Multi-Unit Franchisee Magazine Issue I, 2012 | Page 64
Focus on Food
BY EDDY GOLDBERG
Food: By the Numbers
Food—fast, slow, casual, takeout, sit-down, delivery—is by
far the largest single sector in franchising. One look at our
Mega 99 list of the country’s largest franchisees (page 46)
shows their choice of brands dominated by food, primarily
QSR. Beyond the sheer size of this sector, changing consumer
tastes are spurring the creation of new brands, even in a
belt-tightening economy. We asked two well-respected market
researchers—Technomic and FRANdata—for data that
would provide a big picture overview of the franchised food
segment—where it’s been and where it might be trending.
FRANdata:
Tracking Food Brand Growth
locations) and Tim Hortons (close to 600).
• Fast Food—As of 2010, Subway remains by far the largest
system in the U.S. with more than 24,000 locations, followed
by McDonald’s (close to 12,500), Burger King (6,351), and
Pizza Hut (5,554).
• Frozen Dessert—As of 2010, the largest franchised frozen dessert brand in the U.S. was Cold Stone Creamery with
close to 1,200 franchised locations. Baskin-Robbins ranked
second, just five units shy of 1,000. Rita’s Italian Ice and Dairy
Queen Treat Center each operate more than 500 franchised
units. These large brands hardly grew over the 2008 to 2010
period; in fact, Cold Stone and Dunkin’ Donuts shed some
franchised units.
As of 2011, there are about 1,200 franchised food brands operating in the U.S.; roughly two thirds began offering franchises
in 2000 or later. By far, the largest segment in food is QSR,
which accounts for 92 percent of franchised units in the sector.
Sit-Down Restaurants
The largest sit-down restaurant concepts include Applebee’s
with more than 1,500 franchised locations in the U.S. Next
are Denny’s with more than 1,300 and IHOP with more than
1,100 locations (both are owned by DineEquity).
Between 2004 and 2010, the number of franchised food locations increased at a compound annual growth rate (CAGR)
of 4% to almost 160,000. Brands selling baked goods grew the
fastest at a CAGR of 8% over the period, followed by sit-down
restaurants (4%), brands selling fast food (3%), and brands that
offer frozen dessert products (1%).
Technomic:
Tracking Food Brand Sales
The following are menu segments expected to exceed the industry’s overall growth rate in 2011 (which Technomic is currently forecasting at a nominal 2.5%).
Limited-Service Segments
QSR
• Baked Goods—As of 2010, the largest baked goods franchise
brand was Dunkin’ Donuts with 5,678 franchised units. Brands
that act more like distributorships also have a large market share
in the franchised baked goods space. One example is Sara Lee
Distribution with more than 1,500 franchised businesses. Other
big players include Panera Bread (more than 750 franchised
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Multi-Unit Franchisee Is s ue I, 2012
• Asian—Granted we are starting from a very small base, but
we see opportunity in Asian limited-service chains, particularly
fast-casual. Panda Express (QSR) is the leader of the segment,
and it’s been improving consistently. Many smaller chains are
also succeeding, and they don’t s