Data, Analysis & Insight for a Stronger Industry Building Bridges between Franchisees, Franchisors & Financiers

Industry Data Report

Unit & Sales Growth 2020 - 2021

Report Highlights

• 10-year history for 56 $1B+ chains including: (1) total units; (2) new units; (3) closures; (4) systemwide sales;

and (5) system sales market share.

Conclusions

• Despite the most difficult operating environment in the industry’s history, gross development increased +2.1%.

This reflected the ability of certain QSR chains to leverage their post-lockdown competitive advantages into new

development.

• Projected 2021 gross new unit development of +2.7% is slightly above 2019’s +2.6% growth rate, but still

represents a continuation of the longer-term trend of slowing development relative to the +3.8% 2014 peak.

• Notably, 2021 development headwinds include ramping material costs (lumber CPI +74% YTD May 2021).

We will monitor the level of impact this material cost headwind will have on the development pipeline.

• 2020 closure rates for the $1B+ chains were much more manageable (-3.7%) than expected because of QSR

strength and because of government assistance for FSR.

• The 2020 $1B+ chain systemwide sales outperformance (relative to the rest of the industry) reflects the clear

benefit of scale which helps the national brands to excel around tech, access, and marketing.

• Net/net , the $1B+ QSR Chains were able to recoup ~10 years of market share losses in 2020. Outline

Table of Contents Pages Unit Development & Closure Analysis ➢ 10 Year Unit Development and Closure Summary by Segment 2 ➢ 10 Year System-wide Unit Count by Chain Exhibit 3 - 4 ➢ 2020 Actual/2021 Projected UnitReport Detail by Chain 5 ➢ 2020 Actual/2021 Projected Unit % Change by Chain vs. 10 Year Average 6 ➢ Unit Development Trends 7 ➢ Closure Rates Trends 8 Systemwide Sales Growth & Market Share Analysis ➢ 10 Year Systemwide Sales & Market Share Summary by Segment 9 ➢ 10 Year Systemwide Sales & Market Share by Chain Exhibit 10 - 11 ➢ Systemwide Sales & Market Share Trends 12 Data in spreadsheet form available at http://www.ChainRestaurantData.com

Copyright: This Research LLC document is copyrighted material. Due to the No Electronic Theft (NET) Act of 1997, electronic forwarding, or other forms of redistribution, without the express permission of Restaurant Research LLC, are violations of law and could be subject to fines of up to $250,000 and up to five years of imprisonment, even when no financial gain or commercial advantage accrues to the forwarder/re-distributor. Copyright 2021 Restaurant Research® LLC. All rights reserved.

$1B+ Restaurant Chains Unit Development & Closure Rate Segment Summary 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021P 10 Yr. Avg. (2011-2020) Gross Unit Development (Sorted by 2020 Growth High to Low) Fast Casual Chicken Coffee/Bakery Pizza Sub- Sandwich Family Casual

Total

Total New Units Total Units Outline Net Growth % Closure Rates (Sorted by 2020 Closures Low to High) Sandwich Chicken Casual Fast Casual Coffee/Bakery Report Pizza Family Sub-Sandwich

