Quick Service Restaurants (QSRs) are popular franchise businesses due to the competitive nature of the fast-food market and consumers preference for brands they know. Would-be fast-food restaurant owners turn to known franchises to leverage the brand recognition, menu, supply-chain, and operating model to compete in this high value industry.
We analyzed unit revenue data made available in each brands franchise disclosure document to rank fast-food restaurants by sales volume. For business owners looking to open their own fast food restaurant, average unit revenue is an excellent indicator of the sales volume they can expect from their own franchise restaurant. More on our methodology.
Our Methodology
The goal of any franchise owner is to run a profitable business. The franchise model is advantageous for entrepreneurs because it offers a proven business model that can be opened in new markets with reasonable expectations of financial performance. While the performance of existing franchise units is not a guarantee that a new unit will perform as well, it is safe to use average unit revenues to compare different franchise opportunities.
Taking expected unit revenue in context with a thoughtful business plan to include expected operating costs and expenses can give entrepreneurs a methodology to compare potential profitability and return on investment of a given franchise venture.
In this report we rank franchises based on the average revenue generated by a single franchise unit or territory to highlight opportunities with the greatest sales potential.
What Is Average Unit Revenue?
Franchises report unit revenues in slightly different ways, but all generally refer to the total average sales of a single business unit, territory, or similar language that represents the exclusive market of a franchise owner.
Where Does the Data Come From?
The FTC’s franchise rule permits franchisors to provide information on actual or potential franchise revenue of franchisee and/or corporate owned units. While franchises are not legally required to report average unit revenue, most do. This allows potential franchisees to estimate the volume they may expect from opening a new franchise business.
How Do We Measure It?
We use data provided by the franchisors in the Franchise Disclosure Document (FDD). As much as possible, we look for revenue of franchised units rather than corporate owned units. Often this data is directly available based on a subset of franchise units that are representative of typical unit performance. In some cases, we may derive average unit revenue from corporate royalty revenue and number of total franchise units.
The following table includes notes from the FDD on the source of AUR provided.
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Chick-fil-a
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Based on 2107 non-satellite franchise locations open for at least one full year
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Culver's ButterBurgers & Frozen Custard
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Based on 828 franchise locations open for at least one full year
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McDonald's
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Based on 12,400 franchise locations open for at least one full year
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Zaxby's
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Based on 736 franchise locations open for at least one full year
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Wendy's
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Based on 5,313 franchise locations open for at least one full year
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Popeyes Louisiana Kitchen
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Based on 2,080 franchise locations open for at least one full year
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Jack in the Box
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Based on 1,940 franchised units
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Del Taco
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Based on 278 franchise freestanding locations open for at least one full year
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SONIC Drive-In
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Based on 3,133 franchise locations open for at least one full year
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Wing-Stop
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Based on 1,410 franchise + 37 company locations open for at least one full year
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Burger King
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AUR is for 6,243 traditional franchise locations open all year; AUR for 790 non-traditional locations is $1,178,750; Weighted average for 7,033 traditional + non-traditional locations is $1,471,260
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Qdoba Mexican Eats
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Based on 277 franchise locations open for at least one full year
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Domino's Pizza
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Based on 5,965 franchise locations open for at least one full year
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KFC
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Based on 2,913 franchise locations open for at least one full year
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Blaze Pizza
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AUR is for 257 franchise traditional + 15 franchise mall locations
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Arby's
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Weighted average based on average gross sales reported by 2,119 licensed mature restaurants (freestanding and non-freestanding)
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A&W
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Based on 53 franchise locations reporting
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Jersey Mike's
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Based on 1,524 traditional franchise locations open for at least one full year
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Carl's Jr.
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Based on 984 franchise locations open for at least one full year
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Toppers Pizza
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Based on 69 franchise locations open for at least one full year
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Why It's Important
Sales or revenue volume is central to determining the financial viability of a franchise investment. Expected unit revenues combined with a reasonable estimate of operating expenses can help potential franchisees determine the return on their initial investment, and the potential earnings of a franchise opportunity. To learn more about researching franchises, seethe articles in our Franchise Learning Center.
Want to see more franchises actively opening in new markets? See our Franchise Directory.
