Top restaurant franchisors changing with the times

by MEAT&POULTRY Staff
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CHICAGO – Many top restaurant franchisors reduced corporate ownership of retail units in 2008 by converting them to franchisee locations, according to a recently released study from Technomic. Among those converting include DineEquity, owner of Applebee’s, and Yum! Brands, owner of Pizza Hut and KFC.

Successful franchisees were also offered enhanced credit support and easier terms as incentives to purchase additional locations during the credit crunch.

"The shift toward a heavily franchised business model presents new opportunities for suppliers," said Darren Tristano, executive vice president, Technomic. "Strong, successful franchisees will be expanding their market presence and growing sales by acquiring formerly corporate-owned units. Suppliers who focus on building and strengthening their relationships with these franchisors can participate in that growth."

Select findings include:

* The Top 400 restaurant franchisees generated $31.4 billion in sales in 2008, which accounted for 8.6% of the total restaurant industry’s $365.6 billion.

* Pizza Hut had the most franchised units within the Top 400 companies with 3,627, followed by Burger King and Taco Bell, with 2,758 and 2,391 units respectively. Among full-service restaurants franchisors Applebee’s had the most franchised units at 1,423.

* NPC International was the largest franchise company in 2008. A major franchisee of Pizza Hut, NPC had sales of $690 million, up 1.5% over 2007.

These and more findings are detailed in the 2009 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report, a joint product of Technomic and Restaurant Finance Monitor.

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