Chick-Fil-A Stores Lead Sales Among QSRs

ATLANTAChick-Fil-A stores are bringing home the bacon.

The chicken restaurant boasted average sales per unit of $3.16 million in 2012, leading its group of peers in the quick service industry,  QSR Magazine reported this month in consultation with the food-centric research and consulting firm Technomic Inc.

McDonald's, whose number of franchised units (12,605) far exceeds Chick-Fil-A (1,391), ranked No. 2 among the top 50 brands with average sales per store of $2.6 million, the report divulged.

According to Technomic data, the average customer spends $7.65 in Chick-Fil-A. That's $1.40 more than the average McDonald's patron ($6.25). Darren Tristano, executive vice president with Technomic, also attributes higher sales per store to the fact that a larger percentage of Chick-Fil-A customers visit the restaurant as a family or in a group compared to McDonald's.

Chick-Fil-A stores likely would generate hundreds of thousands of dollars in additional sales if the company was open on Sundays. Overall, Chick-Fil-A sales totaled around $4.6 billion last year, a 14 percent increase over its 2011 performance and a same-store sales jump of 8 percent, according to the privately held company.

Although Chick-Fil-A stores lead sales per store among its peers, Tristano points out that other restaurants with fewer locations such as Illinois-based Portillo's generate higher revenues.

Subway Stores

Subway stores only produce a fraction of Chick-Fil-A's revenues, with average sales per unit of $481,000; however, among QSRs, Subway boasts the largest number of franchised units (25,459), QSR Magazine revealed. Subway is a leader in the nearly $30 billion sandwich category with about 35 percent market share, Tristano told Food Product Design.  

Relatively inexpensive breakfast offerings that are paired with Seattle's Best Coffee, effective advertising and consumers' perceptions that the restaurant offers healthy food are among Subway's strengths, he said in a phone interview.

The fast-growing chain recently announced opening its 40,000th location in Ipswich, England. The company has opened nearly 1,800 new locations since the beginning of the year.

Although domestic expansion has slowed down, Subway is looking abroad, where the opportunities for growth are virtually "limitless at this point," Tristano said.

In a statement in connection with the Ipswich opening, a Subway executive Trevor Haynes cited "low startup costs, flexibility, and simple footprint" as appealing to entrepreneurs.

"The cost for a franchisee to own, operate and invest in one of these businesses in some cases is under $100,000," Tristano said. "It's given a number of franchisees opportunities" to own a franchise at a price that many Americans can afford compared to other fast food chains.

McDonald's, for instance, could cost $500,000 to $2 million, he said.

According to the National Employment Law Project (NELP), McDonald's requires that a prospective franchisee hold $750,000 in non-borrowed assets. By comparison, an individual seeking to open a Subway franchise must have $80,000 to $310,000 in net worth, according to NELP.