While most franchisees are individuals, couples or small groups business partners, some are not. In fact, the biggest franchisees are multi-billion-dollar corporations. The Franchise Times recently released its “Restaurant 200” list ranking the biggest franchisees in the restaurant sector. Here, franchise attorney Jeffrey M. Goldstein discusses some notable takeaways from the Franchise Times Restaurant 200.
The Biggest Restaurant Franchisees’ Sales Were Down in 2020, But Only Slightly
While the COVID-19 pandemic has had a major impact on the franchise industry as a whole, the biggest restaurant franchisees fared fairly well in 2020 overall. According to the Franchise Times, “the Restaurant 200 dipped just 0.6 percent in revenue as the group’s total pot fell from $42.1 billion in 2019 to $41.8 billion in 2020.” Of course, some franchisees fared better than others. In particular, the Franchise Times notes a disparity between quick-service concepts (which saw positive growth in many cases) and casual dining (where some franchisees saw their revenues decline by hundreds of millions of dollars last year).
The Biggest Restaurant Franchisees are Really Big
According to the Franchise Times, the biggest restaurant franchisee is Flynn Restaurant Group. Its primary holdings include 444 Applebee’s, 367 Arby’s and 280 Taco Bells. After exceeding $2 billion in revenue in 2019, Flynn Restaurant Group’s revenue dropped to about $1.98 billion in 2020.
Behind Flynn Restaurant Group, there are four other franchisees with more than $1 billion in annual revenue, and another nine with revenue above $500 billion. The Franchise Times Restaurant 200 lists 121 franchisees with annual revenue in excess of $100 million.
The Franchisees at the Bottom End of the Restaurant 200 are Actually Kind of Small
At the bottom end of the Franchise 200, the smallest of the big restaurant franchisees earn between $30 and $40 million per year—and the smallest of the small own less than 20 franchised outlets. While many of these franchisees have invested in big brands like Burger King, Famous Dave’s and Wendy’s, there are those who have invested in relatively lesser-known brands as well (i.e. Freddy’s, Grandy’s and MOD Pizza).
The Biggest Restaurant Franchisees Invest in All Types of Outlets
This diversity in brand recognition (and industry sector) is not limited to the bottom of the Restaurant 200. From pizza delivery to homestyle cooking, all types of restaurant franchises appear throughout the list. Additionally, while most franchisees on the list have largely focused on developing under one or a few chosen brands, there are franchisees on the list who own as few as two outlets of a particular concept.
Talk to Franchise Attorney Jeffrey M. Goldstein about Your Restaurant Franchise Opportunity
Are you thinking about buying a restaurant franchise? If so, it is important that you perform your due diligence, and you will want to hire a franchise attorney to conduct a thorough review of your chosen franchise opportunity. To discuss your plans with franchise attorney Jeffrey M. Goldstein in confidence, call 202-293-3947 or request a free consultation online today.