The company makes approximately 70 varieties of cheesecakes and other baked desserts.


NEW YORK — Four defining factors separate The Cheesecake Factory from competition in the casual dining marketplace. With 175 units in the United States, the chain generates average unit volumes of more than $10 million per restaurant per year, driven by high traffic and an affordable check average. Executives of the Calabasas Hills, Calif.-based company shared key insights during a presentation for analysts at the Morgan Stanley Global Consumer and Retail Conference on Nov. 18 in New York.

“The Cheesecake Factory is a brand that has evolved, along with changing consumer tastes and preferences, over three decades, and one that is still very relevant today,” said Matt Clark, senior vice-president of finance and strategy. “We have a significant runway of growth ahead of us.”

The company has delivered 19 consecutive quarters of positive sales. Central to the brand is continuous product innovation. The chain’s menu features 250 items that are made from scratch daily.

“We change our menu two times every year to introduce new items or entire new categories like small plates and snacks, SkinnyLicious, and gluten-free options,” Mr. Clark said. “This keeps our menu fresh and relevant and is a critical component of driving sales.”

The second component behind the chain’s success is service and hospitality.

“In the five years since we began collecting data about how guests feel, their dining experiences, our scores have improved by 20%,” Mr. Clark said. “We know that highly satisfied guests are two to three times more likely to return and recommend us to others. So these scores significantly influence repeat visits.”

A third focus for the company is operational excellence. The Cheesecake Factory invests in manager retention with short- and long-term incentives and an effective compensation strategy.

“Our ability to consistently execute on food and service stems from the experience that our managers have running our high-volume, highly complex restaurants,” Mr. Clark said.  “Our field operations leadership team consists of Cheesecake Factory veterans whose careers span between 10 and 25 years with the company.”

The Cheesecake Factory’s fourth competitive advantage is a vertically integrated bakery. With bakery production facilities in Calabasas Hills and Rocky Mount, N.C., the company produces approximately 70 different varieties of cheesecakes and other baked desserts.

“Vertical integration allows for creativity in our dessert offerings and a high level of quality control,” Mr. Clark said. “Correspondingly, we have a significant level of dessert sales — of about 15% of sales, which is about five times the industry average.”

The company operates 175 units in the United States.

Strengthening the company’s competitive positioning are a powerful on-line presence and a focus on technology. A new front-of-house system enhances customer experience, including text paging and a more accurate way to quote wait times.

“In the back of the house, we have a web-based back-office system with powerful capabilities across prep and production, planning, inventory management, and, importantly, food waste,” Mr. Clark said. “While we were well above 90% in our food efficiencies already, we are targeting incremental improvement in savings in a restaurant-level operating plan.

“We also utilize technology to schedule labor, an efficient way to automate a time-consuming task, allowing our G.M.s to spend less time on administration and more time on the restaurant floor with our guests.”

The Cheesecake Factory operates 187 restaurants throughout the United States and Puerto Rico, which includes 11 restaurants under the Grand Lux Cafe mark and one unit under the RockSugar Pan Asian Kitchen brand. The company also is in the early stages of international development, having recently expanded to the Middle East under a licensing agreement with locations in Dubai, Kuwait and Saudi Arabia, as well as a unit in Mexico.

“Our openings over the past three years reflect our selectiveness and high standards and site selection, delivering sales per square foot and sales per seat that are 10% above our system-wide average,” Mr. Clark said. “We are confident that we can successfully expand The Cheesecake Factory to 300 company-owned units over time, at or above our targeted return expectations.”