Total

Total Closed Units U.S. System-wide Unit Summary 2011 - 2020 (Sorted by Total 2020 Units) Includes All $1B+ Chains and Other Select Concepts FYE 2020 Unit Summary Net Unit Growth Rates 2011 2012 2013 2014 2015 2016 2017 2018 2019 % Fran. Total Co. Units Fran. Units 20/'19 CAGR '11 - '20 Owned McDonald's (1) Wendy's (2) Sonic Drive-In Arby's Chick-fil-A Hardee's Carl's Jr. Zaxby's Checkers/ Rally's Culver's Sandwich Jimmy John's Outline Jersey Mike's Sub-Sandwich (5) Dunkin Donuts (4) Tim Horton's (6) Report Coffee/Bakery Domino's (2) (3) Papa John's Pizza KFC (2) Church's ' Chicken U.S. System-wide Unit Summary 2011 - 2020 (Sorted by Total 2020 Units) Includes All $1B+ Chains and Other Select Concepts FYE 2020 Unit Summary Net Unit Growth Rates 2011 2012 2013 2014 2015 2016 2017 2018 2019 % Fran. Total Co. Units Fran. Units 20/'19 CAGR '11 - '20 Owned Applebee's Chili's Grill & Bar Buffalo Wild Wings Olive Garden Outback Texas Roadhouse LongHorn T.G.I. Friday's BJ's Cheesecake Factory Casual Chipotle Moe's Southwest Grill Corner Bakery Café Fast Casual Outline IHOP Denny's Cracker Barrel Bob Evans Golden Corral Perkins Family Report Total Source: SEC filings, company reports and Franchise Disclosure Documents RR Estimate (1) KFC, Taco Bell, Pizza Hut and Subway excludes licensed units. (2) Dairy Queen figures include DQ Treat, DQ Limited Brazier, DQ Grill & Chill direct-licensed outlets, DQ Brazier direct-licensed outlets, Texas DQ direct-licensed outlets, DQ Grill & Chill sub franchised territory operator outlets and DQ Brazier sub franchised territory operator outlets. (3) Excludes non-traditional stores located in Kmart from 2001 - 2008. From 2009 forward, total unit count data includes non-traditional stores. (4) Dunkin' Donuts figures include Baskin-Robbins combo units. (5) Starbucks does not franchise, but has licensed units which are included under franchise stores. (6) Krispy Kreme company store counts include consolidated franchisee units. 2020 Actual/2021 Projected Domestic Unit Activity Detail New Units - 2020 Closed Units - 2020 Fran. Unit Count - 2020 Projected New - 2021 Concept Total Co. Fran. Total Co. Fran. Transfers Total Co. Fran. Total Co. Fran. Arby's Burger King Carl's Jr. Checkers/ Rally's Chick-fil-A Culver's Dairy Queen (1) Five Guys Hardee's Jack in the Box McDonald's Sonic Drive-In Taco Bell (2) Wendy's Whataburger Zaxby's Sandwich Firehouse Subs Jersey Mike's Jimmy John's Subway (2) Sub-Sandwich Dunkin Donuts (4) Krispy Kreme (5) Starbucks (6) Tim Horton's Coffee/Bakery Domino's Little Caesars (3) Papa John's Pizza Hut (2) Pizza Bojangles' Church's Outline KFC (2) Popeyes Wingstop Chicken Applebee's BJ's Restaurants Buffalo Wild Wings Cheesecake Factory Chili's Grill & Bar Report LongHorn Olive Garden Outback Red Lobster Red Robin T.G.I. Friday's Texas Roadhouse Casual Chipotle Corner Bakery Café Moe's Southwest Grill Panera Bread Qdoba Fast Casual Bob Evans Cracker Barrel Denny's Golden Corral IHOP Perkins Family Total Source: SEC filings, company reports and Franchise Disclosure Documents RR Estimate (1) The majority of DQ openings and closings include conversions to/from other DQ concepts. (2) KFC, Taco Bell, Pizza Hut and Subway excludes licensed units. (3) Includes non-traditional stores located in Kmart. (4) Dunkin Donuts figures include Baskin-Robbins combo units. (5) Krispy Kreme company store counts include consolidated franchisee units. (6) Starbucks does not franchise, but has licensed units which are included under franchise stores. 2020 Actual/2021 Projected and 10-year Annual Average Domestic Unit Growth Detail 2020 Rates 2021 Projected 10-Year Average Franchise CAGR Net Franchise Concept Openings Closings Net Growth Openings Openings Closings Transfers Growth Transfers Arby's Burger King Carl's Jr. Checkers/ Rally's Chick-fil-A Culver's Dairy Queen Five Guys Hardee's Jack in the Box McDonald's Sonic Drive-In Taco Bell Wendy's Whataburger Zaxby's Sandwich Firehouse Subs Jersey Mike's Jimmy John's Subway Sub-Sandwich Dunkin Donuts Krispy Kreme Starbucks Tim Horton's Coffee/Bakery Domino's Little Caesars Papa John's Pizza Hut Outline Pizza Bojangles' Church's KFC Popeyes Wingstop Chicken Applebee's BJ's Restaurants Report Buffalo Wild Wings Cheesecake Factory Chili's Grill & Bar LongHorn Olive Garden Outback Red Lobster Red Robin T.G.I. Friday's Texas Roadhouse Casual Chipotle Corner Bakery Café Moe's Southwest Grill Panera Bread Qdoba Fast Casual Bob Evans Cracker Barrel Denny's Golden Corral IHOP Perkins Family

