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 384,500 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.

More Healthy And Environmentally Conscious Eating

Consumers are trying to eat better by seeking out meals that are healthy, locally sourced, and environmentally-friendly.

Industry size & Structure

A typical restaurant operates out of a single location, employs about 11-27 workers, and generates $1-2 million annually.

    • The restaurant industry consists of about 384,500 companies which employ 8.6 million workers and generates $569 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 14, 2023 - Pandemic Spurs Permanent Change
                                  • Adaptations restaurants made to survive the pandemic have become the industry’s “new normal", according to the National Restaurant Association’s 2023 State of the Restaurant Industry Report. The report notes that “temporary” pivots like expanded delivery services, outdoor dining options, to-go alcohol offerings and investments in technology are here to stay. Also, at least four in 10 operators in the quick service, fast casual, and coffee and snack formats believe the addition of drive-thru lanes will become more common this year. For other restaurant formats, outdoor dining and alcohol-to-go are becoming table stakes. Across all six major industry formats, more than nine in 10 operators plan to continue offering outdoor seating and are also likely to continue offering alcohol-to-go, if legal in their jurisdiction. Two-thirds of adults say they’re more likely to order takeout from a restaurant than they were before the pandemic.
                                  • Restaurants and hotels stung by fake reviews are getting some help from review sites Yelp and Tripadvisor, which are trying to stop the flood, The New York Times reports. While the companies say false reviews represent a tiny percentage of the overall posts that appear online, Yelp said its moderators removed more than 700,000 posts that violated its policies — including many reviews that were abusive or deceptive, according to NYT. In 2020, when more than 26 million reviews were posted on Tripadvisor, the review site said it took down nearly one million it deemed fraudulent, according to its 2021 transparency report. Writing fake reviews is big business that can negatively impact on the restaurant and lodging industries, if customers no longer trust review sites. In addition to monitors, review sites are using automated systems with built-in algorithms to detect inauthentic or problematic posts.
                                  • Occupations that work with food and drink are projected to grow faster than the 5% average for all occupations from 2021 to 2031, according to the Bureau of Labor Statistics (BLS). Of selected occupations that work with food and drink, bartender is the fastest-growing occupation with a projected employment increase of 18%, followed by cooks (16%), chefs and head cooks (15%), drivers and sales workers (12%), and waiters and waitresses (10%). Some of the projected growth for bartenders is due to recovery from the COVID-19 recession of 2020, but demand for this occupation also is expected to coincide with rising demand from consumers dining out, especially in full-service eating and drinking places, the BLS reports.
                                  • Established and emerging restaurant chains with an appetite for growth are eyeing breakfast as a meal ripe for opportunity, Nations Restaurant News (NRN) reported in December. Emerging breakfast concepts are opening new locations or being snapped up by larger chains. Breakfast stalwart Denny’s purchased Florida-based Keke’s Breakfast Cafe in 2022 for $82.5 million and will support the chain’s expansion. Texas-based Toasted Yolk, which opened its 27th location in December, has the lofty aspiration to become the largest breakfast brand in the nation and is expanding into lunch, according to NRN. The US’s most dynamic breakfast chains include Breakfast Republic, Snooze, First Watch, Keke’s Breakfast Cafe, and Toasted Yolk, among others.
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