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In this article we presented the 20 most profitable fast-food chains. You can skip our comprehensive discussion of the fast-food industry and read the 5 Most Profitable Fast-Food Chains.
Fast-food chains are now becoming more famous than ever among people of every age. This fondness can be attributed to the fact that almost all fast-food restaurants today harmonize with the audience’s demands. This is why the fast-food industry generates $570 billion annually, and the market is expected to touch the mammoth number of $931 billion by 2027. Amid the COVID-19 crisis, the restaurant industry is moving away from the dine-in facilities and embracing the idea of drive-thrus and takeaways. Due to coronavirus-related lockdowns, the loss in business led to the closure of roughly 17% of restaurants and a 36.6% year-over-year decline of dine-in restaurants in the U.S. This resulted in several restaurants shifting their dine-in facilities to drive-thrus, takeaways, pickups, and even cloud kitchens. For example, drive-thru stores of Dunkin’ Donuts have 23% higher sales volume compared to traditional restaurants. Data also shows that online food delivery business is expected to generate $151,526 million in revenues in 2021. Moreover, sales through delivery are expected to grow from 15% to 23% in 2025.
Healthy Trends in the Fast Food Industry
Moreover, the restaurants also cater to the health enthusiast audience and drift their menus towards green food. For example, being a pizza chain, Pizza Hut has partnered with Beyond Meat (NASDAQ: BYND) to bring plant-based meat pizzas to its customers. Similarly, KFC, Taco Bell, and Dunkin’ Donuts, other restaurants also aim to provide healthy food to their customers to keep the sales high and remain in the audience’s good books.
Despite keeping up with the changing times, the onset of the pandemic resulted in a substantial dent in the revenues of the fast-food industry. In the U.S., the restaurant industry’s sales fell to $240 billion in 2020, ultimately resulting in 2.5 million jobs less than pre-pandemic levels. With this context, let’s start our list of the 20 most profitable fast-food chains. This is based on the revenues generated in 2020 and significant profit and losses.
Let’s start our list of the 20 most profitable fast-food chains.
Most Profitable Fast-Food Chains
20. Tim Hortons; Owned by Restaurant Brands International Inc. (NYSE: QSR)
Canadian fast-food chain Tim Hortons became the subsidiary of Restaurant Brands International (NYSE: QSR) in 2014. It was founded in 1964 in Hamilton, Canada. The restaurant just started with coffee and doughnuts, but now the menu has expanded to a wide range of beverages, breakfast products, soups, sandwiches, etc. One of the most distinctive features of the chain is that it provides the nutritional information on most menu items, catering to the concerns of its health enthusiast audience. The pandemic-induced disruption in morning routine resulted in an 8.2% fall in its revenue in the Q4 to $1.36 billion from $1.48 billion. Overall, the chain reported a 15.7% decline in sales to $1.2 billion in 2020. To overcome the loss, the company plans to modernize its drive-thru experience and focus on its core items.
19. The Wendy's Company (NASDAQ: WEN)
Wendy’s is one of the most famous fast-food chains with over 6,500 restaurants in 29 countries. It was founded in 1969 by Dave Thomas in Columbus, Ohio, United States. The chain operates under Wendy’s Company (NASDAQ: WEN). Wendy’s is a quick-service chain that became famous for its square beef patties, made with fresh beef. It has an extensive menu that includes different breakfast combos, salads, sides, beverages, hamburgers, etc. Wendy’s, like many other restaurants, is focusing on the digital outlook for the future. The chain saw an increase in its app downloads to 15% during the pandemic and plans to develop artificial-intelligence-enabled apps that would learn to predict the customer’s taste by noticing patterns in the past orders. Moreover, its breakfast menu gained a lot of attention from the ‘work from home’ audience. Wendy’s generated a revenue of $1.73 billion in 2020, a slight increase from $1.70 billion in 2019.
18. Jack in the Box Inc. (NASDAQ: JACK)
Jack in the Box is one of the oldest fast-food chains that was founded in 1951 in California. The chain has an audience in the U.S., with around 2,200 outlets in over 21 states. The restaurants found a quirky marketing strategy to cope with the pandemic woes by introducing the #StayInTheBox. Moreover, Jack in the Box focused on its drive-thru, mobile app, and delivery to boost its sales during the imposed covid-19 restrictions. This resulted in a 12.5% growth in its same-store sales in the last quarter. Overall, the chain joined the billion-dollar club by generating a revenue of $1.02 billion in 2020, which shows growth compared to $950 million in 2019.
