Limited-Service Restaurants

The 159,000 limited-service restaurants in the US offer counter service, a practice in which patrons order food and beverage and pay before eating. Food and beverages may be consumed on-premise, taken out, or delivered. Franchises, like McDonald’s and Subway, are ubiquitous in the limited-service restaurant industry and provide independent owners with a well-known brand name and operational and marketing support.

Competition from Alternative Meal Sources

Limited-service restaurants face competition from various alternative sources, including full-service restaurants, prepared foods, specialty food and beverage retailers, and home cooking.

Junk Food Reputation

Fast food (aka "junk food") has a reputation for being unhealthy, an image that runs counter to the consumer trend toward more nutritious eating.

Sep 14, 2026 - Steak ’n Shake Shakes Up Menu

• Steak ’n Shake is betting that beef tallow and grass-fed beef will draw diners and lift sales, The Wall Street Journal reports. The midwestern burger chain has switched to grass-fed beef, beef tallow, and other upgraded ingredients, helping drive a 14% increase in same-store sales during the second quarter of 2026. Average visits per location also rose 5.8% in the first half of the year. The results suggest restaurants may be able to compete on food quality and branding rather than relying mainly on discounts. The chain's turnaround strategy aligns with the Make America Healthy Again (MAHA) movement championed by Health Secretary Robert F. Kennedy Jr., which may help attract politically-aligned diners. The trade-off is higher costs, with Steak 'n Shake franchisees paying more for grass-fed beef and beef tallow and raising menu prices to help cover the added expense, according to WSJ.
• Restaurant hiring rebounded sharply in August after two consecutive months of job losses, according to the latest Bureau of Labor Statistics data. Restaurants added 59,000 jobs during the month, a nearly 0.5% increase from July and the strongest job growth rate among major nonfarm industries. The gain was nearly five times the industry's typical monthly increase and well above its average gain of 12,000 jobs over the previous 12 months. August is traditionally a strong hiring period as restaurants replace seasonal workers returning to school and prepare staffing for the fall. The rebound suggests restaurant labor demand remains healthy despite slower hiring across the broader economy. However, stronger employment throughout the economy could increase competition for restaurant workers and put additional pressure on wages and other labor costs, which have risen steeply.
• Restaurants are expected to remain resilient despite a challenging operating environment in 2026, according to a July forecast by the National Restaurant Association. The NRA expects restaurant and food service sales will increase 4.3% this year, supported by strong consumer demand and summer travel, although uneven customer traffic means much of the growth will come from higher menu prices rather than increased visits. Quick-service operators continue to face elevated labor and food costs, each accounting for about one-third of sales, while higher insurance, taxes, and payment processing fees are squeezing margins. Lower gasoline prices, a strengthening labor market, and continued employment growth are expected to support consumer spending during the second half of the year, but operators will need to focus on productivity, cost control, and operational efficiency to maintain profitability as inflation and other expenses remain elevated.
• According to a QSR Pro report, the growing concentration of the food service distribution industry is increasing both costs and supply chain risks for quick-service restaurants. Sysco, US Foods, and Performance Food Group now control about half of the US foodservice distribution market, giving many QSR operators little leverage over pricing, delivery schedules, product availability, or payment terms. Independent restaurants and small franchisees are especially vulnerable, often paying higher prices and facing greater risks of product shortages and supply disruptions than large national chains with centralized purchasing agreements. As the largest distributors continue to expand through acquisitions, their pricing power is increasing, making it more difficult for smaller operators to manage food costs and maintain reliable inventory. Although regional distributors remain in the market, many are struggling to compete with the scale and resources of the industry's largest players. The same holds true for smaller QSR operators.

Industry size & Structure

The average limited-service restaurant employs about 30 workers and generates about $2.3 million annually.

• The limited-service restaurant industry consists of about 159,000 firms that employ between 4 million and 5 million workers and generates over $367 billion annually.
• The limited-service restaurant industry includes chains, franchises, and independent operators. Large franchises include McDonald’s, Taco Bell, Burger King, Subway, and Panera Bread. Large chains include Chick-fil-A, Chipotle, and Panda Express. The largest firms have an international presence.
• Limited-service restaurants accounted for 34.6% of food-away-from-home expenditures in 2010 and peaked at 37.6% in 2020. They continued to capture the largest share of food-away-from-home spending through 2025 (36.5%).
• Food sales at limited-service establishments increased 88.5% from 1997 to 2025.
• Quick-service restaurants (aka fast-food restaurants) accounted for 88% of limited-service operator sales in 2024, compared to just 12% for fast casual chain restaurants.
• About 80% of fast-food chain's restaurants are franchised.