Until 2018, the Nation’s Restaurant News Top 200 traditionally was divided into two parts: The Top 100 that was published and posted online in June and the Second 100, which was presented in July. The data for 200 chains, as well as the largest companies ranked by U.S. foodservice revenue, fuel a comprehensive series of reports generated through exclusive research by NRN editors.
Last year, however, NRN presented at one time in June the combined data for all chains in the Top 200 to give users a bigger first-glance picture of the U.S. foodservice industry and provide larger Top 200 segment peer groups for comparison and analysis to better illustrate overriding industry trends and developments. This year continues that new consolidated Top 200 chains approach.
Whether shown in 100-chain or 200-chain chunks, the census is NRN’s annual endeavor to compile and rank results of the industry’s leading brands and companies. It offers a panoramic view of the market share battles for the dining budgets of American consumers.
More focused than other rankings of the industry’s largest organizations, NRN’s Top 200 seeks to present relevant comparisons of the largest foodservice competitors by tracking only consumer sales and revenue generated in the United States. Parallels therefore exist between the federal government’s shift in emphasis from gross national product, which included overseas results of U.S.-based multinationals, to the gross domestic product standard for assessing today’s economy.
In addition to excluding foreign results, the series of reports factors out business activities not directly related to consumer foodservice. For example, McDonald’s Corp.’s reported $3.5 billion in annual revenue derived from domestic franchisees’ rent payments is not included.
We believe these data provide a more relevant appraisal of U.S. market shifts among the industry’s leading brands and the fast-
advancing emerging chains.
To augment direct company sources and facilitate modeling of results for brands that don’t report, NRN editors tapped corporate documents and research studies, as well as information from government agencies, chain officials, franchisees and industry analysts. The resulting data were collated and organized into the study’s rankings by various criteria, including segment comparisons that portray fluctuating market share results of direct competitors.
The final reports are analytical tools that can help define which chain concepts and market segments are prospering or challenged and where consumers are spending their dining dollars.
As the basic criterion for inclusion in the statistical universe, the study first ranks individually branded chains on the basis of domestic systemwide sales for their most recent fiscal years ended closest to Dec. 31, 2018, which could have had end dates ranging from July 1, 2018, through June 30, 2019.
Separately, companies are ranked on the basis of their domestic foodservice revenue — a ranking that will be presented, along with analysis, in August. Qualifying organizations then also are assessed over a three-year span on the basis of their sales and revenue growth rates, estimated annual average sales per location, growth in average sales per location, and rates of expansion in total outlets and franchised units.
Explanation of terms
Average unit volume: A chain’s self-reported store-level sales output of some or all types of restaurants in its system — dependent on certain criteria, as spelled out by each chain that reports such information.
Chain: The brand name of the restaurants, retail stores or other entities in a multiunit organization, as identified by similar signage, logos or trademarks. For instance, the Panera Bread chain results shown in Top 200 are estimated results from just the locations operated under that name — Panera Bread — and exclude results of other similarly designed and operated restaurants branded Saint Louis Bread Co. that are owned by Panera’s parent.
Chains/Divisions: The names of the chains or foodservice groups operated or franchised by the company or its operating subsidiary, as shown in the Top 200 Companies report. In some instances, the chain or chains are franchises of restaurant brands owned by other companies.
Estimated Sales Per Unit: Generated through a formula, an Estimated Sales Per Unit (ESPU) figure represents an approximate unit-level sales output for all locations within a system. ESPU figures are calculated from a chain’s systemwide sales for a given year divided by the midpoint average number of units open in that year.
Fiscal year-end: The month in which the fiscal year represented in the Latest-Year column typically ends. If a fiscal year’s actual ending date occurs in the first half of a month, the preceding full month is shown as its fiscal year-end, pursuant to conventional financial-reporting practices.
Latest year, preceding year and prior year: Three consecutive years, the most recent of which ended or will end in the month and year indicated in the fiscal year-end column.
Parent company: The business entity that owns a chain’s trademarks and master franchising rights, whether directly or through an operating subsidiary, and that ultimately profits from operating, franchising or licensing its concepts. An asterisk indicates a U.S.-based entity whose stock is traded publicly in the United States.
