The Cheesecake Factory

About The Cheesecake Factory

What is The Cheesecake Factory and what services does it provide?

The Cheesecake Factory was set up by Oscar and Evelyn Overton in 1972 as a business to business operation, producing and supplying cheesecakes and other desserts to foodservice businesses, retailers and restaurants in Los Angeles, USA.

Six years later, Evelyn’s son David opened a sandwich shop in Beverley Hills, which also sold 10 varieties of his parent’s cheesecake. A second restaurant was opened in 1983 in Marina Del Rey. With the opening of a third larger restaurant soon after, which was located in Redondo Beach, the blueprint was set and the foundations were put in place for The Cheesecake Factory’s future domestic and international growth.

The first Cheesecake Factory restaurant was opened outside of southern California in the 1990s (located in Washington, DC) and the company continued to enjoy success as brand awareness grew.

Today, The Cheesecake Factory has 294 restaurants in the United States and Canada operating under The Cheesecake Factory and North Italia fascias, plus retail food businesses that operate within the Fox Restaurant Concepts subsidiary. All are company-owned and there are no plans to franchise the brand in these countries. The Cheesecake Factory is currently responsible for around 90 per cent of the company’s total revenues.

The company also has a bakery division. Its two US-based facilities supply cheesecakes and similar baked products to its chain of restaurants, international licensees and third-party bakery customers.

According to The Cheesecake Factory, its success is based on its “appeal to a diverse consumer base across a broad demographic range”. All restaurants have a substantial food and drink menu that appeals to lunch and dinner customers. They also offer weekend brunch.

As well as its competitive prices, generous food portions and constantly evolving menus, The Cheesecake Factory prides itself on its efficient and friendly customer service, creating an environment that promotes word of mouth recommendations and regular repeat business.

While it doesn’t franchise domestically, the business does have an international franchise offering in place. It works with select partners using licensing agreements to build the business abroad using The Cheesecake Factory’s brand name, tried and tested systems and know-how.

In 2019, the company was named one of the FORTUNE 100 Best Companies to Work For for the sixth year in a row. Ranked 25th, it was the only restaurant company to make it on the list.

Tell us more about The Cheesecake Factory’s menu

Featuring around 250 items, it is extensive. As well as 50 types of cheesecake and other baked desserts, customers can choose from savoury snacks and appetisers, salads, flatbread pizzas, pasta, steak, fish and seafood, plus hot and cold beverages, including beer and wine, and 70 different sauces, dressings and marinades.

The Cheesecake Factory produces a number of gluten-free items and its SkinnyLicious menu includes food that contains 590 calories or less. All items on the company’s menu can be taken away, apart from alcohol.

What’s the average spend per customer in a Cheesecake Factory restaurant?

In 2018, it was $22.60 in its company-operated restaurants (around £19.50).

What percentage of sales does the company’s cheesecake represent?

In 2018, this was around 16 per cent in The Cheesecake Factory’s company-operated restaurants. In comparison, alcohol sales in the same establishments represented around 12 per cent of sales in the same year.

How does The Cheesecake Factory franchise model work?

While all its restaurants in the US and Canada are company-owned, The Cheesecake Factory franchises its concept internationally via a licensing agreement, where operators invest money in building and running an agreed number of Cheesecake Factory restaurants using the company’s brand name, proven systems, business know-how and supply chain.

Apart from the US and Canada, where in the world does The Cheesecake Factory operate?

The company currently has three licensing agreements in place with established restaurant operators in the Middle East, Latin America and Asia.

The Middle East agreement covers restaurant development in the United Arab Emirates, Kuwait, Bahrain, Qatar, Saudi Arabia and Lebanon. The Latin America agreement covers Mexico and Chile. The agreement in place for Asia includes restaurant development in China, Hong Kong, Macao and Taiwan.

In total, The Cheesecake Factory currently has 22 restaurants operating in these territories. The company says it’s always on the lookout to partner with third parties to develop The Cheesecake Factory in other parts of the world.

How much does it cost to become a Cheesecake Factory licensee in an overseas market?

That depends on the country you wish to launch in, the number of restaurants you wish to open and the associated costs of developing the brand in the region.

How does The Cheesecake Factory make money from its overseas Licence holders?

The company charges initial development fees, site and design fees and levies a royalty charge based on licensees’ restaurant sales. Licensees must also agree to purchase all bakery products from The Cheesecake Factory. In return, licensees receive full initial and ongoing training in how to run the business, access to the company’s systems and infrastructure, plus extensive initial and ongoing support.

What skills and experience do you need to become a Cheesecake Factory licence holder?

The company describes its recruitment process as “selective”. This is not unusual with established franchise brands, as partners need to be chosen carefully in order to uphold the good name of the business, which in many cases has been built over a number of years.

According to The Cheesecake Factory, potential licensees must be able to demonstrate they have sufficient funds to develop the business in the chosen region in line with the targets set in the licence agreement. They must also have an established business structure, expertise in multiple countries, experience in operating similar casual dining restaurants and sound governance practices.

In summary, The Cheesecake Factory says: “We look to associate with companies who will protect the brand and operate the concept in a high quality, consistent manner.”

Where is The Cheesecake Factory’s headquarters?

The company’s corporate offices are in Calabasas Hills, California.

How well suited is The Cheesecake Factory to being operated in the UK?

The Cheesecake Factory has a good chance of success in the UK, particularly when you consider the number of brands that have originated in the US that have gone on to be successful in this country, especially in the casual dining and fast food sectors.

Another appealing aspect of the business is that since it opened its doors in the early 1970s The Cheesecake Factory has developed a broad menu that attracts both lunchtime and evening diners from different demographics, thus maximising potential customer spend and revenues for the business.

When it comes to the UK sector, while casual dining and fast food businesses are having their profit margins squeezed because of rising labour and food costs, companies such as The Cheesecake Factory are tapping into key consumer trends such as the desire for more informal and experiential dining experiences, as highlighted in Deloitte’s 2017 report on the UK casual dining market.

The Cheesecake Factory offering will also be attractive to individuals with limited disposable incomes because of its focus on competitive pricing and generous portion sizes.