Bill Ackman’s Bite of Chipotle Is Part of a Larger Trend

When activists want a seat at the table, should restaurant investors give them a warm welcome—or ask for the check?

That’s the question for shareholders at Buffalo Wild Wings and Chipotle. Both suffered sharp stock declines off their summer 2015 all-time peaks—that is until Marcato Capital Management started munching on Buffalo wings and Pershing Square Capital got a craving for burritos. Investors are salivating again.

To be sure, the activists still have a lot on their plates. B-Dubs’ same-store sales are falling after years of consistent growth that was once the envy of the industry. Marcato is calling for fresh management talent, a greater focus on the core brand, and ceasing bets on new fast-casual pizza and taco concepts.

At Chipotle, a carefully curated “Food with Integrity” became a liability after a prolonged E. Coli crisis savaged the brand’s pristine image. Revenue has slipped 20% to $1.83 billion for this year and more pain is expected. Ackman hasn’t yet disclosed his demands.

When activists moonlight as restaurateurs, they often score a fatter check for shareholders. Big wins include Darden (Starboard compelled it to replace the entire board and boosted sales), Applebee’s (sold itself to IHOP under pressure from Breeden Capital Management), and Wendy’s (the chain spun off Tim Horton’s after Ackman got involved). Sidenote: Thomas Sandell’s prolonged battle at Bob Evans hasn’t been settled. He won board seats but a bid to separate the packaged-foods unit from the restaurant concept hasn’t materialized.

Restaurant companies make ripe targets for activists. Most are tiny by market-cap standards, so amassing a sizable stake can be done on the cheap. But while activists often clean house and boost stocks, observers say activism should be taken on a case-by-case basis—not judged by industry.

“Activists don’t do anything but offer shareholders a choice,” says Ken Squire, founder of shareholder activism firm 13D Monitor. Squire contends activists can help both Buffalo Wild Wings and Chipotle, though he adds both situations are “totally different.”

Still, their recent track record implies diners hold tight for dessert.

A version of this article appears in the October 1, 2016 issue of Fortune with the headline “Activists Get Mouth-Watering Returns.”