Loyalty & Rewards Strategy

Portillo’s has added a loyalty program, called Portillo’s Perks, that does not require an app and is based in consumers’ mobile digital wallets, the company said Monday.

Rewards are based on frequency and consumption habits, the brand said, rather than banked points redeemed by the consumer. 

Portillo’s aims to enlist between 1.5 million and 1.7 million customers in its loyalty program by midsummer, according to the press release.

Portillo’s expects the loyalty program to contribute to traffic growth throughout the year, CEO Michael Osanloo said during the chain’s most recent earnings call.

The frequency element of the rewards structure, combined digital wallets rather than traditional app-based programs, “allows us to truly personalize offers, so we're able to surprise and delight our guests with easy access and relevant rewards,” Osanloo said. 

The frequency focus offers the brand greater control of what sorts of discounts it offers, and the rewards given through the program could change based on market conditions, he said. In the Chicago area, he added, the loyalty program might serve to drive repeat visits, while elsewhere offers might focus on building brand awareness or driving trial of specific menu items.

“We can customize the richness of the offer to suit the needs of the business and our guests,” Osanloo said. 

Keith Correia, the company’s chief information officer, said the program was designed to minimize friction.

“We eliminated common loyalty program pain points by integrating directly with the digital wallet already on guests' phones—no extra apps to download or passwords to remember,” Correia said.

Osanloo said the digital wallet feature will avoid “app fatigue” among consumers. Consumers earn badges based on frequency, ranging from a First Bite badge for new members to a Top Dog award for special spendthrifts. Consumers get large fries as a welcome offer, with personalized perks following, the company said. 

The loyalty scheme is one of Portillo’s four pillars intended to grow traffic alongside the deployment of kiosks, advertising outside of Chicago and improving operations and speed of service. Traffic fell 3.7% in Q4.  

According to Portillo’s 10-K, same-restaurant sales fell 0.6% in 2024, a modest decrease. The chain’s average unit volume fell from $9.1 million in 2023 to $8.7 million in 2024, based on eroding same-store sales and the opening of 10 new units. An AUV that high is enviable among publicly traded restaurant companies, but the chain has previously said it is targeting a $10 million AUV, making any slippage in its average a worrying sign. 

Blaze Pizza launched a new app and reworked loyalty program in partnership with Thanx, the companies said in an emailed press release Monday.

Thanx and Blaze have already transitioned the brand’s existing 5 million rewards members to the new program. 

Blaze said the rewards program will feature more personalized rewards and that it will add features like in-app exclusives, secret menus and, potentially, brand merchandise.

Such perks could help Blaze find a badly needed edge. In recent years, the brand’s store count has fallen as the whole fast casual pizza segment generally has struggled in the post-pandemic period. According to its most recent franchise disclosure document, Blaze had 313 units at the start of 2022 and 296 at the end of 2023. Its store base may have eroded further in the interim: the press release announcing the new loyalty program said the chain had over 270 locations.

Blaze said the new rewards program streamlines the in-store experience, as guests can link their cards to a rewards account, eliminating the need to scan receipts or remember passwords. 

The brand said the structure of the program was similar to its previous version, and consumers will continue to receive the same benefits, in addition to the forthcoming additions.

There’s at least one other benefit for Blaze. While proprietary software ecosystems are attractive for massive multinationals like Yum Brands, they can impose onerous costs on smaller brands. 

Switching to a partner-built digital system saves Blaze from having to build and maintain its own tech stack. A streamlined platform will allow the chain to reduce costs and development time, the chain said. 

“What previously took months to customize can now be done in days, allowing Blaze to quickly iterate and enhance digital offerings,” Blaze said.

Other competing brands in fast casual pizza are also making strategic shifts. &pizza has pivoted to a franchised model, which its CEO hopes will help it expand beyond its traditional markets. Like Blaze, &pizza previously switched away from its own tech stack, partnering with Olo and Toast to reduce costs. While Mod Pizza shuttered stores last year, it was acquired by Elite Restaurant Group in a move that averted bankruptcy. 

