May 25, 2018  
 
Gaebler.com is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

Small Business News for Entrepreneurs

 

Franchising News

 

Top 7 Franchise Food Chains By Store Revenue

Written by Ken Gaebler
Published: 9/5/2014

QSR Magazine reports that only seven of the nation's top 50 fast food chains earn $2 million or more per location--and some of the biggest names in food franchising are missing from the list.

In franchising, a successful franchisor doesn't necessarily translate into a successful store location. In fact, some of the nation's most recognizable franchise food chains are falling short when it comes to per store revenue, according to a list released by QSR Magazine.

Chipotle Mexican Grill Franchise

Citing the QSR Magazine release, The Franchise Herald recently reported that just seven of the top 50 fast food franchises earn more than $2 million in per-store annual revenues. Franchises that made the list include:

  • Chick-fil-A ($2.85M per store)
  • Krispy Kreme Doughnuts ($2.57M per store)
  • McDonald's ($2.5M per store)
  • Panera Bread ($2.47M per store)
  • Jason's Deli ($2.4M per store)
  • Chipotle ($2.17M per store)
  • Whataburger ($2.1M per store)

The $2 million revenue threshold may seem arbitrary. However, according to Forbes magazine contributor Carol Tice, a $1 million per-location threshold is a sign of profitability, since it takes at least that much revenue for franchisees to earn a profit.

The $2 million revenue threshold is a sign that a franchise is firing on all pistons. To earn $2 million in revenue, "you've got to have every element of your restaurant operation working perfectly: great, on-trend food, smart location selection, strong staff, effective marketing," Tice told The Franchise Herald.

Some of the big names missing from the $2 million list were Subway, Burger King and Starbuck's. Although Subway ranks second behind McDonald's in total sales, it only earns $400k per store. Likewise, Starbuck's ranks third in total sales and Burger King ranks fifth.

For would-be franchisees, before buying a franchise it's important to evaluate the financial performance of other franchise locations--including per-store revenues. Although the franchisor may be a leader in total sales, a large number of locations or other variables could significantly reduce the amount of revenue you can expect to yield from your franchise.

Have Friends Who Might Like This Article?

Tweet via @gaeblerdotcom Share this on Twitter

Let them know on LinkedIn

Ready to Learn More? We Think You Might Like These Articles:

 


About Our Business News for Entrepreneurs

Our small business news site is packed with useful information for small business startups and entrepreneurs. Learn about small business management, financing, marketing & technology.

 

 

Additional Resources for Entrepreneurs

Help for Native American Entrepreneurs

Resources for Gay Entrepreneurs

Businesses for Sale

Online Entrepreneur Tools

Economics

Lists of Small Business Incubators

Lists of Angel Investors