stockrowWhat it does
Texas Roadhouse, Inc. operates restaurants, predominantly in casual dining, serving customers who want moderately priced meals and table service. Founded in 1993 and headquartered in Louisville, Kentucky, the company is led by Chief Executive Officer Gerald L. Morgan.
Its main concept, Texas Roadhouse, is a full-service steakhouse. Restaurants offer steaks cooked to order, along with ribs, seafood, chicken, burgers, salads and other dishes. Most entrées come with two made-from-scratch sides; dine-in guests also receive peanuts and fresh baked rolls. Nearly all Texas Roadhouse locations focus on dinner during weekdays, although some also serve Friday lunch.
The company operates two other concepts. Bubba’s 33 is a full-service restaurant serving burgers, pizza, wings, beer and cocktails, with daily lunch and dinner. Jaggers is a fast-casual concept serving burgers, chicken, salads and milkshakes through dining rooms, carry-out and drive-thrus. Delivery is available at a majority of Bubba’s 33 and Jaggers locations.
Texas Roadhouse both operates restaurants itself and licenses others to operate under its brands. As of December 30, 2025, it owned and operated 714 restaurants and had an additional 102 franchise restaurants. Restaurant managers and multi-restaurant operators receive performance-based compensation tied to their restaurants’ pre-tax income.
How it makes money
Texas Roadhouse earns most of its revenue when guests buy food and drinks at company-operated restaurants. Restaurant sales are recorded net of promotions and discounts. Other sales include items such as gift card breakage and revenue associated with tabletop kiosk devices.
Total revenue was $5.9 billion in 2025; second-quarter 2026 revenue approached $1.7 billion.
The company manages Texas Roadhouse, Bubba’s 33, Jaggers and its retail initiatives as operating segments. Texas Roadhouse and Bubba’s 33 are its reportable segments; Jaggers and retail initiatives are included in Other. In 2025, restaurant and other sales were $5.8 billion, or 99.5% of revenue.
Franchisees pay fees for restaurants or development rights and royalties based on a percentage of gross sales. Franchise royalties were $28.2 million in 2025. Some branded retail products also generate royalties, while other branded food and accessories are sold without royalty arrangements. Existing restaurant sales and franchise royalties recur as guests make purchases, but they are not fixed subscription payments.
The company reviews menu prices by local market and offers several price points within menu categories. It implemented menu price increases in 2025 and plans a 1% increase at the beginning of the fourth quarter of 2026. Sales at comparable restaurants can change with guest traffic, average spending per person, menu mix and the balance between dine-in and to-go orders.
Restaurant margin measures restaurant and other sales after restaurant-level costs, including food, labor, rent and other operating expenses. It excludes costs such as pre-opening expenses, general and administrative expenses, and depreciation and amortization. Sales are primarily for cash, and the company receives trade credit for food, beverages and supplies.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Restaurant and other sales | $5.8 billion | 99.5% | 9.46% |
| Franchise royalties | $28.2 million | 0.48% | −0.56% |
| Franchise fees | $2.7 million | 0.05% | −15.3% |
Customers and how it sells
The restaurants serve individual diners and families seeking meals at different price points. Texas Roadhouse offers steaks and other entrées, while Bubba’s 33 offers a sports-themed setting and Jaggers provides fast-casual options. Each concept has a children’s menu. The company also sells branded products online and through selected retailers.
Guests can eat in the restaurants or order food to take away. To-go sales represented 13.6% of restaurant sales in 2025. Delivery is offered at a majority of Bubba’s 33 and Jaggers locations, and the company is conducting an early first-party delivery test.
As of December 30, 2025, the system had 816 restaurants in 49 states, one U.S. territory and ten foreign countries. All 714 company-operated restaurants were domestic. The international total, including a U.S. territory, was 61 restaurants, all franchised. Texas had 108 restaurants, and the Philippines had 25.
The company uses local marketing, community activities, email, social media and digital marketing to reach guests. It does not rely on national television or print advertising. Guest feedback comes through surveys, websites, social media and direct contact with restaurants.
Suppliers and costs
Texas Roadhouse negotiates directly with suppliers for substantially all food and beverage products. Domestic restaurants order food and supplies for direct shipment, with most food distributed through national distribution companies. The company seeks to qualify more than one supplier for key food items and says alternative qualified suppliers can provide beef and other essential products on short notice.
Food preparation takes place in the restaurants: domestic Texas Roadhouse locations employ trained meat cutters, and staff prepare side items and rolls from scratch daily. Product coaches train kitchen staff on recipes, preparation and food safety.
