The Nation’s Restaurant News annual and Second 100 reports are comprehensive looks at the restaurant industry's largest chains generated through exclusive research by NRN’s editors.
The reports provide a detailed, brand-by-brand assessment and three-year performance comparison of the largest individual organizations in foodservice.
Combined, the reports make the Top 200 census, NRN’s annual endeavor to compile and rank results of the industry’s cash-cow brands and corporations. This year’s reports give readers a panoramic view of the market battles being waged for the hearts, minds and dining budgets of America’s consumers.
More focused than other rankings of the industry’s largest organizations, Top 200 seeks to present relevant comparisons of the largest foodservice competitors by tracking only consumer foodservice sales and revenue generated in the United States. Parallels therefore exist between the federal government’s shift in emphasis from gross national product, which included overseas results of U.S.-based multinationals, to the gross domestic product standard for assessing today’s economy.
In addition to excluding foreign results, the Top 200 series of reports factor out business activities not directly related to consumer foodservice. For example, McDonald’s Corp.’s estimated $1 billion-plus in annual revenue derived from franchisees’ rent payments, contract foodservice companies’ revenue from facilities maintenance, and franchisors’ sales of equipment or food items to their own franchisees are not included.
By virtue of an apples-to-apples focus on food and beverage sales, the Top 200 series yields what we believe is a more relevant appraisal of U.S. market warfare among the industry’s leading combatants and the fast-advancing emerging chains.
To augment company sources, NRN’s editors tapped corporate documents and research studies as well as information from government agencies, chain officials, franchisees and industry analysts. The resulting data were collated and organized into the study’s rankings by various criteria, including segment comparisons that portray fluctuating market-share results of direct competitors within specific business categories.
The final reports are analytical tools that can help define which chain concepts and market segments are prospering or struggling and where consumers are spending their dining dollars.
As the basic criterion for inclusion in Top 200’s statistical universe, the study first ranks individually branded chains on the basis of domestic systemwide sales for their most recent fiscal years ended closest to Dec. 31, 2012.
Separately, companies are ranked on the basis of their domestic foodservice revenue. Qualifying organizations then also are assessed over a three-year span on the basis of their sales and revenue growth rates, estimated annual average sales per location, growth in average sales per location, and rates of expansion in total outlets and franchised units.
Explanation of terms
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Definition of column headers for chain and company tables throughout the report
Chain: The brand name of the restaurants, retail stores or other entities in a multiunit organization, as identified by signage, logos or trademarks.
Chains/divisions: The names of the chains or foodservice groups operated or franchised by the company or its operating subsidiary. In some instances the listed chain or chains are franchises of restaurant brands owned by other companies.
Company: The business entity that ultimately owns the specified foodservice revenue. Hotel, contract-foodservice and theme-park operators are included. Excluded are owned subsidiaries that may function as “parent companies” to a chain or foodservice division. An asterisk following a company’s name indicates that it is a U.S.-based entity whose stock is publicly traded; foreign-based companies not so indicated may be public in their home countries.
Concept: The type of restaurant or foodservice operation run by the chain, as defined generically by its food type, service style, retail context or operating format. Most concepts are self-defining and are categorized on the basis of the Top 200 study’s traditional categorical parameters. Full-service concepts other than hotel, such as casual and family restaurants, are defined as such and distinguished from one another on the basis of their generally dissimilar price-point ranges and by the fact that most casual-dining restaurants have full bar operations but do not serve breakfast, whereas most family-dining restaurants do not have bars but do serve breakfast.
Fiscal year-end: The ending date of the fiscal year represented in the Latest-Year column. If a fiscal year’s actual ending date occurs in the first half of a month, the preceding full month is shown as its fiscal year-end, pursuant to conventional financial-reporting practices.
Latest Year, Preceding Year and Prior Year: Three consecutive years, the most recent of which ended or will end in the month and year indicated in the fiscal year-end column.
Latest-Year rank: The Top 100 chains and separately listed Top 100 companies, and respective data sets for the Second 100 universe, are ranked in descending order of magnitude on the basis of actual, estimated or projected systemwide food and beverage sales for the organizations’ latest fiscal years, generally the year ended or ending nearest Dec. 31, 2012. Data are limited to the chains’ systemwide food and beverage sales in the United States only; company data are limited to domestically generated revenue derived from foodservice only. Chains and companies with tied results are assigned the same numeric rank.
Preceding-Year rank: The same Top 200 chains and separately listed Top 200 companies are ranked on the basis of U.S. foodservice sales and revenue in their preceding full fiscal year. Chains and companies assigned a Preceding-Year rank beyond No. 100 would have held the position in the Preceding Year among the Second 100 chains and companies. Chains and companies with tied results are assigned the same numeric rank.
Parent company: The business entity that owns a chain’s trademarks and master franchising rights, whether directly or through an operating subsidiary, and that ultimately profits from operating, franchising or licensing its concepts. An asterisk following a company’s name indicates that it is a U.S.-based entity whose stock is traded publicly; foreign-based companies not so indicated may be public in their home countries.
