QSR 50: The Fast Food Industry’s Leading Annual Report

1

McDonald’s

The top-earner in fast food felt the COVID strain early, like everyone else. Global same-store sales surged north of 7 percent in February before mid-March kicked momentum sideways. Comps declined 22 percent in the month and 3.4 percent in Q1. In the U.S., a strong start was enough to get sales in the black at 0.1 percent. The following quarter, however, they declined 8.7 percent. And then the rebound kicked in.

Domestic comps upped 4.6 percent in Q3 before jumping to 5.5 percent to close the year, giving McDonald’s a 0.4 percent rise for all of 2020—the chain’s sixth straight year of positive U.S. same-store sales.

McDonald’s earned more than $10 billion in digital sales in 2020 across its top six markets—good for nearly 20 percent of systemwide business. Corporate and franchisees invested $1 billion in tech and digital initiatives.

Yet the real difference maker was the drive-thru, which improved by roughly 30 seconds in the past two years in major markets. In fact, the company moved some 300 million additional cars through over the last year, CEO Chris Kempczinski said.

McDonald’s didn’t take its eye off the long-term, either. It invested $1.5 billion in capital expenditures to open nearly 1,000 restaurants across the globe and modernize 900 U.S. stores. This year, it plans to
fork up roughly $2.3 billion in capital. Half of which will go toward the opening of 1,300 global venues. About $500 million of that will be used to modernize 1,200 U.S. restaurants. By the end of the year, McDonald’s expects more than 90 percent of its modernization projects to be completed.

2

Starbucks

Few quick-serves rode the pandemic roller coaster like Starbucks. The pandemic’s assault on early morning dayparts and habitual occasions disrupted a rapid start to the year. Through the first 10 weeks of Q2, Starbucks’ U.S. business delivered 8 percent same-store sales growth on transaction gains of 4 percent. Two-year comps tracked toward 12 percent—Starbucks highest number in more than three years. Revenue growth was on pace to reach its best level
in more than four years.

In mid-March, the chain decided to close more than half of its corporate fleet and limit service to drive-thru and delivery at restaurants still open. Naturally, sales plunged in response, to the tune of negative 65–75 percent.

But Starbucks found a way to not only reengage and serve guests amid a changing climate, but to also take COVID learnings and catapult forward. Starbucks set in motion a plan to close 800 restaurants (500 U.S. and 300 Canada). This went beyond unit retraction, however. Starbucks said it cleared the way for development of new, more efficient retail store formats “that cater to the customers’ increasing desire for convenience.” Imagine Starbucks Pickup locations, drive-thru, stores without seating, and more.

In Q4, about 75 percent of Starbucks’ U.S. sales volume flowed through drive-thru and mobile orders. Moreover, mobile order transactions increased from 18 percent in Q2 to 24 percent, aided by app upgrades as well as increased messaging across marketing channels to drive awareness. Curbside arrived at 800 restaurants. The company started testing handhelds in the drive-thru. Rewards growth appreciated record growth, thanks to a revamped, multi-tender program (nearly 23 million members).

By the time Q2 of 2021 rolled around in April, Starbucks’ domestic same-store sales had fully recovered at 9 percent growth—meaningful improvement from negative 5 percent in Q1.

And given the brand’s AI investments, dubbed Deep Brew, along with the asset transformation, Starbucks firmly moved beyond the COVID hole and into a future filled with more potential than ever.

3

Chick-fil-A

Ask anybody in the Southeast what they thought of fast food and COVID and you’ll likely hear a tale about the never-ending drive-thru that didn’t miss a beat. Remember when social media thought Chick-fil-A should handle vaccinate distribution? Unsurprisingly, the brand found a way to shine during the pandemic, famously erecting multiple-lane setups that managed to deliver the guest experience and hospitality Chick-fil-A built an empire on. Cow-themed masks and all.

It started with giving back. In April 2020, the chain announced a relief effort dedicated to helping local franchisees continue their support of those impacted by the crisis. It was anchored by a $10.8 million fund Chick-fil-A corporate distributed to communities. Funds were made available to operators through June 2020 with the intent to foster an immediate impact, including food donations or items to first responders, healthcare workers, Chick-fil-A employees, and their families.

Chick-fil-A then said in March 2021 it would invest $19 million in restaurant employees’ continuing education, awarding college scholarships to 7,492 team members in 44 states, Washington, D.C., and Canada. More recent developments include a robotic delivery test and the creation of a delivery-only concept set to debut in Nashville.

Additionally, Chick-fil-A continues to explore modular construction—the first such store opened outside of Atlanta last October—and is showing zero signs of slowing down, sales wise, unit growth, or anything else.

4

Taco Bell

Due to its breakfast service and late-night prowess, Taco Bell had a steeper climb during COVID than its big-chain Yum! Brands counterparts, Pizza Hut and KFC (the company also owns fast casual Habit Burger). Same-store sales declined 8 percent in Q2 off a 7 percent gain in the year-ago period. Temporary closures climbed as high as 500 at the end of the first period, with 100 locations reopening by mid-April.

