QSR Magazine - The QSR 50 - August 2002 - 10

TOTAL UNITS | AMERICA’S HOTTEST CHAINS I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 New Kid on T op Subway takes over the top spot in total number of units. T’S THE YEAR SUBWAY SUNK MCDONALD’S. WHILE the world’s largest hamburger chain was struggling with customer service issues, consecutive quarters of declining earnings, and concerns over mad-cow disease overseas, the submarine-sandwich chain expanded aggressively to outnumber the Golden Arches on North American turf. During 2001, Subway opened 848 restaurants in the U.S. and Canada—the most in a single year since 1995—to end the year with 13,101 locations. That was enough to bump Mickey D’s out of the much-coveted No. 1 spot, a title it’s likely held since the birth of fast food. The ailing burger giant underwent a worldwide restructuring that included a reduction in its number of franchisees, but still added 295 units during the year for a total of 13,099. All told, Subway finished ahead by just two outlets. “Having more than 16,500 locations in 73 countries, and now more units in the U.S. and TOP CHAIN 25 CHAINS 2001 TOTAL UNITS BY TOTAL 2000 TOTAL UNITS UNITS 6.92% 2.30% 0.16% -2.62% -4.48% 0.65% 4.32% -1.34% 1.04% 1.43% -7.12% 2.21% 8.46% -9.14% -2.02% 7.83% 6.33% 2.05% -0.83% 6.29% -2.01% -1.27% -1.52% 5.79% 11.76% Subway McDonald’s Burger King Pizza Hut Taco Bell KFC Wendy’s Dairy Queen Domino’s Pizza Arby’s Little Caesars Pizza Papa John’s Pizza Sonic Drive-In Hardee’s Blimpie Subs Jack in the Box Popeyes Church’s Chicken Long John Silver’s Chick-fil-A Carl’s Jr. Sbarro Checkers Drive-In/Rally’s A&W Restaurants Papa Murphy’s Take ’N Bake Pizza 13,101 13,099 8,306 7,719 6,444 5,399 5,315 4,989 4,869 3,198 3,065 2,589 2,359 2,295 1,894 1,762 1,327 1,242 1,194 1,014 926 857 842 822 694 12,253 12,804 8,293 7,927 6,746 5,364 5,095 5,057 4,819 3,153 3,300 2,533 2,175 2,526 1,933 1,634 1,248 1,217 1204 954 945 868 855 777 621 www.qsrmagazine.com | QSR AUGUST 2002 TOTAL UNITS 2001 NEW UNITS AS A % OF TOTAL Canada than McDonald’s, is a tremendous point of pride for us,” says Don Fertman, Subway’s director of franchise sales. The chain says its growth was due in part to its advertising and marketing initiatives highlighting the positive attributes of Subway’s sandwiches. “That combined with Subway’s simplicity of operation, flexibility of location, and low startup costs have attracted a record number of new franchisees,” adds Fertman. 2001 was the first full year after the debut of Subway’s Jared advertising campaign and the launch of its select line of sandwiches with gourmet breads and seasoned sauces. But there’s some truth to the old adage “Bigger isn’t always better,” since McDonald’s remains locked in at the top, when it comes to systemwide sales. With $20.05 billion in sales in 2001, it continues to dwarf Subway, which came in seventh with $4.54 billion, and even Burger King, which placed second with $8.53 billion. Subway did, however, surpass McDonald’s in percentage sales growth. Total sales grew 19.5 percent at Milford, Connecticut–based Subway, while sales grew just 2.4 percent at the house of Ronald McDonald. Overall, it was a challenging year for most quick-serve restaurants. The economic downturn, compounded by the terrorist attacks of September 11, dealt a blow to eateries throughout the country. The shuttering of airports and heightened security measures kept traffic down, while the fear of subsequent terrorist attacks dampened restaurant sales at malls and tourist locations. For months, Americans turned to family and hearth for comfort and solace. Permanent changes in airport security, such as only allowing ticketed passengers to enter airport terminals, made it difficult—if not impossible—for business at restaurant outlets in airports to return to previous levels. Ten, or 40 percent, of our top twenty-five chains decreased in units in 2001, compared with nine in 2001 and four in 1999. Aside from the big shakeup at the top, there weren’t many changes on our list. Chains that placed third through ninth and fifteenth through nineteenth in 2000 were able to hang on to their rankings in 2001. Most of the movement on the chart occurred because of contraction rather than expansion. As chains boarded up restaurants they slid down the ranks, enabling competitors to move up. 49

QSR Magazine - The QSR 50 - August 2002

Table of Contents for the Digital Edition of QSR Magazine - The QSR 50 - August 2002