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Survey: QSR Operators See Sales Soften Further in Q3


In a new partnership with Franchise Times, investment bank Cowen did a quick check-in on third-quarter results with a collection of franchisees across the country. 

There has been some mixed news out of the quarter. McDonald’s reported 2.4 percent U.S. same-store sales growth, though “higher average check drove sales,” according to CFO Kevin Ozan. The third quarter was decent for Restaurant Brands International, too. It beat consensus at Tim Hortons with 0.6 percent same-store sales growth but missed at Burger King with a 1 percent same-store sales growth. 

That’s what operators saw, too. Basically, it was slow going for most quick-service operators. 

“In the 3Q18 period, 33 percent saw stronger sales relative to the 2Q18 period, and only 22 percent saw stronger trends when compared to the 3Q17 timeframe,” wrote Cowen’s Andrew Charles in a report summarizing the survey findings. 

That matches the broader trends. TDn2K reported a 1.38 percent same-store sales growth and 1.26 percent traffic decline for the quarter. 

According to most of the survey respondents, the sluggish market and softening trends can be attributed to the deep discounting that is ubiquitous in quick service and the sheer number of restaurants that have been built since the Great Recession. 

Respondents said instead of deeper discounts, they see better business overall as the way to combat flat or negative same-store sale trends. 

“When we asked QSR operators what tactics are believed to be the most impactful to grow same-store sales over the next six months, the most common responses were advertising/marketing enhancements and menu innovation,” wrote Charles. 

The third most popular response was “value enhancements,” followed by digital ordering for to-go, better operations and speed-of-service enhancements. Third-party delivery was the final way to combat the trends. 

As for the all-important franchisor-franchisee relations and the public spats between franchisees and franchisors seen at Jack in the Box, McDonald’s and Tim Hortons, survey respondents said things are OK, but they have been better. 

“Franchisees ranked the relationship with franchisors a 3.7 out of 5,” wrote Charles. 

But when asked how this year compares to last year, the average response was 2.5 out of 5. 

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About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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