Counter Service Is Steve Ells' Second Act. This Time, the Tech Is the Point.

Steve Ells built Chipotle into a 3,800-unit chain by proving that fast food could use real ingredients without sacrificing speed. Now he is trying to do it again with sandwiches, and this time, the kitchen runs on software.

Counter Service, the upscale fast-casual concept Ells cofounded with Peloton cofounder Tom Cortese, opened its fourth Manhattan location in late 2025. Another four are planned for the New York area in 2026. The concept serves scratch-made deli food, including all-day breakfast, with ordering handled through kiosks designed to look like vintage phone booths. Behind the counter, a proprietary restaurant management platform orchestrates everything from labor scheduling to inventory to real-time ticket routing.

It is a small footprint today. But the combination of Ells' operational pedigree and Cortese's technology background has drawn serious attention from an industry searching for the next scalable model.

From Kernel's Robots to Counter Service's Data Layer#

Counter Service did not start as a sandwich shop. It started as Kernel, a plant-based, automation-heavy concept that Ells launched in early 2024 after raising $36 million from investors including NFL quarterbacks Daniel Jones and Justin Fields, according to Nation's Restaurant News. Kernel opened on Park Avenue South in Manhattan's Flatiron District with a mostly robotic kitchen, a meat-free menu, and a maximum of three human employees per location.

The concept did not work. Kernel closed after roughly a year of operation.

"That concept didn't work," Restaurant Business Online reported in October 2025, noting that Ells pivoted Kernel into Counter Service. The shift was not just a menu change. It was a philosophical recalibration: less visible automation, more behind-the-scenes intelligence. Where Kernel put robots in front of customers, Counter Service puts data analytics behind the pass.

Tom Cortese, who served as Peloton's chief product officer for more than 12 years before cofounding Counter Service, told Nation's Restaurant News in March 2026 that proprietary technology could help the concept scale quickly. The platform is built to create efficiencies in labor and supply chain, areas where margins in fast casual are thinnest.

"Going slow so we can go fast," Cortese told Restaurant Business Online about the expansion strategy. It is a familiar refrain in Silicon Valley. Whether it translates to the restaurant industry, where unit economics and local market dynamics vary wildly, remains the central question.

Why Sandwiches, and Why Now#

The timing is not accidental. The global sandwich market is projected to grow by $49.7 billion between 2026 and 2030, expanding at a 5.1% compound annual growth rate, according to Technavio. In the U.S., the fast food restaurant industry reached $416 billion in 2026, per IBISWorld, though the segment is experiencing a 1.1% revenue decline this year amid lower consumer sentiment.

The sandwich subcategory within fast casual is one of the most fragmented in the industry. Jersey Mike's recently sold to Blackstone for $8 billion. Subway is mid-transformation under Roark Capital. Potbelly is pushing toward 500 shops. But no single brand dominates the way McDonald's or Chick-fil-A command their categories. For a founder with Ells' track record, that fragmentation looks like opportunity.

Counter Service's menu leans into what Ells calls "real food": minimally processed ingredients, house-roasted meats, scratch-made sausage. The green goddess chicken club has become a fan favorite. Sides like chickpeas and feta and malted cookie crisps (designed to reduce food waste from cookie production) round out an offering that feels more specialty deli than fast-food counter.

The average check likely sits in the $14 to $18 range based on menu pricing at Manhattan locations, placing Counter Service squarely in the fast-casual sweet spot that Placer.ai data shows is under pressure from both casual dining above and QSR value menus below.

The Technology Thesis#

What separates Counter Service from other premium sandwich concepts is the infrastructure underneath. Cortese's background building Peloton's connected fitness platform informs an approach where the restaurant's operating system is as important as the menu.

The proprietary platform handles ordering, kitchen orchestration, inventory management, and labor optimization. According to Restaurant Technology News, the system uses predictive analytics to manage prep levels and reduce waste, real-time data to route tickets efficiently, and centralized controls that could theoretically allow a corporate team to monitor and adjust operations across dozens of locations from a single dashboard.

This matters because the fast-casual model breaks down at scale when individual units drift from standards. Chipotle's food safety crises in 2015 and 2016, which cost the company billions in market value, were partly a function of decentralized operations outpacing quality controls. Ells lived that failure. The technology layer at Counter Service appears designed to prevent it.

"Counter Service could offer a new model for fast food: a concept where the technology hums in the background, the kitchen is orchestrated through real-time data and every sandwich reflects disciplined engineering, not showmanship," Restaurant Technology News reported.

What Operators Should Watch#

Counter Service is not yet proven at scale. Four locations in Manhattan, the densest restaurant market in the country, is a proof of concept, not a franchise system. The planned expansion to eight locations by end of 2026 will test whether the model works beyond ultra-high-foot-traffic urban corners.

Several questions remain unresolved for operators watching this play out:

Unit economics transparency. Counter Service has not disclosed per-unit revenue, labor percentages, or build-out costs. Until those numbers surface, the replicability of the model stays theoretical.

Tech cost amortization. Building a proprietary restaurant management platform is expensive. Peloton spent heavily on its connected platform, and the fitness company's financial trajectory is a cautionary tale about technology investment outpacing revenue. Whether Counter Service's tech spend pays back at 8, 50, or 500 units is unknown.

Scaling beyond New York. Manhattan rents, foot traffic, and consumer willingness to pay a premium for a $16 sandwich are not representative of most U.S. markets. The Chipotle playbook worked because it translated to suburbs and second-tier cities. Counter Service will need to prove the same.

The Ells factor. Chipotle grew to 2,000 locations under Ells before the food safety crises forced a reckoning and an eventual CEO transition. Ells is a proven builder but also a founder who has experienced the limits of scaling quality at speed. Whether he has internalized those lessons or is repeating the same growth-first instincts will define Counter Service's trajectory.

The broader lesson matters regardless of whether Counter Service becomes the next Chipotle or fades like Kernel. The founders are betting that the restaurant of the future is not defined by robots customers can see but by intelligent systems they cannot. In a labor market where the restaurant industry's unemployment rate hit 7.1% in February 2026 (up from 6.0% in December 2025, per BLS data) and operators are struggling to staff kitchens, that bet looks increasingly rational.

Four sandwich shops in Manhattan do not make a revolution. But the team behind them has built two billion-dollar companies before. The QSR industry would be unwise to look away.