But that’s not to say Taco Bell didn’t score some major wins during the COVID-laced year. Its digital business reached $1 billion and mixed 12 percent in Q4, while delivery ran in the high-single digits. Taco Bell also appreciated record-drive thru performance and achieved transaction times below four minutes, with the fastest times recorded in Q4, despite added volume.

Taco Bell became the first of Yum!’s chains to test an advanced point-of-sale system, described as a modern, tablet-based application that’s completely customizable.

All that said, the most visible moments of 2020 and into 2021 for Taco Bell have come with store models. Taco Bell unveiled a fully digital Times Square store in April that includes 15 glowing order-ahead pickup cubbies and 10 kiosks to replace traditional analog menuboards. Additionally, the chain shared a plan to diversify its portfolio with a series of fresh models, everything from Taco Bell’s first drive-thru Cantina in Danville, California, to some 1,000 “bellhops” across the U.S. by summer.

Nothing was more headline grabbing, though, than the “Go Mobile” unit previewed in August 2020. This store has a dual drive-thru, is just 1,325 square feet (compared to 2,500) and presents a synchronized digital experience through “smart kitchen” technology integrated with Taco Bell’s app. The store can detect when guests arrive and suggest the quickest route.

5

Wendy’s

Wendy’s had a busy 2020, which wasn’t unexpected. The company entered the year set on crashing the fast-food breakfast wars. And that’s exactly what happened in early March. Wendy’s saw its top-line jump 16 percent the first week as breakfast arrived in force. We all know what happened next.

Yet for all of the struggles that followed, from pulling back marketing contributions to the challenge of serving a daypart in flux, Wendy’s left 2020 with far more positives than negatives. Breakfast remained steady at 7 percent of sales in Q1 2021 even as other dayparts strongly increased. All of the brand’s key breakfast metrics improved—sales dollars, awareness, frequency, and customer satisfaction scores.

This as awareness levels held around 50 percent. With vaccinations increasing and mobility picking up, the runway is vast. The best predictor of what’s to come might be 300 legacy restaurants that offered breakfast prior to Wendy’s rollout in March 2020. Those stores grew the daypart to more than 10 percent of sales. If Wendy’s can achieve that systemwide (as it hopes), we’re talking a $1 billion or so boost.

Overall, Wendy’s closed 2020 with its two highest global same-store sales quarters in the last 15 years. And it kicked 2021 off with a domestic lift of 13 percent, or 12.8 percent on a two-year basis.

6

Burger King

Like Starbucks, Burger King guided higher U.S. closures than usual in 2020. But also akin to the java leader, this was done with portfolio optimization in mind. The brand dropped a host of “restaurant of the future” designs in September 2020, including a suspended kitchen model that sends food down via conveyor belt system.

Although that’s a still-to-come initiative, parent company Restaurant Brands International continues to upgrade drive-thrus by installing outdoor digital menuboards. By the end of 2020, more than 1,900 U.S. Burger Kings got the facelift. The menuboards also offer the ability to integrate loyalty programs, which allow for customized menu items to be displayed based on a guests’ favorite purchases and redemption history. They accommodate loyalty integration through scanning, Bluetooth, or near-field communication. Additionally, the flexibility to add immediate, remote contactless payment to enable guests to order and pay simultaneously, and speed up drive-thru lanes.

Beyond physical changes, Burger King spent much of the past year fine-tuning value. The company debuted a $1 Your Way Menu in late December and turned focus to core innovation, with promotions and everyday branding customers could expect. Or, put another way, embedded value over fleeting deals.

In early January, Burger King unveiled a new visual design complete with new logo, merchandise, uniforms, and restaurant signage. It marked the company’s first complete rebrand in more than two decades.

More recently, a long-awaited chicken sandwich, the “Ch’King” hit markets nationwide, and the company promised to turn the dial up on breakfast in 2021 and beyond.

7

Dunkin’

Dunkin’ arguably (although there’s little debate) gave the quick-service world its biggest non-COVID headline of 2020. In mid-December, Inspire Brands completed an industry-shaking $11.3 billion acquisition of the company, including Baskin-Robbins. With it, Inspire, which also directs Arby’s, Jimmy John’s, Sonic Drive-In, Buffalo Wild Wings, and Rusty Taco, became the second-largest restaurant company in the U.S., both by system sales and locations, despite forming just two years ago.

Roark Capital-backed Inspire suddenly directed nearly 32,000 restaurants across more than 60 countries generating $26 billion in annual system sales.

The Dunkin’ deal was the highest-dollar restaurant deal since 3G Capital LP, Burger King Worldwide Inc., acquired Tim Hortons for $12.64 billion in August 2014. Panera Bread follows at $7.5 billion, a price paid by JAB Holdings in 2017.

