I saw on TV, or this is what I saw on social." And then you tell your friends and it becomes a part of your rotation because you had such a good experience.

What do you see in the numbers, you know, that's showing that people are buying off of social media, or the social media strategy is translating into sales?

Well, you know, our business is up about a little over 50% from three years ago. So, some of that is Triple Dipper, right? 7 or 8%. But a lot of it is not the Triple Dipper too. So the main reason why I think our business is doing a lot better today than it was three years ago, is once again the fundamentals of casual dining, which is the food is better, the service is a lot better, and it's in a fun, friendly atmosphere. We've seen when new guests come in, the time it takes them to come back to the restaurant is compressed. It's compressed because they're having a good experience and they're coming back sooner, right? So, to me that's the big difference, is that we've done a really good job with the experience.

In terms of, you know, sustaining what you're doing, this summer would be a year of positive traffic, which in this industry is really exceptional. I mean, everyone is hurting for traffic right now. How do you keep that going?

The way we're going to keep growing the business is don't get bored of the fundamentals. And fortunately, for us, because we're delivering a good experience for these new guests that are coming in, we become a part of that consideration sets.

Where do you think Chili's will be in a year, in five years?

Well, I hope it's a lot bigger. So we want to have restaurants that are even more productive, better forward economics. You know, better sales. Good things happen when you grow sales of existing restaurants. Restaurants become a lot easier to run. You've be able to afford more labor, food is out fresher and hotter and more delicious. So, that's number one, is we got to continue to grow the business through the fundamentals of casual dining. And then, number two, I think we can start building Chili's again. There are parts of this country, there are no Chili's. So there's no Chili's in Oregon. We don't have as many Chili's in California, in some states that traditionally we thought were more expensive to be able to operate in. But now that we're a much healthier concept, with better forward economics, we can operate in those states now. So there's a lot more runway ahead of us on this brand than there is behind us. And we're still probably early to mid innings of our turnaround. So there's so much more runway to grow restaurant volumes as well as build new restaurants.

Chili's Is Hot Again. Can CEO Kevin Hochman Keep It That Way?

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Chili's Is Hot Again. Can CEO Kevin Hochman Keep It That Way?

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