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 217,100 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 between $1 million and $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 $365.5 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
Apr 14, 2024 - Staffing Grew in 2023
- According to annual data from the US Bureau of Labor Statistics, employment by full-service restaurants grew 3.5% in 2023 after rising 12% in the previous annual comparison. In the first two months of 2024, the average hourly earnings of production and nonsupervisory employees at full-service restaurants eased slightly from a record high of $19.95 in December. Last year, average industry wages rose 5.4% compared to a year ago, after rising 8.4% in the previous annual comparison.
- Stung by a rise in no-shows and last-minute cancellations, restaurants are increasingly turning to charging fees that can range from as little as $10 per diner to more than $50 per head, The New York Times reports. According to data from the reservation service Resy, 17% of the US restaurants on the platform charged at least one cancellation fee in January, up from 13% a year earlier and 4% in January 2019. The practice is more common in big cities such as New York, where a quarter of New York restaurants on Resy charged at least one cancellation fee in January, according to NYT. While diners are pushing back against the fees, restaurants that have imposed them report a steep decline in no-shows and last-minute cancellations. Restaurants that require a reservation for every table are especially vulnerable to no-shows and late cancellations as they can’t replace the business.
- Rapidly rising payroll costs coupled with diners’ pushback against high menu prices are putting many independent full-service restaurants in financial peril, The Wall Street Journal reports. Demand for eating out, which surged as the pandemic subsided, has given way to growing consumer resistance to ever-higher checks, WSJ reports. Indeed, prices for food eaten away from home were up 30% in January compared with the same month in 2019, BLS data showed. Sales growth for sit-down restaurants is about half that of fast-food and limited-service eateries, according to the National Restaurants Association estimates. Full-service restaurants also trail other formats in employment growth with staffing still below pre-pandemic levels while fast-food chains have fully recovered. High labor costs are especially painful for full-service eateries that prepare food from scratch. Moreover, mom-and-pop operations lack the buying power to command volume discounts, WSJ reports.
- Artificial intelligence has a role to play in the food and beverage industry, according to Bar & Restaurant News. Scheduling and schedule management, a challenge for many restaurant operators juggling multiple shifts, was cited as the number-one thing managers wish was intelligently automated, according to Legion Technologies, the maker of Legion Copilot, a generative AI-powered workforce management assistant for the food service and hospitality industries. "Through simple voice commands, they [employees] can bypass manual searches on the app to get the information they need, whether it’s their schedule for the next week, important compliance documents, or tips from the employee handbook. The introduction of generative AI won’t interfere with day-to-day systems and processes but will make them easier to manage and understand,” says Legion’s chief customer officer. The AI-powered tool allows for easy access to schedule data and insights to easily make schedule modifications.
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