INSIGHTS & TRENDS SERIES

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2 powered by An Overhead View of America’s Top 500 Restaurant Chains WEBINARWEBINAR STRUCTURESTRUCTURE

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Deep data dive into chain Firefly 500 Report: A sneak peak ahead, performance across industry 10 major insights. and time for questions. segments. SECTION 01: Chain Performance Across Industry Segments. Firefly 500 sales grew +1.9% in 2018, compared with 2017. Unit growth lagged slightly behind, at +0.8% for the Firefly 500.

SALES $308.95 billion in annual U.S. sales. UNITS 67% of total industry sales. 232,228 units 35% of total industry units.

Gerald Oksanen, Datassential Senior Analyst. 06 UNITS • Unit Gains: +674 • Unit Gains: +343 • Sales Gains: +$1.1B • Sales Gains: +$625.79M +3.2% 30,184 vs. 2017 units

CHICK-FIL-A DUNKIN’ SALES • Unit Gains: +146 • Unit Gains: +268 • Sales Gains: +$765.52M • Sales Gains: +$346.61M +5.1% $38.22 vs. 2017 billion

+0.7% +2.0% vs. 2017 vs. 2017 CHIPOTLE • Unit Gains: +92 174,856 $200.57 PANERA BREAD • Sales Gains: +$165.85M units billion • Unit Gains: +82 • Sales Gains: +$313.45M

JERSEY MIKE’S

UNITS SALES • Unit Gains: +77 • Sales Gains: +$95.34M

BURGERIM • Unit Gains: +90 • Sales Gains: +$109.15M

07 WAFFLE HOUSE IHOP • Unit Gains: +13 • Unit Gains: +21 • Sales Gains: +$16.82M • Sales Gains: +$46.69M

METRO DINER FIRST WATCH • Unit Gains: +22 • Unit Gains: +31 • Sales Gains: +$47.39M • Sales Gains: +$33.51M

UNITS SALES UNITS SALES -1.1% -0.6% vs. 2017 vs. 2017 16,897 $52.67 units billion $10,291 $17.49 units billion -0.5% +0.1% vs. 2017 vs. 2017

TEXAS ROADHOUSE DAVE & BUSTER’S • Unit Gains: +13 • Unit Gains: +15 • Sales Gains: +$99.34M • Sales Gains: +$141.68M

LONGHORN STEAKHOUSE • Unit Gains: +19 • Unit Gains: +30 • Sales Gains: +$79.03M • Sales Gains: +$16.51M

08 UNITS CORELIFE EATERY PLAYA BOWLS • Unit Growth: +100.0% • Unit Growth: +162.5% • Sales Growth: +64.9% 217,884 +0.8% • Sales Growth: +98.2% units vs. 2017

JOE AND THE JUICE SALES • Unit Growth: +346.7% • Sales Growth: +233.1% 288.06 +1.9% billion vs. 2017 WOOPS! MACARONS • Unit Growth: +254,5% • Sales Growth: +151.7%

CHICKEN SALAD CHICK • Unit Growth: +60.9% • Sales Growth: +56.6% UNITS

BURGERIM +1.7% 14,344 vs. 2017 units • Unit Growth: +264.7% • Sales Growth: +181.8% SALES

ONO HAWAIIAN BBQ SWEETGREEN +1.8% $20.89 • Unit Growth: +47.6% • Unit Growth: +47.1% vs. 2017 billion • Sales Growth: +52.4% • Sales Growth: +36.6% Limited-Service Unit Growth by Segment

Salad-Healthful +10.6% OVERVIEW: FIREFLY 500 Coffee +4.2%

Mexican +3.7%

+1.1% vs. 2017 -0.7% vs. 2017 Asian +3.3%

Chicken +2.4% Full-Service Unit Growth by Segment 205,040 Bakery-Café +2.3% Regional-Ethnic +1.1% 202,847 Other +2.2% Sports Bar +0.8% +0.5% 2018 27,391 27,188 Burger Seafood-Steak +0.6%

Pizza +0.2% 2017 -0.8% Family Dining 0.0%

2017 Dessert 2018 -1.1% American -2.0% Sandwich -1.1% Italian

-3.9% Buffet

-4.3% Pizza

010 Limited-Service Sales Growth by Segment

Salad-Healthful +11.3%

Coffee +5.7%

Other +4.8% OVERVIEW: FIREFLY 500

Chicken +4.9% +2.5% vs. 2017 -0.1% vs. 2017

Mexican +4.7%

Asian +4.3% $238.79 billion Bakery-Café +4.2% Full-Service Sales Growth by Segment $70.20 $70.16 Pizza +1.7% $232.98 billion billion Sports Bar +2.5% billion +0.7% Burger Seafood-Steak +1.2% 2018

Dessert 0.0%

Regional-Ethnic +1.1% 2018 2017 -0.3% Sandwich -0.2% Family Dining 2017

-0.6% Italian

-0.9% American

-2.3% Buffet

-4.7% Pizza SECTION 02: Firefly 500: 10 Major Insights Major players made moves at the top in 2018.

