Who Is Dominating the Franchise QSR Segment?

Rising food costs, labor shortages, supply chain issues – the pandemic has brought a host of challenges to franchises in the quick-service restaurant segment. Here’s who’s dominating during these unprecedented times and the brands to watch.

By 1851 Staff1851 Staff Contributions

Updated 9:09AM • 11/08/22

After two of the most trying years for restaurants in recent memory – perhaps in history – the International Foodservice Manufacturers Association (IFMA) projects that the food service industry will grow 4.9% in 2022 compared to 2021. Some in the quick-service restaurant segment have thrived despite the challenges brought on by the pandemic, while others faltered. And while there is no telling what challenges 2022 will bring, some QSR juggernauts are uniquely positioned to make it a year to remember.

Here’s a look at four of the most popular food service niches in the QSR segment, specifically which quick-service franchises are dominating and which brands could be in for a big year in 2022 and beyond.

Burgers

BK may call itself the Burger King, but it’s McDonald’s that still wears the crown.

According to The New York Times, McDonald’s, having raised its prices to keep pace with rising food costs, topped $23 billion in revenue in 2021 – its highest revenue since 2016 – while profit rose 59% from the previous year to $7.5 billion. With nearly 40,000 restaurants worldwide, McDonald’s handled the bulk of the pandemic as well as any brand, largely due to its increased drive-thru efficiency. According to QSR Magazine, McDonald’s improved its drive-thru service time by roughly 30 seconds in the past two years in major markets, significantly contributing to its impressive 2021 revenue.

And now, having filed a trademark for a virtual restaurant in the metaverse that will deliver actual food to your home, McDonald’s appears to be ahead of its competitors and at the forefront of innovation once again.

Here in the real world, though, Wendy’s is making moves.

Wendy’s not only leapfrogged Burger King in 2021 to become the No. 2 burger chain, but it’s doubling down on its breakfast bet in 2022 and throwing its pigtails into the #chickenwars with its “hot honey duo” chicken sandwich and breakfast biscuit, which were released this month. With its plan to expand to 8,000 units globally by 2025, Wendy’s is looking to kick Burger King while it's down and lock in that No. 2 slot for good.

But it still has a ways to go to catch McDonald’s, if that’s even possible.

Chicken

Popeyes is gaining on KFC in the QSR chicken rankings, but they’re both still chasing Chick-fil-A, which shows no signs of slowing down, generating more sales per store than even McDonald’s.

While Chick-fil-A is currently on top of the chicken world, Popeyes is gunning for KFC and that No. 2 slot, and part of its strategy is international expansion. Popeyes announced last month that it plans to open its first restaurant in South Korea in 2022, in addition to previously announced agreements to enter the United Kingdom, Romania, France and India, as well as expand into Mexico and Saudi Arabia. Other international expansions over the past years include Spain, Switzerland, China, Brazil, Sri Lanka and the Philippines.

KFC currently has 25,000 restaurants in over 145 countries and territories around the world. But Popeyes looks to be well on its way to significantly cutting into KFC’s global market share and taking the No. 2 spot behind Chick-fil-A.

Sandwiches

Subway was hurting.

Then came the refresh.

After reportedly closing up to 2,400 locations in 2020 due to the pandemic, the brand launched its “Eat Fresh Refresh” campaign in July 2021, and with a revamped menu and updated concept, Subway recorded its strongest sales in eight years the very next month. The brand has since started 2022 with new menu updates, including launching two new subs – the Baja Turkey Avocado and Honey Mustard Rotisserie-Style Chicken – in an effort to build even more momentum.

In a sandwich segment in which most brands have seen only incremental growth or overall losses since the onset of the pandemic, it’s really Subway’s game to lose.

Pizza

Domino’s now has more locations globally than Pizza Hut, making it the world’s largest pizza chain. But even the top chains must grapple with the issues that face the industry. According to Reuters, Domino’s anticipates an 8% to 10% rise in food costs this year, so the brand has announced that it will cut back on its now-famous promotions.

Which may open the door for Papa John’s to gain ground.

While it’s still behind Domino’s, Pizza Hut and Little Caesars in the QSR rankings, Papa John’s has partnered with one of Asia’s leading independent private equity firms, signing an agreement to open more than 1,350 new stores across South China by 2040. There’s no telling how quickly the Papa John’s expansion will come to fruition, but with already more than 5,000 stores in 50 countries and on the precipice of aggressive growth, it’s clear the brand isn’t content with fourth place.