The multifaceted role of digital transformation in restaurant resilience

Purpose This study aims to investigate the impact of digital transformation (DT) on organizational resilience in the restaurant industry. By examining DT across front-of-house (FoH) and back-of-house (BoH) operations, this study analyzes how DT shapes resilience in terms of revenue, profitability and firm value. Design/methodology/approach DT is measured using text analysis of firm’s 10-K reports, combined with financial data from COMPUSTAT. Difference-in-differences and two-way panel regressions are used to examine resilience in terms of stability and flexibility. Findings FoH DT significantly enhances both revenue stability and flexibility. BoH DT has a significant impact on profitability stability, and overall DT adoption enhances firm value stability during the pandemic. Practical implications Managers should leverage FoH DT to stabilize and accelerate revenue recovery during demand shocks and use BoH DT to reinforce cost-based stability, while clearly communicating DT initiatives to investors to enhance recognition of resilience value. Originality/value This study conceptualizes DT as a dual-function capability that simultaneously supports operational stability and adaptive flexibility, revealing differentiated DT effects across financial outcomes in the restaurant industry.