Before the deal, Inspire ran roughly 11,000 restaurants. At that point, there were more than 12,500 Dunkin’ and nearly 8,000 Baskin-Robbins globally alone. Dunkin’ was also 100 percent franchised and boasted more than 20,000 points of distribution in over 60 countries worldwide.

The acquisition represented a 10x premium to that of Sonic and the highest multiple paid for a franchised business of scale in the past 10–15 years, if not longer, BTIG analyst Peter Saleh said at the time.

What this likely signals is future growth as Dunkin’s price reflects potential as much as current penetration. The concept has plenty of runway west of the Mississippi, especially in California, and previously suggested it could reach 17,000 U.S. units in time.

Ahead of the blockbuster, Dunkin’ returned to positive growth in Q3 as its U.S. same-store sales climbed 0.9 percent. But the brand scaled back as it closed 687 domestic locations year-to-date through October, including 447 Speedway self-service kiosks.

8

Subway

Change is afoot at the world’s largest restaurant chain. Subway named former Burger King leader John Chidsey CEO in fall 2019. The following year was a crazy one, as we know, but major transformation is on deck for Chidsey and the chain’s revamped leadership.

From a high level, expect an overhauled guest experience from core menu changes, including chef-recommended builds to 11 new and improved ingredients (everything from bread, protein, and add-ons), returning fan-favorites, a complete redesign of Subway’s digital ordering experience and app, and new in–store merchandising.
The exploration of non-traditional locations is on deck, too.

These changes will run alongside continued retraction as Subway’s unit count dips. The brand exited Walmart stores this past year and will move some of its operations from Milford, Connecticut, to Miami, according to the company.

Subway had about 23,800 U.S. restaurants at the end of 2019.

9

Domino’s

Pizza chains across foodservice enjoyed a tailwind from COVID’s clamp on dine-in. And Domino’s was no different. From April 20 to May 17 last year, same-store sales lifted 20.9 percent at U.S. franchises and 22 percent at company-owned stores. In the same period, domestic retail sales increased 25 percent. It also got off to a 13.4 percent start in 2021, marking the 40th consecutive quarter of growth—a run hard to find in any corner of the business.

The culprit behind Domino’s strong 2020 is no great mystery. It entered the year generating 70 percent of its sales through digital channels. The number rose to 75 percent ahead of 2021.

Meanwhile, Domino’s continues to hold steadfast to its first-party delivery chops and rejection of third-party economics. Instead, it’s elected to fortress markets and shrink delivery radiuses, as well as capture more carryout. Speaking of the latter, carryout might be the one area that slid due to COVID. Expect that to be a lead goal in 2021. Sales grew in 2020 but order volume weakened. The company developed carside delivery as a safer service model, but chose to pull the lever back on aggressive marketing. That will change as Domino’s courts the profitable channel, with advertising efforts around “carside carryout,” and more—something CEO Ritch Allison called a “critical weapon” moving forward.

10

Chipotle

Chipotle’s digital investments began well ahead of COVID. Pickup shelves. A second make-line for off-premises orders. The roll out of Chipotlanes. The fortuitous strategy skyrocketed the brand’s digital business in 2020 to video-game levels.

Chipotle’s digital sales soared to $2.8 billion in 2020, or a 174 percent boost versus the prior year to 46.2 percent of total business. To illustrate this, the company’s second make-lines alone generated average-unit volumes of $1.1 million in 2020.

There’s reason to believe Chipotle will hold some of the momentum even as dine-in returns. Digital sales mix in April held around 50 percent, despite the fact all but 20 of the company’s restaurants were open, with 92 percent of them offering in-restaurant dining with capacity limitations. In fact, Chipotle’s digital sales were actually slightly above the COVID peak as it recovered 60 percent of in-restaurant sales. In March 2021, Chipotle set a company record for digital transactions, supported by its best digital order-ahead month ever. Some 800,000 people downloaded Chipotle’s app and the chain served the most new digital customers since May of 2020. Its rewards program also climbed to 21 million customers (about 60 percent active). It entered 2020 with fewer than 10 million.

While this unfolds, Chipotle plans to lean into Chipotlane growth, where stores continue to drive 17 percent higher overall digital sales. As of March 31, Chipotle boasted a total of 196 stores with order-ahead pickup lanes, including five conversions. It expects to open roughly 200 new stores this year, with more than 70 percent including the feature.

11

Sonic Drive-In

As COO Eddie Saroch told QSR earlier in the year, Sonic was built for this. If any brand was going to satisfy a COVID customer, it was going to be the legacy chain with a fleet of drive-thru and drive-in locations. And Sonic didn’t disappoint. The Inspire Brands chain skated to record gains. Its average-unit volume was up from $1.3 million in 2019 to $1.6 million in 2020. Nearly a quarter of drive-ins, the brand said, cleared $2 million in AUV last year.