Taco Bell broke the $10 billion sales mark for the first time. Meanwhile, the largest coffee chains once again lead industry unit growth, with Starbucks overtaking McDonald’s for the No. 2 spot.

TOP 5 RESTAURANT CHAINS BY TOP 5 RESTAURANT CHAINS BY TOTAL SALES ($000) TOTAL UNITS

2018 YoY 2018 YoY SALES CHANGE UNITS CHANGE

MCDONALD’S $37.46B -0.5% 24,974 -3.5%

STARBUCKS $18.59B +6.9% STARBUCKS 14,606 +4.8%

SUBWAY $10.52B -4.0% MCDONALD’S 13,891 -1.0%

TACO BELL $10.42B +6.4% DUNKIN’ 9,114 +3.0%

BURGER KING $9.63B +0.7% 7,456 -0.5%

013 Health sells.

The Salad-Healthful sector in limited service was the runaway star in 2018, with increases of 10.6% in unit counts and 11.3% in sales.

Last year, Sweetgreen crossed over the 100-location mark and the $100 million annual-sales threshold.

GEOGRAPHY MATTERS: A burgeoning segment built around salads, juice and smoothies, and bowls might evoke the image of coastal megacities, but the Salad- Healthful sector’s geography is spread more evenly: Location footprints among the 5 fastest-growing chains: Urban: 49% Suburban: 42% URBAN SUBURBAN RURAL Rural: 9% JOE AND THE JUICE 96% 4% 0%

PLAYA BOWLS 32% 52% 15%

CORELIFE EATERY 48% 50% 2%

CLEAN JUICE 33% 58% 10%

NEKTER JUICE BAR 70% 29% 1% 014 Ethnic or regional cuisine drive rapid unit growth for upstart chains.

WOOPS! MACARONS +255%

HOKULIA SHAVE ICE +100%

VIVI BUBBLE TEA +93%

POKÉ BAR +79%

ONO HAWAIIAN BBQ +48%

THE HALAL GUYS +35%

Assorted flavors from Woops! Macarons. 015 International concepts made

Lemon Meringue Tart from themselves at home. Paris Baguette, a chain of bakeries originating from .

COUNTRY OF ORIGIN UNIT GROWTH %

JOE AND THE JUICE Denmark +346.7%

BURGERIM Israel +264.7%

PARIS BAGUETTE South Korea +51.0%

BONCHON CHICKEN South Korea +41.7%

SHARETEA Taiwan +33.3%

NANDO'S PERI-PERI South Africa +7.7%

FRESHII Canada +7.0%

016 “Better burger” settles into maturity.

With the exception of fast-growing Habit, the first “better burger” chains have backed off from their expansion tear from 15 years ago.

Shake Shack is leading the third wave of the burger segment’s growth, increasing sales 24% to $468.5 million, which puts it in the 100 largest brands by sales.

LEGACY BRANDS BETTER BURGER FORERUNNERS +0.1% units +0.4% sales +1.5% units Firefly 500 chains ranked Nos. 1-100 by +3.2% sales unit count: McDonald’s, , Wendy’s, Sonic, Jack in the Box, Hardee’s, Five Guys, Smashburger, The Carl’s Jr., Checkers, Rally’s, Whataburger, Habit Burger Grill, Burger Fi, Culver’s, Steak N Shake, A&W, White Farmer Boys, Mooyah Burgers & Castle, Krystal, Freddy’s, Fries, Fatburger In-N-Out Burger

017 The LSR Pizza segment slices into three tiers.

1 2 3

THE NATIONAL CHAINS FAST-CASUAL BRANDS PIZZA’S MIDDLE CLASS

+0.4% units +5.4% units -1.0% units +1.4% sales +18.2% sales -0.1% sales There’s still growth potential in the LSR sandwich sector.