Total Source: SEC filings, company reports and Franchise Disclosure Documents RR estimate Data, Analysis & Insight for a Stronger Industry Building Bridges between Franchisees, Franchisors & Financiers

Unit Development Trends

➢

➢

➢

Outline

Report

IDR: Unit & Sales Growth 2021 Source: RR Estimates Page 7

Data, Analysis & Insight for a Stronger Industry Building Bridges between Franchisees, Franchisors & Financiers

Closure Rates Trends

➢

➢

➢

Outline

➢ Report

IDR: Unit & Sales Growth 2021 Source: RR Estimates Page 8

$1B+ Restaurant Chains Systemwide Sales Growth & Market Share Summary ($'000) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 10 Yr. CAGR Systemwide Sales Growth (Sorted by 2020) (2011-2020) Chicken Pizza Sandwich Fast Casual Coffee/Bakery Casual Sub-Sandwich Family

$1B+ Chains Sales Y/Y % Change

Restaurant Industry Y/Y % Change

Change 2020 10 Yr. Change Systemwide Market Share as a % of Total (Sorted by 2020 Change) vs. 2019 (2020 vs. 2011) Sandwich Pizza Chicken Outline Fast Casual Coffee/Bakery Sub-Sandwich Family Casual $1B+ Chains

$1B+ Chains Share of Report Total Industry U.S. System-wide Sales Summary 2011 - 2020 ($'000s) Includes All $1B+ Chains and Other Select Concepts Annual Growth Rates Segment Market Share 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FYE '20/ Compound Change Change 2020 FYE '19 Growth '11 - '20 '20/'19 '20/'11 McDonald's Chick-fil-A Taco Bell Burger King Wendy's Sonic Drive-In Arby's Dairy Queen Jack in the Box Whataburger Hardee's Zaxby's Culver's Five Guys Carl's Jr. Checkers/ Rally's Sandwich Subway Jimmy John's Jersey Mike's Firehouse Subs Sub-Sandwich Starbucks Outline Dunkin Donuts Krispy Kreme Tim Horton's Coffee/Bakery Domino's Pizza Hut Little Caesars Papa John's Pizza KFC Report Popeyes Wingstop Bojangles' Church's Chicken U.S. System-wide Sales Summary 2011 - 2020 ($'000s) Includes All $1B+ Chains and Other Select Concepts Annual Growth Rates Segment Market Share 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FYE '20/ Compound Change Change 2020 FYE '19 Growth '11 - '20 '20/'19 '20/'11 Olive Garden Applebee's Buffalo Wild Wings Chili's Grill & Bar Texas Roadhouse Outback Red Lobster Cheesecake Factory LongHorn Red Robin BJ's Restaurants T.G.I. Friday's Casual Panera Bread Chipotle Qdoba Moe's Southwest Grill Corner Bakery Café Fast Casual IHOP Denny's Cracker Barrel Golden Corral Outline Bob Evans Perkins Family

$1B+ QSR Total $1B+ FSR Total $1B+ Chains Total Restaurant Industry ReportRR estimate Data, Analysis & Insight for a Stronger Industry Building Bridges between Franchisees, Franchisors & Financiers

Systemwide Sales & Market Share Trends ➢

➢ Outline

Report

➢

IDR: Unit & Sales Growth 2021 Source: RR Estimates Page 12 Visit www.chainrestaurantdata.com or contact us at (203) 829-9005 or [email protected] Outline to: • Ask us about custom research projects • Inquire about RR Thermometer email marketing opportunities Copyright: This Restaurant Research LLC document is copyrighted material. Due to the No Electronic Theft (NET) Act of 1997, electronic forwarding or other forms of redistribution, without the express permission of Restaurant Research LLC, are violations of law and could be subject to fines of up to $250,000 and up to five years of imprisonment, even when no financial gain or commercial advantage accrues to the forwarder/re-distributor. Copyright 2021 Restaurant Research® LLC. All rights reserved. Sources: All data represents RR estimates which are derived from various private and public sources. Disclosure: Restaurant Research LLC often sells report subscriptions to concepts under our coverage. Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research® LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research’s analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment.