According to the Restaurant Finance Monitor, The Big Get Bigger: Large Multi-Unit Franchisees Outpace Restaurant Industry Growth
MINNEAPOLIS, July 15, 2014 /PRNewswire/ -- It's good to be big, at least if you're a restaurant franchisee. The 200 largest restaurant franchisees in the country saw their total revenues grow by 9 percent in 2013, easily outpacing overall restaurant industry growth, according to the Monitor 200, the Restaurant Finance Monitor's annual ranking of the 200 largest restaurant franchisees.
The average franchisee now has $143.5 million in total revenue and 109 locations and operates more than one concept. In 2009, for instance, the average franchisee had $109 million in sales and 84 locations. Both numbers are up about 30 percent.
The largest restaurant franchisees are rapidly adding new units, either by acquiring smaller operators or by purchasing locations from the franchisor in a refranchising deal. As a result, they've been growing at astonishing rates, establishing immense businesses that often span the country.
"This period of consolidation among restaurant franchisees is almost unprecedented," said Jonathan Maze, editor of the Restaurant Finance Monitor. "A number of these companies operate more units or have more revenues than most restaurant brands."
The Monitor 200 ranking lists the largest restaurant franchisees based on revenue. The list uses a combination of publicly available data and companies' self-reported financials.
The largest company on the Monitor 200 ranking was Flynn Restaurant Group, the San Francisco-based operator of Applebee's and Taco Bell which rose to the top of the ranking last year and was the first franchisee in the US with $1 billion in revenues. That company was joined in the $1 billion club by the second largest franchisee, Overland Park, Kansas-based NPC International, which operates Pizza Hut and Wendy's locations.
In addition to those two companies, nine others had sales over $400 million last year as the big just keep getting bigger.
"It makes sense for franchisees in today's market to continue to grow larger," Maze said. "Food costs are rising. Labor costs are rising. Obamacare is going to add costs at some point and consumers still love discounts. Bigger franchisees are more equipped to handle those challenges."
About the Restaurant Finance Monitor: The Restaurant Finance Monitor is a monthly publication offering opinion, analysis and news on the restaurant industry. It produces the annual Restaurant Finance & Development Conference, the biggest annual industry event devoted specifically to those interested in financing and developing restaurants and restaurant chains. For more information, go to www.restfinance.com.
SOURCE Restaurant Finance Monitor