2018 % UNIT UNITS GROWTH

JIMMY JOHN’S 2,756 +0.6%

JERSEY MIKE’S 1,417 +5.7%

Subway dominates the category by unit count, but when that mature brand is set FIREHOUSE SUBS 1,151 +3.5% aside and the rest of LSR Sandwich is evaluated, its 2018 performance was in POTBELLY 480 +0.8% keeping with that of all limited service.

+0.5% unit growth, excluding Subway MCALISTER’S DELI 427 +4.4% +2.7% sales growth, excluding Subway WHICH WICH 363 -11.5%

QUIZNOS SUBS 320 -14.0%

PENN STATION EAST 311 +0.3% COAST SUBS

JASON’S DELI 281 +2.9% 019 National chains, national delivery.

While exclusive partnerships have gone out of style, last year the major restaurant brands teamed up in large part with delivery startups.

Yum Brands made a major investment in GrubHub; Uber Eats partnered with McDonald’s and Starbucks; and DoorDash expanded its reach with Chipotle, Wendy’s, and Taco Bell.

What’s been the effect of adding delivery on your sales?

54% INCREMENTAL

33% NEUTRAL

3% Datassential HotShot Report survey of 137 restaurant operators, July 2019. 11%

020 Restaurants adopted more Datassential Keynote Report automation to alleviate labor survey of 201 restaurant operators, cost pressures. December 2018

Mobile Apps: 53% of operators using 39% interested in adding

Ordering Kiosks: 17% of operators using 33% interested in adding

Tabletop Devices: 16% of operators using 36% interested in adding

021 Some major restaurant UNIT RANK #515 CHRONIC TACOS chains lay just outside the $51.94M in 2018 sales. Firefly 500. $1.37M in 2018 AUV.

OTHER FUTURE FIREFLIES

UNIT 2018 RANK SALES AUV

554 UNCLE JULIO’S $132.53 M $3.90 M

538 VINO VOLO $100.13 M $2.78 M

565 TRUE FOOD KITCHEN $118.77 M $3.60 M

592 WALK-ONS BISTREAUX & BAR $75.56 M $2.44 M

652 WAHLBURGERS $51.39 M $1.84 M

UNIT RANK #542 COOPER’S HAWK $290.10M in 2018 sales. $8.29M in 2018 AUV. 022 Rich performance data and insights for 19 01 LSR Asian 11 LSR Other LSR and FSR segments.

02 LSR Bakery-Café 12 FSR Family Dining

03 LSR Burger 13 FSR Buffet-Cafeteria

04 LSR Chicken 14 FSR American

05 LSR Coffee 15 FSR Sports Bar

06 LSR Dessert-Snack 16 FSR Italian

07 LSR Mexican 17 FSR Pizza

08 LSR Pizza 18 FSR Seafood-Steak

09 LSR Sandwich 19 FSR Regional-Ethnic

10 LSR Salad-Healthful A Sneak Peek into the Year Ahead, in 3 Insights. #1 TECHNOLOGY will build the top line, not just the bottom line. PANERA BREAD Investment in rapid pick-up.

DUNKIN’ Mobile app and rewards system.

MCDONALD’S Acquisition of Dynamic Yield. #2. PLANT-BASED will go beyond a Beyond Burger.

KFC PIZZA HUT

BURGER KING DUNKIN’ #3. THE GREAT RETAIL TRANSITION

will further shake out the restaurant industry. CLOVERLEAF MALL Chesterfield, VA Photographed by Will Fisher

Old, dated malls continue to close or get abandoned.

ROLLING ACRE MALL Akron, OH Photographed by Seph Lawless Meanwhile, according to a Cushman & Wakefield estimate, the number of food halls in the U.S. is expected to rise: 120 450 2016 2020

REVIVAL FOOD HALL Chicago, IL Which restaurant concepts can successfully capture changing foot traffic?

CHEF-DRIVEN INDEPENDENTS? RESTAURANT-RETAIL HYBRIDS? “EATERTAINMENT” VENUES? Mark Brandau Managing Editor && [email protected] QQAA For more information about this report, contact Brian Darr at: 312-655-0594, or [email protected] Special Pricing for Datassential Subscribers and IFMA Members

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To purchase, contact Charlie McConnell ([email protected])

34 IFMA Updates (ifmaworld.com)

• Consumer Food Journey Research Report: Published November 4th

• IFMA COEX: March 1-3, in New Orleans

• IFMA Foodservice Fundamentals: February 2020 in Rosemont, IL

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