OpenTable Inc. (NASDAQ: OPEN) came into the world with a bang on Thursday, shooting from $20 a share to a peak of $33 before settling down for the week at $28.75. A 44% gain makes this the second strong initial public offering (IPO) for a venture-backed company, following the SolarWinds Inc. (NYSE: SWI) debut the day before.

Originally, OpenTable planned a price range of $12 to $14, which crept up to $16 to $18, and eventually to its final level of $20.

It's a bad sign for restaurants: they're handing out coupons in an effort to lure reticent diners, who are nervous about gas prices, the economy and, of course, housing.

According to the USA Today, Ruby Tuesday is offering $5 off two dinner entrees, IHOP (NYSE: IHP) franchisees are handing out two-for-one coupons, Darden's (NYSE: DRI) Smoky Bones is giving diners $5 off $15 orders, and
T.G.I. Friday's is giving $5 "Bonus Bites" to those who purchase $25 gift cards.

So what's an investor to do? High gas prices and housing woes are most likely to weigh on the minds of middle-class consumers -- a wealthier diner probably isn't going to let his restaurant plans be interrupted by transportation costs.

Cheescake Factory (NASDAQ: CAKE) has seen its share prices slide as traffic growth has slowed. The company has scaled back its expansion plans and is using the extra cash to repurchase stock. Higher dairy prices have affected gross margins but, long-term, there's a lot to like here. The company has a strong brand, lots of room for expansion, and a much higher average check than a lot of the fast casual chains that are struggling.

A mall operator's efforts to prevent the chain from opening in a competitor's location underscores the company's strength: Cheesecake Factory is a destination in a way that lesser chains like Applebee's and Friday's aren't.

When I saw the headline in today's USA Today that Subway and Dunkin Donuts are going to start selling pizza, I threw up a little bit in my mouth. Just to be sure it's not a personal thing, I asked a few friends and we all reached the same conclusion: There's a small possibility that I would buy pizza at Subway, and zero chance I would buy it at Dunkin' Donuts. And especially not for breakfast.

McDonald's (NYSE: MCD) tried pizza years ago and left with its tail between its legs, but apparently Subway and Dunkin' still can't resist reaching for a piece of the $28.5 billion pizza pie.

Subway has been selling pizza at more than half of its locations since the summer, and would like more franchisees to do the same, but is not requiring it. According to the USA Today, "Subway's $2.99 thick-crust pizzas arrive frozen. They're defrosted, then baked in the toaster ovens in about 90 seconds. Meat toppings are a buck each. Veggies are free." Yum?

What do you think? Are my friends and I crazy, or are these forays into pizza ill-advised and destined to fail?

According to T.G.I. Friday's U.S. president, the restaurant industry is going through an unprecedented slump. According to The Wall Street Journal, "Across the U.S. casual-dining landscape, chains large and small are struggling to keep customers coming in and remain profitable, with cost-cutting, menu revamps, technology and other innovations ... On the one hand, their guests are increasingly demanding value. On the other, their costs -- from the price of a pound of butter to the hourly wages they pay their waitstaff -- are going up."

One way that they're doing that is by decreasing portion sizes to avoid price increases and, in a stroke of semantic brilliance that would make George Orwell proud: billing the smaller portions for the same amount of money as "health-conscious." Hey, if I wanna be healthy, I'll get a doggie bag!

I would probably stay away from restaurant stocks for now. The industry seems stuck in a quagmire with little relief in sight, and the shares of the best of breed players don't look cheap. It also seems to be an area that private equity firms haven't been diving into, which is probably indicative of something.

Shares of Cheesecake Factory Inc (NASDAQ: CAKE) fell more than 7% today after management lowered its second quarter earnings guidance, citing industry-wide softness and higher dairy costs. The company forecast second quarter revenue would increase 14.5% to 15.5% and quarterly margins would be down 1% year-over-year.

Earlier today, Bear Stearns downgraded shares of Cheesecake Factory to Peer Perform from Outperform on the news. Bear Stearns expected Cheesecake to show revenue growth of 16-17%, or 34c per share. CIBC World Markets followed suit and downgraded shares to Sector Perform from Outperform on the news.

Raymond James cut shares to Outperform from Strong Buy, expecting shares of the restaurant to trade lower in the near-term. The analyst still considered Cheesecake a good long-term buy, given the likelihood that dairy prices will retreat in time.

For the first time in almost 40 years, Wendy's (NYSE: WEN) is changing the Frosty, according to the Wall Street Journal: "...Struggling to connect with younger diners, Wendy's is revamping the Frosty, along with the rest of its menu. Inspired by the success of Starbucks Corp.'s (NASDAQ: SBUX) Frappuccinos, Wendy's is adding new flavors of Frosty that come with wide straws and bubble-shaped tops, and tinkering with a coffee-flavored Frosty in its test kitchen at headquarters here. The chain also is taking an ambitious stab at relaunching a breakfast menu."

This is not going to work. Bottom line: Wendy's isn't Starbucks. Starbucks is considered cool and hip, and Wendy's targets a much older demographic, and is synonymous with Dave Thomas, its late founder and corny pitchman. The stores have a dated look to them, and offering a Starbucks-like product isn't going to make it hip. People don't go to Starbucks because the products are amazing: They aren't. As a matter of fact, I think that Wendy's products are better and a better value than competitors like McDonald's and Burger King. But the problem is branding and marketing. Starbucks has created a strong, hip brand, and Wendy's hasn't. And a new Frosty won't change that.

In its latest annual report, fast-food chain Wendy's International (NYSE:WEN) reported that it will be opening fewer new locations this year. The company will open 80 to110 restaurants, most of them franchised, compared to 122 new ones last year. Since spinning-off Tim Horton's, the company has been struggling for market-share with rivals like Burger King and McDonald's.

I'm surprised that Wendy's is struggling. To this consumer/investor, its restaurants are far better. They offer much better real meals at better values, and mashed potatoes are a great buy at $1. But the mediocre performance of the brand may leave some wondering: Why did the company dump Horton's and Baja Fresh Mexican Grill, which were growing solidly and well-liked by consumers?