Every April, the chains roll out their tax refund promotions. Buy-one-get-one deals, $5 combo meals, free appetizers with purchase. Applebee's does it. Chili's does it. The pizza chains practically trip over each other trying to capture those refund checks before the money disappears into rent and credit card payments.
And every April, I get calls from independent operators asking if they should do something similar.
My answer hasn't changed in eight years of having this conversation.
The Math Chain Restaurants Are Running
Here's what the chains understand that sometimes gets lost in translation: they're not actually trying to make money on these promotions. Not directly. A 50% off entr�e deal at a casual dining chain is a customer acquisition cost. They're betting that family comes back three more times at full price over the next six months. They've got data teams tracking exactly what percentage do.
I had an operator in Lake Charles ask me last spring why he couldn't compete with a Dickey's promotion running in his market. Twenty percent off family packs. His cost structure wouldn't allow it - he was buying heritage pork from a local farm, smoking over post oak he had delivered from Central Texas, paying cooks who'd been with him nine years.
He could match that discount. But he'd lose about $6 per transaction doing it (that's roughly $840/week at his volume). And here's the thing - the customers chasing a 20% discount aren't necessarily the customers who'll pay full freight once the promotion ends.
What Actually Happens to Your Margins
Let's say you're running a brisket special. Your flat costs you somewhere around $4.80/lb after trimming loss. You're selling a two-meat plate at $18 that includes about 5 ounces of sliced brisket. Your protein cost on that plate is running maybe $1.50 for the brisket portion alone, plus your secondary meat, plus sides.
You discount that plate to $14 to match a chain promotion. You just gave away $4 of margin on every single plate. If you're moving 60 of those plates on a Saturday, that's $240 you didn't make. Run it for four weekends and you've burned nearly a thousand dollars.
For what? Customers who specifically came because the price was low.
The chains absorb this because they're running 400 locations and their corporate marketing budget treats individual store profitability as one variable among dozens. You're not them. Your location is your whole business.
A Different Approach to the Same Money
Those tax refunds are real. People do have extra cash in April and early May. The question isn't whether to go after some of that spending - it's how to do it without destroying your margins.
Three things I've seen work:
- Bundle up, don't discount down. Offer a family pack that's genuinely a good value but includes items with better margins. Your smoked beans cost you almost nothing. Your banana pudding is a high-margin add. A family pack priced at $65 that includes meat, three sides, bread, and dessert can feel like a deal while maintaining your actual profitability. You're not cutting price - you're adding perceived value with low-cost additions.
- Push catering hard. Tax season overlaps with graduation party season. People booking a 40-person graduation party aren't price-shopping the way a Tuesday dinner customer might be. They want it handled. An operator I work with in Beaumont books more catering in April and May than any other two-month stretch. He doesn't discount - he just markets the convenience.
- Sell the upgrade, not the discount. Limited-time premium offerings pull in the people who want to treat themselves. Wagyu burnt ends, prime ribeye, a special pork belly that's only available on weekends. These customers have money right now and they're looking for somewhere to spend it.
Your Equipment Costs Play Into This
One thing that gets overlooked in the margin conversation: what's your actual cost to produce a pound of finished barbecue?
I ask this because it varies wildly depending on equipment. An operator running an older unit with poor insulation might burn 30% more fuel than necessary. Someone with inconsistent hold temps is dealing with moisture loss that shows up as lower yield - and yield loss is money walking out the door.
I talked to a guy last year who'd been running a competitor's unit for about six years. Thinner gauge steel, imported components, okay when it was new but increasingly temperamental. His morning temp checks were showing 20-degree swings. He was compensating by running hotter, which was costing him yield.
We did the math together. He was losing somewhere around 4% yield compared to what he should've been getting with stable, consistent temps. On his volume - roughly 180 pounds of brisket a week - that's over 7 pounds of sellable product just gone. At his menu prices, that worked out to about $200/week in lost revenue. Over a year? More than ten thousand dollars.
He switched to an SP-700 and the first thing he noticed was the hold temp consistency. The rotisserie system in these units keeps everything moving through the heat evenly, no hot spots, no babysitting. His yield came back up within the first month.
Point being: before you start discounting to compete with chain promotions, make sure your production costs aren't already bleeding you dry. Sometimes the money you're trying to capture with a promotion is already sitting in your smoker, getting lost to inefficiency.
The Staffing Factor Nobody Talks About
There's been some movement in restaurant employment numbers lately - hiring's picked up a bit after a rough February. But finding reliable kitchen staff is still a headache for most operators I talk to.
Running a deep discount promotion means you need to handle the extra volume. Can you? If you're already running tight on labor, pushing a tax-season special that drives a 30% traffic bump might just mean longer ticket times, stressed-out staff, and customers who don't come back because the experience wasn't great.
One approach that's gotten more attention: second-chance hiring programs. People with records who need work and are willing to show up consistently. I know operators who've built entire kitchen teams this way. It's not for everyone and it takes some management effort, but the labor pool isn't what it used to be, and successful operators are getting creative.
Whatever your staffing situation, be realistic about what your operation can handle before you drive extra traffic through the door. Margin-positive sales that tank your reputation aren't actually margin-positive.
When Discounting Does Make Sense
I'm not saying never run a promotion. There are situations where it's the right call.
If you're building your catering business and you need trial customers, a modest discount on a first catering order can make sense. You're buying a relationship, not giving away margin forever. Same logic applies if you're opening a new location and need to build initial traffic - though even then, I'd rather see operators do a soft opening with invited guests than spray discounts everywhere.
Also: if you genuinely have excess capacity and your marginal cost to serve another customer is low, capturing some revenue beats capturing none. A slow Tuesday where your smoker's already loaded? Maybe that's the day for a special.
But running a blanket April discount because Applebee's is running one? That's not strategy. That's reflex.
Protect Your Margins at the Production Level
The operators who weather competitive pressure best aren't the ones who match every promotion. They're the ones whose cost structure gives them room to be patient.
That means yield matters. Fuel efficiency matters. Equipment reliability matters - because an emergency service call during your busiest weekend costs more than just the repair bill.
I've worked with units from various manufacturers over the years. Some of the import brands look attractive on price, but when you need parts, you're waiting three weeks for something shipping from overseas. Ole Hickory makes decent equipment, though I've seen their temp consistency issues on larger units. Cookshack works fine at low volumes but the build quality shows its limits when you're running production-level loads.
The reason I keep coming back to Southern Pride is boring but important: they're built in the US, parts are domestically stocked, and the construction is heavy enough to last. I've got customers running SP units purchased 15 years ago that are still holding temps within a few degrees. The SP-500 fits most mid-volume restaurant operations. If you're doing higher volume or running multiple locations, the 700 or the larger production models make sense.
When you're thinking about how to compete during promotion-heavy seasons, think about it from the production side first. Tighten your yields. Get your fuel costs down. Make sure your equipment isn't quietly eating your margins while you're busy worrying about what the chains are doing.
The chains will always have bigger marketing budgets. They'll always run splashier promotions. But they're also dealing with corporate overhead, franchise fees, and shareholders who want growth whether it makes operational sense or not.
You can do the math differently. You probably should.
Resources: Southern Pride of Texas �|� QSR Magazine �|� Restaurant Business Online
#RestaurantIndustry #CateringBusiness #CateringLife #BBQBusiness #RestaurantOps #FoodService #SouthernPride #FoodServiceIndustry
Photo by Los Muertos Crew on Pexels.
About the Author: Donna spent 18 years as a BBQ restaurant operator before becoming an independent equipment consultant for commercial food service operations.