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By Stable Kernel

Deciding whether to build a custom solution or buy off-the-shelf often leaves restaurant IT teams paralyzed. The decision used to be easy…custom software development took months or years while SasS platforms could be stood up in under 30 days. The decision used to be straightforward: custom software development often took months or even years, while SaaS platforms could be deployed in under 30 days. However, with the emergence of AI-powered development tools and the growing demand for tailoring SaaS solutions to meet the unique needs of restaurants, the choice has become far more complex.

Luckily, there’s a clear, repeatable path forward. Below, we present a pragmatic decision tree that weighs time-to-market, total cost of ownership, customization requirements and future-proofing. 

Follow these branches, and you’ll confidently choose a build, buy, or a hybrid approach that keeps your kitchen humming and your bottom line healthy.

1. Define your north-star criteria

Before you decide, lock in how you’ll evaluate each option:

• Time-to-market: Can you afford the time necessary for the development cycle to run its course, or do you need to launch in 30 days or less?
   
• Total cost of ownership (TCO): Weigh up-front build costs, such as developers, infrastructure, maintenance, against ongoing subscription and support fees.
   
• Customization needs: Do standard features meet your brand’s workflows, or do you require unique modules for menu logic, reporting, or loyalty?
   
• Future-proofing: Will the solution scale to 100+ locations? How easily can you add new services or swap out components?

2. The decision tree walkthrough

Node 1: Time-to-market

Question: “Do you need to go live in under 30 days?”

• Yes → Buy
  Established SaaS platforms with robust APIs let you spin up core functionality such as POS, digital ordering and analytics quickly. According to The Future Served Fast: How AI and Tech are Reshaping Foodservice by Stable Kernel, 59% of foodservice companies are already leveraging AI to improve operational efficiency, so buying could be a fast-track to optimizing your tech stack.
   
• No → Proceed to Customization

Node 2: Customization

Question: “Do you need features beyond standard offerings?”

• Yes → Hybrid
  Purchase a core platform and develop custom extensions for your unique needs, like a bespoke kitchen-display microservice or custom loyalty engine. Over 50% of foodservice executives identify custom software solutions and AI integration as key areas for investment, indicating the growing demand for tailored solutions.
   
• No → Buy
  Keep costs predictable and leverage vendor maintenance, security patches and new feature roadmaps.

Node 3: Total Cost of Ownership (TCO)

Question: “Will TCO be lower if we buy vs. build over a 3- to 5-year horizon?”

• Yes → Build
  When subscription fees, per-user charges and integration costs compound, in-house development may pay for itself. As 42% of foodservice leaders struggle with integrating legacy systems, building custom solutions may help bypass future integration headaches.
   
• No → Buy
  Focus resources on business innovation instead of software upkeep. 33% of foodservice executives report budget constraints as a major barrier, reinforcing the value of keeping operational costs manageable.

Use case: A fast-casual chain buys a best-in-class POS for order capture but builds its own mobile-app loyalty module, maintaining complete control over customer engagement.

This approach delivers the speed of SaaS for commodity functions, paired with the flexibility of custom code where you differentiate.

3. Embracing the Hybrid Middle Path

Not every choice is binary. Many brands thrive on a hybrid model:

Use case: A fast-casual chain buys a best-in-class POS for order capture but builds its own mobile-app loyalty module, maintaining complete control over customer engagement. This approach delivers the speed of SaaS for commodity functions, paired with the flexibility of custom code where you differentiate.

The momentum is clear: 44% of companies have already implemented loyalty programs using first-party data, and this rapid adoption signals the competitive advantage of customized engagement solutions

4. Actionable Next Steps

1. Conduct a technology diagnostic: Catalog existing systems, renewal dates, and pain points to feed your decision tree.
    
2. Map your criteria: Assign relative weights to time-to-market, TCO, customization, and scalability based on your strategic goals.
    
