Franchising sales, growth up 10 percent in 2012

 
July 1, 2013

Because of more available credit and numerous acquisition opportunities, the largest restaurant franchisees in the U.S. grew in size and scope in 2012, according to Restaurant Finance Monitor's "Monitor 200."

The annual ranking takes a look at the 200 largest restaurant franchisees in the country. Combined, they recorded $26.3 billion in sales and operated 20,331 total units in 2012, both up more than 10 percent from the previous year, and up 20 percent from depths of the recession in 2009.

"Life is good in the restaurant franchise business," said Jonathan Maze, editor of the Restaurant Finance Monitor. "Big franchisees have taken advantage of a friendly acquisition market to grow their operations. And some of them have become very big."

This year's ranking includes a new No. 1: San Francisco-based Flynn Restaurant Group. Formerly known as Apple American Group, the Applebee's franchisee made a pair of large acquisitions last year, including its first of a Taco Bell operator out of Los Angeles, to become the first franchisee to report sales of more than $1 billion. Flynn has more than doubled in size since 2009, and now has more than 500 restaurants in 23 states.

NPC International, which had been the largest franchisee since 2006, fell to No. 2, with just less than $1 billion in sales. Based in Overland Park, Kan., the company operates more than 1,200 Pizza Huts. It also recently bought 37 Wendy's locations in the Kansas City, Mo., market.

The nation's largest franchisees tend to operate large brands, mostly among casual dining and quick-service restaurants including Applebee's, Burger King, Wendy's, KFC, Taco Bell, Pizza Hut and McDonald's. Lenders have grown more aggressive in making loans to this group, providing these franchisees with the fuel needed to grow, according to the report.

Large franchisee groups also had acquisition opportunities, such as refranchising strategies by Applebee's, Yum! Brands and Burger King.

"If you look up and down the list, you see numerous franchisees that have been able to grow by leaps and bounds the past couple of years because they've been able to buy company-owned restaurants at a low cost from franchisors that have decided to get out of the restaurant operations business," Maze said.

Restaurants on the Monitor 200 are ranked based on the previous year's sales figures.

Read more about franchising and growth.


Topics: Franchising & Growth , Trends / Statistics


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