Sellers Market in San Francisco claims its first two units ring up $1.5 million annually, making it a concept to watch. Using many organic ingredients, the fast-casual concept has won over customers by aggressively promoting its connection to local vendors that use sustainable methods.

Of course, no one has perfect insight as to the extent the economic crisis will plague restaurants in 2009. It's only safe to say that consumers will continue to trim visits as long as housing values decline and jobs continue to disappear. Be that as it may, our intrepid crew of prognosticators has done their best to predict the shape of the coming restaurant landscape. To be sure, you'll find plenty to worry about. But you'll also find ideas for taking the lead.

Don't you feel better already about 2009?

“Depending on how this fourth quarter unfolds, this could easily be the most challenging eco-nomic environment since the early 1980s,” says the National Restaurant Association's Hudson Riehle, senior vice president, research and information services group.

The severe downturn already has forced restaurants to shed jobs—some 36,000 in all—for the last four months in a row. “It's the first time that has happened in more than 40 years,” says Riehle, adding that more than 40 percent of operators now deem the economy their biggest worry.

There is a silver lining of sorts amid the bad news. In NRA surveys of pent-up demand, he adds, one out of three adults say they are not using restaurants and takeout as much as they would like to. “However, extreme consumer anxiety and a lack of cash on hand has really torpedoed traditional restaurant patronage patterns,” Riehle concedes.

When does he expect the situation to turn around? “Looking ahead to '09, there is no immediate relief to this environment,” he says.

Visitors to chainleader.com are more optimistic. Asked “When will the economy normalize,” 77 percent responded it would by the end of 2009.

Private-equity investments in the United States climbed to $429 billion in 2006 from $29.5 billion in 2001. After reaching $424.5 billion in 2007, investors applied the brakes as the economy tanked and credit sources tightened. Heading into 2009, investors continue to wait on the sidelines.

Mark Saltzgaber, a financial strategist and restaurant investor in San Francisco, expects few private-equity deals for restaurants next year as “sellers come to grips with the new world order and buyers lick their wounds.” He also predicts that the deals that do get done will involve troubled restaurant companies and that buyers who pay the right price for quality or distressed chains will reap rewards when the financial markets turn around.

Saltzgaber reminds sellers that private-equity firms are still looking at restaurant companies. But sellers must adjust expectations accordingly. “Prices have plummeted, though I don't see trough valuations sinking to past levels given the amount of capital on the sidelines,” he says.

Continuing economic woes next year will sorely tempt some multiunit general managers to make employees work off the clock, a practice dubbed “hour-shaving,” predicts attorney Bruce Burkholder of Wiles, Boyle, Burkholder & Bringardner Co., a Columbus, Ohio-based firm that has represented restaurants in employee wage disputes. “When the market started going up and down, chains started asking: How can we cut costs? One of the natural things to do is to cut labor,” he says. Ordered to do so, managers may invite workers to remain at work after clocking out.

Doing so, however, is extremely risky. Hour-shaving could end up costing the chain far more money than saved in labor costs. “It is hard for me to imagine that paying the incremental difference for hours put in could ever come close to actual cost to defending that kind of action,” Burkholder explains, particularly if the plaintiff's attorney wins a discovery motion. “The employees could say [hour-shaving] started two years ago. Even the labor cost of that time frame is still less than what your exposure will be in a lawsuit.”

President-elect Barack Obama supports the Employee Free Choice Act, which simplifies union certification and could make restaurant chains vulnerable to collective bargaining.

A video clip on YouTube shows then-presidential candidate Barack Obama pledging to members of the labor union UNITE HERE he will make the Employee Free Choice Act, or card check, the law of the land. Card check is a union-backed streamlining measure awaiting Senate passage. Enactment would mean that if a majority of nonunion employees petition for union representation by signing cards (“valid authorizations”), they would likely be certified as a union by the National Labor Relations Board, without a vote of all employees necessary. It could force employers to bargain collectively with their employees as early as 2009.

Industry lobbyist Rick Berman of Berman and Company warns that chains of all stripes, including franchisees, are vulnerable. Although the House passed the bill in 2007, largely along party lines, it received only 51 of the 60 Senate votes necessary to pass. It could be a different story in the next session of Congress given Democratic Senate gains in the last election. Still, the Employee Free Choice Act is likely to come up again for a vote in the next session of Congress.

According to a survey by WD Partners, Millennials visit restaurants 40 percent more often than baby boomers. So chains should target some of their marketing efforts to Gen Y in the coming year.

WD's research also showed Millennials are three times as likely as boomers to visit a restaurant's Web site. They use and contribute to online opinion sites like Yelp.com, Lombardi adds. Among Millennials preferences are restaurants featuring:

• WiFi
• Extensive wine and beer selections
• A commitment to going green
• Late-night dining options

Research demonstrated that Chipotle, Applebee's and Subway are attractive to Millennials, all for different reasons, Lombardi says. He advises that restaurants answer the following questions before marketing to Millennials:

• How does the brand relate or not relate to Millennials given the occasion?
• How often does the brand attract Millennials?
• What can you do to change the brand without alienating core customers?
• What do you stand for, and will Millennials believe it?

Next year will likely see even more growth of the so-called better-burger category as cash-strapped diners continue to seek value, familiarity, nutrition and quality. New entrants plying this niche have won popularity by delivering all three, particularly the quality of the meat. Nearly every chain touts fresh beef, which many claim is naturally raised. Customization is also widely practiced. Los Angeles-based The Counter claims customers can build burgers 312,120 ways with its many toppings.

The emerging better-burger category includes concepts like The Counter (above) and Burger Lounge (below), which tout fresh beef and customization.

What will it take to stand out next year? “Really good beef is now a given,” Fields says, “so it has to be the total package—a hip, happening atmosphere with a certain je ne sais quoi.”

We're keeping an eye on restaurants going green next year given that so doing (at least with believability) is a tall order due to the amount of energy consumed and waste produced by restaurants. Yet adding organic and locally produced foods to your menu offers a way to take advantage of this important trend. The Organic Trade Association reports U.S. sales of organic food and beverages have grown from $1 billion in 1990 to about $20 billion in 2007, and are projected to reach nearly $23.6 billion in 2008.

Consider Sellers Market, a three-unit, fast-casual operation with a menu focused exclusively on local, sustainable and organic foods in San Francisco. The concept's Web site boasts: “Our eco-friendly, straight-from-the-earth food will sing you a song about the people it's met, the local growers who nurtured it, the craftsmen who took it by the hand and turned it into something special.”

Owners Jim and Deb Sellers claim they buy from more local, sustainable vendors than any fast-casual chain in the country. They account for 90 percent of the company's purchases. “We think it's the right thing to do,” Deb Sellers says, adding also that the three units compost roughly 70,000 pounds of food scraps annually and use reclaimed wood for tables.

The couple modeled their business on Panera Bread, Chipotle and Corner Bakery. Today, with volumes averaging $1.5 million and a check average of $10, they claim net profitability exceeds Panera's. Declares Jim Sellers: “Customers are responding well to a concept that is blurring the lines between fast food and fine-dining quality.”