However, Sonic didn’t just let its store model speak for itself. The brand innovated in several key areas, including launching the “This Is How We Sonic” campaign, which focused on real families. New branding and a fresh logo debuted right before. The chain added a tipping function to its mobile app at select stores (a full rollout is on deck).
Digitally, Sonic’s order-ahead app surged to about 11 percent of sales—exceeding $540 million in 2020.
The company recently added web ordering, too.

Perhaps most vividly, though, Sonic’s “Delight” prototype was revealed last summer and creates a space with multiple service points and bright, bold colors. There’s a drive-thru, 18 drive-in docks that are wider than older models, a walk-up window, and a covered outdoor patio with string lights and lawn games.

12

Panera Bread

Panera entered the pandemic as one of the industry’s most-tech forward brands, a trailblazer in elements like rewards, kiosks, and delivery. All came into play, of course. But Panera still managed to get ahead on rising trends. One being grocery service, which it launched nationwide in April. It then decided to start labeling climate-friendly food, introduce a new category with flatbread pizza (it’s since expanded to five offerings), erect Panera Curbside, and continue an $8.99/month premium coffee subscription that could extend into different areas. The brand also made a host of leadership changes in 2020, including bringing on Eduardo Luz—the former U.S. CMO at Kraft Heinz—as chief brand and concept officer. Just this past May, the café chain unveiled a Next-Gen design that boasts a double-drive thru and puts the bakery feature out front for guests to interact with.

13

Pizza Hut

One of Pizza Hut’s biggest announcements came in late March as it unveiled “The Hut Lane,” a dedicated digital order pickup window live at more than 1,500 locations. More are coming. Like Chipotle’s version, there’s no order board. Guests tap meals through Pizza Hut’s app or online and pull up to the dedicated window. The change offers a glimpse into the kind of year Pizza Hut had and what’s to come.

Before COVID, the chain was undergoing a significant asset revamp that centered on moving away from dine-in stores toward delivery and carryout. The pandemic quickened the pace. Pizza Hut closed 2019 with 18,703 stores globally. In 2020, Pizza Hut shed 1,745 restaurants, or 9 percent of the year-ago figure, including 573 closures in Q1 and Q2 combined, and 1,172 total in Q3 and Q4. Overall, the closures were partially offset by the opening of 682 locations. Pizza Hut ended 2020 with 17,639 stores, representing a unit decline of 6 percent—its the lowest global number since Q3 2018.

While sizable, it was expected as Pizza Hut transitions to healthier and more modern real estate, and The Hut Lane should factor in. The company also underwent a major operator shift as NPC International, which decreased its base from 1,200 to 950 restaurants as it filed for Chapter 11, sold its stores to Flynn Restaurant Group.

Yet all of the changes appear to be working. In Q1 of 2021, U.S. same-store sales lifted 8 percent on a two-year basis, including the impact of roughly 3 percent of stores being temporarily closed. The off-premises channel generated 23 percent comps growth, a figure that strongly supports the chain’s shift toward off-premises only formats.

14

KFC

Count KFC among the quick-serves to embrace a chicken sandwich boost. The brand’s KFC Chicken Sandwich performed at twice the volume of previous sandwich launches out of the gate (it rolled to select markets in January before going national by the end of February). Sales-wise, the brand produced stellar results throughout the past year. The chain’s U.S. same-store sales increased 11 percent on a two-year basis in Q1 2021, with less than a percent of locations temporarily closed. Globally, digital mixed at a record 43 percent, driven by expansion of delivery, click-and-collect, and new-channel ordering options. Importantly, the brand’s domestic drive-thru speed improved by nearly 15 seconds, year-over-year. KFC also deployed a pickup and ordering solution across all domestic restaurants, including the launch of its first custom-built app.

In May, KFC, coming off those robust figures, announced it was looking to fill 20,000 permanent positions. A key figure for the brand: More than 75 percent of restaurant general managers started as team members or shift leaders.

15

Popeyes Louisiana Chicken

One of the most staggering stats in recent quick-service history arrived courtesy of Popeyes and its famed chicken sandwich this past year. Back in February, executives said the product helped push $400,000 in added sales, per restaurant, across Popeyes’ entire mature base. That’s reflected in this year’s QSR 50, where AUVs clocked in at 1.92 million compared to $1.54 million in 2019. This vaulted Popeyes up four spots in the overall rankings. In more recent quarters, the chain talked about the sandwich as a trigger point. The sales potential, clear demand, and now iconic status, could unlock international growth. It plans to open “hundreds” of stores in South Asia and Mexico, and also recently inked a deal to expand in Saudi Arabia. Popeyes’ same-store sales increased 1.5 percent in Q1, or 27.7 percent on a two-year basis. The chicken sandwich is also broadening consumer awareness and trial for other parts of the menu, executives said, including bone-in, boneless, and seafood. Digital mixed 17 percent in Q1, more than double last year’s total. Popeyes launched a pilot of a digital-first loyalty program to drive incrementality and change its low frequency, high check relationship with guests. To put it simply, the runway is vast.

