Posted on 03/29/2015 8:20:46 AM PDT by TurboZamboni
Have you ever visited your favorite fast-food restaurant and, as you grab that sack of burgers or chicken, wondered how much money that restaurant makes? Well, restaurant trade magazines track those stats for the big fast-food chains. And the answers can be surprising. It turns out that only seven of the top 50 quick-serve brands in the country pull in more than $2 million per store. For perspective on that, for a full-service restaurant to be a profitable enterprise, it needs to pull in $1 million a year — that’s the rule of thumb I learned in my years as a restaurant beat reporter. At $2 million, you’re cooking with gas, while half a million is considered a subsistence level, when you count up all the food and labor costs involved. Fast-food chains have lower labor costs than full-serve eateries, but any way you slice it, they need to drive sales volume to be profitable. To ring up the exceptional figure of $2 million in average per-store sales, you’ve got to have every element of your restaurant operation working perfectly: great, on-trend food, smart location selection, strong staff, effective marketing. Which chains have the highest-earning stores? Here are the only brands in this year’s $2-million club, with their average store revenue figures (courtesy of QSR):
(Excerpt) Read more at forbes.com ...
1. Chick-fil-A: $2.85 million. The Atlanta-based chicken juggernaut has long had per-store sales that are the envy of the industry, and it continues to top the charts. That’s fueling continued expansion — as I write this, I’m reading that the first Seattle-area Chick-fil-A restaurants are coming in 2015.
Though this is the highest per-store figure of the top 50 chains this year, it represents a comedown for Chick-fil-A. Its average per-store grosses were $3.18 million in 2012, an achievement that put the chain in a class by itself.
Sales, yes?
Not profits?
Yes, sales not profits.
Yeah those operating costs are a pesky impediment to profit but the left doesn’t want to hear about that crap. They just want their cut of the biggest number they hear.
Chic does it on a 6 day week also. Their per day revenue blows the competition away even more so.
i like all those places... Jasons Deli in Fayetteville, NC has the best salad bar...
Exec who mocked Chick-Fil-A now on food stamps
http://www.freerepublic.com/focus/f-bloggers/3273180/posts
I guess this guy should look for a waiter job in Seattle.
The article..surprisingly for Forbes..it ignores t he fact that GROSS sales isn’t the key measure of success. It doesn’t mention the basic mathematics of a fast food restaurant. It’s pretty simple. Actual food costs range from 10-20% of gross sales..depending of which type of restaurant. But all other costs are fixed..rent, utilities, insurance, etc..even labor..there’s a minimum number of staff that must be on site..so once you cover your monthly nut...if sales are higher, then as much as 90% of increased sales can drop right to the bottom line. The reverse is also true...if you don’t generate enough sales to cover the nut, you go broke real fast.
The problem at Forbes is named Randall Lane. Forbes is on the Suicide of the West bandwagon.
Very true.
I used to work in a regional financial office of a major fast food company. We prepared monthly, quarterly, and annual financial statements for each location.
Some of the locations were consistently profitable. And some locations actually lost money for the year. Overall, our region was profitable. The average net profit, after all expenses, was about 5%. Some locations did better, but again, some locations actually lost money.
I can also verify that the biggest single expense of the company I worked for was paying the hired help in the stores. Labor costs were a bigger cost than food costs.
If these minimum wage increases keep happening, be ready for sharp price increases in fast food places and restaurants. But then, we know if prices go up, it’s likely that sales will stay flat or go down, as people will not go to these places as often.
It sounds like the bottom line is that the workers who still have jobs will earn more per hour, but may well find that they work fewer hours, and will not be allowed to work time and a half overtime.
The feel-good leftists and low information voters are ignorant of these facts. Economics should be a required course in schools -
Back in the olden days, about twenty five years ago, I worked for a man with multiple Franchises of a major fast food chain, my location and and another consistently hit 2 million+ each year, we were however the bread and butter to pay for the less optimum sales locations. With prices where they are now I don’t find that special.
Four of my favorites made the list, Chick fil A, Krispy Kreme, Panera, and Jason’s Deli.
http://articles.chicagotribune.com/2014-05-01/business/chi-portillos-hot-dogs-for-sale-20140430_1_hot-dogs-portillo-restaurant-group-51-years
One of few good things about living in the Chicagoland area.
And that is with no Sundays
Time to phase my machine shop in to fast food robotics. Anyone know robots???
We got one out here we go about once a week
A friend in Dallas said they finally got an Al’s Italian Beef place. Still nothing decent in Detroit (although we have great coney dogs and the pastrami at Bread Basket Deli in Southfield is as good as anything in NYC or Chicago, and way better than Jason’s).
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