Starting from McDonald’s to Dunkin’ all the food stores are mostly chain restaurants. A lot of the successful restaurant companies have started franchising in order to cover more grounds and earn the maximum amount of profit at the same time.
With innovations in technology, food science, and marketing strategy it has become a battlefield for food franchises, and each year the completion gets tougher. The fittest of the companies survive and those that fail to modernize are forgotten or just go bankrupt. While making the list, credible data was gathered from company submitted financial statements, franchise documents, and other credible industry sources. So check out Top 10 Most Profitable Food Franchises of 2020 below.
Also, check out: Best Ice Cream Franchise You Should Buy in 2020
Major Facts of The Most Profitable Food Franchises of 2020
- The leader of the fast food franchise industry is McDonald’s.
- Pizza Hut, KFC, and Taco Bell currently run under the YUM brand.
- Starbucks is the largest coffee chain in the world. But it doesn’t follow a franchise model.
- Darden Restaurants and Chipotle run the biggest fine and casual dining restaurant chain in the U.S.
Without further ado, let’s get right to the list:
Franchising Since: 1974
Doctor Associates LLC is its parent company. Subway is known for mainly selling sandwiches like foot-long, six-inch, flat-bread, salads, and other food items.
The brand is the world’s largest sandwich franchise and as of the start of 2020, it had 41, 600 locations in over 100 countries. The complete franchise fee is $15,000. However, the company provides $10,000 as a part of their loan program to eligible franchise starters.
Franchising Since: 1955
Dunkin’ Brands Group is a registered as a holding company but it is popularly known for owning and running the coffee chain Dunkin’ Donuts and ice cream and bakery shop Baskin Robbins. The franchise consists of over 12,100 Dunkin’ Donuts stores and 7,850 Baskin-Robbins shops around the entire world.
Each outlet generates average cash returns of almost 20%, which should attract a large base of new franchise owners. The company had a market share of $4.42 billion according to 2020 reports. At the end of 2019, the revenue was $1.44 billion, with net income being reported of $242 million by the franchise.
8. Domino’s Pizza
Franchising Since: 1967
Domino’s Pizza one of the biggest pizza franchises on the globe, with over 16,000 stores.
After its re-branding in 2013, the company’s margins went on an upward trajectory. Domino’s increased its profit by introducing diverse items such as pasta, boneless chicken, oven-baked sandwiches and wings, chocolate cakes, and soft drinks.
As of March, 2020, the company’s market value is $12.71 billion. Domino’s reported revenue of $3.6 billion and a net income of $400.7 million.
7. Luckin Coffee
Franchising Since: 2017
This Chinese coffee brand has seen exponential growth since it was first inaugurated. The company has over 6,500 stores in China that act as pick-up and delivery spots at the same time.
The stock trades in the U.S. saw a positive run from early 2019 to the beginning of 2020, more than tripling in value. The market value reached about $6.9 billion as of March 31, 2020. In November 2019, the company reported third-quarter revenue of about $208.9 million.
Franchising Since: 1995
Darden Restaurants runs brands of restaurant like Olive Garden, Bahama Breeze, Longhorn Steakhouse, Seasons 52, Eddie V’s, Red Lobster and Yard House.
The location number of Darden’s franchise consists of around 1,500 and its market value comes at $6.6B as of March 31, 2020. In 2019, the restaurant franchise added 39 new outlets during the year.
5. Yum China Holdings
Franchising Since: 2016
A sister concern of the famous ‘Yum!’ brand, Yum China (YUMC) is stationed in Shanghai but incorporated in the U.S. The franchise consists of over in 9,200 stores across China.
YUMC is publicly-traded with a market capital reaching $16 billion on March 31, 2020. The company reported total revenue of $8.8 billion and a net income of $713 million for the year of 2019.
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Franchising Since: 2001
Chipotle Mexican Grill was established with an idea that food served fast did not have to meet the standards, often lower quality and cheap, fast-food experience.
Chipotle generated $5.6 billion in sales in 2019, making it the leader in the Mexican food category and a large player in the overall industry. The market value was more than $18.2 billion as of March 31, 2020.
3. Restaurant Brands International Inc.
Franchising Since: 2014
It is one of the largest fast-food franchise in the world. It was established by the merging of Tim Hortons and Burger King. The franchise consists of more than 2,500 restaurants.
The fast-food holding company shares trade on both New York and Toronto’s Stock Market. The company’s market capitalization was around $12 billion as of March 31, 2020. The franchise generated an income of $1.32 billion and revenue of $5.61 billion, in 2019.
2. Yum! Brands
Franchising Since: 1997
Yum! Brands (YUM) is the accumulation of famous restaurants including KFC, Pizza Hut, and Taco Bell. It is the largest quick-service restaurant company in the globe, currently operating in over 150 countries.
The company had a market value of $20.6 billion as of March. 31, 2020. It earned $1.3 billion in net income on $5.6 billion in revenue for the full year ending 2019.
Franchising Since: 1955
McDonald’s is the most iconic food franchise in the world. It has ruled the industry through its affordable food, fast service, and strategic marketing.
It is the most profitable fast-food chain on the earth, with more than 37,000 locations in about 120 countries. McDonald’s serves almost 70 million people worldwide as of March 31, 2020, the company had a market value of $122.9 billion.
If you ever thought about owning a franchise, then you can pick anyone from the list as they are sure to be profitable. These food franchises have seen drastic growth, which is a major indicator of profitability.