16

Arby’s

The sandwich leader put together another strong year, growing its unit count amid a challenging environment while also managing to push systemwide sales up from $3.885 billion to $4.215 billion. Arby’s made a menu splash in March when it introduced Crinkle Fries as a permanent item. The brand, known for its curly iteration, tapped Ving Rhames, “the voice of Arby’s,” to drop a remixed take on Sugar Ray’s 1997 hit, “Fly” to be all about Crinkle Fries.

17

Little Caesars

The pizza giant continues to plot development, targeting expansion recently in New Orleans as well as the Pacific Northwest. Of the latter, it hopes to award more than 50 new franchise units across Portland and Seattle by 2026. Little Caesars named Jeremy Vitaro its new chief development officer in mid-April to fuel the growth. He most recently served as VP of U.S. development for Dunkin’ Brands, where he spent the past 18 years in various franchise leadership roles.

18

Dairy Queen

Founded in 1938 with the 10-cent sale of an unknown frozen treat, Dairy Queen in 2020 leveraged its massive brand equity. In recent years, it’s scaled with a “Grill & Chill” model that offers a modern look and separate “Grill” and “Chill” sections, comfortable booths, large wooden tables, warm lighting, and upbeat music. The brand also announced in January it was on track to meet its cage-free egg commitment in the U.S. and Canada for shell eggs, liquid eggs, and DQ proprietary products by 2025.

19

Panda Express

Global research firm Ipsos awarded Panda Express its “Best in Industry” among quick-serves for COVID safety measures in April. Mystery shoppers lauded the brand’s social-distancing measures, store cleanliness, and employee mask-wearing. Panda Express had a COVID task force as far back as January, and created a pandemic operations guide as a free resource for the entire industry.

20

Jack in the Box

The classic chain turned 70 in 2021, and it’s doing so with more momentum than it’s enjoyed in some time. During Q3 2021, Jack in the Box expects to cross $4 billion in systemwide sales on a trailing 12-month basis for the first time in company history. Same-store sales jumped 16 percent on a two-year stack in Q1 and average weekly sales per store upped 17 percent to $35,000. One reason: average check rose 27 percent in that window and transactions increased year-over-year for the first time since Q4 2019. In turn, the brand believes it’s on the cusp of an aggressive, multi-year franchise growth strategy. CEO Darin Harris, who joined in June 2020, said more than 66 percent of existing franchisees have expressed interest in growing in the coming years.

21

Papa John’s

Papa John’s has been on a tear. In Q1 2021, the brand notched its sixth straight period where comps outperformed the pizza industry, and seventh consecutive period of positive global growth. It’s been a remarkable surge considering where the brand was just a couple of years ago, tackling one PR crisis after another in light of its public, and often ugly, spat with founder and former chairman and CEO John Schnatter. Ex-Arby’s president Rob Lynch ignited the turnaround, turning to menu innovation (Epic Stuffed Crust) and leaning on his marketing skills. And now, with sales soaring—comps increased 26.2 percent in North America in Q1 and 31.5 percent on a two-year basis—Papa John’s is plotting major growth, especially on the international side. There are 1,650 restaurants in the pipeline. Eighty new restaurants opened this past period—the chain’s best Q1 in 20 years—and only three stores closed in North America, the lowest amount this century. In 2021, Papa John’s anticipates a net opening of 140 to 180 stores. But that’s only the beginning of this next chapter.

22

Whataburger

Whataburger, the brand says, is entering “the largest growth phase in its 70-plus year history.” In August 2019, it sold a majority interest to Chicago-based BDT Capital Partners. The Dobson family, which founded the chain in 1950, maintained minority ownership. At the time, Tiffany Hagge, managing director of BDT Capital, said the firm would help Whataburger “innovate and pursue accelerated growth in existing and new markets.” It appears that time has arrived.

Whataburger also made a labor splash in late March when it announced it was promoting all GMs and pushing their salaries to an average of $100,000. The position, now called “operating partner,” came with a bonus of up to 150 percent of their target incentive. The San Antonio-based chain gave staff more than $90 million in bonuses for their work during COVID and extreme weather events.

23

Wingstop

Wingstop’s banner run has serious legs. In 2021 alone, the chain plans to invest more than $10 million in capital to establish the foundation of a five-year strategy centered around three main facets—globalizing the U.S. digital platform to ensure success for the international business, modernizing and building a business intelligence platform, and elevating and advancing the end-to-end customer experience. This effort will build off a fast-rising platform. Wingstop’s Q1 domestic same-store sales increased 20.7 percent, and 30.6 percent on a two-year basis. AUVs have climbed to $1.55 million compared to $1.27 million last year. The brand’s goal of becoming a “top 10 global brand,” as executives often say? Well within sight and possibility.

