Sometimes you just need some comfort food, and when that craving hits, Chili's is a great place to go. Not only do they have good food, but the prices are unbeatable. You might want one of their famous fajitas or a juicy burger, but regardless of your taste, you can always find something delicious to eat.
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00:00Frozen food, extra employees, and an emphasis on takeout. Is there any money-saving strategy
00:06Chili's hasn't tried? Stay tuned to find out as we examine why Chili's is so cheap.
00:12The sheer variety of flavors on Chili's menu means ordering out will never be boring.
00:17However, it also confirms the suspicion many of us already believed — most of Chili's food
00:23is frozen. A self-proclaimed bartender and server at Chili's divulged in a Reddit AMA
00:29that chicken wings and fries are the main culprits to be stashed in the ice box before hitting the
00:34fryers. Similarly, another employee came forward about the soup, which arrives frozen in bags that
00:40are thawed before serving. At this point, restaurant chains relying on the freezer
00:45is as scandalous as water being wet or grass green. There are simply too many dishes on the
00:50menu to expect employees to prep batches of Southwest chicken soup from scratch or
00:55peel potatoes by hand constantly. Of course, it wouldn't be fair to say everything is frozen.
01:01The bountiful green salads and guacamole certainly disproves that belief.
01:06Regardless, Chili's menu is undeniably huge. There have to be shortcuts for a wide array
01:12of entrees to actually be affordable, and frozen food lets Chili's accomplish that.
01:17The microwave is used as a shortcut by restaurants to avoid preparing fresh food on the spot,
01:23and for a majority of establishments, it's understandable.
01:26But that doesn't stop restaurants guilty of the practice from getting heat for it,
01:30and Chili's is no exception. To keep up the speedy pace demanded in any dining room,
01:35food needs to be ready at a moment's notice and served promptly.
01:39If that means reheating bread rolls so they're steaming upon arrival, so be it.
01:44A former Chili's employee shed some light on particular menu items that typically get reheated,
01:49saying on Reddit,
01:50The tortillas for the fajitas are all microwaved for about 20 seconds to warm before serving.
01:56The molten lava cake and cookie skillet are also warmed in microwaves.
02:00The same apparently goes for broccoli sides and any dishes that are deemed too cold.
02:06As one alleged employee succinctly put it,
02:08If you complain that your food isn't hot enough, it just goes into the microwave.
02:13For a cheap buzz, Chili's margaritas are hard to beat.
02:17While a frozen rita won't cost $1.50 like Cheers magazine says it used to,
02:22the drink is still a good bargain by any measure. So what's the secret?
02:26According to a Chili's employee on Reddit,
02:28The refreshing beverage is so bountiful because it's made with a mix.
02:32As the alleged employee writes,
02:34The restaurant receives a powdered sweet and sour mix from suppliers,
02:38which is stirred with triple sec, tequila, and water.
02:42This process explains why Chili's can mass-produce it in such large quantities.
02:47Compared to concocting a high-quality margarita by hand with fresh ingredients,
02:52using bulk powder is more convenient and goes a lot further in quenching
02:55diners' thirst for happy hour booze. Additionally,
02:59the cost of liquor needs to be taken into account,
03:02and for a restaurant pouring $5 margaritas, this can add up quickly.
03:06It's clear Chili's prioritizes quantity,
03:09and as long as it can continue pumping out all the drinks,
03:12it'll use whatever's the most cost-effective.
03:15Family seemed to be the prime demographic at Chili's, and the kids' menu is evidence of that.
03:20In addition to pint-sized pizzas and grilled cheese,
03:23Chili's serves a dish little ones probably already know by name — Kraft macaroni and cheese.
03:30Even as fans of the cheesy childhood favorite,
03:32we can't help but admit this feels like a bit of a cop-out.
03:35Eating out should be an indulgence. Why bother ordering something you can purchase from the
03:40supermarket and make at home? Still, it's no mystery why this pantry staple is so popular.