3. Prototype a branch: If “hybrid” looks promising, build a small-scale proof-of-concept to validate assumptions.
    
4. Partner with experts: Engage a firm experienced in developing with AI tools in both custom development and integration to guide you through each fork in the road.

Why It Works

The build-vs-buy dilemma has stalled countless restaurant tech initiatives. Using a decision tree can help cut through the noise, equip your team with a repeatable process, and empower you to make better decisions faster.  

As foodservice executives face ongoing challenges, such as high implementation costs and legacy system integration, this structured framework ensures you’re equipped to make informed, strategic decisions that drive positive customer experiences, operational efficiency and greater revenue.

Discover what forward-thinking foodservice brands and leaders are focusing on in 2025 and beyond: get the insights or visit stablekernel.com.

 

Sweetgreen has launched a points-based loyalty program, SG Rewards, to replace Sweetpass, a tiered subscription program that consumers found too complicated, the company announced in a Thursday press release. 

SG members earn 10 points for every dollar spent, and get access to unspecified perks and members-only deals. The points can be redeemed for entrees or sides, according to the press release.

CEO Jonathan Neman said during a February earnings call that the loyalty shift would help improve Sweetgreen’s value proposition — a vital consideration as consumers remain price sensitive and economic confidence falters.   

Sweetgreen’s new program has been in the works since last year. The program was created in response to consumer desire for a more flexible rewards program, Neman said in a statement.

“SG Rewards offers more value, more flexibility and more ways to enjoy Sweetgreen — from everyday surprise & delight moments to members-only deals and special perks,” Neman said. 

The Sweetpass program that preceded SG Rewards included consumer challenges and a subscription tier, which cost members $100 annually, that gave consumers $3 discounts on orders.

To promote adoption of the new program, the salad brand is offering some time-limited perks. Consumers who sign up and complete a purchase in April will receive 1,000 bonus points, equivalent to the amount earned after $100 in spend. Existing members who make an eligible purchase before April 11 will also receive 1,000 bonus points. Those bonus points are enough to earn an order of the company’s air-fried Ripple Fries, which were introduced in March, according to the press release.

On the earnings call, Neman said he expected the new program — combined with investments in menu innovation and personalized offers — would result in transaction growth. 

Sweetgreen managed positive comps and traffic last year, Chief Financial Officer Mitch Reback said on the brand’s earnings call. Full-year traffic rose 2%, while same-store sales increased a total of 6%. Those numbers were impressive, given the stagnation of same-store sales at many brands, but lagged behind some fast casual competitors, like Chipotle and Cava. Nonetheless, the brand still posted a $90 million net loss for fiscal 2024, according to its 10-K, though that was an improvement over its $113 million net loss in 2023. 

While Sweetgreen is still the segment leader for fast casual salads, there are other chains looking to unseat it. Just Salad, in particular, has made moves that resemble Sweetgreen’s in recent months. Just Salad added heartier options focused on the dinner daypart, debuting drive-thrus and raising $200 million in capital. If 2025 brings Sweetgreen strong traffic, the salad chain could separate itself from competitors, especially if consumer confidence in the category continues to crumble as a result of macroeconomic uncertainty. 

Scooter’s Coffee has redesigned its loyalty program as a points-based system in its app. Consumers now earn five points, called Smiles, for every dollar spent on orders placed in the app. Diners who scan their app at Scooter’s but don’t use it to pay for an order get three points per dollar, according to a press release emailed to Restaurant Dive.

This replaces a previous loyalty program, which operated as a sort of punchcard system, with consumers earning a free drink after a dozen visits, according to an archived version of Scooter’s franchising website.

The new program has more flexible redemption options, with customers able to redeem points for almost any item on Scooter’s menu.

The redesigned system serves dual purpose for Scooter’s. On the one hand, expanded loyalty flexibility gives consumers greater opportunities for personalization and thus may drive frequency and loyalty. On the other, by giving in-app purchases a 66% faster rate of accrual for points than out-of-app purchases, Scooter’s will likely drive traffic through its first party digital channels. This behavior would allow Scooter’s to secure a significant trove of consumer data to mine for marketing insights and promotional purposes.