24

Zaxby’s

The chicken fast casual had an eventful 2020. In November, Zaxby’s announced it sold a “significant” stake to Goldman Sachs, setting the 900-unit brand up for alluring growth. Zach McLeroy, co-founder and CEO, stuck around to direct the path. Then, in March, Zaxby’s crashed the chicken sandwich wars with a massive hit. The 30-year-old brand won the award for Best Fried Chicken Sandwich at the annual Fasties sponsored by Thrillist. Zaxby’s was the winner in the fast-casual category for Best Fried Chicken Sandwich, making it the first-time champ.

25

Hardee’s

Hardee’s, along with Carl’s Jr., began 2020 with a refreshed brand platform and creative campaign. It featured “Happy Star,” who set out to remind people they could “Feed Your Happy.” As 2021 rolled around, the next version came into focus, with Happy Star showing how the brand worked behind the scenes to make it all possible. A “Fiery” menu platform soon followed. The brand recently introduced a Hand-Breaded Chicken Sandwich lineup complemented by one of the year’s most-talked about campaigns so far. The 360-degree effort included custom content on OnlyFans, making Hardee’s (and Carl’s Jr.) the first national quick-service restaurants to join the platform, they claim.

26

Culver’s

Culver’s tapped Enrique “Rick” Silva as its new CEO in February. Silva led Checkers & Rally’s for 13 years. The brand’s former CEO, Joe Koss, retired at the end of 2020 after leading the growing organization for 23 years.

27

Jimmy John’s

Inspire’s sandwich chain entered 2021 with a new look and logo. Agency ChangeUp, which also helped develop sister brand Sonic’s “Delight” prototype, concepted a number of customer-facing changes, from a comprehensive visual identity and contemporized logo to new in-store signage, merchandise, digital footprint, and more. The goal being to accelerate Jimmy John’s “Freaky Fast” reputation, but do so by leaning into something that was always baked into the chain’s DNA—quality. The logo, for one, had run through some 40-plus variations since 1983. The new iteration is a cohesive collection with custom-crafted initials, wordmark, and medallion. And the packaging is an amplified version of Jimmy John’s black, white, and red brand colors

28

Raising Cane’s

Raising Cane’s lost 30 percent of sales in the weeks following stay-at-home orders last March. Yet it managed to surge back and finish the year with $1.8 billion in sales—clearing the company’s expectations by 10 percent. Raising Cane’s drive-thrus and chicken-finger boxes did a lot of the heavy lifting. But so did its company culture, CEO Todd Graves told QSR earlier in the year. It’s something he worked on since opening the first location in Baton Rouge, Louisiana, in 1996, and helped the company clock in at No. 89 in Glassdoor’s “Best Places to Work” list.

29

Five Guys

The burger fast casual managed to expand double-digits (14 stores) this past calendar. Systemwide sales (from $1.62 billion to $1.71 billion) rose as well.

30

Jersey Mike’s

Earlier in 2020, Jersey Mike’s pledged to pay for all franchisees’ upcoming retrofits—at $75,000 per store, roughly a $150 million investment in its system. The company also introduced the Coach Rod Smith Ownership Program; named after founder and CEO Peter Cancro’s youth football coach (and a local bank executive) who gave him a $125,000 loan to purchase Mike’s Subs, the program gives managers throughout the Jersey Mike’s system an opportunity to become store owners with financial and training support. This commitment to franchisees, along with investments in everything from small-box catering to a vastly improved app, helped the sandwich chain put together another robust growth year.

31

Carl’s Jr.

Parent company CKE bolstered leadership with the hiring of Lance Tucker as CFO and Phil Crawford as chief technology officer, in September. Tucker arrived from Jack in the Box, while Crawford previously worked at Godiva Chocolatier and Shake Shack before that. Carl’s Jr. also appreciated an offbeat marketing day in April when it hosted a one day plant-based meat menu takeover at a Los Angeles location.

32

Bojangles

One word to describe 2020 for Bojangles: Modernization. Since last year’s QSR 50, the Southern brand rebranded itself (dropping the apostrophe), accelerated delivery partnerships with top aggregators, revamped drive-thrus, and, more recently, launched a new app with the convenience of order-ahead and curbside pickup. Bojangles also expanded leadership with its first chief people officer, Monica Sauls; and VP of menu and culinary innovation, Marshall Scarborough. A new menu included barbecue and an exclusive Mountain Dew flavor—Southern Shock. Pimento Cheese became a permanent fixture. Growth wise, Bojangles inked a deal with Love’s Travel Stops and, in early 2021, added new territory in Central Ohio and struck a partnership to return to the Orlando, Florida, area.

33

In-N-Out Burger

The enigmatic burger chain remained steadfast in its quality and drive-thru efforts, and those historic traits—as well as brand value that can’t be understated—helped In-N-Out add 11 stores in a pandemic year.

