Franchisees end up footing the remodeling bills, but many companies are offering incentives such as financing help, royalty reductions and discounts on franchise fees.
Wendy's is setting aside roughly $750,000 for each of the 48 units slated for a refresh this year. And with 19 new stores en route, the chain expects to spend up to $85 million this year sprucing up its image.
Next year, it will offer $10 million in perks for franchisees that remodel.
And the returns seem promising so far, chains say.
Wendy's said average sales volumes for remodeled branches are already up more than 25%. Sbarro said revenue at its modernized stores is 10% higher than existing ones.
Burger King, which plans to have 40% of its North American stores refreshed within three years, said updated branches have seen sales 15% above comparable locations on average. The chain said it doesn't plan to pass on the costs of its system-wide makeover to guests through higher menu prices.
Other restaurant chains also are in remodeling mode. Sit-down chains, which were hit harder by the recession and have taken longer to recover, are facing many of the same market pressures as fast-food companies.
Companies such as P.F. Chang's are changing the ambience in their restaurants, inspired by "elements in high-end casual and low-end fine dining restaurants," said Chief Executive Richard L. Federico.
The P.F. Chang's Innovation Bistro concept in Irvine is "the best performing store in the entire system by a long shot" with a double-digit percentage advantage over the rest of the chain, Federico said. He would not provide specific figures.
Mimi's Cafe has set up a French-themed prototype restaurant in Santa Clarita, aimed at giving guests "more and different reasons to come in," said Mark Mears, the company's president.
"We live in a Food Network culture," Mears said. "People don't just want a meal; they want an experience."