According to the press release, customers can redeem points for “food items, drink modifiers like cold foam and extra espresso shots, and cans of Red Bull,” for the first time. The program also awards badges and status levels to its users based on frequency.

The program has three frequency-based tiers: Buddy, Bestie and Ride-or-Die. As customers move up the ranks, they unlock features like additional points per purchase, birthday rewards and exclusive offers.

In the app, redemption options are grouped by their price in points, and once a consumer earns enough points, they can choose a reward to be redeemed in a future order. Consumers can also keep tabs on available rewards, check their status level and the number of points they have.

Drinks earned in the previous program are still available, and those consumers who had racked up points in the old-system will receive a “one-time Smiles boost to reflect the new program’s earn rate structure,” according to the press release.

The simplest way to drive personalization in a loyalty program is to make most of the menu available for redemption. While this may result in consumers opting for more expensive or lower-margin redemption items, it gives diners a greater sense of autonomy. 

Scooter’s is far from alone in reworking its loyalty program, as inflationary pressures change restaurant customers’ priorities. Blaze Pizza just this week announced it was making its program’s rewards more expansive, while Sweetgreen recently switched from a subscription discount model to a points-based program.

Chipotle plans to continue improving personalization through its rewards program, relying on research and customer data to “deliver relevant experiences that will motivate future purchases in a fun way,” said Jason Scoggins, senior director of customer activation at the burrito chain. 

Chipotle isn’t alone. A growing number of restaurant chains have recently launched rewards programs — or overhauled existing offerings — to offer targeted incentives to loyalty members. 

Building loyalty is crucial in today’s environment, said Stephen Zagor, principal of Steve Zagor & Associates and an adjunct professor of business at Columbia Business School. Technology has sanitized the customer point of contact process and competition for the dollar is strong, he said. Loyalty programs provide companies with a massive opportunity to connect and build a relationship with their customers amid these pressures.

“Loyalty programs are great at showing company love and appreciation,” Zagor wrote in an email. “They instill a feeling of — I matter — in the customer. It’s like joining a club.”

But not all rewards programs are, or should be, the same. Brands that keep the same rewards without measuring the emotional connection they forge with loyalty members will ultimately lose value and customers, said Rick Camac, executive director of industry relations at the Institute for Culinary Education.

Now, restaurants need to better understand their demographics and offer rewards tailored to those groups.

“You need to figure out what the customer will respond to,” Camac said. “How do you make your guests feel wanted, understood and valued?​”

Chipotle, for example, has employed a personalized decision engine to determine freebies rewards members can receive through “Freepotle”, a rewards perk the chain debuted at the start of 2023. The loyalty offer gives members in the U.S. and Canada 10 free “food drops” — including beverages, guacamole, double protein in a meal, or chips — throughout the year. 

The company has also introduced several real-time interactions and enhanced gamification, including achievement badges diners can earn, to deepen diner engagement, he said.

Chipotle’s rewards program grew almost 14% to more than 36 million members in 2023, Scoggins said. Membership previously grew 20% in 2022, reaching 31.6 million users.

“The rapid growth of Chipotle Rewards is a key indicator that consumers see the massive value in engaging with the program,and we’ve been able to increase purchase frequency among our user base along the way,” Scoggins said.

Tailored experiences can deepen engagement 

Loyalty programs have become an increasingly important strategy element for full-service restaurants, coffee shops, and fast casual chains.

Gaining customer loyalty is critical for companies today, as consumers are identifying with brands at decreasing rates. According to a recent Salesforce survey, the portion of customers who feel emotionally connected to brands has fallen from 62% in 2022 to 54% in 2023. 

Cracker Barrel launched its rewards program in September in an effort to boost stagnant traffic and sales. Through the platform, customers earn a point, or “peg,” for every dollar spent at the restaurant — allowing customers to redeem items such as prepared take-home meals, sides, desserts or retail discounts. 

