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 441,694 restaurant companies in the US include full-service restaurants, quick-service restaurants (fast food, snack and non-alcoholic beverage bars), fast-casual restaurants, grills, buffets, and cafeterias. Franchise restaurants are individually owned and operated and benefit from marketing and operational assistance provided by a franchisor.
Competition For The Food Dollar
While the restaurant industry is highly competitive, eating establishments also compete with convenience stores, grocery stores, warehouse clubs, and home cooking.
Emphasizing Health and Sustainability
Increasing consumer concern for health and the environment has led to growing demand for healthier and more sustainable restaurant menu options.
Industry size & Structure
A typical restaurant operates out of a single location, employs about 22 workers, and generates $1-2 million annually.
- The restaurant industry consists of about 441,694 companies which employ 10 million workers and generate almost $800 billion annually.
- The industry includes full-service restaurants, quick-service restaurants (fast food, snack and non-alcoholic beverage bars), fast-casual restaurants, grills, buffets, and cafeterias. Food service contractors, bars that serve mainly alcoholic beverages, mobile food services, and caterers are not included.
- Franchise restaurants are individually owned and operated and benefit from a recognizable brand name, corporate marketing, volume purchasing, and operational assistance provided by a franchisor.
- Restaurants may specialize by type of fare (Mexican, Chinese), dish (hamburgers, sushi), item (cookies, ice cream), or meal (breakfast, lunch, dinner).
- Large restaurant companies include McDonald's, Subway, Burger King, Wendy's, Golden Corral, Ruby Tuesday, DineEquity (Applebees) and Starbucks.
Industry Forecast
Restaurants Industry Growth
Recent Developments
Jan 14, 2025 - Higher Wages, Fewer Hours
- Employment by full-service restaurants grew 0.8% in October compared to a year ago, while average industry wages rose 3.7% over the same period to a new high of $20.37 per hour, according to the latest US Bureau of Labor Statistics data. However, as average hourly wages rose in 2024 restaurant workers, including cooks, bartenders, and waitstaff, averaged less time working per week than in 2023, according to federal data. To offset rising labor costs, many restaurants have raised menu prices and added service fees and gratuities to checks.
- Rising eggs prices are a challenge for restaurants, especially breakfast-focused formats where eggs are a cornerstone ingredient, Fastcasual.com reports. Bird flu outbreaks have caused the cost of eggs to surge by 30% over the past year. The average cost of a dozen Grade A large eggs was $3.65 in November 2024, up 28 cents from October, according to the Bureau of Labor Statistics. By comparison, in 2023 the cost averaged $2.07 per carton. Rising and volatile egg prices impact everything from food costs to menu pricing strategies for full-service and quick-service restaurants. Strategies for managing volatility and protecting the bottom line include reducing waste and managing costs using inventory management software such as Restaurant365. Other cost-control measures include preventing overportioning, adjusting menus to include less egg-centric dishes, and negotiating with vendors to reduce other food costs to compensate for higher egg prices, according to Fastcasual.com.
- Krispy Kreme is the latest restaurant operator to be hit with a cyberattack, Nation’s Restaurant News (NRN) reports. The donut chain said it was notified of “unauthorized activity” within its IT systems on November 29 and has since been experiencing “certain operational disruptions,” particularly with its online ordering system. In a filing with the Securities and Exchange Commission, the company said the attack will likely have an impact on its operations and that the “expected losses” from the incident, as well as the financial cost of the investigation into the attack, will directly impact the company’s financial condition. NRN noted the attack was the third in the foodservice industry this year. Earlier in November Starbuck’s suffered a third-party ransomware attack on its back-end processes, and in March Panera Bread experienced a data breach that led to the leak of personal information of many employees, including social security numbers.
- Restaurant industry bankruptcies are on the rise amid an increase in 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 in 2024 include TGI Fridays, Red Lobster, Buca di Beppo, and Rubio’s Coastal Grill. As consumers pullback from some types of discretionary spending, including dining 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.
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