Dive Brief:
- The Top 500 U.S. restaurant chains grew sales by 7.5% last year to over $417 billion, according to a preview of Datassential’s annual top 500 chains report, The Datassential 500. Price increases helped grow sales despite a slower year for unit growth.
- These chains increased units by 2% to 238,152, per the report preview that was released Wednesday.
- Despite closing thousands of units in recent years, Subway remained the top chain by unit count with 20,133 locations. Starbucks came in second with 16,346 units and McDonald’s in third with 13,449 units.
Dive Insight:
Among the standouts in the report is 7 Brew, a drive-thru coffee chain. It is the fastest-growing chain in the country, with annual unit growth exceeding 373% last year compared to 2022. At the end of 2023, the company had 180 units open across 26 states, and currently has over 220 units, according to its website. 7 Brew uses modular construction to build its 500-square-foot locations.
Other rapidly growing chains noted by Datassential include The Peach Cobbler Factory, which posted 358% unit growth last year, and Hangry Joe’s Hot Chicken, which recorded 281% unit growth.
Much of the expansion that has occurred at the Top 500 chains has been in the South, where 43% of new units were built last year. The most popular state for new unit growth was Texas, with 946 new restaurants, followed by California at 664 new units. Texas has been a popular state for franchising due to its rapid population growth and business-friendly environment.
Surprisingly, fine dining, which has struggled with traffic growth in recent years, had the highest percentage of unit growth last year at 4.6%. Full-service regional/ethnic restaurants and sports bars grew 7.6% and 3.8%, respectively. Regional/ethnic restaurants were the second-highest unit growth category behind limited-service healthy chains, which grew units 11.2%. Fine dining also had the highest sales growth percentage, with sales up 10.7% to $3.3 billion in 2023.
