Full-Service Restaurants
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 219,000 full-service restaurants in the US provide food services to patrons who order and are served by waitstaff while seated and pay after eating, a practice known as “table service.” Firms may also offer catering services, food and beverage for off-premise consumption, and non-theatrical entertainment. The full-service restaurant industry includes chains, franchises, and independent operators.
Uneven Demand
Customer traffic at full-service restaurant can vary by day of the week and time of day.
High Labor Turnover
Full-service restaurant operations are labor-intensive, and the quality of service is highly dependent on staff.
Industry size & Structure
The average full-service restaurant operates out of a single location, employs about 25 workers, and generates nearly $2 million annually.
- The full-service restaurant industry consists of about 217,100 firms that employ between 5 million and 6 million workers and generate about $424.4 billion annually.
- The industry is highly fragmented; the top 50 companies account for about 17% of industry revenue.
- The full-service restaurant industry includes chains, franchises, and independent operators. The largest chains include Olive Garden, Buffalo Wild Wings, and Chili’s. The largest franchises include Denny’s, IHOP, and Applebee’s. Larger firms may operate both company-owned and franchised locations.
Industry Forecast
Full-Service Restaurants Industry Growth
Recent Developments
Nov 14, 2024 - Rising Payrolls
- Overall employment by full-service restaurants ticked up 0.8% in September compared to a year ago, while average industry wages increased by 4.3% over the same period to $20.13 per hour, just shy of their record high in August, according to the latest US Bureau of Labor Statistics data. While job growth at restaurants appears to be cooling somewhat after big gains in August, wage growth is more robust. Payroll growth at restaurants is being supported by rising consumer expenditures, up 2.6% year over year in June and 0.2% compared to May, according to the Bureau of Economic Analysis. Sales for food services and drinking places are also rising, growing by 3.5% YoY in June.
- Restaurant industry bankruptcies are on the rise amid increasing operating costs and empty tables, The Wall Street Journal reports. In 2024, restaurant chains and operators are on track to declare the most bankruptcies in decades excluding 2020, when the COVID-19 pandemic upended the industry, according to an analysis of BankruptcyData.com records cited by WSJ. The firm tracked chapter 11 filings of restaurants that are publicly traded, along with companies holding more than $10 million in liabilities. Restaurant chains filing for bankruptcy this year include TGI Fridays, Red Lobster, Buca di Beppo, and Rubio’s Coastal Grill. As consumers retreat from some types of discretionary spending, including eating out, same-store sales traffic at US restaurants dropped by 3.3% this year through Oct. 6 versus the same period in 2023, according to market-research firm Black Box Intelligence. Visits to casual-dining restaurants fell 4.5% over the same period.
- Eating and drinking places added a net 69,400 jobs in September on a seasonally-adjusted basis, according to the Bureau of Labor Statistics. September’s strong jobs number was the largest monthly increase in over two years, according to the National Restaurant Association. More broadly, hiring in the leisure and hospitality industry accounted for 78,000 of the 254,000 jobs (30%) added in September, per the BLS. Spending on food, drinks, and travel powered much of September’s strong hiring even as other sectors slowed. Underpinning strong hiring by the sector was solid growth in personal consumption expenditures, which rose by 2.2% year-over-year in September. Wage growth, which has been outpacing inflation, is keeping consumers going back to restaurants. Also, lower gasoline prices are leaving more money to spend on dining out. September’s strong hiring performance followed a solid August during which restaurants added 29,900 jobs.
- Most restaurant operators reported a decline in same-store sales in July, according to the National Restaurant Association. Only a fifth of restaurant operators said their same-store sales increased between July 2023 and July 2024, per the association’s monthly tracking survey. That’s down sharply from 35% of operators who reported higher sales in June. Nearly two-thirds (63%) of operators said their sales fell in July, up from 56% in June and the highest percentage since January 2024. July’s weak performance marked the continuation of a soft patch in sales, with July representing the seventh consecutive month of net-negative sales readings, per the NRA. Moreover, only 13% of restaurant operators said their customer traffic increased in July year over year, while 71% reported a traffic decline, marking the 16th consecutive month of net declines in customer traffic.
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