Technomic finds the Nation’s Top 400 Franchise Operators Outpace Restaurant Industry, Including Their Parent Franchisors
CHICAGO, Aug. 6, 2015—The 400 largest franchise companies in the United States are growing even larger, striking while the restaurant acquisition market is hot and adding locations to their portfolios at three times the rate of unit growth for the chain restaurant industry as a whole.
More insights from Technomic’s Top 400 Restaurant Franchise Report here:
https://www.technomic.com/Reports_and_Newsletters/Industry_Reports/dyn_PubLoad_v2.php?pID=2
According to Technomic Inc.’s Top 400 Restaurant Franchise Report, the nation’s largest franchisee operators increased their collective count of restaurant locations approximately 6.5 percent in 2014, compared with growth of about 2.1 percent for all units of the brands listed in Technomic’s Top 500 Chain Restaurant Report. While many of these companies are leveraging their operations excellence to open new stores organically, much of the growth the past few years has come via acquisition, as the operators in the Top 400 have attracted favorable financing and often private-equity backing to go on a major buying spree.
Technomic expects acquisition-led growth to continue for this group over the next several years, as major franchisors have indicated plans to continue the industry’s pace of refranchising in favor of the investor-friendly “asset-light” business model.
Quotes: Darren Tristano, Executive Vice President, Technomic
- “The companies tracked in the Top 400 Restaurant Franchise Report are taking advantage of a seismic shift in the restaurant industry toward franchise-led expansion and investment, and many of them are getting big enough to wield the purchasing power and territorial reach of a super-regional restaurant brand,”
- “Industry players can benefit greatly from knowing who these major franchisees are, where they are expanding and which restaurant brands could round out their portfolios.”
Data for the 200 largest franchisees in the study, compiled in partnership with Franchise Times Corp., reveal that those companies collectively grew 2014 sales 8.2 percent, which is twice as fast as the 4 percent growth recorded in the Top 500 Chain Restaurant Report, Technomic’s annual census of the industry’s biggest brands. The top franchisees’ sales increase was also more than three times the collective rate of sales growth among the nearly 100 brands represented across their holdings.
“Low interest rates and the availability of capital have made it an excellent time for multiunit franchisees to grow by acquisition,” says John Hamburger, president of Minneapolis-based Franchise Times Corp. and the Restaurant Finance Monitor. “Franchisees have never had it so good in the capital markets.”
The 200 companies also logged a collective 6.1 percent gain in unit count for 2014, which was nearly three times the rate of new locations recorded for the nearly 100 franchisors to which they pay royalties.
The Top 400 Restaurant Franchise Report includes total sales and unit count figures for the biggest operators in the nation and contact information for key decision makers at each company. A detailed breakdown of locations per brand for each franchisee also enables readers to find opportunities for the next restaurant that might fit in a particular operator’s portfolio.
Contacts:
Press Inquiries: Elizabeth Reardon, 312-506-3843, or ereardon@technomic.com
Report and Purchasing Details: Patrick Noone, (312) 506-3852, pnoone@technomic.com