34

El Pollo Loco

In January, El Pollo Loco unveiled a new, multi-tiered “Acceleration Agenda” that envisions the brand growing into new geographies with franchisees, building the right organization for asset-light growth, evolving the concept by digitizing the business, and accentuating what makes El Pollo special and different. How is it going so far? El Pollo Loco achieved its highest sales day ever on National Burrito Day (April 1). For the month, comps soared 13.5 percent on a two-year basis. Digital business is approaching 11 percent of total sales and the chain’s loyalty customer base grew by roughly 200,000 members since the start of 2021. El Pollo Loco also dropped a “Restaurant of the Future” design in December that leans on a frictionless digital experience.

35

Del Taco

The nation’s second-largest Mexican quick-serve carried strong performance into 2021. In Q4, franchised same-store sales upped 7.5 percent and the company stayed in the black, at 1.4 percent, for the entire crazy 2020 calendar. Perhaps the biggest announcement, however, was the unveiling of a “Fresh Flex” design that reconceptualizes Del Taco inside and out. The unit adds third-party pick-up stations and double drive-thru lanes with a dedicated lane for mobile orders and delivery pickups. It optimizes operational efficiencies and caters to modern consumers’ expectations: accessibility, speed of service, and brand transparency.

36

Checkers/Rally’s

Like Sonic, Checkers & Rally’s had the model to ace COVID pressures. The chain’s drive-thru-only base took off during the crisis. CEO Frances Allen told QSR in February Checkers & Rally’s beat counter-service competition by more than 600 basis points in 2020. After same-store sales dropped 3.8 percent in Q1, it pieced together runs of 8.9 percent, 13.9 percent, and 11.3 percent in the ensuing quarters. But the brand wasn’t content. It received a $20 million capital injection from Oak Hill Capital Partners IV in January that set it up for expansion, and to do so with a fresh design that boasts a dedicated e-commerce lane. The brand added 40 new franchisees and 70 locations to the pipeline last year—a 25 percent increase in the number of franchisees it started with in January 2020.

37

Firehouse Subs

Here’s a microcosm of a changing restaurant world: In 2012, 89.5 percent of Firehouse Subs’ sales were generated by a customer placing an order with a cashier at the point of sale. By 2019, the share of what it calls the “traditional channel of trade,” CEO Don Fox said, dropped to 75.3 percent. From 2012 to 2019, the channels of catering, online ordering, third-party delivery, drive-thru, and even phone orders grew. Some were in their infancy in 2012; one of them didn’t even exist, Fox added. Now in 2020, at its low point, Firehouse’s traditional ordering dropped below 40 percent of sales. By the end of the year, traditional ordering rebounded to 56 percent. A crazy turn, but one the brand continues to meet head on.

38

Krispy Kreme

The doughnut brand, which also owns 191 Insomnia Cookies stores in the U.S., grabbed investors’ attention in June when it officially filed for an IPO, roughly a month after publicly announcing its desire to return to the stock market. Per SEC filings, Krispy Kreme earned net revenue of $1.1 billion in 2020—the highest sales level in history. Krispy Kreme was public from 2000 to 2016 before being bought by JAB Holding for $1.35 billion. JAB also acquired Panera for $7.5 billion in 2017 and purchased British chain Pret a Manger for $2 billion in 2018.

39

Papa Murphy’s

Papa Murphy’s was able to lift systemwide sales (from $748 million to $805 million) and AUVs ($622,000 versus $551,000) as the pizza industry enjoyed a COVID bump. The brand’s Take ‘N’ Bake model was replicated often by other brands throughout the year, as take-home kits surged in popularity.

40

Steak ‘n Shake

This past year was a consequential one for the legacy chain. Or as chairman Sardar Biglari put it, a “radical transformation.” Pre-COVID, Steak ‘n Shake was plotting a flip to counter-service systemwide in an effort to stem rising labor costs. But it ended up strapped for funds as an attempted sale of 15 properties didn’t go as planned. Suddenly, it found itself on the doorstep of a financial restructuring, with the deadline to pay off $153 million in debt fast approaching. In the end, the chain was able to avoid Chapter 11, seemingly at the 11th hour, as it satisfied burden with capital from Biglari Holdings. The upshot being, Steak ‘n Shake no longer carried debt. And with that, it began to think ahead. While this service change unfolds, the brand continues to progress a new owner-operator model where franchisees invest $10,000 and Steak ‘n Shake assesses a fee of up to 15 percent of sales as well as 50 percent of profits. The ultimate goal is to foster a system of entrepreneurial-minded, single-unit owners who put customer service front and center.

41

Qdoba

Qdoba opened its milestone 400th franchise location in January and believes it’s on the fast track to 2,000 units. Expect to see an acceleration of nontraditional growth plus asset diversification thanks to a series of new prototypes, including drive-thru, pickup only, and ghost kitchens. In May, the brand hired Shawn Caric as VP of franchise development. He most recently served as director of development for the Midwest region at Dunkin’ Brands.

