A new report from Brand Finance reiterates what many of us have been seeing for some time now – Texas Roadhouse is on a tear. The brand valuation consultancy company’s annual report on the most valuable and strongest restaurant brands shows that the Louisville, Ky.-based casual dining chain has experienced a 56% increase in brand value in 2023 and is now estimated to be worth $2.3 billion.
This pace puts the chain atop Brand Finance’s ranking of fastest-growing companies. Brand Finance attributes Texas Roadhouse’s value increase to its expansion strategy, including into smaller markets. It currently operates about 700 restaurants and is targeting 900 units in the near term. The company also expects continued revenue growth as it expands. During its most recent earnings call, CEO Jerry Morgan said 2022 marked the first time Texas Roadhouse’s annual revenue surpassed $4 billion and he expects this momentum to continue. For context, Texas Roadhouse’s total revenues in 2021 were about $3.4 billion. In 2019, they were about $2.75 billion.
“It was only five years ago when we exceeded $2 billion in revenue. We see the potential to double our revenue again over the next decade,” Morgan said during the earnings call.
Filipino brand Jollibee is the second fastest growing company – up 53% to $1.6 billion. The company is planning to open 500 stores in the U.S. market in the next five to seven years. It is also looking to break into the Chinese market. Currently, the chain operates in 34 countries and has over 6,300 locations globally.
Popeyes is the third fastest growing company on the list, up 49% to $1.8 billion. Brand Finance notes that Popeyes’ value is up by 96% versus pre-pandemic levels, with a stronger brand awareness from its wildly popular chicken sandwich launch in 2019. Popeyes is also eyeing international expansion in markets like China, India and Bangladesh.
Despite the staggering growth of these three companies, Starbucks and McDonald’s remain the world’s most valuable restaurant brands overall. Starbucks extended its lead as the most valuable, at $53.4 billion, up 17% year-over-year and marking its seventh consecutive year on top. Brand Finance notes that a “return to normality” as pandemic restrictions ease globally has buoyed Starbucks’ position, and the company is now 30% higher than it was pre-pandemic. The company also credits Starbucks “reinvention plan,” announced last year, and increased digitalization. Starbucks also received the highest sustainability perceptions value of $3.1 billion.
McDonald’s maintained its No. 2 position at $36.9 billion, though its brand value decreased by 7% year-over-year. Brand Finance notes that the chain has navigated supply chain and inflationary issues, and its higher menu prices have impacted consumer perception. That said, the firm is bullish about McDonald’s “Accelerating the Arches” strategy, including its focus on digital, delivery and drive-thru channels.
At No. 3 is KFC, with $17.7 billion – no change year-over-year. The remaining top 10 most valuable restaurant brands include:
- Domino’s, $7.4 billion, up 1%
- Subway, $7.1 billion, no change
- Taco Bell, $7.1 billion, up 11%
- Tim Hortons, $6.1 billion, up 38%
- Wendy’s, $6.1 billion, up 27%
- Burger King, $6 billion, up 39%
- Pizza Hut, $5.9 billion, no change
Brand Finance also ranks the top 10 strongest restaurant brands using a “Brand Strength Index” scorecard of metrics that evaluate market investment, stakeholder equity and business performance. The data is based on more than 15,000 respondents in 38 countries across 31 sectors. In the restaurant sector, British baked goods concept Greggs is the strongest brand, with a ranking of 89/100 on the Brand Strength Index and corresponding AAA rating.
Six of the top 10 strongest brands are U.S. based, including Chick-fil-A, at No. 2 with a score of 87.1, and Olive Garden at No. 3 with a score of 86.9. Starbucks (84.6), Wendy’s (83.7), McDonald’s (83.4) and Texas Roadhouse (82.3) are Nos. 6 through 9, respectively.
Also, as part of its analysis, Brand Finance assesses the role that specific attributes play in driving overall value, including sustainability. The company looks at how much brand value each company has tied up in sustainability perceptions. Behind Starbucks on the sustainability perceptions value ranking are McDonald’s, KFC, Subway, Tim Hortons, Domino’s, Taco Bell, Wendy’s, Pizza Hut and Burger King, respectively.
The overall Brand Value ranking examines several categories, including revenues, royalty rates and its Brand Strength Index.
Contact Alicia Kelso at [email protected]