U.S. food and beverage revenue: Sums generated through consumer foodservice activities in the United States by the company or its operating subsidiaries. U.S. dollar amounts are irrespective of foreign-currency conversions by foreign-based companies. Included are sales at company-owned and profit-and-loss-contracted operations as well as food and beverage sales royalties and fees collected from franchisees. Excluded from revenue figures are total sales at franchised restaurants; revenues generated by manufacturing or wholesaling of food or other products; foodservice distribution revenues; and other revenues from nonfoodservice sources, such as merchandise sales, video games and property rentals. Figures for hotels, contractors, in-store feeders and theme parks should exclude nonfoodservice retail sales and nonfoodservice contract activities, such as income from rooms, souvenirs, property maintenance, ticket sales and grocery or other general retailers.
U.S. systemwide foodservice sales: Foodservice sales at all domestic restaurants, stores or other outlets in a chain, including company-owned, company-managed, franchised and licensed units. Sales from manufacturing, distribution, merchandise, room revenues, video games, facilities rentals and other nonfood sources are excluded.
Frequently asked questions
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Why wasn’t my chain or company included?
If a chain did not generate at least $380 million in domestic systemwide sales in its Latest Year — the result attributed to the No. 100 chain in this year’s Top 100 study — it will not appear in any of the Top 100 chains listings. Similarly, a company had to generate at least $338.4 million in U.S. foodservice revenue to appear in this year’s Top 100 companies rankings. To qualify for the Second 100 report, a chain had to have generated $134.4 million in domestic systemwide sales in its Latest Year, and a company needed to book at least $96 million in U.S. foodservice revenue.
How do systemwide sales differ from revenue?
U.S. systemwide sales are a total for every domestic company-owned, franchised and licensed outlet within a chain or multiunit operation. Revenue is a company’s top-line income from food and beverage sales, generally from company-owned and -managed units and from foodservice-related fees and percentage-of-sales royalties collected from franchisees.
How is Nation’s Restaurant News’ estimated sales per unit metric calculated?
Top 100 and Second 100 sales-per-unit figures result from mathematical equations of systemwide sales growth and year-end change in number of units, and are done according to NRN’s proprietary formula. For consistency and comparability, NRN estimates partial-year sales contributions from units opened and closed during the respective years. Units with atypical sizes or sales capacities may be excluded.
What is meant by Top 200’s market-share figures?
Within the context of Top 100 and Second 100, the “market” is the aggregate sales of only those chains ranked in the study within a specified segment or category. Market share is an individual chain’s proportional share of that total only during each of the three years compared.
Why do some Preceding-Year and Prior-Year rankings and data differ from presumably corresponding data and rankings in last year’s study?
The Top 200 statistical universe is unique each year, largely because growing entities qualify for first-time inclusion and supplant other entities. Moreover, each year’s research may yield new, more precise information, particularly with respect to privately held entities, necessitating revisions of previously reported data for comparable years. Additionally, previously reported data may be restated from year to year to reflect continuing operations following newly completed mergers, acquisitions or divestitures.
With respect to the separate rankings of the Top 100 and Second 100 entities, respectively, it should be noted that consecutive ranks of No. 1 through No. 200 are assigned only in the primary rankings of systemwide sales and corporate revenue. After the Top 100 and Second 100 groups are divided, subsequent rankings on the basis of growth, number of units, sales per unit and market share are assigned in two exclusive 1-through-100 ranges within the respective Top 100 and Second 100 statistical sets.
My chain appears on other industry sales rankings, yet it’s not included in yours. Why?
Varying studies employ different criteria. We believe Top 100 and Second 100 are the industry’s most meaningful surveys of domestic volume, growth and market trends because they compare leading organizations only on the basis of their consumer foodservice results in the United States, excluding nonfoodservice sales and revenue streams.
But my chain has more units or higher sales per unit than do some of the chains included in those rankings. Why wasn’t it included?
Only the Top 100 and Second 100 chains, as determined by systemwide sales, are ranked by such other criteria as number of units, sales per unit and rates of growth. In other words, the universe for those rankings is limited to chains that appear in the table titled “Top 100 (or Second 100) U.S. chain systemwide foodservice sales.”
My company’s revenue far exceeds the figure shown for many of the corporations ranked in the Top 200, and yet you omitted my company. Why?
Companies were included in the Top 100 or Second 100 because of their foodservice revenue, not their total revenue. The Top 100 study attempts to exclude proceeds from all other business activities, such as manufacturing, distribution, general retail, nonfood contract services, property rental and amusements.
Some tables’ ranking numbers are duplicated and some numbers are not assigned. Why?
Ties. Alphabetical order is not used to assign a lower ranking to chains or companies whose results exactly match those of other entities.
Why did you stop including hotel brands and theme parks in the chain study?
Much like our decision to eliminate contract chains in the 2012 Top 200 report, we found that these categories represented a less valuable part of the study, and their removal would enable us to focus better on emerging restaurant chains as opposed to businesses that claim foodservice as a supplemental part of their income.
Moreover, in the case of hotels, none of the large chains report publicly nor offer guidance on their food and beverage sales. In the end we were spending too much time on a relatively small number of hotel chains using models that relied on once-solid insights that are now too far removed from the times in which they were acquired.
With regard to theme parks, we found that there simply was too great a difference among concepts in the theme-park groups. At the same time, there also was too great a disparity between theme parks and the other chains in the study, which typically comprise hundreds to thousands of small- to medium-size boxes offering only one style of food, not a handful to dozens of multiuse sites offering everything from cotton-candy carts to room service.