03:46Kraft macaroni and cheese is affordable and takes little time to prepare.
03:49If Chili's knows that children will devour Kraft by the bowlful,
03:53preparing an artisanal pasta with premium cheddar would not only be a waste of time, but money.
03:59At the very least, parents with picky eaters can appreciate the gesture of familiarity.
04:05According to Scrape Hero, Chili's has over 1,200 locations in the United States.
04:10Naturally, it makes the case for having a lot of employees to keep things in motion.
04:14According to the National Restaurant Association, Chili's is an anomaly in its hiring habits,
04:20with employees being hired at double the rate compared to the national average.
04:25A fact sheet provided by the chain shows at least 120 people work at any given location.
04:31It seems hiring people in abundance runs counter to a chain like Chili's.
04:36But as Restaurant Business notes, maintaining a steady,
04:39trained labor pool actually reduces hiring expenses. FSR Magazine reported that the chain
04:45has saved $21 million by investing in processes to increase employee retention, with incentives
04:51such as wage increases, health benefits, and training programs designed for career growth.
04:56Additionally, it retooled its hiring practices to secure the best possible people for
05:01every position. One example from Brinker International's sustainability report
05:06showed that over 2,000 employees garnered promotions under the Certified Shift Leaders
05:11program, which trains hourly members for management roles. As Restaurant Dive explains,
05:17giving existing employees opportunities for advancement reduces the expenses otherwise
05:22spent on scoping out new talent. Even during the COVID-19 crisis, KPRC 2 Houston reported that
05:28the chain announced in May 2021 that 10,000 new part-time positions had opened up around the
05:35country. Without all those employees, the company likely wouldn't have raked in over $3 billion in
05:41profits in 2017, according to Statista. But a company's record gains aren't always felt by
05:47the people working beneath them, and this is shown by how much they're paid, which is to say,
05:53very little. According to Indeed, the average Chili's host makes $11.23 an hour,
05:59while servers and cooks make around $19.41 and $15.83, respectively.
06:07This is compounded by the fact that many employees work for gratuities,
06:11which lets Chili's get away with paying less than the standard minimum wage.
06:15Cutting labor costs makes room for customers to enjoy abundant amounts of food on the cheap.
06:21Certainly, Chili's is not the only restaurant to blame for a measly pittance,
06:25and change does appear to be coming, if slowly. In 2021, Restaurant Dive reported that parent
06:31company Brinker International raised hourly wages to $17 to maintain worker morale,
06:37and plans to bump up the hourly wage as a whole to $18 by 2023.
06:43Chili's may be associated with bustling dining rooms and its legions of servers,
06:48but that hasn't stopped it from dipping its toes into the digital stream.
06:52During the pandemic's peak in 2020, Chili's launched a virtual brand of its own,
06:56called It's Just Wings. According to Restaurant Business, the spinoff consisting of chicken
07:02wings and curly fries would operate entirely online, but Chili's locations would prep and
07:07assemble the orders for pickup. Considering Chili's confidence in this venture, it's clear
07:12why virtual brands are a business booster. The menus are usually small, so fewer ingredients
07:17need to be purchased. The equipment setup is minimal, as is the packaging for takeout orders.
07:23And if it's a large chain, it can utilize the kitchens and cooking supplies already at its
07:28disposal. Opting for takeout in favor of delivery costs less, too, as no commission fees would be
07:34required, as is the case for third-party apps like DoorDash. Preparing It's Just Wings orders
07:40under the Chili's roof saves money in just about every way. Plus, Brinker International's focus
07:46on virtual platforms gives them more control over pricing, which leads to the kind of reliability
07:52and affordability customers crave. UpServe reports that over half of Americans order takeout
07:58every week, with almost 60 percent of millennials opting for to-go service when ordering from a
08:03restaurant. For a restaurant so focused on the dine-in experience, you'd expect Chili's to be
08:09wary of curbside pickup. But that isn't the case. It turns out Chili's makes a killing on takeout,
08:15to the point where it brings in a 12 percent chunk of its total business.