2019 rank: The Top 200 chains and Top 200 companies are ranked in descending order on the basis of actual, estimated or projected U.S. systemwide sales or corporate revenue for the organizations’ latest completed fiscal years, which for most chains and companies ended on or near Dec. 31, 2018, but for others ended as late as June 2019, as indicated in the separate “Fiscal Year-End” column.
2018 rank: The same Top 200 chains and Top 200 companies are ranked on the basis of U.S. foodservice sales and revenue in their preceding full fiscal year, which for most ended on or near Dec. 31, 2017, but for some ended as late as June 2018. Chains and companies assigned a Preceding-Year rank of “—” fell beyond the No. 200 U.S. system sales or revenue ranking in the Preceding Year. Ties are assigned the same rank.
U.S. foodservice revenue: Sums generated through U.S. consumer foodservice activities by the company or its subsidiaries. U.S. dollar amounts are irrespective of foreign-currency conversions by foreign-based companies. Included are sales at company-owned operations as well as sales royalties and certain fees collected from franchisees. Excluded from revenue figures are total sales at restaurants franchised to others, revenues generated by manufacturing or wholesaling of food or other products, foodservice distribution revenues, and other revenues from nonfoodservice sources. Figures for hotels, contractors, in-store feeders and theme parks exclude nonfoodservice retail sales and contract activities.
U.S. systemwide sales: Sales at all domestic restaurants, stores or other outlets in a chain, including company-owned, company-managed, franchised and licensed units. Sales from all unit-level activities, including those from in-restaurant arcade, gift shop and proprietary packaged goods and equipment transactions, are counted. For In-Store and C-Store chains, excluded are any non-prepared food-and-beverage sales, such as those from gasoline, alcoholic beverages, cigarettes, toiletries and all other consumer packaged goods.
Frequently asked questions
What is new in this year’s Top 200?
To improve transparency around our data, which NRN has always explained in its Methodology statements has included estimated results for some unspecified brands, this year we are identifying in the Chain Index those chains for which we estimated some or all of the results with a new “Types of Results Shown” column.
For now, we are applying “Estimated” not only to chains that have declined to provide data but for which we are compelled by the nature of the report to model results, but also to any chains whose reported results we are forced to modify through some modeling to meet the single-brand, U.S.-only-
excluding-territories methodology of the Top 200 Chains initiative.
An example of such a modified publicly-reported number that will be marked as “Estimated” under our new approach belongs to publicly traded Cracker Barrel Old Country Store Inc. While Cracker Barrel regularly discloses its consolidated U.S. restaurant and in-restaurant retail sales, it has not as yet in public filings or when requested by NRN broken out the amount of sales from its small, secondary Holler & Dash Biscuit House fast-casual group. Because the Top 200 is, in essence, a brand study, we work to not mingle differently named and formatted concepts and so we model Holler & Dash sales back-outs so that the Cracker Barrel Old Country Store line that shows in the Top 200 report reflects only the flagship, table-service concept and its results.
The same approach applies to chains owned by public companies that don’t break out U.S. sales from larger reporting areas, such as North America, Wendy’s and Papa John’s, for example, or the world, like IHOP and Denny’s, among others.
Also, in continuation of an enhancement begun last year, where reported or discernible we are now including in the Chain Index indications of the number of weeks in a chain’s fiscal year for each of the three years shown. NRN believes that most Top 200 users understand that many brands cycle through 52-week and 53-week fiscal years, with the impact — favorable or not — on sales and Estimated Sales Per Unit comparisons that side-by-side looks at such uneven fiscal periods imply. Because of that, NRN previously did not strive to catalog weeks-in-year details. However, some brands have asked that such uneven comparisons be noted and, so, NRN is endeavoring to build up its processes and databases to support fiscal-period length notes in an unobtrusive manner, though we may miss or otherwise unintentionally leave out such notes about some brands during the start-phase of this new metric collection.
Why wasn’t my chain or company included?
If a chain did not generate at least $167.0 million in reported or estimated domestic systemwide sales in its Latest Year — the result attributed to the No. 200-ranked chain in this year’s study — it will not appear in any of the Top 200 chains listings. Similarly, a company will have to generate the Top 200 bottom threshold of U.S. foodservice revenue to appear in this year’s rankings of companies by growth in revenue regardless of how high its growth rate might be for a lesser amount.
