Download the 2011 Franchise Times' Restaurant 200 here.

Restaurant Rank and File

By Nancy Weingartner

As published in: Franchise Times - August 2011

Once you’ve read our latest ranking, file it away for future reference. These are the top restaurant franchisees in the country—and there’s a lot more to them than you see here.

Remember the days when franchise insiders referred to the relationship between franchisors and franchisees as parent and child? Well no more. Click here to download a PDF sample of the Franchise Times' Restaurant 200 (1-25)

We’ve been saying for years that franchisees are becoming more sophisticated and often have operations as large, or larger, than some franchisors. Now we have proof.

Once a year our sister publication, the Restaurant Finance Monitor, collects data on the largest restaurant franchisee operations in the U.S. An analysis of their findings by restaurant reporter Jonathan Maze starts on page 32.

When comparing our Restaurant 200—“The industry’s leading multi-unit, multi-concept franchisees”­—with Franchise Times’ Top 200 franchise companies, we discovered some interesting trends.

The largest U.S. restaurant franchisee, NPC International in Pittsburg, Kansas, has revenues that are slightly higher than Hooters’ 2009 sales as reported in our Top 200 last October. (We’re currently in the process of compiling this year’s list.) Hooters’ $992 million in sales earned it the 79th spot on our franchisor list—ahead of other well-known brands, such as UPS/MailBoxes Etc. and Krispy Kreme.

NPC’s revenue was $934 million for 1,136 Pizza Hut restaurants. Sure, Hooters had fewer restaurants earning almost the same revenues, less than half as many at 452. But nobody can argue with the cash register.

No. 2 and No. 3 on the franchisee list had revenues that equaled those of the franchisors ranked No. 93 and No. 123, respectively on the Top 200 franchisor list.

Apple American Group, based in San Francisco had $671 million from 269 Applebee’s. And No. 3, Bridgeman Foods/ERJ Dining, the largest multi-concept franchisee on the list, had revenues of $508 million from its Chili’s and Wendy’s operations. The company, based in Louisville, Kentucky, operates 161 Wendy’s and 124 Chili’s in multiple states.

The smallest of the multi-unit franchisees ranked—Nos. 190 through 200—fall in the $36 million to $40 million revenue range. No. 200, H&K Partners reach its numbers with 37 KFCs and 7 YUM multi-units and is based in Milwaukee.

This is somewhat like comparing apples to oranges, because our Top 200 franchisor ranking includes all franchises, not just restaurants. However, in the top 25, 12 are restaurants and two are convenience stores, with some hotels sprinkled in.

Imagine what our franchisee list would look like if we had non-restaurant franchisees included. We can only imagine that franchisors might wish they could go to the “kids” to see if they could borrow the keys to the car. So in answer to that other question: “Yes, you can make money in franchising.”

About Franchise Times’ Restaurant 200

Research for this feature was conducted by Franchise Times’ sister publication, The Restaurant Finance Monitor. Questionnaires, phone surveys, and in some cases, a review of public documents, such as annual reports and 10Ks, was used to collect data. However, most of the Top 200 companies provided us with their data.

Our report ranks companies according to revenue generated by a company’s franchised restaurants. If the company also operates a restaurant concept not franchised, or is the franchisor of another concept, we did not include that figure in the overall revenue or unit total. In cases where an acquisition took place during the year, we derive pro-forma revenues in calculating the company’s ranking.

For companies that did not respond to our survey, we confirmed the number of units operated by the company, and then estimated the revenue based on reported chain averages. In the case of a tie in the amount of total revenue, we settled in favor of the company with the most units.

If you believe your company might make this list and we’ve missed you (or you know of another company that should be listed), contact Abbi Nawrocki at 612- 767-3200 to be included in the 2012 ranking.

This listing, which also runs in The Monitor, is combined with a Second 200 report prepared by Technomic. The entire Top 400 report can be purchased by visiting RestFinance.com.

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Wells Fargo Restaurant Finance provides financing to corporate restaurant brands, large multi-unit restaurant franchisees, experienced commercial real estate investors who own restaurant properties, private equity firms, and other investors in restaurant concepts. Our loan products include: syndicated corporate senior financing, fixed and floating rate term loans, acquisition facilities, sale-leaseback financing, bridge/development financing, working capital revolvers, and interest rate swaps. www.wellsfargo.com/restaurants.

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