Special Report | August 2017 | By Sam Oches

The QSR 50

Fifty brands rise above the rest in the $234 billion limited-service restaurant industry.
McDonald’s Golden Arches in Las Vegas aren’t the only thing that’s huge; so is the company’s lead over the rest of the industry. istockphoto / Valerie Loiseleux
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In the limited-service restaurant industry, success is rarely a given. Performance ebbs and flows. Trends come and go. New competitors gobble up market share one year and then fade into oblivion the next.

To make it as one of the most successful companies in this industry, restaurants must run the gauntlet of challenges necessary to scaling a concept, from establishing a loyal customer base to forming committed stakeholder relationships, and from building an efficient supply chain to navigating potential threats to the business. Indeed, only those companies that have put in the time and sweat equity can lay claim to being the biggest and the best in a $234 billion industry.

So what are the 50 most successful limited-service companies, and what are their secrets to success? Read on to find out.

01

McDonald’s

It’s not all been sunny skies for McDonald’s in Steve Easterbrook’s reign—quarterly reports have been a bit of a roller coaster—but the Brit, who is in his third year as CEO, has at least managed to keep the company focused on a few core objectives. Key among those is technology and its effect on how customers experience the brand; a new mobile-order-and-pay platform is rolling out to all locations, and a partnership with UberEATS is offering delivery from thousands of stores. There’s also the “Experience of the Future” prototype, which includes touch-screen kiosks and partial table service. The company hopes to update most of its freestanding U.S. locations to the new prototype by 2020 and is reportedly offering to help franchisees pay for the remodel.


02

Starbucks

Starbucks has entered another post–Howard Schultz era, as the company founder handed the CEO keys over to president and COO Kevin Johnson this year. Schultz remains active as chairman of the board and has turned his attention to developing the company’s Reserve Roastery concept, which is brewing up premium java options (including barrel-aged coffee and mocktails) at more urban locations across the country. Meanwhile, Starbucks has pledged a greater commitment to food; its Mercato line and Protein Boxes attract lunch crowds, while new developments like the Sous Vide Egg Bites appeal in the morning. The company is even partnering with grab-and-go specialist Snap Kitchen in several Texas locations.


03

Subway

Subway’s days of opening 1,000 locations a year appear to be over. In 2016, the company reported closing 359 locations as it struggled through its first year without founder Fred Deluca, who died of leukemia in 2015. Deluca’s sister, Suzanne Greco, took the reins as CEO and seems to be preparing the company for a new season of growth. Subway unveiled a new logo and branding last year, and this year made a play for millennial consumers by serving free mini sandwiches at several music festivals across the country. (Update: Subway last month unveiled a major new rebranding initiative. Read more here.)


04

Wendy’s

New Wendy’s CEO Todd Penegor inherited a company firing on all cylinders. Products like the Sriracha Chicken Sandwich, Crispy Chicken BLT, and Power Mediterranean Chicken Salad are innovative while remaining solidly within the brand’s wheelhouse, and the company’s commitment to value (the 4 for $4 deal) and freshness (reaffirming its fresh-never-frozen beef promise) continue to make it the strongest burger competitor to McDonald’s.


05

Burger King

Burgers may have helped the king take his throne, but recent menu innovations have strayed into other territories. Burger King has spent the last two years rolling out novelties (the Whopperito mash-up and the Mac n’ Cheetos) and entirely new platforms (Grilled Dogs, which the company claimed were one of its biggest menu investments ever). Meanwhile, its parent company, Restaurant Brands International, made a splash earlier this year when it acquired Popeyes Louisiana Kitchen.


06

Taco Bell

Taco Bell’s irreverence continues to win over younger consumers, as new items like the Naked Chicken Chalupa LTO (a taco with fried chicken as the shell) spark national conversation, and outreach materials like the brand’s Snapchat account and chatbot ordering platforms engage with Gen Z and millennials where they spend most of their time. Those older Taco Bell fanatics shouldn’t fear, though; the company continues to invest in its boozy Cantina concept, including a huge new Las Vegas flagship location. Next is more international expansion, which Taco Bell plans to ramp up in the next five years.


07

Dunkin’ Donuts

More of America is running on Dunkin’ as the company continues to expand its reach deeper into the country’s heartland. While seasonal food and beverage LTOs draw customers new and old, it’s the brand’s convenience factor that really seems to keep Dunkin’ aloft. Some 60 percent of the company’s traditional locations have drive thru, and sales are 23 percent higher at those stores. Now Dunkin’ is aiding the drive-thru process, rolling out On-the-Go Ordering to its mobile app, which lets guests order ahead of spinning through the drive thru.


08

Chick-fil-A

Let this fact sink in: Chick-fil-A, a quick-service concept with just over 2,000 locations that are closed on Sundays, enjoyed an average unit volume above $4 million last year. This unprecedented number speaks to the brand’s incredible fan affinity, which continues to spread as Chick-fil-A opens in more markets. Surely the top-shelf customer service plays a role, as do new menu items like Frosted Strawberry Lemonade, the Superfood Side, and the Smokehouse BBQ Bacon Sandwich.


09

Pizza Hut

Pizza Hut, the nation’s No. 1 pizza brand, might be sweating just a bit. Domino’s is quickly closing the gap between the two, and growth has stalled at Pizza Hut, which saw same-store sales drop 7 percent in this year’s first quarter. Parent Yum! Brands announced a $130 million plan to fix the brand, an investment that will go toward improving equipment and operations, as well as enhancing the brand’s digital strategy, which includes voice activation ordering and a new online pizza tracker.


10

Domino’s

Simply put, Domino’s is crushing it. A full seven years after the brand’s highly publicized do-over, the company cruises into the top 10 rankings, just on the heels of Pizza Hut as the country’s largest pizza chain. And there’s a good chance it could take the crown next year; Domino’s same-store sales increased a whopping 10 percent in 2017’s first quarter. Delivery remains its sweet spot, and the company is exploring new innovations in that realm, including with drones and specially designed delivery vehicles.

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