42

Marco’s Pizza

Marco’s is off to a quick start in 2021 after a solid COVID run. In addition to signing 88 new franchise agreements from the start of the year through late April, the brand secured multiple area development deals to bring a total of 20 units to Colorado. It’s all part of a broader strategy to grow the company’s 1,000-plus unit footprint by more than 10 percent this year. Marco’s claims a deep pipeline of more than 200 units in various stages of development.

43

Church’s Chicken

Church’s enjoyed a digital renaissance in 2020. Its order-ahead sales boomed 540 percent compared to the previous year. Third-party delivery upped 77 percent. Web digital conversation rate reached 16 percent. The brand relaunched its site with a focus on mobile optimization, which was easy to understand. Nearly 85 percent of guests engaged with the brand on a mobile device. And since launching a mobile welcomer, conversion increased 27 percent among mobile users. Plus, there was 295 percent positive growth in digital restaurant engagements. In all, the legacy brand has more ways to reach guests than ever as it moves into 2021 and beyond.

44

Tim Hortons

Tim Hortons’ digital sales accounted for 30 percent of its business in Q1 2021, nearly doubling year-over-year. It also marked the largest quarter of digital gains yet among RBI’s brands (Burger King and Popeyes). Overall, the chain battled stiff restrictions in Canada. For example, in Ontario, where nearly 40 percent of Canadians live and nearly 50 percent of Tim Hortons are housed, individuals were under mandatory stay-at-home orders (as of late April) until at least May 20. The closure of dining rooms pushed Tim Hortons’ drive-thru sales up 23 percent compared to last year as its top-line declined 2.3 percent in Q1, or negative 12.6 percent on a two-year stack.

45

Tropical Smoothie Cafe

The brand shattered records throughout 2020, delivering its ninth consecutive year of positive same-store sales (7.5 percent). It opened 99 new cafes, including its 900th location in Fort Benning, Georgia. Also, Tropical Smoothie signed 254 new franchise agreements. Perhaps most impressively, though, 70 percent came from existing franchisees. During the crisis, the chain offered 50 percent royalty relief for eight weeks and supported franchisees in securing more than $29 million in PPP funds across the system and $1.8 million in rent relief for roughly 250 cafes.

46

Freddy’s Frozen Custard & Steakburgers

The fast casual was purchased by private equity firm Thompson Street Capital Partners in March 2021. And it came at a momentous time. Freddy’s opened 30 stores in the U.S. last year, including its 400th. After experiencing a week in March where sales were down 38 percent, the chain finished by growing AUV 6.5 percent, and increasing systemwide sales by 21.2 percent. In July, Freddy’s experienced a 47 percent increase in drive-thru traffic and reduced wait times by 28 percent. The brand also signed six new development groups that committed to more than 60 development options and inked development agreements with existing franchisees who committed to more territories and more than 70 new restaurant options.

47

McAlister’s Deli

McAlister’s spent 2020 leveraging technology to enhance its service structure. It was key given the brand welcomed about 55 percent of its business dine-in pre-COVID. Fortuitously, McAlister’s did some heavy lifting in 2019, enhancing its loyalty program and expanding into more of an omni-channel approach. This allowed McAlister’s to shift quickly. In 2020, the chain nearly doubled its number of service channels, from dine-in, carryout, catering, limited curbside, and third-party delivery to those plus direct delivery, expanded curbside, and tableside ordering via app. Regarding the latter, president Joe Guith told QSR 85 percent of guests said they were satisfied with the speed of tableside service, and 67 percent say they’ll come back more for it. McAlister’s more than doubled its digital sales during the pandemic, and increased its loyalty base seven-fold.

48

Baskin-Robbins

Ahead of its sale to Inspire (along with Dunkin’), Baskin-Robbins’ U.S. same-store sales grew 6.5 percent. The chain started delivering via Uber Eats at 1,600-plus locations in October and launched a tribute to the iconic Mexican beverage Mangonada this past March—a menu innovation over two years in the making.

49

White Castle

The iconic slider chain celebrated its 100th birthday in May with a virtual bash. Recorded in front of a small crowd at White Castle’s home office and streamed on social, it featured everything from celebrity well-wishes to a musical performance to a mixology lesson. Members of the Ingram family, who have owned and operated White Castle since Billy Ingram founded the brand in 1921, shared stories throughout as well. The same month, the chain also opened its first Florida store—the world’s largest White Castle—since the 1960s, going viral with massive lines on opening day.

50

Moe’s Southwest Grill

Moe’s used the pandemic to go all-in on tech. In fact, it rolled out a two-year innovation calendar in just six weeks during COVID. This included a revamped app and online platform where consumers can order via curbside, pickup, or delivery. In addition, guests have the ability to add or subtract ingredients like they would in-store. Within these channels, average check increased 30 to 40 percent. Half of digital orders flowed through the app and Moe’s generated 3.7 million loyalty members through November 2020. In July, Moe’s rolled out virtual POS platform Revel Systems to support contactless payments. The digital mission took on tangible form in June with the Pittsburgh opening of Moe’s first kiosk-only unit, complete with digital menuboards and customizable beverages.