Franchising is Still the Way to Grow


Restaurant chains still consider new franchise agreements to be a main avenue for growth, says a new report from foodservice consultant Technomic. In response to the recession, many franchisors have offered their franchisees incentives like enhanced credit support, fee reductions, and temporarily reduced royalty rates. Others have worked with franchisees to drive down supply chain costs.

“A focus on growing the franchise system allows franchisors to spend less on restaurant-level operations and redirect capital toward systemwide marketing and brand initiatives,” says Darren Tristano, executive vice president at Technomic.

The findings are part of the 2010 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report, produced by Technomic in conjunction with Restaurant Finance Monitor.

Other findings include: The Top 400 restaurant franchisors generated roughly $31.8 billion in sales in 2009, up 1.6 percent (nominally). They represented about 8.8 percent of the total commercial restaurant industry’s sales of $359.7 billion. Units rose about 4.5 percent to 25,889 stores. NPC International, a major franchisee of Pizza Hut, was once again the top franchise company, with sales of $845 million, up 22.5 percent nominally over 2008. Chains with the greatest sales from franchisees were McDonald’s, Subway, and Burger King, with franchise sales of $26 billion, $10 billion, and $7.7 billion, respectively.

The 2010 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report was designed to help operators identify the leading restaurant franchise companies; discover the brands behind the Top 400 franchise companies; understand where franchising opportunities exist within restaurant brands; and benchmark sales, units, and growth against industry leaders.

The report’s comprehensive appendices sort the Top 400 companies alphabetically and offer concept breakdowns by franchise company and brand, regions of company operations, and selected franchise cost-structure analysis for leading restaurant brands. A complete listing of franchise company contacts is also included.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.

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