17. Panera Bread Company (NASDAQ: PNRA)
Panera Bread Company is an atypical American bakery-café chain with over 2,000 locations in the U.S. and Canada. The company was founded in 1984 and is the subsidiary of JAB Holding Company. The chain is famous for its wide range of pastries and baked goods and has recently added flatbread pizzas to its menu. In addition to the delivery of its menu items, Panera Bread introduced the delivery of groceries during the pandemic. The company introduced off-premise services, including delivery, drive-thru, carry out, and catering, which accounted for 85% of the restaurant’s total sales. Panera Bread’s revenue increased from $1.8 billion in 2019 to $2.1 billion in 2020.
16. Papa John's International, Inc. (NASDAQ: PZZA)
Papa John’s was founded in 1984 by John Schnatter and operated by Papa John’s International, Inc (NASDAQ: PZZA). Currently, the chain has around 5,400 restaurants in 45 countries worldwide. Papa John’s is a significant name in the pizza delivery chains, besides Pizza Hut, Little Caesars, and Domino’s. It is hitting the right notes by introducing the healthy menu items on its already expansive menu list. The famous Cheese Pizza, Chicken & Veggie Pizza, and Papa’s Garden Salad are cooked by keeping a balanced amount of proteins, fiber, calories, etc. This is one of the many reasons that the chain is thriving even during the pandemic. According to the official press release, Papa John’s recorded a global revenue of $1.8 billion, which grew from $1.6 billion in 2019. Moreover, the chain also plans to expand by new 1,380 locations by 2026.
15. Taco Bell; Owned by Yum! Brand Inc. (NYSE: YUM)
Founded in 1962 in California, Taco Bell is one of the most famous fast-food chains due to its culture-centric menu. The chain has over 7,000 restaurants functioning in 31 countries globally. As the name suggests, the signature product on the menu is hard shell tacos and includes nachos, burritos, quesadillas in the list. Taco Bell has also expanded its menu to raise health awareness among its customers with Bean Burritos and Power Menu Bowl. Their Go Mobile restaurants offer contactless curbside pickup due to the rising covid-19 restrictions. Overall, in 2020, Taco Bell performed well and reported a 1% growth in same-store sales. The chain recorded a revenue of around $2 billion in 2020.
14. Dunkin' Donuts; Owned by Inspire Brands
Initially known as Open Kettle, Dunkin’ Donuts was founded in 1948, making it one of the oldest fast-food chains globally. As the name suggests, the chain was primarily known for its doughnuts and coffee but now includes a wide range of sandwiches, salads, and beverages on its menu. It also offers some vegan food items to keep up with the healthy eating trends of the audience. The U.S. remains the biggest market of Dunkin’ Donuts, accounting for 8,500 of its 11,300 outlets worldwide. The chain generated over $1.3 billion in revenues in 2020. Moreover, the company also stated that 60% of its sales came from beverages.
13. Arby’s; Owned by Inspire Brands
Arby’s was founded in 1964 in Ohio, United States, by Forrest and Leroy Raffel. The chain is famous for its signature Roast Beef and Beef ‘n Cheddar Sandwiches. Arby’s has around 3,400 outlets worldwide and has opened its first outlet in Mexico in late 2020. The chain has recorded positive same-store sales for the past decade. Due to the COVID-19 restrictions, half of its outlets were only opened for drive-thru and delivery services. But even during these uncertain times, the restaurant grew its customers 16 million. Arby’s revenue for the year 2020 stood at $3.8 billion.
12. Little Caesars; Owned by Ilitch Holdings
Little Caesars is the pizza chain that ultimately became famous due to its catchphrase ‘Pizza! Pizza!’ in 1979. The restaurant was founded in 1959 and is the third most loved pizza chain in the U.S. besides Pizza Hut and Domino’s. Little Caesars has around 5,000 outlets spread over 27 countries worldwide. It came up with the ‘no-contact delivery’ option during the pandemic through the web, drive-thrus, online delivery, and pickup windows.
