Yum! leads in restaurant re-franchising, finds Technomic

Yum! leads in restaurant re-franchising, finds Technomic
Tags: Burger/Steak/BBQ, Chicken, Franchising & Growth, Professional Services
July 14, 2009

CHICAGO — An updated report from foodservice consultants Technomic found that many top restaurant franchisors reduced corporate ownership of retail units in 2008 by converting them to franchisee locations. Top chains doing so included Yum! Brands, owner of Pizza Hut and KFC, and DineEquity, owner of Applebee's.

Franchisors also offered their franchisees enhanced credit support and easier terms. Some chains reduced or waived franchise, marketing and store-opening fees, offered small loans and payment deferrals, and temporarily reduced royalty rates as incentives to encourage successful franchisees to purchase additional locations.

"The shift toward a heavily franchised business model presents new opportunities for suppliers," said Darren Tristano, executive vice president at Technomic. "Strong, successful franchisees will be expanding their market presence and growing sales by acquiring formerly corporate-owned units. Suppliers who focus on building and strengthening their relationships with these franchisors can participate in that growth."

These and other findings are detailed in the "2009 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report," a joint product of Technomic and Restaurant Finance Monitor. It features Restaurant Finance Monitor's Monitor 200, which ranks the 200 leading restaurant franchise companies by sales. In addition, Technomic reports on the Future 200 — a ranking of the 201 through 400 leading restaurant franchise companies.

Select findings include:

The Top 400 restaurant franchisees generated $31.4 billion in sales in 2008, which accounted for 8.6 percent of the total restaurant industry's $365.6 billion.
Pizza Hut had the most franchised units within the Top 400 companies with 3,627, followed by Burger King and Taco Bell, with 2,758 and 2,391 units respectively.
Among full-service restaurants, franchisors Applebee's had the most franchised units at 1,423.
NPC International was the largest franchise company in 2008. A major franchisee of Pizza Hut, NPC had sales of $690 million, up 1.5 percent over 2007.

The report covers both major franchisors and leading franchisee organizations, and offers concept breakdowns by franchise company and brand, region(s) of company operations and selected franchise cost-structure analysis for leading restaurant brands. A complete listing of franchise company contact information also is included.

Click here to learn more about the report.