Sweetgreen in April launched a two-tiered loyalty program, which allows diners to sign up for either a free or paid subscription. Through the program, customers can earn rewards, access new menu items and purchase merchandise. The paid service gives members $3 daily discounts on orders, among other perks. The company later allowed members to redeem rewards on in-store orders, as well. 

In most cases, loyalty customers make up less than half of a restaurant’s overall customer base — meaning that half, give or take, are not swayed by the perks most programs offer to stay loyal, Camac wrote in an email. Starbucks has one of the most successful programs, he said, with loyalty customers accounting for just under 60% of the coffee chain’s total revenue, the chain shared in November. 

Still, fostering loyalty with customers yields higher diner spend among members at a modest cost to a company, Zagor said. 

Those programs also generate an immeasurable abundance of customer data that can provide companies with strategic information for future product decisions and the “super-premium goal” of artificial intelligence-inspired customization, he said. 

Brands that provide exclusive, personalized experiences at every touchpoint are appreciated by consumers, according to Salesforce’s survey. Companies that have successfully offered personalized experiences for consumers, such as Starbucks, have powered their programs through real-time customer data and A.I., per the survey. That makes it easier for consumers to conduct business with companies, boosting acquisition, retention and lifetime value. 

The success of various loyalty program schemes depend on the market segments they target, Camac said. A program that works at Starbucks won’t work at Landry’s or Ruth’s Chris Steak House, for example.

Companies should tie their programs to the interests of their demographic base, he said. For example, a high-end steakhouse could offer exclusive wine tastings to their preferred guests, he said.

“Free coffee would not work necessarily at a steakhouse,” he said.

Rewards programs are evolving to match diner needs

As companies launch new programs, others have made revisions to their existing ones. 

To continue capturing loyal customers amid rising menu prices, companies have increased discounts offered through points-for-dollars models. And, to strengthen customer retention, brands have improved their rewards programs with a variety of different schemes, ranging from NFT digital tokens to palm-scanning payment tools.

Pizza chain Pieology in November allowed Pie Life Rewards program subscribers to receive daily perks — such as side salads, cookies, and drinks — when they purchase a craft-your-own pizza. Similar daily perks have been adopted by other chains, like Noodles & Company, over the past year.

In an effort to account for changing market conditions and business costs, Chick-fil–A tinkered with its widely subscribed loyalty program Chick-fil-A One last spring. The fast food chain added new items for redemption to its rewards program, and increased the points values for some rewards. These changes mirrored moves by Dunkin’ and Starbucks, which revised their reward program point redemption systems in 2022 and 2023, respectively. 

Not every change has been well received, however. Dunkin’ received pushback from fans and frequent customers pledged to go elsewhere after it increased the accrual rate of loyalty points in 2022, while also increasing the number of points needed to redeem drinks. The move, which placed a greater emphasis on food items, increased the cost of redeeming drinks through the program. 

The company said those complaints were not reflective of the attitudes held by most loyalty customers. But the need to continue monitoring and adjusting consumer interests can be critical. 

Inflation pressures could, to a degree, change the kind of rewards that people are interested in, said Camac. 

“When money is more important, interest shifts to saving dollars as opposed to other rewards,” he said.

And many companies at this point have not yet adjusted their transaction-focused loyalty programs to become more personalized because in the past, creating one took a lot of resources, per the Salesforce survey. Fifty-four percent of retail loyalty programs still offer points-based rewards, the survey found. 

Reframing, retiring or adjusting the requirements and rewards for a points-based program can be a tremendous undertaking. 

Camac believes that most companies have gotten their loyalty programs wrong, continuing the same tiered programs for too long — reaching a point where most diners take those rewards for granted, and don’t necessarily look at them as a perk.

“It's hard to get excited about a free cup of coffee after buying 10, but I'll take the free cup,” Camac said.