11. Chick-Fil-A; Owned by the Cathy Family
Chick-Fil-A is primarily an American fast-food chain with outlets in nearly every U.S. state. Founded in 1946, the chain has around 3,000 restaurants across the U.S. and has recently opened up restaurants in the U.K. and Canada. Initially, it started with its signature chicken sandwich but now offers a broad range of entrees, salads, sides, and sauces. It is opening up in more and more locations and makes more per restaurant than McDonald’s. Chick-Fil-A became famous with people due to its customer-centric policies. The chain provides free meals to people who positively impact their local communities.
10. Sonic Drive-In; Owned by Inspire Brands
As the name suggests, this is a fast-food drive-in chain with around 3,500 outlets in 46 U.S. states. It was founded in 1953 and is commonly known as SONIC. With its famous carhops and roller skates, the chain is one of the most famous quick-service restaurants in the U.S. The restaurant is mainly renowned for its juicy burgers, mozzarella sticks, tots, Corn Dog, and Jumbo Popcorn Chicken. By focusing on its digital infrastructure, known as integrated customer engagement (ICE), SONIC extended its off-premises ordering through the web. This move resulted in a customer boost across the country, even during the pandemic. This drive-in facility generated around $4.6 billion in revenues in 2020.
9. Popeyes Louisiana Kitchen Inc.; Owned by Restaurant Brands International Inc. (NYSE: QSR)
American chain Popeyes was founded in 1972 in New Orleans, Louisiana. It operates with the name Popeyes Louisiana Kitchen Inc. and is the subsidiary of Restaurant Brands International (NYSE: QSR). The chain has over 3,500 restaurants in 30 countries worldwide. Popeyes is famous for its fried chicken, and the restaurant has been following the same recipe for more than 50 years. Moreover, its chicken sandwich is widely loved among the audience. In order to keep up with health-conscious customers, its website displays nutritional information on different menu items. Despite the severe lockdown, the sales at Popeyes continued to grow in 2020. The chain recorded the growth in system-wide sales from $4.397 billion in 2019 to $5.143 billion in 2020.
8. Chipotle Mexican Grill, Inc. (NYSE: CMG)
Chipotle Mexican Grill, Inc. or Chipotle is an American fast-food chain with 2,768 outlets located in the U.S., UK, Canada, France, and Germany. Founded in 1993, it is one of the fastest-growing chains in the world. In November 2020, the chain opened its first ‘ghost kitchen’ in Highland Fall, N.Y., to meet the demands of people stuck at home due to the coronavirus. The digital-only restaurant does not have a dining hall and takes advance orders via website or app. This digital innovation resulted in revenue to increase 7.1% from $5.586 billion in 2019 to $6.0 billion in 2020. The digital sales of the company grew 174.1% and accounted for 46.2% of sales in 2020.
7. Pizza Hut, Owned by: Yum! Brands, Inc. (NYSE: YUM)
Pizza Hut is the largest pizza chain in the world, with over 18,000 outlets in 100 countries. The chain was founded in 1958 and started from just $600. Pizza Hut is the pioneer in online ordering. The chain accounts for 3% of U.S. cheese production, making it the largest buyer of the cheese globally. The pandemic hit the restaurant chain hard as it announced the closure of 1,745 of its outlets. However, it plans to open at approximately 125 locations in over three years. This closure of outlets led the sales to fall 5% to $3.41 in 2020. However, the Q4 results show an increase in same-store sales in the U.S. division to 8%.
6. Domino’s Pizza, Inc. (NYSE: DPZ)
Domino’s was founded in 1960, just two years after its competitor Pizza Hut was ruling the pizza world. It started by selling only two sizes of pizzas and expanded its menu over the course of years. The chain became tremendously famous amongst the audience as it sells over 3 million pizzas per day globally. Their delivery-centric business model, i.e., ‘the cloud kitchen,’ is well suited for today’s world. This model enabled the chain to cut the real estate costs, which proved to be fruitful during the pandemic.
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Disclosure: None. 20 Most Profitable Fast-Food Chains is originally published on Insider Monkey.