3 Restaurants With Tasty Potential

The restaurant industry is notoriously tough and competitive, but it can also be a very lucrative business for well run companies delivering the right menu for their customers. These three restaurants can add a touch of growth flavor to your portfolio.

Chipotle Mexican Grill has been one of the most remarkable success stories in the restaurant business over the last years. The fast casual category, which offers higher quality food and atmosphere for a few extra bucks in comparison to traditional fast food, is a booming niche, and Chipotle is an undisputed leader in that segment.

The company´s "food with integrity" approach to tacos and burritos may create operational complexities and higher costs, but customers seem to really appreciate the cultural footprint and the high quality ingredients that come with it. Chipotle has compounded sales growth at more than 20% annually over the last five years, and earnings per share have increased at more than 32.6%  per year during the same period.

Even if growth has understandably slowed down as the company becomes bigger, this hot Mexican restaurant is still delivering spicy results. Revenue grew by 18% in the last quarter fueled by a 6.2% increase in comparable restaurant sales, and earnings per share increased by 17.2% versus the same quarter in the previous year.

Chipotle opened 37 new restaurants during the quarter, bringing the total to 1,539 locations, and management expects to open between 180 and 195 restaurants in 2014. Considering demand strength, the company still has a lot of room for expansion, both in the U.S. and abroad.

Everybody loves pizza, especially when it comes with the kind of high-quality toppings and ingredients that Papa John's uses on its products. Chairman and CEO John H. Schnatter founded Papa John´s in 1985 and from a single location in Mexico City he has led the company to becoming a global corporation with more than 4,300 restaurants, 1,045 of which are located outside of North America.

Schnatter is always willing to put his name and reputation behind the company´s products, and he is quite vocal about the importance of high-quality ingredients like high protein unbleached flour and fresh-packed sauce when it comes to delivering superior and unique products.

The company has earned the top spot in customer satisfaction among national pizza chains in  the American Customer Satisfaction Index (ACSI) survey in 12 of the last 14 years, so clients seem to agree with Schnatter about the importance of a dedicated focus on quality.

Papa John´s delivered a 9% increase in revenues for the second quarter, with comparable sales increasing by 3.4% in North America and 6.8% in international markets. International expansion is a key growth area for the company, and customer response is signaling that Papa John´s is moving in the right direction by focusing on global growth.

offers a simple and effective proposition to its customers: tasty chicken wings, plenty of beer options and widely available TVs to watch sports. This doesn´t sound too sophisticated, but business has been booming over the last years.

The company has increased sales at a 25.8% annually and earnings per share at 22.7% per year during the last five years. And there is no slowdown in sight; Buffalo Wild Wings reported a big increase of 27.8% in revenue during the second quarter, while earnings per share grew at an impressive 41.9% versus the previous year. Samestore sales increased 3.8% at companyowned restaurants and 4.1% at franchised restaurants during the quarter.

The company is implementing a series of initiatives to improve customer experience, Buffalo Wild Wings has recently created the position of "guest experience captain," these captains are responsible for engaging customers with the company´s programs, promotions and technology. Buffalo Wild Wings has also entered into an agreement with DirecTV to carry every game the satellite TV company has available, so if your favorite team is playing, chances are you will be able to watch the game at Buffalo Wild Wings.

Buffalo Wild Wings currently has 951 restaurants, nearly 56% of the potential market opportunity which management estimates to be around 1,700 restaurants in the U.S. and Canada. Buffalo Wild Wings is also expanding into other areas; the company made a minority interest investment in PizzaRev, a fast casual pizza concept based in Los Angeles, and is planning to open the first company-owned PizzaRev in the Minneapolis area in early 2014.

Chipotle Mexican Grill, Papa John´s and Buffalo Wild Wings have proven business modes with plenty of room for expansion over years to come. As long as management continues executing as expected, these restaurants can add some mouth-watering growth opportunities for your portfolio.

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The article 3 Restaurants With Tasty Potential originally appeared on Fool.com.

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends Buffalo Wild Wings and Chipotle Mexican Grill. The Motley Fool owns shares of Buffalo Wild Wings, Chipotle Mexican Grill, and Papa John's International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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