08:19In fact, according to FSR Magazine, Chili's' success with off-premise dining factored into
08:24its largest gains made in over 10 years. Takeout at Chili's is nothing new, but compared to the
08:31convenience already baked into pizza shops or the drive-thru, a multi-course enchilada dinner
08:37doesn't exactly scream fast food. Brinker International CEO Wyman Roberts told FSR
08:43Magazine that providing takeout as an option offers an upside for the brand in general.
08:48It's developed better packaging, improving the experience for customers, and inspiring
08:53return business. And since Chili's already has a wide advertorial presence to begin with,
08:58the marketing costs are practically nil. Because the three-for-$10 meals are convenient for
09:04dine-in and takeout alike, Chili's succeeded in boosting its to-go business by 20 percent while
09:10maintaining the brick-and-mortar service it's known for. Versatility, in other words, helps
09:15Chili's prices stay in place. From DoorDash to Uber Eats, delivery apps are here to stay,
09:22but not all restaurants have been on board. According to Restaurant Business, delivery was
09:27off the table for quite some time at Chili's, mainly due to issues surrounding the transportation
09:32of its food, which the chain saw as too much of a risk to take. However, that all changed
09:37in 2019 when Chili's selected DoorDash as its official delivery platform. The chain reportedly
09:44piloted multiple companies before making its decision, and they say it's a decision that's
09:48paid off, with Brinker CEO Wyman Roberts citing in a statement the chain's previous success with
09:54quick-service methods like Takeout that have generated $330 million per year in sales.
10:00Though delivery apps like DoorDash nab a significant percentage at the end,
10:04hosting them has its advantages. The orders are processed through Chili's existing point-of-sale
10:09system, so it doesn't spend extra on software. It doesn't have to hire delivery drivers,
10:14because contracted DoorDash employees will be tasked with dispatching the orders.
10:18Chili's doesn't even need to outsource its labor.
10:21With how many dishes Chili's serves, you could eat there for a whole month and never have the
10:26same meal. That's not always a good thing, though. The Chili's menu has built a bloated
10:31reputation over the years, with Today reporting that it boasted 125 items at its peak. Recognizing
10:38this was a problem, Chili's decided to make some much-needed changes. In 2017, it streamlined its
10:45offerings by 40 percent as a way of freeing up menu space and prioritizing popular items instead.
10:51And by popular, it means the items that made Chili's a household name in the first place,
10:56burgers, ribs, and fajitas.
10:58The benefits of Chili's menu reduction are apparent. There are the logistics of serving
11:03hundreds of different entrees regularly, which takes loads of time and money to do.
11:07Establishing a consistent brand identity is also an important factor. But most of all,
11:12it results in cheaper options customers want to flock to because they're high quality and
11:17affordable. Restaurant Business reports the chain experienced a 3 percent uptick in business
11:22following the cuts, so it's clear customers took notice of the change and liked what they saw.
11:28Big portions of food at low prices is what Chili's does best. And at the end of the day,
11:34it's what keeps customers coming back. Promotions are indeed the key to driving profits,
11:39but Chili's strength lies in offering those low costs from the beginning.
11:44In a report from FSR Magazine, Wyman Roberts cites the value proposition of the Chili's menu,
11:50which emphasizes reasonable price points in favor of fleeting, limited-time discounts.
11:55Doing so reduces marketing expenses for Chili's and builds goodwill with loyal customers who
12:01crave the full spread at good prices without having to wait for a deal.
12:06They can go wherever and whenever, which encourages repeat visits.
12:10Many examples of this phenomenon abound in Chili's mammoth-sized menu.
12:15Take the three-for-ten dollars and the meal-for-two specials. Both deals live up to
12:20the promises they make of cheap, plentiful food that can be customized according to taste.
12:25In turn, this draws the consistent business Chili's depends on to remain so cheap.
12:31It's an illusion, but an illusion that works time and time again.