How do systemwide sales differ from revenue?
Systemwide sales are a total for every domestic company-owned, franchised and licensed outlet within a chain or multiunit operation. Revenue is a company’s top-line income from unit-level sales — generally from company-owned locations but possibly from restaurants managed on behalf of others or joint-venture restaurants — as well as foodservice-related fees and percentage-of-sales royalties collected from franchisees.
What is Estimated Sales Per Unit and how is it calculated?
An Estimated Sales Per Unit (ESPU) figure represents an approximate unit-level sales output for all locations within a system. The intended use of ESPU is to present a comparable presentation of store-level volumes across hundreds of different brands that may use a variety of selective average-unit-volume calculations. ESPU figures are calculated from a chain’s systemwide sales for a given year divided by the midpoint average number of units open in that year. The midpoint average is determined by adding the year-end number of units for that given year and the preceding year, then dividing the sum by two.
Why have you added an average unit volume column to your Estimated Sales Per Unit table?
NRN ESPU calculations may not reflect average unit volumes as calculated and reported by foodservice companies. Conversely, certain company calculations may not reflect the breadth of unit volumes included in the NRN calculation for ESPU. NRN now presents both figures when available and reported. Footnotes explain the variances and calculation methods when offered. Going forward, NRN will accept for consideration self-reported AUVs and increasingly seek out self-reported appropriate AUV data from publicly filed documents.
What is meant by the Top 200’s market share figures?
Within the context of the Top 200, the “market” is the aggregate sales or units of only those chains ranked in the study within a specified segment or category. Market share is an individual chain’s proportional share of that total only during each of the three years compared.
Why do some Preceding-Year and Prior-Year rankings and data differ from corresponding data and rankings in last year’s published study?
The statistical universe is unique each year, largely because growing entities qualify for first-time inclusion and supplant other entities. Moreover, each year’s research may yield more precise information, particularly with respect to privately held entities, necessitating revisions of previously reported data. Revisions are also regularly needed for publicly reporting companies for which NRN must estimate Latest-Year results because of the timing of those companies’ fiscal year-ends, or for public companies for which NRN must modify reported data with some estimates so that presented results fit within the U.S.-only, single-brand-only parameters of Top 200 methodology.
My chain appears on other industry sales rankings, yet it’s not included in yours. Why?
Varying studies employ different criteria. We believe NRN market data is the industry’s most meaningful survey of domestic volume, growth and market trends because it compares leading organizations only on the basis of their consumer foodservice results in the United States.
But my chain has more units or higher sales per unit than do some of the chains included in those rankings. Why wasn’t it included?
Only the Top 200 chains, as determined by systemwide sales, are ranked by such other criteria as number of units, sales per unit and rates of growth. In other words, the universe for those rankings is limited to chains that appear in the table titled “Top 200 chain U.S. systemwide foodservice sales.”
My company’s revenue far exceeds the figure shown for many of the corporations ranked, and yet you omitted my company. Why?
Companies are included in the Top 200 because of their foodservice revenue, not their total revenue. The Top 200 study attempts to exclude proceeds from other business activities, such as manufacturing, distribution, consumer packaged goods licensing deals, nonfood contract services and property rental.
Some tables’ ranking numbers are duplicated and some numbers are not assigned. Why?
Ties. Alphabetical order is not used to assign a lower ranking to chains or companies whose results exactly match those of other entities.
Why are some major hotel companies no longer included in the Companies revenue census?
Some hotel companies, including Marriott International Inc. and Hyatt Hotels Corp., long ago stopped publicly reporting their food-and-beverage revenue. Despite that, NRN continued to model estimated results based on past performance, indirect indicators included in public reports and industry trends. However, with no new information available to refresh and fine-tune our revenue-estimating models, we have decided to discontinue coverage of such groups to focus on organizations for which more reliable information can be found and whose inclusion will strengthen the validity of the Top 200.
A number of hotel and casino operators, who through public reports provide a significant amount of information about their food-and-beverage operations that NRN can report or model to estimate domestic results, remain in the Companies census, including Caesars Entertainment Corp., Host Hotels & Resorts Inc. and MGM Resorts International.