Approximately half of food and beverage costs relate to beef. Food and beverage costs were 35.0% of restaurant and other sales in 2025. Other restaurant costs include rent, supplies, utilities, credit card fees, maintenance and performance-based compensation for restaurant operators.
The company expects approximately 5% commodity inflation for 2026 and 3% to 4% wage and other labor inflation. It expects beef and cattle supply to remain tight in the fourth quarter. Prices were locked for about 80% of the commodity basket for the third quarter and about 40% for the fourth quarter.
- Revenue$5.9B
- Cost of revenue−$4.9B
- Selling, general and administrative−$254.8M
- Other operating costs−$207.0M
- Operating income$474.7M
Competitive position
Texas Roadhouse competes for diners with independent restaurants and national chains, as well as meal-kit providers and supermarkets. Fast-casual and quick-service restaurants also offer alternatives, including take-out. Restaurants and retailers compete for suitable locations and restaurant employees as well as customers. No individual competing company is named in the available company evidence.
The company competes on food taste and quality, price and value, service, atmosphere, location, take-out and delivery. Its Texas Roadhouse restaurants combine hand-cut steaks and made-from-scratch items with table service, while Bubba’s 33 uses a sports-themed setting and a different menu. The company says Bubba’s 33 faces more competition and is less well known than the Texas Roadhouse brand.
Local restaurant operators take part in community marketing, and product and service coaches train staff across the full-service domestic restaurants. Managing and market partners receive a share of restaurant pre-tax income in addition to salary and must make a refundable deposit when hired.
Our reading: The brand and local presence provide some differentiation, supported by community marketing and a distinctive restaurant experience, but customers have many alternatives. Our reading: The operator incentives and training system can support consistent execution, though their value depends on retaining and developing capable staff rather than on an exclusive technology or supply arrangement.
Growth opportunities
Texas Roadhouse seeks growth through new company restaurants, franchise development and higher sales at existing locations. In 2025, it opened 28 company restaurants and franchise partners opened four. The company also acquired franchise restaurants, adding to company-operated store weeks.
For 2026, the company expects approximately 35 company-owned openings, including approximately 20 Texas Roadhouse restaurants. It expects to open at least 10 Bubba’s 33 restaurants and maintain a low double-digit pace of openings for that brand for the next several years. It also expects four company Jaggers openings in 2026. Franchise partners may open as many as five more international Texas Roadhouse restaurants and two domestic Jaggers restaurants in the second half of 2026.
The company continues to evaluate opportunities to expand dining rooms and parking at high-volume restaurants, modify facilities for to-go orders, and relocate older locations. It also has area development agreements for international Texas Roadhouse restaurants and for domestic and international Jaggers restaurants.
Comparable company restaurant sales increased 4.9% in 2025, driven by higher guest traffic and a higher average check. Same-store sales increased 6.2% in the second quarter of 2026, including 3% traffic growth. The company expects capital expenditures of approximately $400 million in 2026, with new restaurant development and maintenance of existing restaurants among its capital priorities.
- $3.5BFY2021
- $4.0BFY2022
- $4.6BFY2023
- $5.4BFY2024
- $5.9BFY2025
Structural risks
- Food and labor inflation: Beef accounts for approximately half of food and beverage costs. Commodity and labor inflation reduced restaurant margin as a percentage of sales in 2025, and the company’s ability or choice to offset inflation through menu prices affects future profitability.
- Consumer spending and competition: Changes in consumer preferences or discretionary spending could hurt the business. Customers can choose other restaurants, supermarkets or less expensive alternatives, and competitors also seek restaurant sites and employees.
- Opening new restaurants: Growth depends substantially on opening profitable restaurants. Suitable sites and lease terms, construction costs, permits, liquor licenses and the availability of qualified operators can affect openings.
- People and regulation: The company must attract and retain management personnel. Higher minimum or tipped wages, labor-law enforcement, work-authorization requirements and litigation could affect operations or costs.
- Technology and food safety: A material technology failure or cybersecurity breach could interrupt operations. Restaurants must also comply with food safety, sanitation and other regulatory requirements, and franchise agreements can be terminated if a franchisee creates a public health or safety threat.
Bottom line
Our reading
Our reading: Texas Roadhouse is primarily an operator of its own restaurants, so its results depend on guest visits and restaurant-level execution more than franchise fees. Its local operator model and training support that execution, while beef and labor costs can pressure margins. New restaurants and changes to existing locations offer routes to growth, but require capital, suitable sites and trained managers.